Curis, Inc. (CRIS) Q4 2020 Earnings Report, Transcript and Summary

Good afternoon. And welcome to the Curis' Fourth Quarter and Year End 2020 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note this event is being recorded. I would like to turn the conference call over to the company's Chief Financial Officer, Bill Steinkrauss. Please go ahead.

Thank you and welcome to Curis' fourth quarter and year end 2020 earnings call. Before we begin, I would encourage everyone to go to the Investors section of our website at www.curis.com to find our quarter 2020 earnings release and related financial tables. I would also like to remind everyone that during the call, management will be making forward-looking statements which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and actual results may differ materially. For additional details please see our SEC filings. Joining me on today's call are Jim Dentzer, President and Chief Executive Officer; and Bob Martell, Head of R&D. We will also be available for a question-and-answer period at the end of the call. I'd now like to turn the call over to Jim. Jim?

Thank you, Bill. Good afternoon, everyone. And thank you for joining us today. As ever, our mission at Curis is to develop the next generation of targeted cancer therapies to meaningfully improve and extend patients' lives. In that regard, 2020 was an especially constructive year for Curis despite the difficulties of the ongoing COVID-19 pandemic. We were fortunate to be able to continue bringing our novel therapeutics to patients enrolled in our clinical studies and maintained a steady pace of progress throughout the clinical process, culminating in a number of exciting updates from our lead assets CA-4948, our first in class IRAK4 kinase inhibitor, released during the Ash annual meeting in December. Presently, our IRAK4 platform is led by two ongoing clinical studies, one in combination with the BTK inhibitor ibrutinib for patients with relapsed or refractory non-Hodgkin's lymphoma, and the second 4948 monotherapy study in patients with relapsed or refractory Acute Myeloid Leukemia or AML and high-risk Myelodysplastic Syndromes or MDS. We are on track to provide a follow up update from this AML MDS study by mid-year and report initial data from the CA-4948 ibrutinib combination study by year end. We also continue to be excited by the potential opportunities that could come out of the Cooperative Research and Development Agreement, CRADA with the National Cancer Institute that we announced in November on the development of CA-4948. And from the IFT being run by Dr. Platzbecker studying CA-4948 as a treatment for anemia in patients with lower risk MDS. We will discuss them in greater detail later on this call. But both partnerships offer a uniquely intriguing expansion potential while also substantially increasing the number of patients we are able to reach in a population of dire medical need and providing a derisked opportunity to further develop CA-4948 in novel indications. Moving away from IRAK4 for a moment; also in 2020, we acquired rights received IND clearance and initiated patient dosing in a Phase 1a/1b trial of CI-8993, our first in class, monoclonal anti VISTA antibody for the treatment of patients with relapsed or refractory solid tumors. We have continued to enroll patients, and bring additional trial sites online for the study and look forward to reporting initial safety and efficacy data in the second half of this year. All told 2020 and the fourth quarter in particular, was a time of meaningful progress for the company, including the successful execution of key strategic financings that have provided a robust foundation to support the continued advancement and expansion of our clinical programs in 2021 and the years to come. We look forward to building on this progress, as 2021 shapes up to be another important year for curious. With that, let's dig into some detail on our ongoing clinical programs starting with leukemia. We're evaluating CA-4948 in patients with relapsed or refractory AML or MDS, including those with spliceosome mutations that drive the expression of the oncogenic long isoform of IRAK4. At Ash, we announced highly encouraging Phase 1 data from our ongoing monotherapy study demonstrating marrow blast reductions observable in all evaluable patients, with two of six valuable patients experiencing a marrow complete response. Since the last update, we have continued to gather data. And we have begun dosing patients at 500 milligrams BID. After early indications at preceding doses were in line with what we had previously reported. We are looking forward to presenting updated data from this study by mid-year. Separate from this trial; we're especially pleased to partner with a renowned AML MDS clinician, Dr. Uwe Platzbecker to initiate the Phase 2 LUCAS Investigator Sponsored Trial for the treatment of anemia in patients with lower risks MDS. Following the promising preliminary data we presented in December in patients with relapsed refractory AML and high risk MDS, we were encouraged to explore whether CA-4948 may also provide benefits in earlier stage MDS patients who are farther away from progression to AML. If this hypothesis bears out it could lead to a potential breakthrough in the AML and MDS field as current erythropoiesis stimulating agents or ESA that target anemia in genetically defined lower risk MDS can be effective, but this effect is often transient, culminating in progression to AML and further disease complication. With its direct, non-myelosuppressive targeting of IRAK4 and its already demonstrated robust durability profile, we believe CA-4948 could potentially offer a safe and transformative disease modifying alternative for patients in early stage or low risk MDS. Patient enrollment in this study is expected to begin in the second quarter of 2021 and is anticipated to enroll up to 84 patients across two cohorts. Cohort A will be an ESA refractory or intolerant patient. Cohort B in ESA naive patients. Patients in both cohorts will receive 300 milligrams of CA-4948 twice daily BID for 21 days, in at least four repeating cycles, lasting 28 days each. The primary endpoint of the study is to evaluate the proportion of patients that develop an erythroid response according to IWG 2018 criteria. Now moving to lymphoma. As a refresher, our Phase 1 dose escalation study of CA-4948 for the treatment of patients with relapsed or refractory non Hodgkin's lymphoma includes patients with diffuse large B cell lymphoma Waldenstroms and oncogenic mutations. We are currently in the expansion phase, evaluating patients being treated with 300 milligrams of CA-4948 twice daily, after observing clear dose response and tumor reductions at this level during the dose escalation phase of the study. In an oral presentation at Ash last December, we reported expanded clinical data from this study, highlighting durable reductions in tumor burden that were observed in six of seven evaluable patients treated with 300 milligrams twice daily, single agent CA-4948, following a median of four prior lines of therapy. On the basis of these data, we determined 300 milligrams BID to be the optimal dose for further study, as it appears to strike the most favorable balance of sustained anti-cancer activity and tolerability for long-term treatment, which is critical for these extremely sick patients who have already progressed through several failed lines of treatment. To provide some additional context, these data further supported the trend that first came into focus at Ash 2019, where we presented a small but intriguing data set that suggested CA-4948 could establish IRAK4 inhibition as a new mechanism of action, a novel way to treat patients with NHL as it delivers a compelling safety and efficacy profile, particularly at higher dose levels in a monotherapy setting. Throughout 2020, we had two primary goals for this study. First, we wanted to demonstrate proof of concept in a monotherapy setting, establishing IRAK4 inhibition as a new mechanism of action, a novel way to treat patients with NHL by delivering a compelling safety and efficacy profile, particularly at higher dose levels. This would provide an important read through for our anticipated combination study. And second, we sought to verify which of the efficacious dose levels offered the best balance of safety and efficacy. As shown in the data we presented and in our selection of 300 milligrams BID of CA-4948 as the recommended Phase 2 dose, we believe we clearly hit on both of those points. It is important to highlight again, that these are extremely sick patients who have received in median four prior lines of therapy before entering the study, that we have been able to observe any meaningful therapeutic effect in monotherapy. And that those effects are durable over such an extended period of time is enormously encouraging and provided powerful affirmation of our plan to launch accommodation study with a synergistic therapy like the BTK inhibitor ibrutinib. We initiated this combination study earlier this quarter. Part of the Ash presentation also covered early data for two potential biomarkers that may support patient selection and enrichment efforts. And we look forward to providing updated data on both biomarkers at AACR next month. Now let's talk a little bit about why we and key stakeholders in the NHL clinical community find the prospect of IRAK4 BTK inhibitor combination so compelling. BTK inhibitors like ibrutinib are an approved effective oral class of therapies for patients with various lymphatic cancers that work by targeting one of the main activators of NF-kappaB, The BCR pathway. Crucially, however, comprehensive NF-kappaB regulation requires also shutting down medicinal signaling in the TLR pathway, which is primarily, controlled by IRAK4 the target of CA-4948. In short, two pathways the BCR pathway and the TLR pathway are primary and independent oncogenic drivers of NF-kappaB. This regulation of either of these two pathways drives excessive B cell proliferation. BTK inhibition blocks one, IRAK4 inhibition blocks the other. We believe effective dual targeting of both pathways could provide substantially better outcomes than targeting either pathway alone. And while there are several companies with approved BTK inhibitors, there is only one company developing a BTK IRAK4 combination. That company is Curis. We are currently enrolling patients in the part one of the dose escalation component of the trial, which will enroll approximately 18 patients in a three plus three design with CA-4948 doses starting at 200 milligrams BID, and escalating to 300 milligrams BID. And ibrutinib doses appropriate for the patient's respective NHL subtype. The primary endpoints of the first part of the study, our maximum tolerated dose, and determination of the recommended Phase 2 dose. Secondary endpoints are PK and preliminary efficacy. We'll provide updates appropriately as we progress through enrollment, and eventually move on to part two of the study. But so far, from scientific hypothesis to preclinical data to clinical data, each step of the journey has been a consistent step forward in the long-term vision for Ca-4948 in NHL, that IRAK4 controls a critical pathway that is parallel and complimentary to the BCR pathway. And that inhibiting IRAK4 may provide increased benefit to the vast population of patients treated with a BTK inhibitor and help mitigate resistance to BTK therapy. That is our vision for NHL. And we look forward to our next opportunity to update you on this program in the fourth quarter of this year. Now we'd like to turn to CI-8993, our first in class monoclonal antibody for the treatment of patients with relapsed or refractory solid tumors. To provide a little back story, we acquired rights to CI-8993 in Q1. We received IND clearance from the FDA in Q2 and we opened our first clinical sites and dosed our first patient in Q3. Everything has moved incredibly quickly. Since then, we've continued to open more clinical sites and enroll more patients. This is a target that we and the clinical community have long been excited about because of the critical role it plays in suppressing T-cell activity when it is activated. Conversely, when this is blocked, or inactivated, it has been shown in preclinical studies to prevent T-cell suppression and thereby reactivate anti-tumor immune function. We also see significant combination potential and, in the future, may explore targeting VISTA in combination with certain synergistic therapies such as PD1, PDL-1or even CTLA-4 inhibitors. As preclinical studies suggest that blocking VISTA significantly improves the efficacy of those checkpoint regulators. Moreover, progress in the development of CAR-T therapies, in the broader immunotherapy space over the last decade have addressed previously limiting on target side effects associated with this pathway blockade, namely, immune mediated toxicity and cytokine release syndrome. We believe CI-8993 is the most advanced anti-VISTA antibody currently in clinical development. The clinical community has already shown a deep excitement and interest in this program. And we believe CI-8993 has the potential to be a game changer in cancer therapy. We look forward to reporting initial safety and efficacy data for this exciting program in the second half of 2021. To wrap up, I want to emphasize how proud I am of the entire team at Curis who in the midst of an ongoing global pandemic have worked tirelessly to ensure we hit every ambitious goal we set for ourselves this year. It is a testament to their efforts that we find ourselves in a vastly different place than we were 12 months ago. And that much closer to bringing our promising therapeutics to the patients, they will serve the most. I'm honored to work with them every day. With that, I'll turn the call over to Bill to review our financial results for the quarter. Bill?

Thank you, Jim. The year ended December 31, 2020, Curis reported a net loss of $29.9 million, or $0.61 per share on both a basic and diluted basis, as compared to a net loss of $32.1 million or $0.97 per share on both a basic and diluted basis in 2019. For the fourth quarter of 2020, we reported a net loss of $7.5 million, or $0.11 per share on both basic and diluted basis, as compared to a net loss of $8.6 million, or $0.26 per share on the both basic and diluted basis for the same period 2019. Revenues for the year were $10.8 million as compared to $10 million for 2019. Revenues for both years comprised primarily of royalty revenues recorded on Genentech and Roche's net sales of Erivedge. Revenues for the fourth quarters of 2020 and 2019 were $3.0 million and $3.3 million, respectively. Revenues for the fourth quarters of 2020 and 2019 were $3.0 million and $3.3 million, respectively. Operating expenses for the year ended December 31, 2020 were $35.7 million as compared to $34.4 million for the same period in 2019. Operating expenses for the fourth quarter of 2020 were $9.3 million, as compared to $10.6 million for the same period in 2019. Costs of Royalty Revenues were $0.5 million for the years ended December 31, 2020 and 2019. And were $0.2 million for both the fourth quarter of 2020 and 2019. Research and development expenses were $23.1 million for the year as compared to $22.3 million for 2019. R&D expenses were $5.6 million for the fourth quarter of 2020 as compared to $7.5 million for the same period in 2019. The decrease was primarily due to a decrease in clinical and manufacturing costs related to CA-170 and fimepinostat. General and administrative expenses were $12.1 million for the year ended December 31, 2020, as compared to $11.6 million for the same period in 2019. General and administrative expenses were $3.5 million for the fourth quarter of 2020, as compared to $3 million for the same period in 2019. The increase was primarily due to an increase in personnel related costs. Net other expense was $5.0 million for the year ended December 31, 2020, as compared to $7.8 million for the same period in 2019. For the fourth quarter of 2020 and 2019, net other expense was $1.2 million and $1.3 million, respectively. Net other expense primarily consisted of imputed interest expense related to future royalty payments. As of December 31, 2020, Curis' cash, cash equivalents and investments totaled $183.1 million, which includes net proceeds of $159.1 million from our follow-on public offering in December 2020. As of December 31, 2020, there were approximately 91.5 million shares of common stock outstanding. We expect that our existing cash, cash equivalents and investments should enable us to maintain our planned operations into 2024. With that, I'd like to open the call for questions. Operator?

[Operator Instructions] Our first question comes from Alethia Young with Cantor.

Hey, guys, thanks for taking my questions. And truly, congrats on a very transformative last three or four months and very cool to watch. So yes, a couple from me. One, I just want to get for this mid-year update, can you maybe frame for us or help us think about how many people maybe you might have or, kind of, where you might be on that timeline? And just and also just kind of frame enrollment? It sounds like it probably is going well better than what maybe I expected. My second question is on VISTA, of the VISTA program. And do you think by the time you get to the end of the year that you'll be in place, a place where you could potentially assess efficacy? Is it more going to be about whether this is listing like cytokine release syndrome, which I still think is a big milestone? But I guess I just wanted to know how you think about those two things and the possibility of some monotherapy? And then my third question is just, if you can just go back and maybe talk to us a little bit about like with low risk MDS, some of the IRAK4 science, and you've framed it a little bit, but it just got a little bit more into, why believe there's a connection, and there's some degree of confidence in the ISP that you're running things.

Sure. Hi, Alethia. Thanks for calling in. So, of the three questions, I'm going to let me address the first two, and I'm going to ask Bob to chime in on the third. So the first time the mid-year update. I think our expectation enrollment has been really great. We were able to enroll six patients in the six months leading up to Ash. So it makes sense for a mid-year update that we would probably get another six patients on top of that, how many patients and how that enrollment moves forward to getting the data back, and cleaned and valuable patients identified prior to that update is going to remain to be seen, but somewhere in that range probably makes sense. In VISTA, and it's a little early for us to identify whether or not we're going to be able to identify it or assess efficacy by year end. And just to put this in context, again, we've originally believed going into this study, that the efficacious window is probably going to be somewhere between 0.5 and 2.0 mg per kg. And we need to escalate through, the sub therapeutic doses until we can get into that window and where in that window, we're going to see efficacy is not really clear. Of course the earlier we see it at lower doses, the quicker we'll get to efficacy information, but it could well be at the back end of that window. We don't really know at this point. It's really just enrolling our way through those sub therapeutic doses. So hopefully we will be in a position by year end to talk about efficacy. But it's frankly a little too early for us to say at this point depends how enrollment goes over the next three quarters. Bob, maybe you can talk a little bit about the low risk MDS and the science to that approach.

Yes, exactly. Thank you, Alethia. That's a really good question. Low risk MDS is we think a perfect place to explore this drug and partly because this is where we see a lot of these spliceosome mutations first showing up. The fact that the spliceosome mutations show up in early stages of MDS such as low risk MDS suggests that the outcome, meaning long IRAK4 isoform being created. This outcome is fundamental to the disease process and an early step in the evolution of MDS to AML. Ultimately, so we think because of that, and because of the high level of spliceosome mutations in that disease, this is going to be really important. In addition to the spliceosome mutations that are known to create IRAK4 long, there are likely other causes of excess IRAK4 long, so we know even in early stage MDS, we have excess levels and we guess approximately 50% of all patients with lower risk MDS have access IRAK4 long, even some patients who don't have specific spliceosome mutations. So there's a lot of biology that supports going into this early stage of disease.

And, can I ask just one follow up on the midyear catalyst, is that - so we think about that as ASCO or would you be in a situation where you would just hop on it? Just curious.

So I think it's going to depend of course, so this is Jim again, Alethia. I think it's going to depend of course, on which conference we can get the abstracts submitted to and then of course, which one accepts the abstract for discussion? At this point, we're kind of leaving it open. But, hopefully, we'll be in a position to clarify that as we get closer to that date.

The next question is from Ed White with H.C. Wainwright.

Good evening, guys. Thanks for taking my questions. So perhaps just a couple of timing questions first. With the Phase 2 LUCAS study, I know enrollment doesn't begin until the second quarter of this year. Just wondering if how you're thinking about timing to data?

Sure. Hey, Ed, how are you? So yes, this study is an IST. So it's not going to be as closely controllable by the company as a more typical study would be. So the advantage, of course, is twofold for us. First, with any IST, the cost is much lower. But most importantly, this IST is being run by the clinician that is the Chairman of the European MDS society. So he's got all 17 of his sites on board to enroll this study. So while we don't, we can't typically control it. And we won't be seeing the data on an ongoing basis that we would - the way we would in a normal study. I would suggest we're very optimistic. And we were very pleased when Dr. Platzbecker reached out to us and asked if he could run this study, we think it's a perfect extension of the drug based on the data we presented at Ash. We always have been planning as you know to do the combination study, and wherever we can get blast count reductions. That seems to be really exciting, but based on being able to get blast count reductions across the board, and marrow responses. I think it was, as we've discussed earlier, we were really excited about the prospect of being able to pursue a monotherapy and go earlier stage disease as well. So when Dr. Platzbecker brought his team on board, and said he wanted to take this on, we were thrilled. So I hope it goes quickly. But we'll have to stay tuned, and we'll give you updates as we can.

Great. Thanks, Jim. And another question in sort of on timing, but how should we be thinking about the path to registration. So in NHL, we know that the priority is going to be in combination with ibrutinib. But you had excellent data in monotherapy after four lines of therapy. So just thinking about what's the quickest path to approval? Maybe you can walk through your strategy there either combo or monotherapy?

Sure. Thanks. Great question. So the path to approval is of course, there are many different branches here. So first and foremost, let's think about AML and MDS differently from NHL. So, as you know with AML and MDS, we may have one path combination therapy, one path monotherapy and maybe some earlier stage, but to your question, specifically addressing NHL, we think, we are still pursuing monotherapy is an option that trial is ongoing. And we of course, are also very excited based on having patients that have been on so many prior lines of therapy that we were getting such clear indications of tumor shrinkage, incredibly exciting. So we of course, will be pursuing that as well. I think the long-term perspective, we talk about this a lot when we go out and do presentations to investor communities, we think very differently about the commercial strategy versus the regulatory strategy. The commercial strategy, from my perspective is incredibly clear. There are two pathways that drive NF Kappa b, the BCR path and the TLR path. All the BTK inhibitors, including ibrutinib blocked the BCR path. We're the only ones that can block the TLR path. The question really isn't if you have one of these cancers, the question isn't, which pathway do you want to block? Or do you want to BTK inhibitor or IRAK4 inhibitor? The real question we suspect in a commercial setting is you want to be on both. So that's the primary driver behind going down this study is let's evaluate it in the clinic, and see if we can replicate the findings in the lab, which indicated that clearly this was the best treatment alternative. Once we can establish that, then we want to look at a regulatory opportunity. And that's when we have described the expansion stage of the combination therapy, we will be evaluating the four subtypes or four niche groups within NHL that we think might offer the fastest highest probability success path to getting a regulatory approval to getting that first label. Long term, we want to get a label that allows us to - allows physicians to prescribe this anywhere where they would prescribe a BTK inhibitor anywhere where they would prescribe ibrutinib. But for the first level, we're going to be studying in expansion in this current study four groups, we're going to be looking for patients that are naive to BTK with primary marginal, I'm sorry, with marginal zone lymphoma, with primary CNS lymphoma, with ABC DLBCL, or patients who have been on ibrutinib and have developed adaptive resistance. Those are the four ones that four groups of patients that we think would offer the fastest path to registration, which one of those paths is the best one, or whether several of them look equally attractive, is going to remain to be seen when we get the data, but we're going to be pursuing all of those, and the monotherapy simultaneously. It was a pretty long answer, but it was pretty important question. I hope that was helpful.

The next question is from Soumit Roy with JonesTrading.

Hi, everyone. Thank you for taking the question. First, on the AML MDS front, it looks like your Ash data was mostly 200 and 300 BID and it already started in rolling 500 BID cohorts. Is there a reason - did you skip any or is there a reason for this fast enrollment is such high dose cohort as I would think AML patients are more sensitive towards these drugs? If you can add any color and how many of these high dose cohort patients should we expect in the mid-year update?

Okay. First, thank you so much for calling and I really appreciate your support. And obviously, as always terrific questions. In the AML and MDs study; I think we announced of course, that we're now dosing at 500 it's really a reflection of it has gone so fast. The enrollments, the excitement among the KOLs is as high as it is with us and with investors. This - the data from this drug are really highly encouraging. So we've really been very successful at getting patients in clearing doses and getting on to the next efficacious dose. You may recall in the NHL side, we decided at the end that 300 milligrams was the right dose. In AML and MDS, these diseases are a little more aggressive than NHL. And in fact, in an analysis of the safety profile of the patients that have been enrolled to date and the efficacy that we're seeing the physicians were all very excited about pushing as higher doses we can to try and find the best balance of safety and efficacy in this indication. And it would not surprise us, of course, that a higher dose would be more warranted in this population. To get the kind of impact that we've seen at 200 and 300 milligrams so far was really exciting. And of course, we want to see what that looks like as we go to higher levels, and how high depends on how high we can go until we hit MTD.

Got it. And on the initial front, what do you expect, like your expectation? What percent of these patients in the ibrutinib combo trial? What percent patients you think you would get an ibrutinib naïve versus an ibrutinib resistant relapse patient? If you have any clarity on that?

Yes, actually, I might defer to Bob on that question. That's all right, Bob.

Yes, so all of the phase so Jim went through three cohorts with ibrutinib naive populations. And so we'll enroll patients into each of those groups and then a fourth cohort with patients who have had prior response to ibrutinib and then it subsequently progressed. In that case, they will discontinue ibrutinib and we'll add on 4948. So well, about three out of the four groups will have ibrutinib naive patient population. Does that answer your question?

Yes, I didn't realize because it's such a well-defined cohort. Got it. Thank you and congrats on all the progress.

The next question is from Yale Jen with Laidlaw & Company.

So good afternoon. And my congrats on the very rapid progress you guys have. Just have two quick questions. The first one is that I remember you guys are talking about in other meetings, that you're surprised that the six out of six patients that in MDS trials that all responded but you don't know their mutation status. And I assume that's something you will provide more colors on. But just curious, just in case there's a patient not having those mutations? What might be the theoretical thoughts of why the drug still works so well?

Yes. Thank you, Yale, and thanks for calling in, terrific question. I'm going to take a first part of that question. Then I'm going to ask Bob to chime in as well on some of the scientific rationale. So first, you're exactly right in these six out of six patients that we saw blast count reductions that were a big surprise for us. We had expected as you know based on the mouse data, based on the literature, that we should only get blast count reduction in half the patient population. When we got blast count reductions in all six, there are really only two conclusions possible. The first is that it's statistically possible even though it's unlikely; it's statistically possible that all six of those patients had very elevated IRAK4 long levels. What's more likely, is that, that IRAK4 for long is a much more sensitive driver of AML and MDS in humans than it was in mice? So in mice, you looked like you had to have a 1.25% ratio, or very high level of IRAK4 for long to be driving your cancer and therefore, for an inhibition to be helpful. And in humans, it looks like based on the preliminary data, that it's more likely that the threshold is much lower, for how much IRAK4 long you need in order for it to be driving your cancer. And in order for inhibiting that IRAK4 to be helpful. So if we look forward to what are the key data points, we're looking for in this mid-year update. One of them is of course, for those six patients and for additional patients that have come on. We're not processing, of course, the clinical samples, and we've sent them out to a central lab, we're going to be collecting IRAK4 expression level data on those patients, because we want to try and get a handle if that threshold isn't 50%. If we can address a broader group of the population than that, well, how low is that threshold? Or conversely, how big is the percentage of that population that might benefit from this drug? And the second part of the question of what we're going to be looking for get to sort of the mechanism of action. We had been anticipating all along that we might have an impact on blast counts. And that's why this drug would be such a great add in combination therapy with any of the other therapies that might be available in AML and MDS, because it's a novel mechanism of action. It works differently. And it's clearly efficacious, as we can see in the blast count reductions. We think it's all, it's small molecule, and it's not myelosuppressive. It's clearly active as a single agent. This is a great combination therapy. But because we're also getting responses, as we said in the call earlier, we want to also evaluate if there's a potential here as a monotherapy. And if there's a potential in earlier stage disease. We've addressed the earlier stage disease question with Dr. Platzbecker study, that's going to give us the answer there. And in the other answer whether monotherapy is appropriate; we're also going to be collecting the genomic profile of these patients. So which of these patients have a spliceosome mutation? We know that roughly 20% of the population has a specific spliceosome mutation, the remainder of the population that has elevated IRAK4 has it elevated for other reasons, it might be epigenetic reasons, but 20% of the population, we would expect to have a spliceosome mutation that means one out of the six patients that we dose probably has a mutation. And then in the next group of six, we might see one or two patients as well, if we can get an outsized reaction in those and outside response in those patients and potential signs of heme recovery, we might have a monotherapy strategy available as well. So we're going to be looking at this mid-year update to first, as we expand a higher number of end, do we continue to see this broad across the board blast count reduction in 50% of the population or more? Can we get a better handle on what that addressable population size might be? And then also, do we look at the protein expression levels, and specifically the genetic mutation status of these patients to identify whether or not we might also have a monotherapy strategy? Bob, could you add a little more on the scientific rationale?

Yes, sure. Hi, Yale. Thank you for the question. So I think to actually address a lot of the basic rationale, and I think one key aspect is that we don't know for sure yet what ratio of IRAK4 long, IRAK4 for short, will be appropriate in humans to predict potential efficacy. As Jim mentioned, all of the patients had some blast reduction with their initial dosing with 4948. And so it - we will be reporting those ratios and the information at the mid-year update. And I think that's one thing. I think another thing to consider also is that in MDS and also an AML, one component of the disease is the inflammatory microenvironment, within the bone marrow. And that's obviously partially caused or largely caused by IRAK4 driving that. And in fact, IRAK4 for long is expressed to some level in all patients with AML and MDS. And so to the extent that that's causing an inflammatory microenvironment, that can be mitigated by blocking IRAK4 which it was a key and sort of mediating many of the inflammatory cytokines that come through this pathway. Is that addressed your question, Yale?

Yes, absolutely. That's a very comprehensive and a very insightful answer. I appreciate that. Maybe just a quick one for Bill. 2021 will be a big year for a lot of activities. Do you have any sort of general guidance of thinking how much R&D will be more than increased compared to last year? And does the LUCAS study cost company any expenses - caused company any more money or basically will be supported fully by the academic institutions in Europe? And thanks.

Yes. So I guess maybe in reverse order, the LUCAS IST, we are providing financial support. But as Jim mentioned that it's at a much lower rate than a true sponsored study. So that's part of the investment that we've looked to make, following the successful raise here in December, our main focus is making the investments into both these programs 4948 and 8993, to ensure that we seize the opportunity here and deepening our development path as well as, broadening opportunities like going to low risk MDS, so, but it will take time to ramp up our cash burn, but I think, I would expect for this year, cash burn to be about $12 million in a quarter on average, there'll be some, like I said, it will take a little bit of time to scale up, but I think that's probably more appropriate target than using the 2020 trend.

This concludes our question-and-answer session. I would like to turn the conference back over to the company's President and Chief Executive Officer, James Dentzer for any closing remarks.

Thank you, operator. And thank you everyone for participating in today's call. And as always, thank you to the patients and families, participating in our clinical trials. To our team at Curis for their hard work and commitment, and to our partners at Aurigene and Immunex for their ongoing help and support. We look forward to updating you again soon. Operator?

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.