ORIC Pharmaceuticals, Inc. (ORIC) Earnings Call Transcript & Summary

All right. Welcome back, everyone, to the next session of the first day of Citi's 2026 Virtual Oncology Leadership Summit. I'm Yigal Nochomovitz, Biotech Analyst here at Citi in New York. The next session is with ORIC. It's great to have the CEO and CFO here, Jacob Chacko, CEO; and Dominic Piscitelli, CFO. Welcome to both of you. Thank you very much for doing this. For those listening, if you have questions for the company, just e-mail me, and I will relay over to Jacob and Dominic. So welcome, gentlemen. It's been a busy year, obviously, for you and for us. Maybe to start out, Jacob, if you could just kind of give us the very high level, highest level overview of the company, and then we can move directly into some of the key questions related to your prostate cancer program.

Yes. Happy to do that. Thanks for having us here, Yigal. So ORIC stands for Overcoming Resistance In Cancer. In a nutshell, that's the mission of the company. So we're focused on small molecule drug development in primarily solid tumors, but most specifically, prostate cancer and lung cancer. That's obviously where our 2 lead programs are currently being developed. Both of those programs are in dose optimization right now. Both of those are headed towards Phase III studies with a lot of data that's been presented over the last 12 months, showing the best-in-class potential of both programs. The most imminent Phase III is for our prostate program, which ORIC-944 now has a name, rinzimetostat. And so we anticipate starting a Phase III study with that program in the first half of this year. We're awaiting some more data from our lung program in the second half of this year, after which we would potentially start the first Phase III for our lung program, ORIC-114, which is known as enozertinib, probably in the first half next year. So a lot on our plate, but really excited about where the company is at, both in terms of data and cash runway to execute on our Phase III aspirations.

Okay. Great. Well, obviously, you've got a pretty significant competitor in the race here with Pfizer, and you have a very important and different molecule, too. So maybe if you could just start by talking about what we've seen from Pfizer so far and how that sets you up for how you're going to play out your data this year and beyond.

Yes. We like to refer that fluky young upstart, Pfizer, a lot like ourselves. They've done a lot for the field in terms of derisking this mechanism, Yigal. So as we're talking specifically about PRC2 inhibition within prostate cancer, it's an area that's been studied a lot over the years. And the first-gen PRC2 inhibitors really ran suboptimal clinical experiments. The reason being that those drugs were suboptimal. They had very short half-lives on the order of 1 or 2 hours. They had -- a lot of them had what's known as SIP auto induction, where they would rev up the SIP enzymes that would then metabolize the drug. So in some of those cases, they would get dose-dependent decreases in exposure. So in other words, there was a lot of reasons why those drugs did not work in the clinic despite a really wide swath of preclinical evidence that suggested that if you combine a PRC2 inhibitor with an AR inhibitor, you ought to get longer, more durable outcomes by virtue of keeping those prostate tumors in an AR-dependent state, which is where those AR inhibitors work best. So we're really thankful that Pfizer has really derisked the mechanism quite a bit. You referenced their randomized data set that they presented almost exactly a year ago this time at ASCO GU last year. And in that data set, what they showed was that in a CRPC population where all the patients were post abiraterone, so they had already been experienced with abiraterone and where one prior line of chemotherapy was allowed, those patients achieved a 14.3-month radiographic PFS, median radiographic PFS. And that's in the context of a control arm of enzalutamide alone, so an AR inhibitor alone that achieved exactly what you would expect in that population, which was about 6 months of radiographic PFS. And so that 8-plus month benefit on PFS was profound. It's longer than any other mechanism that you have seen studied in that patient population. Obviously, people talk about how -- what good Pluvicto has done for patients across the prostate treatment paradigm. Pluvicto has been studied in very analogous populations and doesn't come close to the PFS that Pfizer was able to show. And so it explains why Pfizer was investing so heavily in their PRC2 program Mevrometostat, in combination with their AR inhibitor, enzalutamide. They've now got 3 different Phase III studies enrolling and underway with MEVPRO-1, their first study in that post-abiraterone population having finished enrollment, and we're going to get to see a readout from them later this year. But it's really could be game changing if their Phase III results replicate what they were able to show in Phase II. And obviously, we think we've got a better drug than they do.

Okay. So tell us more about that. What are the properties of your molecule that may be differentiated that would give you optimism that you have at least a good profile, perhaps a better one as you start to do your Phase III work?

Yes. I mean if you go through and do the analysis of the drug side by side, and again, if you look at all the ways that the first-gen PRC2 inhibitors sort of fell short of an optimal target candidate profile, it was really in all different ways that they fell short. So they didn't have enough potency. They didn't have enough in vivo activity. They had poor half-life, as I mentioned earlier. A lot of them had these CYP autoinduction issues where essentially they got very bad PK properties. didn't even get to the right exposures that they needed to, to test the clinical experiment. Now Pfizer seems to have solved a lot of it. Their drug, Mevrometostat has very good potency, very good in vivo activity. It looks like it's got a half-life of roughly 5 hours, so better than the first-gen compounds, but clearly something that can be approved upon and doesn't look like it's got CYP autoinduction. And so by virtue of those things, it seems to be getting enough exposure in these patients that they're able to get the kind of profound outcomes that I mentioned earlier. Now in the case of rinzimetostat, our drug, which we acquired from Mirati back in 2020, the chemist of Mirati, they went about this in a very empirical fashion, Yigal. So they just -- they looked at the space. They decided none of the drugs in the space were achieving the right target candidate profile, and they set out trying to make a drug that was every bit as potent and had as good in vivo activity as what you've seen from Pfizer, but importantly, a much better half-life. And in this case, they developed a drug that has a 20-hour clinical half-life, does not have CYP autoinduction. And what that means is that it's consistent with once-a-day QD dosing, but the benefit we're talking about here is not just simply a convenience benefit of QD dosing versus BID dosing. Really, what it is, is the ability to cover target for 24 hours with your Cmin without pushing Cmax high to get -- or too high to get Cmax-driven toxicity. And that's where our drug really seems to differentiate. So if you look at the data we presented last year, we had a couple of different data readouts from our dose exploration work. As folks know, we're working with the other 2 big AR inhibitors. So Pfizer's got their own AR inhibitor, enzalutamide, but the other 2 multi-blockbuster AR inhibitors are apalutamide from J&J and darolutamide from Bayer. We're supported by both companies in our dose exploration and dose optimization work in combo with both of those AR inhibitors. And in the data that we showed last year, we showed PSA50s and PSA90s that were numerically better than Pfizer's. And obviously, we showed some pretty profound ctDNA. We don't know what Pfizer's clearance rate on ctDNA is. They haven't shown it, but we showed about a 59% clearance rate on ctDNA which as you benchmark that across various Phase III data sets, again, is a very profound number. And then finally, on the safety side of things, which is where you really see the differentiation is clearly a differentiated profile for rinzimetostat in combination with either apalutamide or darolutamide as compared to what Pfizer showed you with their drug -- with their combo. And with the PRC2 inhibitor, you should really see 2 major classes of toxicity. You should see heme tox in the form of various penias and you should see GI Tox in the form of diarrhea, nausea, vomiting and sort of that general constellation of GI symptoms. Now clearly, the name of the game here is to try to minimize how much of the frequency and the intensity of those types of toxicities that you see. And in what you saw from us last year, you saw a safety profile that while we see those classes of tox like Pfizer does, we see a lower frequency and a lower intensity of those things while also having, like I said, numerically better PSA50s and PSA90s. Now we don't yet have our own mature PFS number to quote, but really, the way this should work is that if you've got better activity in those early proxy forms of PSA50s and 90s and ctDNA and you have a better safety profile that ought to long term translate to a better PFS profile.

Okay. That is a very, very comprehensive description of the situation. So now you're going to have an update soon, I believe, in the first quarter. You've talked about it a bit, but maybe we can just review and maybe Dom can jump in and comment. What will we -- what are we going to be seeing there? I know you mentioned the PFS is not quite ready for prime time, but what would you show us in this update coming up?

Yes. So big picture, as you know, we wrapped up the dose escalation portion of the study in the latter part of last year and we selected the doses for the dose optimization. So the data that we'll get in Q1 will be from the dose optimization portion of the study. What we're saying is going to be 20 to 25 patients worth of data. Now as you know, we're studying 2 different patient populations. We're testing the post-abi patients, but we're also testing the post-AR inhibitor patient population. So it will be from 1 of those 2 patient populations. And then as Jacob articulated, we're also doing 2 different combinations. We're doing combination with apalutamide from J&J and with darolutamide from Bayer. So it will be from 1 of those 2 patient populations, and it will be from 1 of those 2 combinations. Now this is very intentional. The patient population and the regimen that we disclosed, that's kind of a preface for the Phase III study that we anticipate starting in the first half of 2026. And what we want to show here is, again, PSA50, PSA90, we want that to be consistent to what we've shown you guys previously in 2025. We want to show obviously the ctDNA data that Jacob referred to. Safety and tolerability, we want to be at least as good as what we've shown you previously as well. And the new piece of information will be an early look on durability. And as you said, we will not have a mature PFS, but we'll have an early look and durability. So think of a landmark analysis at 3 months or 4 months, that's what we'll kind of show to kind of make sure there's nothing -- no surprises in the data and that things are trending in the right direction from a durability standpoint.

Okay. So just so everyone is clear. So we're going to see either it's going to be a post-abi group or it's going to be a post-AR. And then within that, you're going to show us -- if you do the post-AR, it will be either apa or daro.

Yes. Whichever patient population we'll show you, we'll show you one of the AR inhibitors. So you do apa or daro. That's correct.

Okay. And then -- so it's -- but it's not going to be both post-abi and post-AR. It's what you're going to pick.

That's correct.

Yes. It will basically, Yigal be a -- it will essentially be a laying the groundwork for the first Phase III study that we intend to start in the first half of this year.

Right. Okay. No, it makes sense. I just want to make sure everyone understands that. And then what -- tell us without revealing what it is because I mean, I guess you're close to the decision, but what are the factors that go into the decision in terms of what you want to see like apa versus daro, as you pointed out, is 2 different pharma partners so presumably that obviously has relevance, but there's also the drug-drug interaction aspects, there's dosing and so forth. So just tell us in broad terms like how you think about the decision.

Yes. In broad terms, I think it's -- we're very lucky to be in a position where both AR inhibitor drugs and both partners are great. And so what we talked about in the data last year was that we don't see any differences in the efficacy or the safety profile of the 2 drug -- the 2 combinations in our hand. Look, there's differences, obviously, on the nuances of each drug and the way they're dosed. One is dosed twice a day, the other one is dosed once a day. One has a food effect, the other one doesn't have a food effect. There's some tolerability differences between the 2 regimens. If you really force rank kind of which of the 2 drugs -- which of the 3 AR inhibitors are the most tolerable, I think the good news is most physicians would tell you that darolutamide and apalutamide are both better tolerated than enzalutamide. And so in a lot of ways, Yigal, it really comes down to we'd be fine with either one of those as our go-forward combo partner for the first Phase III study. And one thing we've emphasized throughout the course of our development of this program is the first Phase III study will choose one of those drugs to be our combo partner of choice. We'll keep an open mind as to whether we stick with that drug for future Phase III studies or whether we choose the other one to get experience with both of them. So there's reasons why we might choose one or the other. I think more fundamentally on just the dosing of 944, I think really the only difference is we use a lower dose of 944 when we dose with darolutamide than we do when we dose with apalutamide. And the reason for that is pretty self-explanatory for folks that have been following us for a while, which is that apalutamide and for that matter, enzalutamide, Pfizer's drug are both well-known CYP inducers. And what that means is that they will push down the exposure of many drugs you combine with them because so many drugs are metabolized by the CYP enzymes. And that's the case for 944. That's the case for Pfizer's drug, Mevrometostat. And so we are testing higher doses of 944 in our dose optimization with apalutamide than we are with darolutamide. So that's the only really meaningful difference between the 2 regimens right now in terms of which one we -- in terms of the experience with the 2 drugs. We have our own choice internally that we've made. Obviously, we'll make that clear when we do the Q1 update.

Okay. But regardless, as you pointed out at the beginning, with the longer half-life and ability to have a better target coverage over the 24 hours and lower Cmax, even if you did go with like an apa for just hypothetically, you would -- you're in a good place because you've got that benefit on the PK.

That's right. There's -- the beauty here, Yigal, is with the combination regimen, we actually have the ability to double down on the differentiation versus Pfizer. And what I mean by that is for all the reasons I articulated earlier, we believe that our PRC2 inhibitor has a better profile and is a better PRC2 inhibitor than Pfizer's. And at the same time, we think that we have the option between darolutamide and apalutamide, either one of those is a better AR inhibitor than enzalutamide, Pfizer's AR inhibitor. And that's not to take anything away from enzalutamide. That was the first to market. It's done phenomenally for patients. But again, if you ask clinicians to rank order the efficacy of those 3 AR inhibitors as single agents, they'll tell you they're all the same efficacy. If you ask them to rank order the tolerability of those 3 AR inhibitors, every clinician is going to tell you it's darolutamide, then apalutamide and then third being enzalutamide. So we actually have a chance to have a differentiated 2 aspects of the combo regimen here versus what Pfizer has got because obviously, Pfizer has chosen to go with enzalutamide, which is their own AR inhibitor.

Okay. I remember covering Medivation back in the day. Okay. So as far as assuming you'll tell us what you're going to -- plans, I guess, in the next 6 weeks, when would you be ready to start the study? When would you actually kick off this Phase III? What else has to happen before you can actually go?

Yes. So we've said that we want to start this first Phase III study first half of this year. That means that, obviously, there was a lot of work that went into that Phase III study planning and execution as early as last year, actually Yigal, so quite a bit has been done. And between now or between the data update and then when we actually kick off the study, it's really just about closing that last little bit of trial execution. But a lot of the heavy lifting has already been completed at this point. We'll obviously -- once we've got data in hand from dose optimization, we want to finalize our end of Phase I conversations with FDA to get sign off on the dose that's going to be taken into that first Phase III and other aspects of the protocol. But those are really the major aspects of what's remaining at this point.

And then obviously, since the partner AR drug is coming from a pharma entity, just can you comment at all in terms of funding of the study? And would it be -- would you do this yourself? Would you partner it? Would you just purchase the drug? Like can you talk to any of that aspect in terms of the funding of the study or the study conduct at this point?

Yes. We raised a lot of money last year on the back of the good data that we presented. We were able to raise close to $250 million last year. And so really, that has put us in a good funding position. So we are fully funded and then quite a bit for this first Phase III study in prostate. We're also fully funded for our first lung study that would be coming as well. And so the cash runway is into the second half of 2028, Yigal, and that's including these 2 different Phase III studies. The reason to do that, of course, was because, look, we recognize the strategic value of this program, both to ORIC as well as just the broader prostate landscape. And so we did not want any aspect of this first Phase III study being beholden to having to do a partnership or having to go find further funding, and that's why we were so aggressive on the capital raising side last year. We have cash runway into the second half of 2028. The study is fast. So if we start first half of this year, we will have our answer by second half 2027. So call it by the end of next year, have the answer from that first Phase III study in hand, and we've got cash runway in the second half of '28, so well beyond the first readout here for our first Phase III study. We obviously have ambitions that will go beyond that first Phase III study to unlock all those full set of ambitions for multiple Phase IIIs across prostate and even getting into areas outside of prostate, we're going to eventually want to bring a pharma partner on board for a more meaningful BD collaboration. But at this point, look, we're going to get free drug from our -- one of those companies of choice just to extend the existing free drug arrangements so that they'll also cover that first Phase III study. But no other cash needs at this point in terms of us going about that first Phase III trial execution.

Okay. So then is there a situation or a scenario where you could start the second Phase III like in a staggered fashion? Or as you point out, since the time lines to get to top line PFS are pretty soon, relatively speaking, you would just kind of wait, level set, see what that looks like and then decide whether you even need to do anything else.

No. We're going to be full on the accelerator, Yigal. So we'll start this first Phase III first half of this year, but we're simultaneously evaluating doing a lot of internal diligence, both in terms of internal data generation, but also kind of talking to external stakeholders to figure out where the next Phase III study would be within prostate so that we can get that up and running in a staggered fashion, as you referenced, as quickly as possible here because the name of the game is going to be to cover the prostate landscape quite quickly in terms of all the different lines or areas that we might want to elucidate this mechanism. And then like I said, even studying the drug outside of prostate. So there's -- we have a lot of ambitions to develop this drug more fully even beyond this first Phase III study. I think the thing that people need to appreciate here is people might be stuck in some of the old paradigms of some of the much older prostate studies, even dating back to like you said, Medivation days, if you look at these recent studies, if you look at the Pfizer study, the primary endpoint is radiographic PFS, it's not OS, which means that for a relatively small-sized study and a relatively quick to enroll study and most importantly, a relatively cost economical study, you can get a Phase III readout. And so as you think about -- look at Pfizer's first Phase III study, it's MEVPRO-1 is 600 patients in total that are enrolled in 15 months with a radiographic PFS primary -- sole primary endpoint. And what that means is that you can get the answer for not that expensive pool of dollars in terms of a Phase III population that is pretty substantial in terms of commercial opportunity. And so the ability to go do that in a second population is absolutely in our -- within our purview here at a small biotech to be able to do that. And so that's where I think that the longer that -- the more aggressively we can evaluate this program in different indications, both in prostate and outside, the better.

Okay. I've gotten a lot of questions about this program update, which I know you've been left to sort of go a little bit loose as far as what you might discuss in the second half of the year. But any clues that you could provide? Obviously, there are a lot of hypotheses about what you might show there. And then related to that, since the Pfizer data are coming later in the year, I mean, obviously, you pointed out the benefits in terms of the tolerability on the heme and the diarrhea. So if you -- essentially, if you can meet -- at least meet what Pfizer showed on a PFS basis, I guess that's going to be a good place for you.

Yes, I'll ask Dominic to cover both of those.

Yes. I think on the first question on what the program update will entail, I think I'm going to tell you the same thing I told you on the e-mail exchange we had when we first put out the guidance. So we haven't said specifically what that is, Yigal. That could just be a general program update on where we are with the first study, how we're thinking about the second study to your earlier question or it could be some additional data that we think is relevant depending on the mature of that data set. So a little bit of TBD on that from your perspective. With regards to the commercial opportunity here, this is prostate cancer. I know we spent a lot of time at Medivation talking about this. But if you look at the AR inhibitors today, it's really the backbone of treatment for prostate cancer patients. I think back in 2024, the 3 big AR inhibitors did $11 billion in sales. And that really only represents half of the ARPI market because there's still abiraterone, which is about 40% to 50% of the market, and it's still widely used. So when we look at this opportunity, we think this is obviously a huge commercial opportunity. The 2 patient populations that we're currently studying are post-abi and post-AR inhibitors. Each one of those, if you just run the numbers, there's 17,000 to 20,000 patients in the U.S. alone. We just did some back of the envelope math that gets you to each of those about a $3.5 billion TAM, Treatable Addressable Market for each of those in the U.S. alone. And if you look at any standard analog for prostate cancer, the ex-U.S. market is almost as big as the U.S. market. So we think it's a huge market. The beauty of this is we're combining with the standard of care, right? Both urologists, oncologists, they're very, very comfortable prescribing drugs like enzalutamide, apalutamide and darolutamide, and we're just kind of piggybacking off their coattails and not -- and providing a great, great benefit with not much more adverse events. So we think this is a huge commercial opportunity from our standpoint. Now do you have to be differentiated, right? And the short answer is, no. And the perfect analog for this is actually the AR inhibitors. Enzalutamide, [indiscernible] innovation, we launched that in 2012. In 2024, that did $6 billion in sales. Apalutamide came 6 years later and is not really differentiated, and that did $3 billion in sales. So 6 years later, and it's basically doing half the number of sales. We're about 18 to 24 months behind Pfizer. So even with an undifferentiated profile, we think this is a blockbuster opportunity. Now there are reasons why we think we have a differentiated profile, and that then obviously would increase that potential market opportunity for us as well.

I mean is there a scenario where because you get the better tolerability that, that will drive your PFS better because you're not going to get the earlier dropout. Maybe the potency side is the same, but you just have a better tolerability, so that will boost PFS. Is that a scenario that's...

Yes, it's an excellent question, Yigal. And I hesitate to kind of hypothesize too much about it right now, at least in the CRPC setting, mainly because if you look at the Pfizer profile that they showed you for their combination regimen at ASCO GU last year, I think most folks would agree that the tolerability profile was okay, but left room for improvement. But they clearly still got a pretty profound PFS at 14.3 months PFS. So they -- my point is they managed to keep those patients on in the CRPC setting despite the tolerability they were seeing. I think certainly, if you go earlier in earlier lines, so let's take castration-sensitive prostate cancer, CSPC I absolutely think that what you mentioned is going to become a factor there where a safer profile could also lead to a more efficacious profile because you're, by definition, going to be able to keep patients on for longer. And the bar for safety is just going to be that much higher in those earlier lines. In other words, people aren't going to put up with a tox signal that they don't have to. And so that actually might lead to a longer PFS, certainly in the earlier line settings. We'll see if that plays out in CRPC as well.

Okay. I mean -- so I mean, you mentioned getting into a lot of other studies, and you just mentioned the castration-sensitive. That's sort of a part of the long-range thinking at some point, too, for this asset?

It is. Yes.

All right. Let's switch over because we spent 30 minutes on prostate. We want to make sure we give due time to the other half of your company. So enozertinib. So let's just talk about that one for a bit. You had the ESMO Asia data recently, which you showed the exon 20 and the PACC data. Can you just -- let's just summarize that, please, and just kind of highlight where you think it's differentiated. As we all know, this is not an uncrowded space for these particular variants.

Correct. Correct. We've heard for many years how crowded these spaces are, and we continue to see dropouts along the way in terms of the drugs not meeting the TPP profiles that you're looking for here. And so the way I would characterize it, Yigal, is we have 3 different populations that we presented on at ESMO Asia last year. So there was EGFR exon 20, EGFR PACC mutations and then finally, HER2 exon 20 mutations. We are nothing if not a data-driven company. We -- in the data we presented in HER2 exon 20, it was not competitive relative to the benchmarks that have been put out there. And so we've stopped further development in HER2 exon 20. We're totally focused on those first 2 populations in the frontline setting. And the reason is, if you looked at the data that we presented, while early and small end, it's developing nicely. And so if you look at the frontline EGFR exon 20 and the frontline EGFR PACC data that we presented at the end of last year, the response rates in terms of ORR response rates was as good as the best of our competition out there in both of those areas. The tolerability profile was as good as the best in terms of both of those areas, in both of those target populations. And what stood out relative to all the competition by head and shoulders was the CNS activity of the drug. So we have always talked about the differentiation of enozertinib is the fact that not only is it exquisitely clean for these targets of interest without the off-target toxicities that all these other drugs suffer from, but it also has profound or should have profound CNS activity based on all the preclinical characteristics of the program. You've now seen that evidence in spades. And so in 100% of the patients with measurable lesions across those 2 populations I just mentioned, we had CNS responses, 100% intracranial response rate in the patients with measurable lesions. Even in patients with what are known as non-measurable lesions, meaning multiple lesions that are below 1 centimeter in size, we have multiple examples of patients with complete responses where every single one of the brain lesions went away. And as you and others know who follow the targeted therapy space for a while, Yigal, the issue in this space, whether it's EGFR exon 20, EGFR PACC or some of the other mutations that people have been following for years with multiple approved drugs is you have this dearth of drugs that are CNS active. And the reason that matters, and you referenced the crowded landscape, the landscape is not crowded when you start to focus on drugs that are CNS active. The reason it matters is because 1/3 of patients in the frontline at initial presentation have CNS metastases at baseline. Many more patients will actually progress in the brain. And then you also have this third category of patients who have the brain metastases present in what are known as micro metastases where the metastases are there, they just don't show up on imaging yet. And where this plays out is in the long-term PFS of these drugs. And so you can look at amivantamab in the EGFR exon 20 space. You can look at mobocertinib. You will see the same dynamic that you've seen play out in multiple other of these target therapy spaces, which is drugs that are not brain-penetrant end up with very different PFS profiles for their patients with versus those without brain mets at initial presentation. Drugs that are CNS penetrant don't have dramatically different PFS profiles in those 2 different patient populations. And so that's where we think the ultimate differentiation for enozertinib is going to shake out is in the PFS because with a well-tolerated profile, with profound CNS activity, you should end up with better durability than for these drugs that don't have CNS activity.

And just tell us a little bit more about the design of the molecule that allows for this CNS activity, the properties that allow for blood-brain barrier penetration, what is happening there that's achieving this?

Yes. Well, I mean, we've got 8 minutes left in the conversation. I could talk -- I can use all 8 minutes to tell you about the specifics of how the drug was designed that way. But I'll maybe simplify it, Yigal, by saying the drug was designed by the company from whom we licensed the drug, Voronoi, which is a South Korean company. They looked at the space and they said, look, all these other drugs are not getting into the brain, and it's a big issue. And so you have to have a molecule that's from a chemical property point of view and from a molecular weight point of view is small enough and can get into the brain, can stay in the brain without getting pumped out and be highly potent for these targets of interest. And so all of that translates into the CNS activity that you're seeing today with the drug, which is all the preclinical profiling showed that, like I said, it gets in the brain, it stays in the brain. It gets into the CNS. And actually, we even mentioned during the Q&A of at ESMO Asia that we have multiple examples of patients. It's very rare actually in clinical trials to be able to draw CSF from these patients. But in the very few patients that we were able to do that in, every one of them had the drug in sufficient quantities of enozertinib in their CSF. So that's the proof in the pudding that the drug is in the CSF, and that's what's giving you the brain activity.

Okay. So then sort of cutting to the chase in terms of where you're going with this. You mentioned HER2 is out of the picture. I think Dom has mentioned many times, the second line is not something you're going to focus on. So you're basically going to focus on 1L EGFR exon 20 and 1L EGFR PACC. So what do you need to show there relative to the benchmarks to be competitive? And where are you leaning in terms of how you would do a registrational study? We've seen some examples of registrational studies already, as you know, from some of the competitors, and that's probably giving you some insight into what you may want to do.

Yes. Dominic, do you want to take that?

Yes. Maybe we'll start off with the data update in the second half of the year, Yigal, because it is a pretty comprehensive data update. So just to kind of rehash that. So we'll have 3 kind of cohorts of patient data that we'll have. And for each of those, it will be 20 to 25 patients. So in total, 60 to 75 patients. It will be first-line EGFR exon 20 as a monotherapy, that's one. EGFR exon 20 in combination with Ami, that's the second. And then we'll have first-line EGFR PACC as a monotherapy as well. So what we're going to show here again, we want to obviously see systemic responses. We want to show CNS activity. And here, we want to get a good look at durability as well. As Jacob said, durability is kind of where you expect to see the benefit from a CNS active agent. With regards to benchmark, I think, generally speaking, from a response rate, you want to be 60% or better in each of those general cohorts. Now obviously, we'll have some data from competitors in the first half of this year. We'll obviously look at those and see how those translate as well. But again, the key thing for us is the differentiation on the CNS activity. I think that's where we -- initially, based on preclinical data, that was the hypothesis that kind of continue to show that in the clinic, both in the dose escalation and then on the dose optimization we shared with [indiscernible] as well. With regards to are we leaning towards one or the other, again, Jacob said, we're a data-driven company. We're going to look at our data, compare it to the competitive landscape and see if it makes sense for us to pursue first-line lung in exon 20 or PACC or both or neither. Obviously, the data will drive that decision. But again, if we continue to show the differentiated profile that we've shown to date, we think we could be potential best-in-class here.

Okay. And just sort of at a higher level, speaking about cash and runway and prioritization, when you think about the R&D budget for the company and kind of roughly, like how much is going to enozertinib versus the prostate work roughly?

Yes. Yes, it's a good question. I think the obvious thing is prostate is a much larger patient Phase III study that you'd have to run just as a hypothetical analog would be for prostate, it could be a 600-patient study. I think for lung, for 1 of those 2 indications, it could be significantly less, call it, 50% of that. So that study obviously would be less as well. But again, I think they're both great opportunities, and we'll have to make that assessment on lung later the part of this year when we have the data in hand.

I'll put it this way, Yigal. The entirety of a Phase III experience in the front line for 2 lung populations is going to be less than or the same as one prostate study. And so from a -- we -- look, we recognize that where investor mentality these days is on targeted therapies, which is investors tend to run hot and cold on targeted therapies. So we know our cost of capital for lung is a lot higher in the minds of investors than it is for prostate and the company is mindful of that as we allocate our resources to these various opportunities.

Okay. And just in the last few minutes here, you talked in a bit of detail about the prostate market. But if you could just very, very quickly just kind of enumerate what the market sizes are for some of these indications like the EGFR exon 20 and the EGFR PACC. I know it's still an evolving calculation, especially for the PACC as some of these are -- there's a long tail of mutations there, which are still being identified.

Yes. I think if you look at the EGFR exon 20, let's call it about -- it's about 2% and look at PACC mutation, it's higher than maybe closer to 2.5%, 3%. So I think if you do the simple math on this, right, 4,000 patients in the U.S. for EGFR exon 20 and call it 5,000 for PACC mutations. It's a sizable patient population or opportunity across the board in the U.S. I'd say that the exon 20 is close to $1 billion plus TAM, whereas the PACC mutation being a little bit higher there, that could be closer to $2 billion as well. So we do think people are under calling it the commercial opportunity here. And again, being the best-in-class here with the CNS activity could position us nicely if we continue to show that.

All right. Well, awesome. Well, we appreciate the discussion. Super interesting. And of course, looking forward to your sort of biggest reveal in a few weeks when we learn more about which way you're going to pivot on the Phase III for prostate. So we'll be -- we're watching our e-mail for that. So great to talk to you.

Sounds good, Yigal. Thank you for having us.

Thank you.