Arcus Biosciences Inc

NYSE:RCUS

Earnings Call Analysis

Arcus Delivers Encouraging Clinical Data

In Arcus' first earnings call in a while, significant clinical advancements were highlighted including encouraging data for domvanalimab, showing strong potential in first-line metastatic upper GI adenocarcinoma treatment. Domvanalimab's superior performance in both the PD-L1 high population and the overall patient group suggests a competitive edge that could expedite participant enrollment in Phase 3 STAR-221 study. Additionally, promising results for AB521 and quemliclustat are anticipated in the next few months, with AB521 about to conclude a pivotal dose expansion phase. Exciting breakthroughs were also reported for ARC-8 trials of the CD73 inhibitor quemli, where a stellar performance against benchmarks in first-line pancreatic cancer could signal new hope for treatment.

Impressive Clinical Efficacy in Cancer Treatments

The recent clinical data has been noteworthy, especially in the context of gastric cancer treatment with EDGE-Gastric. The six-month landmark PFS (progression-free survival) rates observed were 77% in the overall population and an incredible 93% in the TAP high population. These figures outshine historical benchmarks, suggesting that the treatments could surpass the median PFS of 7 to 7.5 months seen in the past, and 24 out of 41 patients are still undergoing treatment, hinting at prolonged efficacy.

Promising Developments in Renal Cell Carcinoma Therapy and Pancreatic Cancer Inhibitor

Innovations in renal cell carcinoma (RCC) therapy have shown a favorable safety profile and potent efficacy data for AB521. The drug displayed dose-proportional pharmacokinetics and has not encountered dose-limiting toxicities even at higher levels, indicating a strong start for its Phase 2 trials. Similarly, the drug Quemli for pancreatic cancer stands out by inhibiting both the membrane-bound and soluble forms of CD73, which may have particular advantages in such fibrotic tumors. Comprehensive data is expected to support the further development of Quemli for this devastating disease.

Strong Financial Position Enables Ongoing Research

The company is in a robust financial state with a cash balance of $950 million as of September 30th, 2023, and a reduced forecasted cash utilization which is expected to sustain operations well into 2026. This healthy financial standing facilitates the continuation of their Phase 3 studies in partnership with Gilead and supports further advancements in their pipeline.

Potential for Strategic Clinical Inflection Points

Substantial updates on clinical data are imminent, with the company poised to share more on Quemli in pancreatic cancer and the HIF-2-alpha program. These updates have the potential to serve as key inflection points for the company, highlighting its commitment to innovative cancer therapies.

Setting the Bar for Survival Endpoints in Cancer Trials

The company's clinical trials are designed meticulously with survival endpoints that could allow approval for specific patient subsets. With a median OS (overall survival) range typically between 9 to 11 months in pancreatic cancer, a median follow-up of 21 months is indeed substantial, indicating extended benefits from the treatment. The waterfall plots from the clinical data reveal intriguing tumor reduction scenarios, further validating the efficacy of the therapies.

Earnings Call Transcript 2023-Q3

[Operator]

Thank you, and welcome to the call. Following prepared remarks from the company, we will open the call for questions. [Operator Instructions] This call is being recorded and will be available on the Investors section of the Arcus website.I will now turn the meeting over to Pia Eaves, Head of Investor Relations and Strategy.

[Pia Eaves, executive]

Hello, everyone, and thank you for joining us on today's conference call to discuss Arcus' third quarter 2023 financial results and pipeline updates, including today's presentation of data from our EDGE-Gastric trial at the ASCO monthly Plenary. Today, you will hear from Terry Rosen, Chief Executive Officer; Dimitry Nuyten, Chief Medical Officer; Jennifer Jarrett, Chief Operating Officer; and Bob Goeltz, Chief Financial Officer. For Q&A, we will also be joined by Juan Jaen, President and Head of Research.I'd like to remind you that on this call, management will be making forward-looking statements, including statements about our cash runway, our investigational products, our expected clinical development milestones and timelines and the potential market opportunity and drug-treatable population of any indications being pursued by our program. All statements other than historical facts involve risks and uncertainties that may cause our actual results to differ. Those risks and uncertainties are described in our most recent quarterly report on Form 10-Q that has been filed with the SEC. We strongly encourage you to review the filing. For today's call, please refer to our latest corporate deck, which can be found on the Investors section of our website.With that, I'll turn the call over to Terry.

[Terry Rosen, executive]

Thank you very much, Pia, and thank you all for those, who are on the line. This is the first quarterly earnings call we've had in some time. So in addition to the domvanalimab data that was just presented at ASCO Plenary, we're also going to discuss our other upcoming data readouts, specifically for AB521, our potentially best-in-class HIF-2-alpha inhibitor and Quemliclustat, our first-in-class small-molecule CD73 inhibitor, both of which we will be sharing data with you just in the next few months.But just a few hours ago, many of you likely watch Dr. [indiscernible] present initial data from our Phase 2 study, EDGE-Gastric for domvanalimab in first-line metastatic upper GI adenocarcinoma. As a reminder, Dom is the only Fc-silent anti-TIGIT antibody in late-stage development, and we and our partner, Gilead, are pursuing a very broad development program that includes 4 Phase 3 studies in non-small cell lung in upper GI cancers.Today's data are extremely encouraging on all fronts. ORR for the PD-L1 high population clearly exceeded historical benchmarks in this setting. Data in the overall patient population appears differentiated, particularly relative to the most contemporary Phase 3 studies in this patient population Merck's KEYNOTE-859 and BeiGene's RATIONALE 305. Most importantly, 6-month landmark PFS data for both the PD-L1 high and overall patient population appear to be quite differentiated from benchmarks. These data are very supportive of our ongoing Phase 3 study, STAR-221, which is evaluating Dom in the same combination, same setting underlying today's data set.STAR-221 is enrolling extraordinarily well, and we expect that today's data will further enhance interest and actually accelerate recruitment in the study. In addition to Dom, we continue to execute on the remainder of our pipeline, including our HIF-2 alpha and adenosine pathway programs. Regarding our HIF-2 alpha inhibitor, AB521, early next year, we will be sharing detailed safety, pharmacokinetic, pharmacodynamic and preliminary efficacy data from the dose escalation portion of ARC-20, which is a Phase 1/1b trial for AB521.We're close to completing enrollment in fact, of the dose expansion cohort that's evaluating 100 milligram daily of AB521, the dose that we believe will hit the target substantially harder than the approved 120 milligram dose of Merck's belzutifan. Merck's most recent data sets for belzutifan presented at ESMO continue to enhance our conviction around the opportunity for AB521. Those data were just what we've been expecting for months, if not the past year. Later in this call, we'll describe this program in much more detail.With respect to our [ adenosine ] programs, we'll discuss our ARC-8 trial evaluating our CD73 inhibitor quemli. This is in combination with gemcitabine and nab-paclitaxel with or without our anti-PD-1 zimberelimab in first-line pancreatic cancer. As you may recall, ARC-8 completed enrollment way back in November of 2021. So the median follow-up, the most recent data cutoff, exceeded 21 months, and we just now achieved a sufficient number of events for mature, median OS estimate. These data show clear differentiation from contemporary benchmarks for Gem/Abraxane in the setting, one with huge medical need. Furthermore, we've generated a rigorous synthetic control data set for Gem/Abraxane, which also shows very meaningful differentiation from our combination therapy.We also continue to work tirelessly to advance new molecules into the clinic. We just initiated our Phase 1 study for AB801, our highly selective AXL inhibitor, and we expect to select the development candidate with potential best-in-class properties for our KIT program for allergic diseases by year-end.So I'll now turn the call over to Dimitry to describe in more detail the EDGE-Gastric data that were presented earlier today.

[Dimitry Nuyten, executive]

Thank you, Terry. I'll start by directing our audience to Slide 9 of our updated corporate deck. The data presented today are from cohort A1 from our Phase 2 EDGE-Gastric platform study, which is evaluating Dom-based combinations in both the first and second line setting. The A1 cohort is evaluating dom plus zim plus FOLFOX chemotherapy in first-line gastric gastroesophageal junction and esophageal adenocarcinomas.As Terry mentioned earlier, this is the same setting and setting [ AR ] evaluating in our Phase 3 study, STAR-221. This cohort was specifically designed to generate safety and efficacy data to support regulatory requirements for the initiation of STAR-221 in certain countries outside of the U.S.Turning to Slide 11. We describe the baseline characteristics of this cohort. 41 patients were enrolled, and all patients are included in the efficacy analysis. The cohort enrolled a relatively diverse patient population from 20 different sites in the U.S., France and South Korea. There was an even distribution of patients including Asia versus the rest of the world and 63% of patients had gastric cancer, 24% had junction tumors and 12% esophageal adenocarcinomas.PD-L1 status was evaluated using the TAP scoring methods with 24 patients having TAP less than 5 and 15 patients or 37% with a TAP greater than or equal to 5. 2 of the 41 patients included in the overall population did not have tumor samples available for PD-L1 testing. Note that the CPS and TAP are 2 methods for PD-L1 assessment and both are used in gastric cancer. We'll show you later in -- on this call, some of these methods -- sorry, that these methods have an high concordance.BMS and Merck have historically used CPS for their Phase 3 studies of anti-PD-1 plus chemotherapy, while BeiGene is using TAP, including in the Phase 3 gastric cancer trial RATIONALE-305.The following slide describes the overall response rates of the data cutoff of September 4, 2023. In the TAP high population, we observed a 73% confirmed overall response rate and an 80% best overall response rate. These results exceed historical Phase 3 benchmarks for anti-PD-1 and chemotherapy. For example, in CheckMate 649 and KEYNOTE-859, the overall response rate was 60% or 61% for anti-PD-1 plus chemotherapy in the CPS high arms of the study. And in RATIONALE-305, BeiGene study in gastric cancer, which is the most contemporary Phase 3 data set in the setting, there's a 50% overall response rate in the TAP high population.For the overall population in EDGE-Gastric, the confirmed overall response rate was 59%, which is very encouraging, particularly given that approximately 60% of our patients are TAP low, which is higher than the 40% PD-L1 low patients in CheckMate 649. The overall response rate in Merck's KEYNOTE-859 trial was 51%.I'd also note that we have seen 2 confirmed complete responses so far. The median duration of response has not been reached. And given the time it takes to get to a complete response and the fact that many of our patients are still on treatment, the CR rate might go up over time. We believe that the overall response rate results seen in EDGE-Gastric demonstrate the additive benefit that an anti-TIGIT agent can provide above and beyond PD-1 to chemotherapy, PD-1 and chemotherapy in upper GI cancers.On Slide 13, we show the waterfall plot. And as you can see, the vast majority of patients experiences tumor volume reduction. While there is a difference in the overall response rates between the TAP high and low tumors, you can see in the chart that we have observed very deep responses in both patients with high and low expression. You can also see that in addition to the 2 complete responders, there are other patients with very significant tumor volume reductions that could convert to CRs over time.The next slide shows the time on treatment by patients. You can see here that there are 6 patients in both the PD-L1 high and low status will continue to have stable disease and remain on treatment.On Slide 15, we show the overall response rate table again, but here, we show the data using both the TAP and the CPS method. And as you can see, there is strong concordance between these 2 methods.The next slide, Slide 16, shows the Kaplan-Meier scores for progression-free survival. Here, we call out the landmark 6-month PFS, which is mature in our trial with a minimum follow-up of 6 months for all patients. These data are extremely promising for both the high and the low patient population Specifically, we observed a 77% in the overall population and a very impressive 93% in the TAP high population for 6-month landmark PFS. While we recognize that these are small numbers, the 6-month PFS numbers compare very favorable to the benchmark Phase 3 studies, which have been in the 50% to 60% range.You can see here in the curves that we have not reached the median PFS for either the TAP high or overall population with a median follow-up of 8.1 months. Given that the historical benchmarks have shown PFS in the range of 7 months to 7.5 months, we believe these data put us on track to exceed those benchmarks. And importantly, a substantial number, specifically 24 out of 41 patients enrolled in our study continue to be on treatment at time of the data cutoff.Lastly, I will cover the safety and tolerability profile we've seen so far in EDGE-Gastric. The most common treatment-emergent adverse events, which are shown on Slide 17 were neutropenia, nausea and anemia, which is very consistent with what we would expect from chemotherapy alone. In fact, the vast majority of grade 3 or higher drug-related treatment-emergent adverse events were contributed to chemotherapy and only 12% were contributed to Dom or Zim. No serious treatment-emergent adverse events were related to Dom or Zim.Of note, all infusion-related reactions shown on Slide 18 were deemed related to oxaliplatin. Overall, the regimen was well tolerated with a similar AE profile to that expected from FOLFOX plus anti-PD-1. These results add to the growing body of evidence supporting a potentially differentiated safety and tolerability profile for Dom relative to Fc-enabled anti-TIGIT antibodies.Before I turn it over to Jen, I wanted to spend a minute on some key elements of the design of our Phase 3 study, STAR-221, which is shown on Slide #20. First, we are stratifying by TAP greater than 5% or less than 5%. So this is well balanced between the 2 treatment arms. We are also closely monitoring the percentage of patients, who have tumors with a TAP score of more than 5% to ensure that the percentage of these patients in our study meets the prespecified percentage for our statistical analysis plan.Second, the study has dual primary endpoints of overall survival of 1 for the TAP, more than 5% and the other one for the ITT population. So we have 2 opportunities to win in this study.With that, I'll turn it over to Jen to talk about the market opportunity for TIGIT.

[Jennifer Jarrett, executive]

Thanks, Dimitry. I'd like to start by talking about the TIGIT field overall. Our most recent feedback from KOLs indicates a clear and growing data-driven enthusiasm for anti-TIGIT is an innovative therapy. Following the release of data from the second interim analysis of Roche's SKYSCRAPER-01, we engaged a third party to conduct a survey of [ 7 to 30 ] oncology KOLs regarding their sentiment on the anti-TIGIT. You can see these results on Slide 35 for investor deck.Approximately 80% of respondents believe it is likely that tirago plus atezo Roche's anti-TIGIT and PD-L1 combination will receive FDA approval. Additionally, based on data they've seen to-date, 83% expect anti-TIGIT to play a moderate or larger role in the treatment of first-line PD-L1-high non-small cell lung cancer. These survey results are telling, as the evidence on anti-TIGIT accumulates, physicians are increasingly convinced of the potential for this mechanism to change the treatment paradigm in lung cancer. Since we are combining Dom with the current standard of care, chemo plus anti-PD-1 and adding almost no toxicity, this is a very easy value proposition for physicians. Today's results continue to demonstrate the potential for anti-TIGIT to improve outcomes and indications, where anti-PD-1 is successful.As Terry mentioned, gastric GE junction and esophageal adenocarcinomas represent a $3 billion-plus market opportunity with approximately 25,000 patients in the U.S. alone and over 100,000 patients across the G7 countries. Note that we are pursuing adenocarcinomas, a different histology than that, which is being pursued by Roche and BeiGene in their respective Phase 3 and 2 studies. In fact, we and Gilead are the only anti-TIGIT in Phase 3 development for first-line upper GI adenocarcinomas, which is one of the fastest-growing cancer types in the U.S. and Western Europe.Many of you are aware that there is another class of agents being developed in gastric cancer, directed against claudin 18.2, which were also discussed in today's plenary session. While the efficacy data are encouraging, published literature estimates that only anywhere from 20% to 40% of patients or high expressers of claudin 18.2, and these molecules are associated with significant GI toxicities. We also expect it will take several years for claudin 18.2 testing to be successfully rolled out.With anti-TIGIT, we believe we have the potential to achieve similar efficacy without the toxicity associated with the anti-claudin and potentially avoid the need for any testing, allowing patients to go directly to treatment. Today's data set will support both study recruitment and regulatory filings for a combination, and we are moving aggressively to secure our position, as first to market and best-in-class in this indication.I'll now turn it back to Terry to discuss our HIF-2 alpha and CD73 programs.

[Terry Rosen, executive]

Thanks very much, Jen. So first, let me start by level setting a bit on HIF-2 alpha. It's a transcription factor. It has no ligand binding domain. And as a result, it's proven very difficult to create molecules that are high-quality inhibitors, but also that have ideal drug properties against the target. That's why there are very few other HIF-2 alpha blockers in clinical development today.Belzutifan is the first and only HIF-2 alpha inhibitor to be approved to-date, but it's only approved for VHL associated cancers, although, Merck recently filed for belzutifan's first approval in clear cell RCC. Slide 47 of our corporate deck describes the value proposition for AB521. It's really pretty simple. The primary limitation of belzutifan is substantial. It's oral absorption saturate at a dose of 120 milligrams. So what does that mean? Even when higher doses of belzutifan are administered, systemic drug exposure does not meaningfully increase. In fact, it's very clear from the published data for belzutifan that the approved dose of 120 milligrams was chosen because doses beyond 120 milligrams did not result in meaningfully higher plasma levels. This had nothing to do with dose-limiting toxicity.Merck, in fact, just released results for LITESPARK-13 at ESMO, which evaluated doses of 120-milligram versus 200 milligrams of belzutifan. No surprises. They concluded that there was no difference in ORR between these 2 doses and that the results support their dose selection of 120 milligrams for their trials. However, it's super important to note that they made no mention of whether they were achieving higher levels of drug exposure with the 200-milligram dose, and they did not share any PK or PD data for this study. So consistent with the previous literature, we just view this as more evidence of belzutifan's PK and PD limitations and the ability -- inability, in fact, to achieve meaningfully greater plasma concentrations with doses that are above 120 milligrams, our fundamental thesis going into this program.The primary objective of our HIF-2 alpha program then was to create a molecule without this pharmacokinetic liability, enabling us to hit the target harder. In a Phase 1b study in second line clear cell RCC, belzutifan demonstrated an ORR of about 25% and approximately half of these responses were not achieved until 6 months or more of treatment. These ORR data were essentially recapitulated in the Phase 3 LITESPARK-005 study, which showed a 22% ORR for belzutifan versus 3.5% for Everolimus and a 5.6-month median PFS. While these results are actually quite encouraging, we believe they show clearly room for improvement. And with AB521, we could observe a higher response rate, deeper responses or faster response kinetics, all of which should translate into longer PFS.In our healthy volunteer study, we demonstrated that AB521 has an ideal profile, including dose proportional pharmacokinetics, that's important. Dose proportional pharmacokinetics is the huge differentiator here. In our dose escalation study in patients, we replicated the pharmacokinetics that we observed in healthy volunteers and now have dosed up to a daily dose of 100 milligrams, which we believe has the potential to achieve at least 3x higher levels of AB521 and those equivalent to the approved dose of belzutifan. Importantly, and this is a key finding, we have not seen any dose-limiting toxicities. So based on these data, we've initiated our 30-patient expansion cohort at a dose of 100 milligrams daily in clear cell RCC patients. There has been a great deal of investigator enthusiasm around the study. And in fact, the cohort is almost fully enrolled.Early next year, we're very excited to have the opportunity to present PK, pharmacodynamic safety data, as well as the initial efficacy data from the 12 patients in the dose escalation portion of the study. Approximately half of these patients have RCC, and all were treated at a dose of 50 milligrams or 100 milligrams daily. So both of these doses are pharmacologically relevant.The safety data support our view that the enhanced target coverage by AB521 relative to that obtained by belzutifan does not result in an increased safety liability. We also expect to present data from the expansion cohort next year. We're progressing the molecule rapidly and expect to start a Phase 2 TKI combination study in second line clear cell RCC by year-end with the goal of getting a Phase 3 study for AB521 as quickly as possible.So now let me shift over to ARC-8. Really excited to talk about this study, our Phase 1/1b study that's evaluating quemli in first-line metastatic pancreatic cancer. Quemli is a highly selective and extraordinarily potent small molecule inhibitor of CD73. A key differentiator of quemli compared to the most advanced CD73 antibody in clinical development is that it blocks both the membrane bound in the soluble forms of CD73, enabling it to achieve complete inhibition of the enzymatic activity. This is a huge difference because CD73 is readily [ shed ] from cells, resulting in significant levels of soluble CD73. So in contrast, the most advanced CD73 antibody is only partially effective in inhibiting the enzymatic activity of either membrane bound or soluble CD73.So I think an important concept here is that although they share the same target CD73, quemli is highly differentiated by its mechanism of action, which, as I said, enables it to fully inhibit both forms of the enzyme. We also believe that a small molecule may penetrate tumors better than an antibody. Pancreatic tumors are notorious for being very fibrotic. It was fibrotic [indiscernible] think of it like scar like tissue. This makes it hard for drugs to infiltrate the tumor and therefore, a small molecule approach may be particularly advantageous in this setting. We chose pancreatic cancer as the first indication for quemli because this tumor type is associated with extremely high CD73 level. And in fact, high CD73 expression has been shown to result in poor overall survival outcomes in patients.Slide 42 highlights the design of ARC-8. We enrolled approximately 30 patients evaluating 100 milligrams of Quemli plus Zim plus Gem/Abraxane in the dose escalation and expansion portions of the study. Subsequently, we enrolled the randomized portion of the study, and this evaluated Quemli plus Gem/ABRAXANE with and without zimberelimab in 90 patients with the goal of determining whether anti-PD-1 therapy provides any clinical benefit on top of what we're seeing from quemli in the setting. We've already disclosed that zimberelimab did not add any benefit to quemli plus Gem/Abraxane in the study.We completed enrollment of this randomized portion in November of 2021 at the most recent data cutoff, median follow-up was 21 months. This data set we will share early next year will, therefore, include mature overall survival data for all 122 patients enrolled in the study. This is financial data set. They're all at the 100-milligram dose of Quemli.There have been several recent data sets, good data sets that provide benchmarks for how Gem/Abraxane performs in the setting. And overall survival for these contemporary data sets falls in the 9 month to 11 month range. The data are really pretty tight. The NAPOLI-3 study, which was just presented at ASCO this year, demonstrated 9.2 months overall survival for the Gem/Abraxane arm. FOLFIRINOX is also used in this setting, but it's often reserved for healthier patients given its toxicity profile. FOLFIRINOX demonstrated a median overall survival around 11 months in the NAPOLI-3 study. We plan to share the full data set from ARC-8 early next year. The disclosure will be comprehensive. It's going to include ORR, PFS and OS, landmark 12-month and landmark 18-month OS.We also plan and this is an important update. We plan to share data from externally generated synthetic control arm of Gem/Abraxane, which we believe will further validate the clear benefit that was observed with Quemli. We'll also spend more time on the mechanism for Quemli in pancreatic cancer and why we might be seeing such a meaningful benefit in overall survival.Briefly, we believe that there are 2 mechanisms at play, both of which are very well supported by extensive literature on the role of CD73 in pancreatic cancer. First, by inhibiting advancing formation in response to chemotherapy and essentially blowing up cancer cells, we may be enhancing a T cell response in the tumor; and second, by interfering with the effects of adenosine and well-known fibroblast biology in tumor fibrosis. We're really very excited about the data, and we believe these results support further development of Quemli for patients with this devastating cancer. There's really been no advances in this field for the better part of a decade.As you know, pancreatic cancer is a disease with extremely high unmet need. It affects 37,000 patients in the United States alone, and we believe the global market opportunity could easily exceed $3 billion.I'd like to turn it over to Bob now to review our financials from the quarter.

[Robert Goeltz, executive]

Thanks, Terry. Arcus continues to be in a very strong financial position. Our cash at the end of September 30th, 2023, was $950 million, and our net cash utilization through 3 quarters of 2023 has been $188 million. Importantly, we share costs 50-50 with our partner, Gilead, on a large portion of our portfolio, including all of our ongoing Phase 3 studies. We now expect cash utilization for full year 2023 to be between $265 million and $290 million, down from our prior guidance of $295 million to $325 million, and we continue to expect our cash balance to fund operations into 2026. Our cash runway guidance excludes potential opt-in payments and approval milestones from our partners.Turning to our P&L. We recognized GAAP revenue for this quarter of $32 million, which compares to $29 million for the second quarter of this year. Our revenue is primarily driven by our collaboration with Gilead, and we expect to maintain similar levels of revenue in the near term with small fluctuations due to updates to our clinical development plans and timelines.In addition to our partnership with Gilead, Taiho is our partner for Dom in Japan. In the fourth quarter, we received a milestone payment of $14 million from Taiho related to their participation in our STAR-221 pivotal study and will receive another $14 million in the first quarter of 2024. We are also eligible for additional milestone payments from Taiho related to STAR-121.Our R&D expenses for the third quarter are stated net of reimbursements from Gilead and were $82 million, as compared to $84 million in the second quarter of this year. In the current quarter, non-cash stock-based compensation represented $8 million of our R&D expenses. We expect modest increases in our R&D expenses, as our Phase 3 studies mature. However, spend may fluctuate based on the timing of clinical manufacturing activities and the purchase of standard of care therapeutics for our clinical trials. For example, in the third quarter, spend in these areas was lower than in the preceding quarters of this year.G&A expenses were $30 million for the third quarter of 2023 compared to $28 million in the second quarter of this year. Non-cash stock compensation represented $10 million of our G&A expenses for this quarter, and we expect G&A to remain stable over the remainder of 2023 and through 2024.For more details regarding our financial results, please refer to our earnings press release from earlier today and our 10-Q.I'll now turn the call back over to Terry for some closing remarks.

[Terry Rosen, executive]

Thanks very much, Bob. So to wrap up, first off, we're really excited about today's data set. It provides evidence that supports Dom, as a potential best-in-class anti-TIGIT in first-line upper GI adenocarcinomas, a setting we're well on track to be first to market and first to market by a distance with an anti-TIGIT antibody. Since it's also important that in a -- if you elevate a bit, it really continues to support Dom/Zim as best-of-class anti-TIGIT, anti-PD-1, the combined holistic profile of efficacy and safety profile,As we execute on our 4 Phase 3 trials for Dom, we continue to advance the remainder of our pipeline, and we're really looking forward to sharing more data in the very near term on quemli in pancreatic cancer and our HIF-2-alpha program. Both of these programs have been ongoing for some time. I think we're going to have some data that you can really look at as inflections for both.So with that, I'd like to thank you for your continued support, as we work to develop, we believe, very innovative combination cancer therapies for patients that are in need,With that, I'll open up the floor for questions.

[Operator]

[Operator Instructions] Our first question comes from Yigal Nochomovitz from Citigroup.

[Yigal Nochomovitz, analyst]

I just wanted to follow up on a comment, Dimitry made around the design for STAR-221. Dimitry, you mentioned that you -- in the plan for the stats to prespecified percentage of TAP high and TAP low. Can you comment on what that is? And is it similar to what you've seen in the EDGE-Gastric?

[Dimitry Nuyten, executive]

Thanks for the question. So as my standard and turn around statistical analysis plans is we don't comment on the exact details. I made the comment specifically because I want to -- I want people to be sure that the trial is designed to look at both the overall population and the high population. In order to do that, we have specific criteria about a number of patients, number of events and thereby, the power for the survival analysis in those groups.What I can say, in general is, what I've said before, we are expecting a slightly lower number of PD-L1 high patients. As you can see in our current data set, we are at about 40% PD-L1 high. That's something that we were expecting to be lower than CheckMate given that CheckMate changed the standard of care more for high expresser than low-expressing tumors. And thereby, we anticipate that patients with PD-L1 low disease disproportionately would want to be on a clinical trial. That's why we've done comprehensive planning to make sure that both of the primary populations have a good shot on goal for success.

[Yigal Nochomovitz, analyst]

And the primary endpoint is on the overall? Or do you have a -- how does it work? Do you have a primary on the PD-1 high?

[Dimitry Nuyten, executive]

Both. So we have dual primary endpoints for overall survival in both the high expressers and in the full population, the intention to treat population. So both can be tested independently, and the study will be declared positive if either one of those is positive.

[Yigal Nochomovitz, analyst]

Okay. And then the discussion today mentioned the -- that Fc-silent might potentially be the reason why you saw the higher efficacy in the TAP high population that had more immune sensitive. Just can you comment on that? Do you agree with that hypothesis?

[Terry Rosen, executive]

I think -- so, Yigal, I'll take that. I think it's an overstatement on the number of patients, et cetera, to get into any differences. And that the one thing that we would comment on the Fc-silent is clearly that safety profile is something that enables patients to stay on better, et cetera. So we think that manifests itself in a better overall profile. I think it's a little too nuanced to get into differences in -- with respect to the PD-L1 data for those patients.

[Yigal Nochomovitz, analyst]

Okay. Got it. And then one on 521, Terry. I'm just interested that you've made the argument that you have better PK than the Merck compound for several quarters. What -- can you comment a little bit on what's driving that? I mean, some of the hypotheses I was thinking about was maybe less protein binding or engineered to avoid certain metabolic pathways or better gastrointestinal absorption. Can you comment at all as to what design features you've introduced that are giving you that edge you keep -- you referred to?

[Terry Rosen, executive]

Yes. So what we know in a black box sense is simply their absorption is limited. And if they go -- actually, if you look at the data closely, there's very little difference between 80 milligrams, 120 milligrams, 160 milligrams and 240 milligrams, you have an issue with absorption. In their case, it probably relates more likely than not simply to solubility. Our molecule doesn't have that liability, and our molecule simply will behave like most small molecule organic molecules, and we don't have that problem. So it's probably something as simple as that, physical, chemical properties.

[Operator]

Our next question comes from Jonathan Miller at Evercore ISI.

[Jonathan Miller, analyst]

I'll follow up on HIF-2. I make -- I guess, it makes sense that you've got better exposure than Merck does, let's take that as read. But I guess what we don't know yet is it hitting the target harder really does result in better outcomes that Terry mentioned during the call. So I guess my question is what data gives us that clear signal of additional efficacy in addition to better PD. Is it likely that we could get something in escalation that does that? Or do we have to wait for expansion data later in the year?

[Terry Rosen, executive]

Thanks, Jon. It's a great question. Of course, that's the -- the key question. I think the arguments that we make are a combination of factors from our own data as well as the data with the Merck molecule. So I'll start with the latter. What's clear from their data is that if you look, the vast majority of the patients, for example, in their earlier study and as you see this [ 20-some-odd percent ] response rate, you see tumor reduction, but you see slow kinetics, you don't see the sort of response rate that you might envision, particularly in a setting that is known to be driven very strongly by HIF-2 alpha. So you might expect that you would see stronger results.So for example, if you had an ORR that was 90% and you could hit the target much harder that probably wouldn't buy you much. Now, if you come to what we know about our molecule, and first of all, let me finish on their molecule. We know that they can't hit the target harder. So as you know, usually in oncology, you've either modeled something or you've hit an MTD. In their case, they simply can't get to a higher exposure. And in fact, that's been demonstrated in multiple ways by them.What we have shown, in fact, is that basically, if you look at the pharmacodynamic endpoint, that's easily detectable, we can get the same effect that Merck gets with their clinically used dose at about 1/3 to 1/4 the dose. And the dose that we're using now go forward is fourfold that dose. So clearly, we should be hitting the target harder. And then you said the obvious question will be now going to a randomized study in a large trial, do we see that manifest itself.From our asset, we -- certainly, from the escalation data, you'll get a good feel that the molecule is behaving well that roughly half or a little more than half of that 12 patients that has RCC, keep in mind, that's a very late line group of patients. It's heterogeneous. But you'll be able to pick those patients out and see that it looks like the drug is working. So I think that what we would say is that the Phase 2 data in the expansion cohort would be one that we will get the real true sense of how much better we might be doing by hitting the target harder.

[Jonathan Miller, analyst]

Great. That makes sense. And then, I guess on TIGIT. It seems like the plenary discussion this afternoon wasn't very excited about the EDGE results. I think because of how early the PFS curve is at this point. So your PR suggests that mature PS is coming -- PFS is coming second half. But I know that the virtual plenary series usually comes to the ASCO presentation. Is it fair to expect we'll get updated PFS at ASCO next year as well?

[Terry Rosen, executive]

So first, let me just come back to the actual data. We think the data actually look quite encouraging. As you know, the 6-month PFS were mature and they're quite meaningful, both in the high PD-L1, as well as the totality of the patient population. So if you think about it, clearly, that 93% landmark PFS for the high PD-L1 is quite meaningful. And even the [ 70-some-odd percent ] is quite meaningful.If you go back and, for example, look at the CheckMate study, what you've got is a median PF on the order of 6 months to 6 months -- I'm sorry, 7 months to 7.5 months, and that's in the PD-L1 high. So in our total population, we're still at 73% landmark at 6 months, which bodes pretty well if you even start to compare it to like what would be 100% high PD-L1 and we are diluted.With that said, in so far as expectations, we do not know. We -- our guidance has been that we expect median PFS to be mature in the second half of next year. So we'll just have to see, obviously, that's event-driven. We had a large, as you saw, a large number of patients remain on the study. So we'll see how that plays out, as the year goes along.

[Jonathan Miller, analyst]

But do you have a presentation at ASCO in the summer as well?

[Terry Rosen, executive]

Yes. Absolutely.

[Pia Eaves, executive]

Hi, everyone. This is Pia. If you could please keep it to one question as much as possible. We'd like to get to everybody if we can [indiscernible].

[Terry Rosen, executive]

Pia, I was going through the multiple questions. It's the bonding experience.

[Pia Eaves, executive]

[ Seb ], you can call the next person, please.

[Operator]

Our next question is from Peter Lawson at Barclays.

[Peter Lawson, analyst]

And I'll try to make a [ multi-part view ]. Just Terry, on your HIF-2 alpha. The data we're going to see early 2024, do you think that differentiation starts emerging, whether it's in OR? Or do you think it [ kind of test ] -- we have to wait to see that emerging in PFS?

[Terry Rosen, executive]

Yes. I don't -- go ahead, Jen.

[Jennifer Jarrett, executive]

Yes. I mean, I think -- so first of all, Terry started to talk about this, but maybe just again to tell you exactly what that data set is going to be. So the dose escalation is going to be 12 patients, approximately half of those patients, so approximately 6 of those patients do have RCC. All of these RCC patients were treated in a pharmacologically active dose.As far as like, will the ORR be differentiated relative to sort of the 20% to 24% you see in cells, I think [ it promises ] the denominator still going to be really small. So whether it's really high ORR or really low ORR, I think the denominator is too small to really tell you much, which is why Terry was saying, we wouldn't rely on the ORR for the dose escalation.So I think from the dose escalation, what's going to be most interesting to see is, one, just what does the waterfall plot look like [ and then ] RCC patients? Are you seeing activity? Two, is, are there any signs that maybe the responses are happening a little bit faster because [ if we note ] belzutifan for a lot of patients that can take 6 months or more to get a response. And they once get to the expansion cohort, so that will be some time in 2024. That will be a higher and a denominator. And so, the ORR will start to be more meaningful.

[Operator]

Our next question is from Robyn Karnauskas from Truist.

[Robyn Karnauskas, analyst]

Great. I have 10 questions. I hope you can do them all in a very short period of time.

[Terry Rosen, executive]

Robyn, you can have a 100 question.

[Robyn Karnauskas, analyst]

All right. I just was noticing given the curve, like [ Bill and I ] were talking about like how patients who experienced tumor reductions were PD-L1 negative and that's so unusual in the waterfall plot. So how do we think about that? How do we put that in perspective for PD-1 high? And can you help us with the median 21 months of follow-up in pancreatic cancer and put that in the context? Like those are 3 -- I'm sorry, I got 3, but like I'm just putting my out, Terry, you can cut one off and give it to another person, it's fine. But I thought the waterfall plots are very interesting.

[Terry Rosen, executive]

So one thing to keep in mind with PD-L1 levels is that once you introduce chemo into the mix, you get -- you sort of have a dynamic situation, and that's an important aspect of this therapy. So it's not surprising if you heard one of the discussions, talk about immunogenic chemotherapy and what that doesn't. So if you get an immune response, now have an immunotherapy, you can generate what might be surprisingly good response.And I think -- it's something we talk about this since we work on a number of immunotherapies, and we talk about this a lot in the context of quemli, you can have a patient, who might not even have that much of a tumor reduction, but from a survival standpoint can really benefit because if they can [ mount a ] T cell response, you can enhance it. So we just feel that, that's certainly amongst the rationales for when you start bringing in chemo together with immunotherapy that the PD-L1 levels don't tell 100% of the story.What was your second question, Robyn?

[Robyn Karnauskas, analyst]

So if you -- for the pancreatic trial, like with the median follow-up of 21 months, how do we put that into context? Is that a long time? That seems like a long time for pancreatic cancer.

[Terry Rosen, executive]

Yes. Yes. It's a long time. And to be clear, when we think about what the median OS readout is, that tends to range somewhere between like 9 months to 11 months on the high end. If you talk to clinicians, given this is so devastating, even something that was 2 months to 3 months longer than that would be meaningful. So we think we're going to have something that really looks like it's moving the needle.

[Robyn Karnauskas, analyst]

All right. I'll put my -- another 8 questions back in the queue. Enjoy.

[Terry Rosen, executive]

Okay. We can always talk later.

[Operator]

Our next question is from Kaveri Pohlman at BTIG.

[Kaveri Pohlman, analyst]

And congrats on the EDGE-Gastric trial results. For PD-L1 expression, can you provide any color on your rationale for using TAP assessment? And how different it is from the CPS score that was used for the 649 trial? Also, if you could tell us about your rationale for using cutoff of 5 versus 1 or can like some other trials have used?

[Terry Rosen, executive]

Dimitry will take that. Thank you.

[Dimitry Nuyten, executive]

Yes. So the rationale [indiscernible], there's a couple of different things, right? So there's the scoring method, which is therefore, CPS and then there's the different assays. And we need a combination of those for regulatory purposes, and we need to have the work done as companion diagnostic to use it as a stratification factor in a trial. That work cannot be done every single assay. That's why we work with SP263.When it comes to TAP and CPS, my simplest way of answering the question is, as the discussion said that TAP is kind of an official scoring method. She didn't use those words, but it's easier for pathologists to do. CPS has a strong scientific rationale. But if you look at BMS's initiated trial that was published looking at 13 pathologists, who have been in practice for 20-plus years and got training, the concordance of the inter-observability for the CPS assay is not great. It is in the 50% to 60% range. So I think CPS is somewhat challenging in implementation in a larger setting, and TAP has the benefit that is easier to implement. The 5% threshold is a reasonable threshold extrapolated from the data for CPS in the public domain. We think it's a good threshold.And then lastly, there was one more so -- part of the question...

[Terry Rosen, executive]

I think that was it.

[Dimitry Nuyten, executive]

No, that was it. Okay.

[Terry Rosen, executive]

Do we get everything, Kaveri.

[Dimitry Nuyten, executive]

Sorry, no. And I want to make the point, we showed the concordance, right? So TAP is easier. I think that makes it easier to implement it on a larger scale also beyond clinical trials. But we have provided the, let's say, that the CPS data on our own data set in the corporate deck as well to provide confidence that the number of patients captured by both assays is not widely different. There's a high concordance between these 2 methods.

[Kaveri Pohlman, analyst]

Got it. And if I can just squeeze one more. For ARC-8 trial, the comment you made about sharing data from externally generated synthetic control arm with Gem/Abraxane. Can you give us some color around that?

[Terry Rosen, executive]

I'll give you minimal. I mean, what I'll say is, it was done with metadata. It was done in an extremely rigorous way, very much get matched patients. And quite frankly, when you start to think about particularly in trials that aren't like 1,000 patients or 800 patients, the reality is you actually, from a control standpoint, get a better patient population that's more matched to your data set assuming that they have a large enough well-annotated data set, which they do. And that was even -- that took a couple of months to just even do that part of the analysis to make sure that they could do it.So I think everyone is going to be very pleasantly surprised by the quality of that data set. And I think it's going to bring a lot of confidence. This type of data set that you can certainly even take to regulatory agencies and discussing your plans going forward. So we think that's going to be a big deal in part of our total package for that program.

[Operator]

Our next question comes from Mara Goldstein from Mizuho.

[Mara Goldstein, analyst]

Great. During the plenary today, there was a comment along the lines of the presentation of this data. There's a hope that this would also help facilitate STAR -221 enrollment. So can you talk a little bit about where that trial is from enrollment characteristics perspective? And what the timing looks like from here?

[Terry Rosen, executive]

Yes. So I love the question. Even though we can't give you a bottom line answer, the trial is enrolling gangbusters. So when we talk about how it isn't so much like, oh, it's in need of help. It's that it's enrolling incredibly well. In fact, I would go and say that more likely than not, if you ask us to bet, I think that's probably going to be our first trial to read out. Our guidance has been that our trials will be, let's say, [ 2025 ] plus. We're not changing our guidance, but it's enrolling well ahead of schedule.A couple of comments on the reasons. I think there's been a lot of enthusiasm that's data-driven, what's going on just in the TIGIT field. In this particular setting, as you could tell from the discussions, there's also a lot of clinical trial need. There's simply not a whole lot happening in an innovative sense, and we believe that the data set unquestionably.So all of the investigators we've spoken to are really excited about the data, and we think it's just going to accelerate things further. So I keep an eye on this. I think what's interesting about this, when you think holistically about the field. For us, this trial is going to help us close the distance on who and what ends up being the first doublet that comes to market in the field.

[Operator]

The next question comes from Daina Graybosch from Leerink Partners.

[Jeffrey LaRosa, analyst]

This is Jeff on for Daina. Do you think you could share your thoughts on the potential differentiating characteristics of Dom relative to the various TIGIT antibodies beyond Fc function to these points? I mean, what else do you think could explain the arguably disappointing Phase 2 data that we saw from ociperlimab, the [ competing TIGIT ] antibody that was recently presented at ESMO?

[Terry Rosen, executive]

Yes. So I mean, I think primarily, we're going to come to that Fc as being a key differentiator. So it's absolutely clear that Fc-enabled anti-TIGITs, and you wouldn't know this until you get the empirical data, but they do deplete T-REGs. And so by definition, that's not going to be a good thing. If you deplete T-REGs in the periphery, you're going to see enhanced immune AEs.But secondarily, dose is different. And in fact, I think it's telling. BeiGene is actually on the higher end of the spectrum for the Fc enabled anti-TIGIT. And what you have to realize it's sort of surprising when you think about because one of the fundamental -- it's not a shock that anti-TIGIT is turning out to have the safe mechanism that we see because it's a tumor-specific mechanism, where you have that high CD155 is just being way over expressed, as a survival advantage by the tumor.So people keep asking questions about TIGIT expression. The key thing is CD155 expression. If you want to draw an analogy, you know how everybody focuses on PD-L1. PD-L1 is the correlate of CD155. So it's not the PD-1 that's a driver, it's not TIGIT, that's the driver. But that component of then the higher dose, particularly with an Fc-enabled anti-TIGIT, you're simply getting -- don't forget that, that depletion of T cells, that's an on-target mechanism. So by going a higher dose, you would expect to see more. And in fact, BeiGene is on the higher end of the spectrum.What's [ telling ], okay? So this is where we sort of look at these data and point people to the forest in addition to the trees. And so far, it's not just this setting. But as you know, Merck is using a co-formulation. And not surprisingly, that co-formulation is a lot about pembro. It's protecting pembro. And Merck explored a 200-milligram dose of vibo, they explored 700-milligram dose of vibo. And in the co-form, they're using 200 milligrams. And that just speaks to this point that we were talking about that going up in dose is more likely to give you more on-target AEs. And so, we think that's -- it's as simple as that.

[Jennifer Jarrett, executive]

I think one other thing, I will point out is ociperlimab, particularly the data was just printed and presented at ESMO was in very different settings and anything that we're doing, and they tended to be going after the second line setting. So their data was presented second line cervical, second line esophageal squamous cell carcinoma. So a different histology that we're pursuing with gastric esophageal.But like I said, going after the second line setting without chemo and tumors that are progressing very rapidly, where you have a PFS of sort of 2 months to 4 months. So not only is there antibody different when you look at ociperlimab, but their development plan and the tumor types that they've been pursuing and settings have been very different than ours.

[Operator]

Our next question comes from Li Watsek from Cantor Fitzgerald.

[Rosemary Li, analyst]

This is Rosemary on for Li. So for STAR-221, hypothetically, if you were to hit the survival endpoint for the PD-L1 high patients, but not for all comers, do you think you still have a chance to get approved in that patient subset given that the PD-L1 status is the stratification factors?

[Terry Rosen, executive]

So we don't just think that we know that. That's -- the study is set up for exactly that it was designed to detect both [indiscernible] Dimitry was talking about the co-primary endpoints. Both of those are opportunities for the way the trial is designing both opportunities for approval. And we think it's a very meaningful opportunity.

[Operator]

Our next question is from Salveen Richter from Goldman Sachs.

[Matthew Sykes, analyst]

This is Matt on for Salveen. On the gastric TIGIT data, could you share anything on how median PFS is currently tracking? I know you're going to share more next year? And what do you view as a meaningful improvement over the 7 months to 8 months of standard of care? And then, could you share anything on how current standard of care breaks down between Keytruda and nivo combos? And are most patients actually treated with an IO combo?

[Terry Rosen, executive]

That's a lot of questions. So when it comes to our most patients treated with an IO combo, it depends on where you are, what the reimbursement structure is and what the experience of investigators is. There are plenty of investigators, especially in the U.S. that give nivo-based regimens to everyone because you don't have to wait for the testing and there is a modest benefit for low expressing, and there is, of course, significant benefit for high expressers and the toxicity profile is very manageable. There's definitely markets, where reimbursement would come to be an issue. And in that case, typically reimbursement focuses on 5% and higher.Your question about the median PFS, we can't really say anything about it. The median hasn't been reached. We need more follow-up to reach the median, that requires a number of events for Kaplan-Meier to calculate that. So that there's nothing what we can say except that we emphasize the numbers we have right now look very, very promising. And obviously, they are significantly away from the medians that we think we should be reaching.When it comes to a meaningful improvement, that to me is actually a question about survival benefit in a Phase 3. If the PFS benefit will be in the same range then, let's say, and hazard ratio [ up by ] 0.75 starts to get interesting for survival, probably a little bit higher. That's as much as I can say. When it comes to absolute differences in months, I think that's very hard to state on a single-arm trial. I would be looking at the hazard ratios in the Phase 3 setting.I think you had another question in there.

[Jennifer Jarrett, executive]

One other question here was, I think the mix of nivo versus pembro maybe in gastric. And today, nivo is the only PD-1 that's approved, markets filed for approval with Keytruda for their study. KEYNOTE-859 was conducted later. And I think their PDUFA dates in December. But our assumption is that nivo will continue to have the vast majority of share in the PD-1 market for gastric. And that is the comparator for our Phase 3.

[Terry Rosen, executive]

One other thing I just -- is probably worth highlighting because it's something that like questions that somehow -- sometimes evaporate like Fc versus non-Fc, which for a year or 2 was the continuous question and overnight somewhat evaporated. I think another one that's evaporated, but I'd like to address it is the Zim Keytruda comparison. I think the data set is another one that just the anti-PD-1 performance clearly looks good. It also was -- got another approval in China recently. But I think that's another example of Zim behaving as you would expect an anti-PD-1 to behave.

[Operator]

Our last question for today comes from Jason Zemansky from Bank of America.

[Jason Zemansky, analyst]

Congrats on the progress this quarter and I appreciate taking the question. So I have to ask, during ESMO, one of the big debates was obviously over how the treatment paradigm would evolve in gastric. And I think one of the big kind of takeaways here was that in any claudin positive patient, who is also CPS greater than or equal to 1, the algorithm would likely move towards combining both agents to get that potential synergistic benefit. Now obviously, it's still very early, but I'm curious, how are you working to position TIGIT, as the conversation starts to evolve? I mean, if KOLs are already thinking about this type of combination, what do you need to do to enter the discussion in favor of a TIGIT PD-1 combo, particularly as claudin is biomarker-driven?

[Jennifer Jarrett, executive]

Yes. And I think -- I mean, we've spent a lot of time with KOLs talking about anti-claudin, and we're working with the same KOLs for the anti-claudin companies are. So -- the first thing that I'd say about antic-claudin, if you look at the prevalence of high claudin 18.2 in patients, I know, that was the number [ cited ] today, 40%, which was the percentage that we've seen in spotlight. But there's literature out there that puts that number well below 20%. And my hunch is, is that if you're outside of Asia, the prevalence of high claudin 18.2 is lower.The other thing that's interesting, if you look at literature, is there seems to be more of a prevalence of high claudin 18.2 in patients that are PD-L1 low for some reason. And we've heard statistics like only 10% of patients that are CPS high are also high claudin 18.2 expresser. So even just looking at that piece, they may not be [indiscernible] directly competitive. I'd say on top of that, when people look at anti-TIGIT versus anti-claudin, we're obviously much less toxic. So if you look particularly at the Astellas' antibody, which is the most advanced antibody in clinical development, there's a lot of GI toxicity in the plenary presentation today. They obviously talked about some of the other toxicities that they're seeing with the ADC. So that's something else to keep in mind.And then the third piece is claudin 18.2 testing does not happen today. And as we talk to the KOLs, they think it's going to take up to 5 years or more for that to roll out. There's a lot of sites that don't even test for PD-L1 today and because PD-L1 or PD-1 is a relatively safe agent. They just feel like I'm not going to test, I want to provide patient right on treatment. And so, I'm just going to give him PD-1 antibody anyway. So we do think the need to roll out testing is going to be another impediment to the uptake of anti-claudin. So we're definitely keeping a very close eye on the class. But at least today, I think we feel very, very good about our chances to compete with anti-claudin and maybe way down the road, there's a potential to combine PD-1 TIGIT and the anti-claudin, as well into claudin ADC.

[Terry Rosen, executive]

Yes. And I do want to add to that, right? So people typically talk about toxicity and grades, but I would encourage you to look up what it actually means. So the claudin antibodies, they have at least 10% or 15% grade 3 nausea and vomiting. If you hit that as a patient, that means you're hospitalized, you're on tube feeding, you get parental feeding. It's a really, really big deal. We talk about grade 1 and 2 toxicities that are obviously a burden on patients, but grade 3 nausea and vomiting is a really, really big deal.So I think that's another uphill battle for the claudin field. Obviously, the efficacy data is absolutely promising. But to the points that Jen made, I think it's going to be a small subset of patients that's funneled into the claudin high PD-L1 high population. And then honestly, ask yourself the question, like, could you deal with grade 3 nausea and vomiting. I think that is incredibly -- incredibly bad toxicity for patients to have to deal with.

[Operator]

This concludes today's conference call. Thank you all, everyone, for joining. You may now disconnect.