MacroGenics, Inc. (MGNX) Earnings Call Transcript & Summary

Okay. Great. I think we've got everyone logged in properly. So welcome, everyone. I'm Yigal Nochomovitz, one of the biotech analysts here at Citi. We're starting the Novel Antibodies in Protein Therapeutics in Oncology Discussion. Remember, if you do -- if any of the listeners have questions, you can just e-mail me at [email protected], [Operator Instructions]. So with that, it's my great pleasure to have with me 5 distinguished guests Jerry McMahon, President and CEO of Harpoon; Yannis Morel from Innate Pharma, the Head of Portfolio Strategy; Scott Koenig, President and CEO of MacroGenics; Bill Lundberg, CEO of Merus; and Ali Tehrani, President and CEO of Zymeworks. So welcome all of you. Thank you very much for taking the time to spend with us today.

Maybe just to kick things off. For those that are less familiar with -- the listeners that are less familiar with each of your companies, if you could just spend a very brief 1 or 2 minutes, giving us the highlights of your platform and pipeline. Maybe touching upon what is -- what are the 1 or 2 key differentiators for each of your programs? And what you believe is being least appreciated by the Street? So I know that's a lot to manage in 1 minute or 2. But just something to get the conversation going. Scott, you want to give that a shot?

I'll try to be succinct. Obviously, we have the greatest longevity among everybody here. The company is now 20 years old. We built the company around 3 distinct platform technologies. Our Fc engineering technology has demonstrated in clinical trials the ability to activate both the innate and specific immunity, including altering various checkpoint molecules. We're the first company to do a head-to-head study of an Fc-modified antibody against a wild-type Fc with clinical success. This is our lead molecule margetuximab for HER2, which is under review, with a PDUFA date late this year. We have a second Fc-engineered molecule also in late-stage development. Overall, we have 8 molecules in development. Our second platform technology is around building bispecific and multi-specific molecules. We have a distinct platform, which uses a core diabody structure, where we incorporate either distinct specificities to 2 or 3 unique molecules, or have different stoichiometry or valances on this module. So we can recognize distinct targets, either in a 2:1 configuration, individual 1:1 configuration or 2:2 configuration. We've employed that platform to both engage specific immune cells and T cells as well as NK cells to promote killing in an MHC restricted fashion, of a tumor target. And we have also employed this platform for combining multiple checkpoints in a single molecule to promote both synergistic activity as well as reducing toxicities that have been observed with single antibodies. The third platform that we're developing is the use of various ADC technologies through various collaborations. Overall, we have 8 molecules in clinical development, 7 of them have shown clinical activity. From Phase I to Phase III, the eighth one is about to start a clinical study next month. What's most notable, just to be brief and let somebody else speak, is that, obviously, the PDUFA date on margetuximab for late-stage breast cancer, we have ongoing studies in frontline gastric cancer ongoing with margetuximab. We have a registration study now ongoing for our bispecific CD123 by CD3, called flotetuzumab, in refractory AML patients. We have 2 combination bispecifics, PD-1 by CTLA-4, with data upcoming at ESMO this year on our Phase I study. PD-1 by LAG-3, which we recently presented at ASCO. We had some very significant data presented on our first ADC targeting B7H3, which is part of the checkpoint family, particularly with very notable responses in late-stage castration-resistant prostate cancer, which we've recently announced, will expand now into a Phase II study in 40 additional patients, plus 2 additional indications in both lung as well as in triple-negative breast cancer. And then we have additional study with enoblituzumab Fc-engineered planned and starting very soon in patients with front-line head and neck cancer. I'll pause there. There's more to talk, but I'll let other people present their data.

Okay. Sure. All right. Ali, you want to give us the highlights from your side?

Sure, Yigal. Thank you very much for having us. Thank you to the Citi banking team for organizing the conference, and getting everyone together. Look, Zymeworks came into business, 16 years ago, as one of the first companies to really get into protein engineering from a structured guided approach. So the core of our capabilities and the core of our knowledge here is how to relate the structure of a protein to its function, and that knowledge enables us to essentially engineer any function onto a protein. Where we're headed as a company, our clinical assets, our preclinical assets, really are based on the fundamentals that we build fit-for-purpose multifunctional antibodies. Sometimes these antibodies are the key component of the therapeutic in terms of agonizing or antagonizing. And sometimes, the antibodies are just a vehicle to deliver a therapeutic to cause another interaction. But at the end of the day, Zymeworks is in full control of antibody engineering in any part of an antibody, whether it's the CH3 domain, whether it's the CH2 domain. And the result of this work has been creating a fully heterodymeric antibody structure called the Azymetric structure, which enables not only bispecificity, but also multi-specificity. This has also given us a proprietary in-house developed ADC capability. This has given us the capability to do masking, to go into the world of cytokines, to really go into the world of tumor microenvironments. Our lead assets are 2 anti-HER2 assets, zanidatamab, EW25 has started a registration-enabling study in biliary tract cancer, and is on track to start a Phase III registration-enabling study in first-line gastric cancer in the first half of next year. Our second asset, ZW49, which is an ADC, is in dose escalation, on route to its expansion phase. And our objective with both of these assets is to go in front of Herceptin, not follow Herceptin. And so far, our data in gastric cancer and biliary tract cancer and colorectal cancer had been supportive of that fact. What we intend to do, over the course of the next few years, is to also introduce the world to new biologies as a result of bringing clinically validated assets together and showcase that how 2, a 1 plus 1 equals 5. And that's the mentality of Zymeworks. How do you accomplish a 1 plus 1 equals 5. That's where I will leave it, and we're very excited to be part of this.

Okay. Very good. Jerry, do you want to give a quick highlights from your perspective?

Yes. So thank you very much, Yigal, for the invitation. Harpoon was founded in 2015, with the premise of creating a way to address T cell activation in solid tumors. And so scientific founder, Patrick Baeuerle and Luke Evnin, at MPM Capital, created the company with that premise. And so a platform was created at the company, we call it TriTAC. It has 3 binding domains. It's a single polypeptide that encodes these 3 binding domains, 2 of which are derived typically from camelids, like Lamas. So we use some single domain, antibody domains. And the net structure is about 50 kilodaltons. And what it does is it makes a connection between a T cell and a membrane antigen on a cancer cell, and that connection hopefully leads to reprogramming that T cell to kill the tumor. And so what we've done over the last couple of years is we now have 4 molecules in development, 3 in the clinic, 1 -- the fourth one going in the clinic later this year. And we've been doing Phase I studies to push the dose up for these molecules and see how the pharmacology and see whether this mechanism of action can actually make a significant difference to patients. The first program went into the clinic late 2018. It's targeting prostate cancer, late-stage disease. The second program is in a basket study for pancreatic and ovarian and mesothelioma, and that went into the clinic last year. And then this year, earlier this year, we went into the clinic with our BCMA-targeted molecule, our only non-solid tumor asset. And then later this year, we'll be going to small cell lung cancer, with a DLL3-targeted TriTAC. So we think the platform is very unique. It increases serum exposure by binding to human serum albumin. There's an OFC domain in the molecule. We think that could be an advantage in terms of not having to use high peripheral concentrations of drugs, but allowing the molecules hopefully to diffuse faster into the tumor microenvironment. And so we're really just seeing whether, as a monotherapy, these agents can impact disease over the next 6 to 9 months. We also have a second platform that will be debuting this year called Pro TriTAC, which is a way to activate TriTAC in the tumor microenvironment and a proteolytic clip will release the blockade of the CD3 domain and convert the molecule to, first of all, an active molecule, hopefully, in the tumor microenvironment; but even more interestingly, convert the molecule to short half-life product, such that any excess material that doesn't engage T cells will be cleared rapidly from the body. So it's a very interesting and unique way, we think, to deliver T cell engagers. For those tumor targets, where they're more promiscuous and not as restricted to the tumor as we would be doing in our 4 development programs. So that's going to become coming later this year. So that's it.

All right. Very good. Bill, do you want go next?

Thanks, Yigal, and thanks to Citi for having me to participate as well. I'm Bill Lundberg, the CEO of Merus. We're a bispecific antibody company. We have been around for a number of years, and our technology is based on 2 fundamental principles. The first is that antibodies and bispecific antibodies are complex, and manufacturing and making them is complex. And if you can simplify that complexity, you can make bispecific antibodies as easily as you can make monoclonals. So the first principle is a common light chain technology, which allows all of our antibodies to use the same common light chain. And the second principle is a very specific and proprietary way to heterodimerize bispecific antibodies. And the combination of these 2 antibodies -- or these 2 technologies, allows us to now make bispecific antibodies as easily as anyone can make monospecific or monoclonal antibodies, which means that we can now take a cell that produces more than 95% of the human IgG that we want that binds to 2 different targets. It allows us to do large-scale screening, high throughput activities. It allows for process development and manufacturing that is much more straightforward. It allows us to stand on the shoulders of decades of monoclonal antibody, engineering, production efficiency, et cetera, and really have grams per liter type of simple, straightforward process development manufacturing. And with this platform, we've developed a number of very interesting preclinical and clinical assets. I'll just touch on a few in the interest of time. Our lead program, zenocutuzumab, also known as MCLA128, is a bispecific antibody that binds with 1 arm to HER2 on the cancer cell, and binds to HER3 and blocks the HER3 ligand interaction with other arm. HER2 is much more abundant on cancer cells. So it's far more binding to tumor cells than would occur with just a HER3 antibody. And this is targeted specifically for an orphan molecularly-defined patient-specific population of patients whose tumors have fusions of their NRG1 gene, NRG1 being the ligand to HER3, and these gene fusions are the drivers of cancer in specific patients with these fusions with lung cancer, pancreatic cancer and then rarely, less than 1% of the time, in a wide range of other cancers. Our trial here has been branded the energy trial, and it's been up and running and ongoing following the presentation of data last year at the triple meeting, where we showed, in a handful of patients, with this very specific molecular change, NRG1 gene fusion, that the treatment with zenocutuzumab led to significant responses in a handful of patients that were prolonged. This is both clinically relevant and medically important. And with this type of approach, in pancreatic cancer or lung cancer patients who generally don't have other therapeutic options, we believe this is an incredibly important program to move forward with as rapidly as we can towards registration. Just to touch on a couple of other programs. We have MCLA-158, which is a clinical study of a bispecific targeting the LGR5 tumor cancer stem cell antigen and EGFR. At MCLA-145, which is also in clinical trials, targeting PD-L1 with 1 arm, and the 4-1BB or CD137 tumor antigen on the other and a number of other programs, largely preclinical, have described activity in this area as well. And then lastly, we have one preclinical program, MCLA-129 that targets the c-MET receptor and the EGFR receptor. This combination, this target pair, has been an area of great interest most recently since J&J, for their targeting antibody that targets the same 2 tumors stem cells -- tumor antigens received breakthrough therapy following some really intriguing responses in exon 20 EGFR mutant lung cancer. So the real advantage and opportunity of this technology is that it produces true human antibodies that are bispecific. Many other approaches have contrived or different approaches where you're just not sure what you're going to get in the clinic or what you're going to get through cross-development and manufacturing. And we believe it's important to use, or rely on the world of experience with monoclonal antibodies in order to produce really meaningful molecules for clinical development that have an opportunity to show patient benefit.

Great. And then I just want to give us a little background on the immuno-oncology pipeline at Innate and what are the key differentiators?

Yes. Thank you, Yigal, for the invitation. So as a reminder, yes, Innate's around also for 20 years now. And since the very beginning, we had this desire to develop a pipeline of products targeting the innate immunity. Now we are at the stage where we are at commercial stage with a strong focus on oncology and developing therapeutic antibodies. And we have now a quite broad pipeline of assets, both preclinical and clinical since we have now 5 clinical programs in the clinic, with having some various clinical milestones in the next 12 to 18 months. And through the acquisition of Lumoxiti too, to AZ, we are also building commercial infrastructure that aligns with our internal development for our lead proprietary asset, which is called lacutamab. And so to come back to the asset, the most advance and lead asset is really lacutamab, on which we have all the rights. And this molecule is currently in development in Sézary syndrome, which is the most aggressive form of cutaneous T-cell lymphoma. The molecule in Phase II program called TELLOMAK, and we are fast track designation in relapsed/refractory Sézary. And within this Phase II program, we have an arm, a cohort of patients, which is a single arm, which has potential to be a pivotal, because we are targeting a population of patient in cell like post mogamulizumab, where there is actually no standard of care and no alternative treatment. And beyond that, Sézary, where we are this fast-to-market strategy, we are developing the antibody in other indications like CTCL, like the mycosis fungoides, where we are currently doing the Phase II within TELLOMAK and we are contemplating starting new trials this year, also where the target is expressed. And we should update starting, beginning out in next year in 2021. Beyond lacutamab, we have also monalizumab, which is a first-in-class checkpoint inhibitor, targeting both NK cell and CD8 T-cell, which is in development with AZ. And we just announced yesterday that the program will be transitioning to Phase III into a post PD-1 head and neck cancer patients, in combination with cetuximab, and this will trigger a payment milestone of $50 million for this program. Beyond that, we have, also a proprietary asset of durvalumab, which is an antibody blocking the C5A receptor of molecule so the terminal receptor, the complement pathway, which is a validated target in inflammation, since there are some products targeting these pathways, that have shown positive results in Phase III, and that we are currently starting exploring in inflammation. And beyond that, we have other assets, namely in the adenosine pathway, but also a lot of more research and preclinical stage programs. Especially, we have developed a technology of bispecific and multi-specific targeting the -- reportedly, the NK cells that, is called the NK cell engager, that we are pursuing technically at the moment.

Okay. Very good. Thank you all for the intros. So you've all done a very good job of forging pharma partnerships across the board. I'd be -- I'd love to get your thoughts on each of your partnership strategy. And how do the partnerships that you've developed over the years advance your objectives? And where are you focusing your partnership efforts going forward? Maybe you want to start, Jerry, talking about the AbbVie deal?

Yes. So we did our first collaboration with AbbVie on -- in the discovery sides, where, because of the modularity of our approach, the use of a single polypeptide, it's relatively straightforward to incorporate novel binders into our platform. And we've -- did a collaboration in 2017 with them to build TriTACs that have binders to specific MHC peptides, and that went very well. And then last year, we extended that research collaboration, which, of course, indicated continuing to build these molecules, and they're pretty straightforward. We can put them into show, sales, manufacture them. We've done 4 GMP runs already with our platform, pretty straightforward, only 3 columns. And we have a nice, stable product in bios. But then we also, last year, we decided to look for a development commercial partner for our hem/onc asset. The only one we're developing. We're targeting BCMA. We knew how competitive the space is. And we knew how complicated multiple myeloma is as a commercial endeavor. And AbbVie stepped up with an option deal that allows us to conduct the trial under our IND. And then after completion of the initial trial, they have an option to license the BCMA asset from Harpoon into their portfolio. And for both the extended research as well as the option agreement, we received a sum of $100 million in cash. And then if they exercise the option, we'll receive another $200 million. So it's a nice transaction for us because most of our business focus is on solid tumors, where we are very well positioned to be very unique, whereas in the case of BCMA, there's clearly a lot of players there with CAR-T and ADC and T-cell engagers. And we thought that this partnership, given our relationship with them from the research collaboration, would be very useful. So that's our AbbVie deal.

Scott, you've, obviously, done some good, nice work with the partners. The Incyte deal was a few years ago, I think 2017 or '18, I don't remember which. And then you more recently did the deal with Zai Lab over in China. And then, of course, you've talked about potential partnering strategies for margetuximab for on the heels of the SOPHIA trial. So I'd love to get your thoughts on how partnering has advanced your pipeline? And what -- how are you going to take that forward?

Thank you very much, Yigal. We've really, over the history of the company, been very successful at partnerships. We have raised non-dilutive capital in excess of $500 million for the company through these partnerships. And so that, obviously, extends our runway quite much further. The Incyte relationship has been a great one. The structure of that relationship with such that Incyte was -- is developing it as monotherapy for a number of indications. In fact, they will be presenting data at ESMO in the next 2 weeks on some of these ongoing trials. In addition, the way this relationship is structured is that we are able to use our anti-PD-1 that we licensed to them in any of our programs as a combination therapy or with any other future partner that we might develop as combination therapy. So it gives us tremendous latitude on using that asset. And of course, the economics behind that have been terrific. So number one is we had an upfront of $150 million. There are regulatory and clinical milestones that amount left of $405 million. And so as this program is now advanced to registration intent studies, going forward, we're expecting many of these milestones to come in this year or next year. In addition, we are actually manufacturing the molecule for their clinical use and what we have the ability to provide a significant proportion of their commercial requirements going forward. So we've actually done our PPQ runs already here in our commercial-sized manufacturing facility. So this has been a terrific relationship. The second one is we have a wonderful relationship with Zai Lab. As you know, we partnered with them on several molecules, which include margetuximab for rights for China, for our MGD013, which is now called tebotelimab, which is a PD-1 by LAG-3. What this provides to us is their ability to enroll patients, particularly in certain indications where there are higher percentage, for instance, of gastric patients in Asia at a much more rapid rate. So in fact, they are a partner on the MAHOGANY trial for the treatment of gastric cancer in the metastatic setting in combination with margetuximab, and they're enrolling in that study. They actually also developed a separate set of clinical trials, where they're combining the MGD013 or tebotelimab with other molecules in their pipeline. So that gives us the advantage to understand combination studies in indications that we would normally not pursue. So again, a lot of advantage from advancement of these programs and enrollment in new indications. And then finally, the question with regard to the commercialization strategy. As we are moving forward towards our PDUFA date late this year for margetuximab, we've been engaging various parties who have interest in providing support, particularly on the sales side of things. We have a very small effort internally in the planning of this but, at this point, we have made no decision how to go forward, and we'll provide updates of this later this year as we get more definitive responses back from the FDA.

Very good. Ali, you've got, I think I last counted 9 active partnerships with a lot of the big players in pharma as well as the BeiGene having rights to ZW25 and 49 in Asia. Tell us how that -- how those partnerships help you and what the cadence of milestones is going to look like as those programs across those 9 partnerships get closer to the clinic.

Thanks for that. Yes, you're absolutely correct. We have 9 active bispecific partnership deals, and I do believe that is the largest amount of bispecifics out there with pharma. They're all active. All of these are going forward. And all of these pharma partners have doubled, if not tripled, down over time to develop more bispecific and multi-functionals using our technology. Essentially, one of the differentiating features about our partnerships is that we have never licensed an asset. These deals that we've formulated are just tech access deal to our bispecific technology. And the reason we have these deals is because the viewpoint from pharma is our bispecific technology has commercial liability as opposed to just clinical proof-of-concept and clinical activity. Eli Lilly has taken programs into the clinic, and our expectation is that a number of other pharma partners over the course of the next 3, 6, 9 months, 12 months, will be taking additional new programs, which, of course, we will announce into the clinic. The second differentiating factor is that we do not actively develop any bispecifics for any of these partners. This technology is fully transferable into their hands whereby they just getting access to our IP essentially when they develop what they want to develop in their own hands and they progress it. So the burden on our team, the burden on our staff of over 300 people is very minimal. Essentially only our business development folks and alliance management are in touch, and there are no protein engineers, no clinical staff, no scientists working on any of these deals. So these deals are pure upside for this. These deals essentially amount to profit for us. We stand to generate, assuming everything is successful, up to $8 billion plus royalties from these deals. And as you mentioned, our -- one of our partnerships with BeiGene were very similar to our friends at MacroGenics. We are utilizing their expertise, their resources, their knowledge, across Asia Pacific to develop, not only our assets, our clinical assets in that region, but also they have also gained access to our bispecific technology for future programs they want to develop. So our partnership strategy has been platform focused as opposed to asset centric, which means we retain our assets completely for our own use. And lastly, we've never given target exclusivity in any of these platform deals. So our hands have never been encumbered in any shape or form in terms of what someone has had, and how that impacts our own pipeline aspirations. And that's how we've been able to navigate a very complex field in terms of maintaining maximum freedom and capability for our own pipeline development.

Great. Bill, you have a program with Incyte for up to 11 Biclonics assets, I believe, and also a partnership with Ono. Tell us about those and how those are helping your pipeline.

Yes. Thanks. We have a major partnership with Incyte, which represented $200 million on the deal was done, which is 11 products that we developed together. And the lead asset there is MCLA-145, our PD-L1 by CD137 bispecific. That is a program where we retain U.S. commercialization rights, and Incyte has the rest of the world's commercialization. The rest of the relationship centers around the discovery and preclinical asset development set of programs, of which the majority of those are well underway. And we also have a very positive relationship with Incyte. They are a great partner. In particular, their development strengths, while not in bispecific antibodies, they certainly have the development and approval chops with all their recent approvals to make that a very productive and very helpful, beneficial relationship for a program like ours as we move our own assets or towards clinical development and registration. I would say we also have a couple of other relationships. I'll mention with Betapharm and Simcere, which are deals where for a couple of our assets, we have a co-preclinical development relationship with them, where they cover the expense of developing from preclinical candidate into the clinic. And in return, they retain China rights. And we retain the rest of world ex-China rights for those molecules. The one that's furthest along there is MCLA-129, which is a cMET by EGFR bispecific that is in IND-enabling studies now. The advantage of that also is that our partner, Betapharm, will continue the clinical development in China, broad clinical development in a number of indications, while we pursue registration -- or clinical development and registration-directed studies outside of China, and in particular, in U.S. and Europe. And then the last deal we have is with Ono, which is a relationship for indications outside of oncology, that we have a relationship with them on. We think all of these allow us also to leverage the strengths of our partners, and leverage not only capability, but capacity, which is very important for us as we are carefully minding our -- maintaining our strong runway position.

Great. And Yannis, just tell us about the deal with AstraZeneca, the 2018 deal, where you obtained right -- rather AstraZeneca obtained rights to monalizumab and the anti-CD39 as well as, I think, 4 additional preclinical candidates? And in turn, you obtained rights to Lumoxiti in the United States.

Yes. Actually, from a more general perspective, we have a long history of partnership at Innate. Since the beginning, we have this desire and strategy to keep up the rights on molecule that we could reasonably develop by ourselves all the way through approval and commercialization, and that's what we are doing with lacutamab, which is targeting Sézary syndrome, which is an orphan indication, and that, we are extending to CTCL. But for -- with the years, as we develop some checkpoint and other products with potential -- big potential in large tumor type and that will require a significant investment in late-stage clinical trial. We decided to go to the partnering route, which allow us to secure also some quite important fund digit financing. Since the beginning of the inception of the company, we get more than $500 million of non-dilutive partnership funding and solely $350 million from the monalizumab deal with AstraZeneca. As you mentioned, we had an initial option deal with AZ with monalizumab that has been converted to license option exercise in 2018. And based on this, AZ also decided to expand the collaboration with us, extending the collaboration to CD39, which is the upstream and down from the adenosine immunosuppressive pathway, which has also a potential in very large and multiple indication in solid tumors. And beyond that, we have also option deals on 3 -- on 4 different preclinical assets that are really at the research stage. And this is really a very strategic alliance because in addition to the nondilutive financing that it brings to Innate, it also brings important competency in late-stage clinical tires, as we can see, for example, now with the transition of mona in Phase III. And beyond that, as you mentioned, we get the right on Lumoxiti because for us, it was kind of a perfect fit because it was basically on the shelf at AZ because it's really a very niche indication. It's approved in third line hairy cell leukemia in the U.S. And by deciding to in-license this product at Innate, we are paving the way for the commercial arm of Innate in order to prepare what we will be doing with lacutamab that we are targeting for first to market strategy in Sézary syndrome. And beyond that, as I mentioned, we have also an NK cell engager technology. And we have a partner -- partnership with Sanofi that we signed 4 years ago, when at the time where this this technology was only a concept, and we have developed now to a point where we published a technology last year, in-cell, and now we have 2 programs actively in development, in preclinical development, with Sanofi and many others that we have in our research pipeline.

Okay. Very good. Well, in the last 7 minutes, we'll try to be efficient, and I'll ask each of you sort of 1 company-specific question. Just let's try to keep the answers brief, so we can squeeze everybody in. So for you, Jerry, tell us quickly in terms of the dose escalation data for mesothelin-targeting TriTAC 536. What would a good ORR look like in that trial? Are there any specific comps that you would compare to as benchmarks for success for the 5 to 6 program?

Well, I think our tumor types of interest in that program, which is our second program in dose escalation is ovarian cancer, pancreatic and mesothelioma. I think all 3 tumor types haven't really had any significant standard of care changes and an immunologic approach in any of those diseases, I think, would be a very welcome product. And therefore, I do think, at least an indicator of effect might be response rates in the 10% to 20% range. But of course, our regulatory strategy will have to take that into consideration for each of those tumor types as we move forward.

Okay. Very good. Scott, obviously, you had some very encouraging data for MGC018 back at ASCO in metastatic castration-resistant prostate cancer, 5 out of 7 PSA 50 responses. So tell us, as you enroll more patients, do you have an internal bar or threshold for success that you'd like to see in terms of PSA 50 response and durability in these late-line heavily pretreated patients?

Yes. Thanks for that question. So if we look at a comparative of products approved for late-line castration-resistant prostate cancer, there is no product right now that I know of that achieves the greater than 50% of these with a 50% reduction of PSA. The ranges where we see best-in-class, at this point, is about a 25% to 30%, 50% reduction in PSA. So if we can exceed that level, we would see that, obviously, as a satisfactory lower bar. But clearly, obviously, greater percentage responses will make it even better. With regard to durability of responses, again, in these late-stage patients, radiographic progression typically occurs around 3 months as a mean or median. And then overall survival in these late-stage patients is about a year. So obviously, eclipsing those parameters as well would be, obviously, an entry bar going forward in this next 40 patients that we're looking at.

Okay. Very good. For you, Bill, at Merus, I believe you presented some nice findings at ASCO related to a meta-analysis, looking at the prevalence of the NRG1 infusions. So based on that analysis and some of your other work, what -- how do you assess the market opportunity for the NRG1 infusions?

With the NRG1 fusion, it's a really important population. It's not a big population, again, sort of NTRK or around that. What we say is 0.5% to 1.5% in pancreatic cancer, 0.3% to 3% in lung as a range. These are uncommon. They're only now being identified in sequence in the database. And so we're working on expanding that. But having meaningful responses in that population, we think it's very important to develop these medicines.

Okay. Very good. And for you, Yannis at Innate, I believe we're expecting data in the IO naive first-line head and neck cancer population coming up in the second half of this year. Maybe you could just spend a quick minute framing the bar for success for that study? And assuming you did have good data, what would the next steps look like?

Yes. As we announced yesterday, actually for this for this cohort of patients where we are testing the triplet of monalizumab together with durvalumab plus cetuximab in first-line head and neck patients. So we have enrolled 20 patients. And now we are -- we'll extend -- we decided to enroll up to 40 patients. And so we will, obviously, report on data next year for this cohort. And with regard to the bar, we all know that now the standard of care has changed in first-line head and neck after the KEYNOTE-48 trial, which is basically, the bar is set by pembro, pembro plus chemo, depending on the CTs of patients. So that is really the bar that we need to beat.

Okay. Very good. And then for Ali, from Zymeworks, can you talk a bit about how you expect to prioritize future indications for ZW49? And how do you think about positioning ZW49 relative to ZW25 in the HER2-positive setting?

Hey, to answer question, our expectation for ZW49 is to be in multiple tumor types, HER2 high and HER2 low. So breast, gastric and a basket of other tumor types across different expression levels of HER2. And our thought is ZW49 is an asset when the target HER2 is no longer in control of proliferating the cancer, and you simply wanted to feed the cancer by binding to the target, getting internalized and destroying the cancer from the inside in a very targeted and in a very systematic fashion.

All right. We'll have to leave it there. Thank you all so much for participating. I hope you enjoy the panel. And best of luck with your continued drug development.

Thank you.

Thank you.