Nxera Pharma Co., Ltd. (4565) Earnings Call Transcript & Summary

Hello. Good morning, and thank you for joining the 2021 Virtual UBS Global Healthcare Conference. I'm Mai Inuzuka, Head of Japan Healthcare Global Investment Banking at UBS. I'm happy to be your host for this session. Our next presenter will be Chris Cargill, Group Chief Operating Officer and Chief Financial Officer with Sosei Group Corporation. A Q&A session will follow immediately after the 25 to 30 minutes presentation. [Operator Instructions] Now I turn it over to Chris. Thank you.

Thank you very much, Mai. Good morning, and welcome to the UBS Virtual Healthcare Conference. It's great to be here this morning to present virtually. I trust everyone is safe and well. And I would like to thank UBS for their support and for allowing us to participate. As Mai mentioned, my name is Chris Cargill, I'm Group Chief Operating and Chief Financial Officer of Sosei. This morning, I'm going to give you a brief overview of our drug discovery platform and our core capabilities in addition to updating you on the excellent progress that we've been making on both our organic and strategic growth plans. So for everyone that's following along in the audience, please turn to Slide 3. And a quick introduction for those that are new to our company. Sosei Heptares is a leading drug discovery and early development specialist, and we focus our efforts on applying our proprietary StaR technology and SBDD platform to discover small molecule therapeutics that modulate G-protein coupled receptors, or GPCRs. And we are a publicly listed company headquartered in Tokyo, Japan. However, we have our R&D center of excellence located in Cambridge in the United Kingdom, and this is where the bulk of our employees are based. Our vision is to become one of Japan's leading global biotechnology and drug discovery champions. We are a science-led organization. Over 75% of our staff have a science background with the vast majority of those holding PhDs. Now some other key items of note regarding our experience. We're prolific researchers and drug hunters in this area. We've solved over 300 molecular structures to date from over 30 different GPCRs. We've published over 180 publications, including 7 prestigious Nature papers. We've been granted over 500 global patents. We work with over 15 major global pharma and biotech partners. And using our technology and platform, to date, we've created 24 preclinical candidates, 9 of which have entered human clinical studies. And this productivity has generated over $700 million in partnered revenues to our company. We have a very robust and diversified pipeline with over 40 active programs, both partnered and in-house and have evolved this pipeline in recent years to specifically focus on the 3 therapeutic areas: neurology, immunology and GI. Now please turn to Slide 4. Our StaR technology enables us to unlock the full potential of GPCRs. And GPCRs are well-known targets, yet the opportunity for drugs that modulate them remains significantly untapped. Now of the 400 GPCR targets believed active in human disease, around 100 have been successfully drugged, leaving 75% potential opportunity for first-in-class novel targets for us to go after. And several GPCR-targeted drugs have become blockbusters and have changed patients' lives, medicines, such as Abilify, Seroquel, et cetera. We believe there are many, many more medicines like this to be discovered in the decades to come. Sosei is in a unique position to exploit this GPCR opportunity. Our StaR technology gives us a competitive advantage. It enables us to unlock the potential of GPCRs via an advanced understanding of their structures and molecular interactions. As I mentioned earlier, we are prolific researchers and drug hunters in this area. We've sold over 300 molecular structures, 30 different receptors and stabilized 60 StaR proteins. And it's this deep know-how that attracts big pharma and biotech partners to us, specifically those seeking to tackle difficult first-in-class novel GPCR targets, those that offer the potential to bring much needed new medicines to patients. Please turn to Slide 5. So we are a research and drug discovery-focused business at our core. We do maintain a tactical presence in late-stage clinical development in Japan. However, 75% of our resources are located in the United Kingdom at our research center, where we have capabilities to take programs through human studies up to and including early proof-of-mechanism Phase Ib patient studies. Now this is really our sweet spot, moving multiple early-stage programs forward at lower cost and lower risk to our business. Now we view large-cap pharma and biotech as being much better equipped to manage the sizable costs, risks and binary outcomes associated with late-stage development, and we seek to develop programs through certain value inflection points before executing high-value partnerships or feeding our programs into co-owned investment companies or vehicles. So Sosei is perfectly positioned to provide innovative GPCR-targeted programs that big pharma want and require. And together, we can bring novel therapies to patients with high unmet medical need. So executing new partnered projects and rapidly progressing existing partnered projects is really at the heart of what we do. Please turn to Slide 6. So in line with this emphasis on partnering, we have a track record of bringing world-class leaders to our technology and to our candidate programs. So on this slide, we show the numerous active collaborations and co-owned investments that we have. And in fact, as was highlighted in a recent initiating coverage report on Sosei, we are the 8th largest licensor of drugs globally, having executed multiple sizable deals with 8 of the top 20 pharma companies in the last 10 years. Some of the new partners that we added last year in 2020 include, on the left-hand side of this slide, AbbVie, GSK and Biohaven, with who we struck a series of major global license and development agreements. And on the right-hand side, you'll see we also partner with innovative early-stage investors to create asset-centric spin-off companies. Now our co-owned companies with Medicxi, which were called Orexia and Inexia, and these are focused on developing Orexin OX1 and OX2 positive modulators for narcolepsy, these may soon flip into a single shareholding in Medicxi's new Centessa Pharmaceuticals company, assuming a successful upcoming IPO. So we're quite excited about that. And also on the right-hand side, Tempero Bio, a new co-owned company that we formed together with Joe Jimenez and Mark Fishman's outfit, a decent buyer. So over the last 10 years, all this partnership activity has generated over $700 million revenues to us in the form of upfronts, milestones, royalties and research funding, and it has enabled us to build a very strong foundation in drug discovery. However, what we're really excited about is the next 10 years, and this is where we think the real value for Sosei will materialize. We've got up to $6 billion of outstanding potential deal value to come as our broad partnered pipeline progresses deeper into development across all of our active partnerships and co-owned vehicles. Now please turn to Slide 7. So with the background now complete, I just want to move on to our organic growth plan and explain to everyone the progress that we've been making over the past 12 months or so. Now our organic growth strategy is really focused on 4 areas: one, extending our technology and platform leadership; two, generating multiple high-quality drug candidates; three, advancing our discovery and development pipeline; and four, executing high-value partnerships. Please turn to Slide 8. So I'm pleased to say, despite the difficulties in the external operating environment, we've remained fully operational over the past 12 months and continue to make excellent progress against our organic growth objectives. So regarding the objective of technology leadership, our StaR technology and structure-based drug design platform remains as relevant as ever. And in 2020, we achieved scientific breakthroughs at our co-owned investment companies with Medicxi. And as I mentioned, they're focused on developing Orexin OX1 and OX2 positive modulators for narcolepsy. The scientific achievements triggered a new tranche of funding into those companies last year and the progress, as I mentioned, remains very, very solid. Now regarding the objective of generating multiple high-quality candidates and advancing our pipeline, we created 4 new discovery programs across neurology, immunology and GI in 2020, and have well over 10 in-house discovery programs ongoing. Furthermore, we advanced 3 of these programs to preclinical candidate stage last year, and they were our H4 antagonist, EP4 antagonist and GPR35 agonist programs. And that last program, the GPR35 agonist, was successfully outlicensed to GSK just before Christmas in a deal valued at around $500 million in terms of biobucks. So the progress in 2020 that we have outperformed our stated target, which is generally to progress at least 2 new preclinical candidate nominations every year. So we're very happy with that. Now lastly, regarding the objective to execute high-value partnerships, we have a standout year attracting new collaborators. And I just mentioned the GPR35 agonist program, which found out a home with GSK. In addition to this, we entered new deals with AbbVie in the inflammation space and a deal with Biohaven for our CGRP antagonist program in the neurology space. And furthermore, we created a new co-owned investment vehicle called Tempero Bio, together with Aditum, which was the fund founded by Joe Jimenez and Mark Fishman. Now Tempero Bio will develop our mGlu5 negative allosteric modulator for substance use disorders and aims to combine behavior modification through digital devices, for example, mobile apps, with the pharmacotherapy to support patient treatment, improve adherence, and ultimately create better patient outcomes. So these 4 new partnerships in 2020, again, outperformed our stated target to execute at least 2 to 3 new high-value partnerships every year. Please turn to Slide 9. So one of the reasons we're very confident in our ability to execute at least 2 to 3 new major deals every year really stems from our productivity. So we believe, based on internal analysis that we are 2 to 3 times more productive than the industry standard when it comes to the discovery of new drug candidates. Now our deliberate focus on being a pure-play discovery outfit gives us the agility to better exploit modern tools and technologies that enable more efficient and productive drug discovery. As I mentioned at the opening, we've generated 24 preclinical candidates in the last decade, 9 of which have now entered human clinical trials. We think this is a very strong return for a small-cap biotech, but we are aiming to go further. So our goal over the medium-term is to deliver at least 4 new discovery programs through the lead optimization every 2 years, and on average, 2 new preclinical candidates every single year. We will shepherd these programs through to their appropriate value inflection points ahead of partnering, seeding or putting them into newly formed co-owned investment vehicles. Now please turn to Slide 10. So we are a neurology, immunology and GI discovery specialist, and we seek to work with the world leaders in these therapeutic areas. So in addition to the collaborations and JVs that I mentioned on the previous slide, namely GSK, Biohaven, AbbVie and Tempero, these are -- we also execute broad multitarget programs. And we had a number of these in 2019, most notably with Takeda and Genentech. And we also have one with Pfizer, which dates back to 2015, which has recently produced 3 programs that have moved into clinical development. And so we're very excited by these multitarget programs that we also do. We expect significant value to be unlocked in the coming years as these collaborations progress deeper into discovery and development, and we start eating into the $5.9 billion of biobucks and potential economics that are yet to be realized by the company. So going forward, we harbor our ambitions to add to this list by executing deals with as many major pharma and biotech parties that we can, particularly those with significant franchises in our chosen therapeutic areas of neurology, immunology and GI. Please turn to Slide 11. So here is a current snapshot of our robust and diverse pipeline that we expect to fuel significant value creation over the medium term. There are a few programs that I'd like to point out as ones to watch over the next 12 to 18 months. So beginning with the top half of the slide and the programs shaded in blue, these are our partnered programs. Now on the left-hand side, you'll see those ones that I mentioned earlier, the co-owned investment vehicles, Orexia and Inexia, which are partnered with Medicxi. These companies are developing Orexin positive modulators for narcolepsy and are progressing well. And hopefully, with the successful IPO of Centessa Pharmaceuticals, we will flip that shareholding into that company. Next in the middle section are the Pfizer programs, and as of last week, we now have 3 programs with Pfizer, which is up from 2 that are advancing through Phase I at present. We have an oral GLP-1 agonist for type 2 diabetes and obesity. We have CCR6 antagonist indicated for IBD. And the most recent one, an MCR4 antagonist for anorexia. And lastly, to the right-hand side of the slide are our AstraZeneca programs, and they're advancing, an A2a antagonist in prostate cancer, which is being trialed in multiple combinations, and we look forward to some news in the next 12 to 18 months regarding the progress of that program. Now next, I'd like to focus on the bottom half of the slide, which are our proprietary in-house programs, and these are the ones that are shaded in orange. Now any one of these programs has the potential to be partnered in the next 12 to 18 months, and we think, in particular, the H4 antagonist and PAR2 programs, both indicated for atopic dermatitis, may represent attractive programs for pharma partners with expertise in immunology and inflammation. However, in addition to the several new preclinical programs that we brought through last year, perhaps, the most significant opportunity for us over the next 12 to 18 months may come from our muscarinic M4 and M1 agonist programs. Now these programs were regained from Allergan at the beginning of this year, following its acquisition by AbbVie. And we got them back for no material costs under the reversion terms of the original agreement. And these programs were originally outlicensed to Allergan in 2016. And at the time, we received $125 million upfront and $3 billion in future biobucks. Now over the course of our 4-year partnership with Allergan, Allergan invested over $55 million of new R&D to advance these muscarinic programs, and this is something that we now stand to benefit directly from. So what we have regained is effectively a stronger IP portfolio, together with all the preclinical and clinical data generated over the 4-year partnership, including a pipeline of next-generation selective muscarinic agonists, which have all been precision designed using our StaR technology and SBDD platform and all come with novel and diverse chemistry. So these programs, which are highlighted with the orange stars on the slide, each of them has the potential to generate pipelines in a product, multiple clinical stage programs with the potential to deliver transformative new treatments for patients living with schizophrenia, dementias and other neurological disorders. So we've immediately picked up development, and we'll advance these programs through their next logical value inflection point before seeking a global outlicense deal. Please turn to Slide 12. And so I just mentioned that each of these muscarinic programs has the potential to be a pipeline in a product. Muscarinic M4 and M1 receptors, each one of the few scientifically validated targets in the CNS that have yet to be successfully developed, most notably for psychosis and cognition. Now more than 20 years ago, Eli Lilly successfully demonstrated the antipsychotic effects of an M4/M1 preferring agonist compound called xanomeline, and they did achieve human proof-of-concept in 2 double-blind placebo-controlled trials in schizophrenia and Alzheimer's disease patients. And the relevant studies are shown in the clippings on the right-hand side of this slide. Now despite this clinical proof-of-concept being achieved for the M1 and M4 targets, the development of xanomeline was ultimately terminated due to severe GI and cardiovascular side effects, most likely caused by its very limited selectivity over peripheral muscarinic M2 and M3 receptors. After these studies were reported, there were compelling reasons to want to design much more selective orthosteric M4 and M1 agonist, but this remained very challenging due to the fact that muscarinic subtypes are almost identical in the agonist binding site, called the orthosteric site, and that was confounding these efforts. But with over 20 million schizophrenia sufferers and over 50 million dementia sufferers worldwide, the need to develop new treatment options remains of paramount importance. We believe at Sosei Heptares that the muscarinic M4 and/or M1 receptor agonist with high selectivity of these peripheral M2 and M3 receptor subtypes have the potential to be truly transformative treatment for these disorders. Please turn to Slide 13 now. So our portfolio of muscarinic programs is being led by our highly selective muscarinic M4 agonist, code named HTL'878, and it's initially indicated for schizophrenia, which is an area of continued high unmet medical need. Now schizophrenia is a large market. There is over 20 million patients worldwide. And despite the limited efficacy and the significant side effects associated with current approved therapies, these drugs regularly achieve peak sales of over $1 billion. As you can see in the middle of the slide, there's been very little innovation in this space since the 1950s with all current and generic treatments essentially having the same mechanisms of action with limited efficacy. So we know the severe side effect profile of the currently approved drugs, known as atypicals, continues to drive high relapse rates, disease progression and discontinuation of treatment. Now in a chronic disease like schizophrenia, it's very important that patients keep taking their medicines, and it's of no use if they stop treatment because they do not like the effects. Therefore, we see a significant need for new treatment options, and we're very hopeful that our M4 program can potentially be transformative in terms of treatment options for these patients. So we think there is a very reasonable opportunity for a highly selective M4 agonist, and we believe our compound HTL'878 is a potential first-in-class therapy with a novel mechanism of action and a potentially improved tolerability profile. And so we've been receiving a fair few questions on this from investors who want to know how we have been progressing since we retained the -- regained the asset, sorry, in January 2020. What we did immediately was, we engaged an external team with CNS development expertise to conduct a rapid and detailed analysis of the complete data package that reverted to us from Allergan. As a result of this analysis, we increased our capital allocation and our R&D investment in the M4 program in Q1, and this will continue through Q2 and Q3. Now this investment will enable us to accelerate the development path of the M4 program, so that any prospective global outlicense partner will be able to pick up a truly Phase II start ready clinical program towards the end of this year. Now on top of this, we will also maintain sensible levels of maintenance investment in the other muscarinic programs that we have to ensure that they continue to progress. So we are seeking a motivated global development partner to work with us to bring these important programs through Phase II and Phase III and ultimately to approval. And active negotiations have begun with several CNS-focused pharma and biotech players, and we're very confident of executing an outlicense by the end of 2021. Please turn to Slide 15 now. So just shifting our focus towards our strategic growth plan, which was launched in the middle of last year, in July 2020. At that time, we successfully raised $200 million to fast track our strategic corporate ambitions. And our strategic growth plan is really focused around 4 areas of interest to us: One, seeking out revenue-generating acquisition opportunities; two, investing or collaborating in novel technologies, three, taking early steps to expand beyond GPCRs and into other target classes; and four, in-licensing late-stage assets for development in Japan. Now we are already executing against a number of these objectives. And on the first point regarding -- well, sorry, the second point regarding investing and collaborating in novel technologies, we recently entered into a strategic 2-year technology collaboration with a Poland-based targeted protein degradation company called Captor Therapeutics. And through this collaboration, we hope to achieve early validation that we can create GPCR degraded technology together. Secondly, in the beginning of this year, we announced a collaboration with a Cambridge, U.K.-based company called Pharma Enable, who are an AI-driven drug discovery specialist. And through this collaboration, we aim to match our proprietary structural data with Pharma Enable's AI capabilities to drive more efficient novel drug discovery against a challenging peptidergic GPCR target associated with neurological disease. Now in addition to the initiatives just mentioned, we are actively seeking to acquire revenue-generating companies and/or assets as well as targeted in-licensing activity of derisked late-stage rare diseases drugs for the Japan market. And just to point out, Japan is where we are headquartered, and we do retain that tactical late-stage clinical development presence in that country. Now these transactional initiatives are designed to boost our near-term revenues and thereby, enhance our ability to sustainably invest behind our innovative pipeline for many, many years to come. Please turn to Slide 16. So turning now to our recent financial performance. We are aiming to build a biotech enterprise, but with a unique risk profile, a company with a sustainable financial profile that retains significant value upside from multi, multibillion-dollar partnerships, if that make sense, but without the binary risk associated with wholly-owned asset values. So for discovery and early clinical organization, we generated over $80 million of revenue and over $25 million of cash earnings for the successive -- the second successive year in a row last year, and ultimately, drive a profitable result in financial year 2020 as it did back in financial year 2019. Now our focus on collaborations, out-licensing and co-investments ensures that our R&D costs are largely covered, which enables us to continuously refresh the pipeline without the typical cash burn of an ordinary biotech. And as I alluded to earlier, we stepped up our R&D investment in Q1 for our M4 program, and this will continue in Q2 and Q3 as we accelerate and build value ahead of a potential global out-licensing deal towards the end of the year. And looking at our cash balance following our successful capital raise last year to fund growth initiatives, we ended Q1 2021 with $365 million cash on hand, and we will look to deploy this capital over the next 12 months. And turning now to the final slide. I just wanted to reiterate, as we move through 2021 and into 2022, the areas that we'll be focusing on. One, as I've presented today, progressing our organic growth plan; two, as I've just mentioned, executing on our strategic growth plan; and three, ESG. It's an area of interest at the moment. We are one of the few Japan-listed biotech companies that prides ourselves on our ESG compliance, and we will, of course, continue to build on this in 2021 and beyond. So in conclusion, we are a world-leading drug discovery business focused on GPCRs, and we look forward to executing our plan over the medium-term to achieve our vision of becoming one of Japan's global biotech drug discovery champions. Thank you for your time today. That completes the main presentation. I'll hand back to you, Mai.

Thank you, Chris. We will now move to the Q&A session. [Operator Instructions] So our first question for Chris is about Sosei's positioning and competition. It's a simple and a good question. So who is the largest competitor to Sosei? Would you please describe Sosei's competitive positioning and differentiators against the competitors?

Thanks, Mai. That is a good question. We don't really see ourselves as having a direct competitor, per se. We know that every major pharmaceutical company in the world has programs against GPCRs, but what makes us a little bit different is our exclusive focus on GPCRs. And when you look at the way the R&D landscape has evolved, and in particular, the shutting down or outsourcing of research units from major pharmaceutical companies globally, you can see that what we've built is really a very specialist GPCR-focused research and discovery group. And that group is increasingly being sought out by major pharma, biotech and even early-stage venture capital funds to access our knowledge and expertise in this area when they have programs that they want to prosecute against GPCRs. So it's a long way of saying, we don't see someone that has a direct focus on GPCRs that would threaten us competitively, but we do see ourselves as providing these services to a very broad range of potential customers and partners. And we think that, that makes us very, very unique in the global landscape.

Okay. So next question is about re-partnering of muscarinic agonist programs. Sosei Group looks to re-partner muscarinic agonist programs this year. I presume there are high expectations for the M4 agonist targeting schizophrenia, by the way. So just want you to share a little bit more color on the progress of re-partnering discussions and/or expected timing of the announcement.

Yes. Sure. Look, there is not too much detail that I can share, obviously, because we are -- when we do these -- we have a very active business development team, and they talk to lots of people, and the people that we speak to are obviously under confidentiality agreements. But it has always been our intention to out-license these programs as soon as we can really once they've reached a logical value inflection point. So our goal is certainly to continue developing those programs this year and seek a new partner this year. However, if that were to slip into next year, it wouldn't be super concerning for us, but the point is, certainly, in the next 12 to 18 months, we are looking to find a new partner. And the reason for that is, as I mentioned at the beginning of the presentation today, we are a drug discovery and early development specialists. We are prepared to take programs through to early proof of mechanism Phase Ib patient studies. What we do not do as an organization is take on the risk and cost associated with Phase II and Phase III development. So it's essential for us to find a motivated partner, and we're very hopeful of doing that by the end of the year. However, negotiations do take time. So we'll see how we go there. But certainly, our aim is to move forward quickly and then find a new partner to work with on these programs. We think that they're very valuable and going to be incredibly beneficial for patients. Thank you.

All right. So next question is about potential M&A for listing to TSE prime market. I think this topic was attached during the previous quarterly earnings call, not this time. So question is, Sosei Group has announced the plans to acquire profitable companies with the aim of satisfying the criteria for switching its listing from TSE Mothers to TSE Prime market successfully in April 2022. Would you be able to give us more colors on the progress with potential M&A? And why Sosei wants to switch to TSE Prime market?

Thank you very much, Mai. It's a good question. I can't obviously disclose too much about M&A, except to say that we are well capitalized, and we are always looking. And so when the right opportunity presents itself, we have the right people internally, and of course, very good support from external advisers to be able to execute an M&A transaction that will help drive a step change in the size, growth and financial profile of the organization. For those that have known Sosei, they'll understand that the company has actually been created through a series of acquisitions. So the history of Sosei is that following its listing in -- back in, I think, it was 2005, we acquired a Cambridge-based biotech called Arakis, and that brought us a product which was successfully out-licensed to Novartis. And following that, we then acquired Heptares in 2015, which has been a very successful acquisition, brought to us a very powerful drug discovery engine, which is pretty much everything that I've talked about today. So we know how to do M&A, but yes, I can't give any more updates on that, unfortunately. And with regard to why do we want to move towards TSE Prime? Well, it's really a natural evolution for the company, and it makes a lot of sense. So if you think about how the Japanese stock markets are structured, most of the institutional money sits on the TSE First Section currently. In the future, that will be TSE Prime. We want to put our company in the best position to be owned by as much institutional investors as possible, and unfortunately, the current structure of the markets, the Mothers exchange, doesn't really allow for that. We have some incredibly supportive investors, but we're not really maximizing the opportunity there. And therefore, we think putting ourselves in the best position to be able to transfer up to Prime will be the best way to get as many investors involved in the Sosei growth story as possible. Thank you. That completes my question.

Okay. So next question is about antibody development platform. So recently, we see several biotech companies that are getting into the development of antibodies against GPCR. So what is the current status of the antibody development platform at Sosei Heptares?

Yes, that's a very good question. We've noticed that trend as well. Certainly, we are not late movers in this area. We have 2 programs on our pipeline that are GPCRs against -- sorry, antibodies against GPCR targets. And we have developed both of those through effectively marrying our platform capabilities with those of a partner. So our PAR2 antibody program that we currently have ongoing was actually, the initial research work on that was done jointly with MorphoSys' platform. And we also have CXCR4 antibody program in immuno-oncology, which was developed in conjunction with Kymab's platform. Now -- so we have 2 programs ongoing. It's definitely an area of focus for us going forward. So at the end of last year, we launched a new initiative internally called the new target ID and validation framework. And as part of that strategy, we are looking to build out our antibody platform capabilities. So what we are doing is, we're actually going through a process of triaging the best antibody discovery people that we can work with or potential partners that we can work with globally so that we can really expand potentially the number of programs that we have against GPCRs that are antibody programs. Now one of the things, I guess, that has held the industry back is, if you just look at the number of approved therapeutics, antibody therapeutics, against GPCRs, I think it only numbers to 2 or 3. There are not a lot of approved drugs out there that are antibodies that target GPCRs. Now that is changing. There is a lot of money flowing into this space, and we want to be a part of that. We want to ride the wave of this increased investment in this space, and we are quite advanced in seeking out partners to work with. So if we come back to the UBS Healthcare Conference next year, I'm pretty confident that we will have some new discovery collaborations with partners that are focused on antibodies. And then over the years going forward, we should certainly have more programs in our pipeline like that. But for now, the overwhelming majority of our pipeline are small molecules, but that will change. Thank you.

The next questions are about oral COVID-19 treatment. Sosei Group has identified with compounds and is developing an oral COVID-19 treatment by leveraging its proprietary drug discovery technology. With the vaccination rate high in some regions and Pfizer's initiation of early stage trials of oral COVID-19 treatment in the U.S., maybe Sosei's clinical trials have to be located in countries where COVID-19 is still on the rise. Do you please help us to clearly understand Sosei's development strategy and views on the competitive landscape of oral COVID-19 treatment development.

Yes, certainly. Thanks, Mai. So look, we think there is going to be an important place as the question that was proposed, there's going to be an important place for these oral therapies going forward as indicated by Pfizer's move into the space. Now we don't necessarily, as a company, have a development strategy, per se. Our job as drug discovery experts was to get a candidate quality program discovered and then seek an appropriate partner to work with going forward. Now, I agree. We don't, as a company, have plans to develop our Mpro program going forward. We are in discussions with multiple parties about potentially partnering that asset. It was really something that we launched as a way of demonstrating our ability to contribute to the pandemic last year. So it's not normally the sort of class that we would work on, but we've come this far, and we've got what we think is nearly a very solid program and have initiated discussions with the sorts of partners that one would expect that we would partner with on a program like this. We think there is a huge potential for it. The vaccines are being developed at a fantastic rate, but the need for an oral small molecule that can be given to someone perhaps immediately after they test positive for COVID-19 will just form another potential treatment option to protect everyone from this particular disease. So it's -- like I said, it's not something that we have a long-term plan to develop ourselves. We are actively seeking a partner to take that forward. And of course, how our program rates head to head versus what Pfizer are doing will be important towards the success of that program should someone decide to pick it up. Thank you. That completes the question -- the answer, sorry.

Okay. One more follow-up question. When do you target to enter into the partnership agreement? This year or next year?

Is this for -- for which program, sorry?

It's oral COVID-19 treatment.

Right. So discussions have already commenced, and we would love to -- with all -- when we commence all of our discussions, we would like to enter into them sooner rather than later. But it may actually be that there is a little bit more work that we do to bring that program forward before we engage, but we'll see. Ultimately, it will be the counterparties that we speak to and how fast they want to move that will dictate how quickly we can potentially partner that program. But if not, we've generated a lot of interesting data and science to date. And as I said, the program is part of our ESG initiative. And we will, in future, make a lot of that research available to the world.

Okay. Got it. Now we have just a few minutes. Anyone has any last minute questions? Okay. So I think all questions are answered already. So Chris, do you want to make a closing remark?

No, I think I've covered everything today. Thank you very much for your time, Mai. And thank you to the team at UBS for hosting us. It's a great honor to present again. So thank you very much.

We'd like to thank Chris and you all for attending the 2021 Virtual UBS Global Healthcare Conference.