Protagonist Therapeutics, Inc. (PTGX) Earnings Call Transcript & Summary

Welcome to the Protagonist Therapeutics IL-17 oral peptide antagonist development candidate nomination Conference Call. [Operator Instructions]. As a reminder, this call is being recorded today, Thursday, November 21, 2024. I will now turn the call over to Dr. Corey Davis of LifeSci Advisors. Please go ahead.

Thanks, Shamali. Hello, everyone. Thanks for joining us on our call today. Joining me from Protagonist are Dr. Dinesh Patel, President and CEO; Dr. Newman Yeilding, Chief Scientific Advisor; Dr. Samuel Saks, Clinical Development Advisor; and Dr. Ashok Bhandari, EVP, Chief Drug Discovery and Development Officer; and Asif Ali, CFO. Earlier today, Protagonist issued a press release announcing the formal nomination of oral peptide IL-17 antagonist development candidate. A copy of this press release is available on the company's website. On Slide #2, please note that on today's call, we'll be making forward-looking statements, including statements relating to the safety and efficacy and the therapeutic and commercial potential of our investigational product candidates. For further information relating to risks and uncertainties related to our business, please see the periodic reports we have filed with the SEC. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 21, 2024, Protagonist undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities law. With that, I will now turn the call over to Dinesh Patel.

Thank you, Corey, and hi, everybody. We appreciate you all being on this call. I would start by highlighting on Slide #3, that Protagonist is focused exclusively on the discovery and development of peptide therapeutics. We have an innovative technology platform and very unique expertise and experience with peptides that has now led to 2 distinct assets that are in late stages of clinical development. Rusfertide is a first-in-class hepcidin mimetic partnered with Takeda Pharmaceuticals and is currently in a Phase III study in polycythemia vera, and we look forward to sharing our results in the first quarter of next year. Icotrokinra or ICO is the first-in-class and only-in-class oral IL-23 receptor antagonist peptide where earlier this week, we and our partner, Johnson & Johnson, or JNJ reported successful outcome from 2 separate Phase III studies in psoriasis, confirming its potential as a best-in-class oral targeted therapy for psoriasis. With such multiple validations and a balance sheet that is now stronger than ever before, with cash runway extending at least up to end of 2028, we can now effort to initiate multiple new oral peptide based discovery programs and succession and also effort to keep full ownership of these programs for longer time periods including to clinical proof of concept and beyond. The specific objective of today's call is to share with you the selection of PN-881 a potential best-in-class oral IL-17 receptor antagonist peptide as a development candidate for the potential treatment of various immune-mediated skin diseases. A common theme with our oral approach, be it ICO or 881 is that we choose to work on biological targets that are strongly validated with blockbuster category of injectable drugs thereby eliminating the biological rationale risk. Our strong differentiation usually comes from offering a unique oral peptide against such validated targets that will have the potential of being a best-in-class oral paradigm-shifting targeted therapy in those areas. So Slide 4 lays out the general pros cons of the 2 broad category of drugs, namely small molecules and big biologics, which is what the pharmaceutical industry has most commonly worked on ever since its inception 50, 60 years ago. In general, small molecules are less potent, but can be administered orally, whereas the antibodies are much more potent, but are administered as injectables. With oral peptides, Protagonist is trying to combine the best of both ones. That is combining the amazing picomolar potency of antibodies and the convenience of the oral pill characteristics of small molecules in a single peptidic chemical entity. We have already done this successfully with the IL-23 blocker, icotrokinra and would now like to achieve the same with PN-881. On Slide 5, interleukin-17 is a clinically and commercially validated pathway with multiple successful parentally administrative drugs currently on the market for several immune-mediated conditions, including psoriasis, psoriatic arthriitis, HS and axial spondyloarthritis. IL-17 inhibitors and IL-23 inhibitors are the 2 go-to treatment option for psoriasis and these other derm conditions. And together, they command the vast majority of market share. Fortunately, for Protagonist, it has a highly differentiated presence in both of these areas. First, through the IL-23 blocker, ICO in partnership with JNJ and now with the IL-17 blocker 881, which is fully owned by us. Recent reports estimate that IL-17 therapeutic cells could more than double by 2031 to 9.3 billion for psoriasis alone and that other derm indications where IL-17 therapeutics are effective, could offer an additional $8 billion opportunity. It is very important to stress that currently, there are no approved oral IL-17 antagonist on the market. So with PN-881, our new asset -- it is an outcome of our expertise and experience with oral peptide and it has the potential to be a best-in-class oral IL-17 antagonist. We have achieved the very ambitious target profile by having 881 match or exceed the potency of IL-17 antibody drugs and also by being able to block all 3 isoforms of IL-17, AA, AF and FF, and this collectively could lead to optimal and durable efficacy through an oral pill. With this general introduction, now I would like to hand it over to Dr. Newman Yeilding of our full-time Chief Scientific Officer, to go over the IL-17 biology and share more details about the drug properties of PN-881. Newman?

Thank you, Dinesh. If you go to Slide 6, thank you. This simplified schematic provides a high-level mechanistic overview of psoriasis and the successful identification of its key mediators over the last 2 decades, 2 targets have emerged as the key mediators of psoriasis, IL-23, which polarizes the immune response towards a Th17 phenotype and then IL-17, which directly activates keratinocytes, resulting in their hyperproliferation and production of additional inflammatory cytokines. And on Slide 7, you'll see that multiple injectable agents targeting IL-23 and IL-17 have transformed the care of psoriasis patients. Recent efforts to develop oral agents have largely focused on these same 2 key pathways targeting the IL-23 receptor or its downstream signaling cascade, in other words, tick 2 or by targeting IL-17. In Slide 8, we designed PN-881 to block IL-17. There are 2 relevant isoforms of IL-17A and F shown here. The IL-17 receptor can be activated by either the homodimer out AA or FF or by the heterodimer, AF. PN-881 neutralizes all 3 dimeric form of IL-17 of the currently approved products to Cosentyx and Taltz, current target IL-17A, thereby blocking 2 of the 3 dimeric forms, AA, AF -- and the third, BIMZELX targets both IL-17A and F, thereby blocking all 3 dimeric forms. This distinction turns out to be important as shown in the B radiant clinical trial, which showed higher levels of PASI 90 and PASI 100 responses at week 16 and 48 with BIMZELX as compared with Cosentyx. So these results demonstrate the additional benefit of blocking all 3 dimeric forms and taking these data into account, we focused our efforts on creating a product that targets all 3 dimeric forms, much like BIMZELX. Moving to Slide 9. I creating oral inhibitors of IL-17 has proven challenging with many unsuccessful efforts to create small molecules in our peptide approach in creating PN-881 ad we focused on peptides with high potency and a broad spectrum of activity for IL-17 isoforms. We selected peptides that were stable in the harsh conditions of GI tract for oral delivery and with metabolic stability in serum after absorption. Final selection of our development candidate was based on in vivo pharmacology assessments, including in vivo PK and a number of animal models, in vivo PD, tissue distribution characteristics likely to achieve efficacy in dermatologic conditions, as well as efficacy assessments and a rat skin inflammation model. This slide shows the extensive data package supporting progression of PN-881, and we look forward to sharing these data in greater detail at future scientific meetings for today, we'll focus on the highlighted data, namely the in vitro potency of PN-881 and a preclinical proof-of-concept study in an IL-23 induced skin inflammation rat model. In Slide 10, this describes our in vitro assay and graphically illustrates the potency obtained in our labs for PN-881 in comparison to an oral small molecule analog and several approved IL-17 antibody drugs. PN-881 blocks all 3 dimeric forms of IL-17, but on this slide, we're showing it's blocking activity only against the IL-17 AA, homodimer. Shown on the left is an illustration of how we assess potency, HT-1080 fibroblast stimulated with accommodation of IL-17 and TNF alpha produce IL-6 and blocking IL-17 inhibits that IL-6 production. In the graph on the right, the orange curve shows that PN-881 maximally inhibited IL-6 production, which is shown on the Y-axis at higher concentrations, which shown on the X axis, while IL-6 production progressively increases lower PN-881 concentrations and these data were used to generate the IC50 or the concentration that inhibited 50% of IL-6 production and the IC90 or 90% inhibition. The blue curve shows BIMZELX in the same assay showing that PN881 has generally similar potency while being significantly more potent than Cosentyx, which is shown in the gray line or what we believe is the Dice molecule, DC-806 or a close analog based on the Dice patent, which is shown in the black line. In Slide 11, this is our money slide. It captures the potency profile of PN-881 against all 3 dimers, namely 17 AA, AF and FF and compares it to the potency obtained in our labs for the oral small molecule analog and several approved antibody drugs. You can see from these data PN-881 has very good picomolar levels of potency against AA and double-digit nanomolar levels of potency against the AF and FF isoforms. In general, it compares well against the most potent approved antibody drug BIMZELX against all 3 dimeric forms. PN-881, as you can see, is 2 orders of magnitude more potent than Cosentyx in blocking IL-17 AA, and Cosentyx does not block the FF dimer. Our target is the best-in-class oral and compared to the most recent oral IL-17 inhibitor in the clinic DC-806, PN-881 is 3 orders of magnitude more potent with a broader spectrum in that it also blocks IL-17FF. And we hope to leverage this high potency to drive high levels of efficacy in the clinic. In Slide 12, having summarized the in vitro potency of PN-881 here on Slide 12, we're summarizing key in vivo preclinical studies. The pharmacology of 881 was evaluated very extensively in a variety of preclinical models with pharmacokinetics evaluated in mice, rats, dogs and cynomolgus monkeys in cynomolgus monkeys, PN-881 achieves high levels of systemic exposure reaching concentrations in excess of 100 nanograms per milliliter after oral administration of 2.5 milligrams per kilogram, and as in vivo proof of concept of a pharmacodynamic effect or proof of activity, we challenged mice with a super physiologic dose of IL-17 and showed that oral administration of PN-881 inhibited the production of CXCL which is a downstream biomarker of IL-17 activity, thus demonstrating good pharmacodynamic effects. And based on valuable feedback from key opinion leaders and scientific advisers, we also have evaluated PN-881 concentrations in the skin and are glad to share that it achieves good skin penetration in mice and also in mini pigs, which have thicker skin and more akin to human skin. So to summarize these data, PN-881 achieves good systemic exposure, good PD effects and good tissue distribution and we look forward to sharing more details about each of these studies at future medical conferences. Moving to Slide 13. Finally, we evaluated PN-881 pharmacology in the same preclinical model of skin inflammation that we use for icotrokinra in this rat model. Ear inflammation is induced by repeated intradermal injections of IL-23, which causes inflammation through IL-17 production and ear thickness is measured over time. In the left panel, the orange line with the steepest increase shows the increase in ear thickness over 4 days with daily injections of IL-23, which is significantly higher than the black line, which shows the ear thickness changes after daily injections of vehicle, but no IL-23. The future colored lines show that rats twice daily with PN-881 at doses from 160 milligrams down to 10 milligrams per kilogram, had reduced ear thickness intermediate compared to IL-23 alone, demonstrating PN-881 inhibits the inflammation induced by IL-23. And we can look at this in the right panel quantitatively where we assess this reduction showing that the change in your thickness was statistically lower from baseline at day 4 at doses as low as 10 milligrams per kilogram. If you move to Slide 14, encouraged by these results. We conducted additional experiments that are shown here, same model, lower doses that demonstrate that PN-881 ameliorates skin inflammation in the same model at doses as low as 1 milligram per kilogram BID. So the IL-23 induced inflammation in this bottle is ultimately driven by IL-17, which is potently inhibited by PN881. Moving to Slide 15. I based on these very promising discovery preclinical studies, the PN-881, we've nominated this peptide as a development candidate and have initiated IND-enabling work including manufacturing to support initiation of toxicology and early clinical development studies. I'd like to point out that we have already accelerated our Tox Program and are skipping the customary 28-day Tox and are instead opting to move directly into a 3-month Tox Program this way, after completion of our Phase I SAD MAD study, we'll be well positioned to begin a 12-week proof-of-concept dose-ranging trial in patients with moderate to severe psoriasis. And based on the strong precedents from injectable antibody drugs, we believe that the results of this Phase II study can be used to effectively gate our decisions about rapid expansion into other IL-17 mediated diseases including sclerotic arthritis, hydradenitis supparativa and spondylarthropathies. So with that review of PN-881. I'll now hand it back over to Dinesh for concluding remarks.

Thank you, Newman, for that excellent overview on the IL-17 blocker PN-881. Now let me make a few high-level comments on what's next in our promising pipeline. So clearly, as you can see on this Slide #16, the Protagonist team continues to demonstrate its expertise, experience and dominance in the field of oral and injectable peptides. In the IL-23 program earlier this week, we shared the successful outcome from 2 Phase III psoriasis studies with icotrokinra , the only oral IL-23-receptor antagonist. I jokingly refer to this as an overnight success story that was only 10 years in the making. In the first quarter of next year, we look forward to the results from the Phase II ulcerative colitis study and also to the initiation of the Phase III psoriatic arthritis study by our pharmaceutical partner, JNJ. While the Phase III cross-trial comparison results already look favorable for ICO. In the second quarter, we anticipate getting preliminary results from the direct head-to-head comparison studies of icotrokinra versus the oral small molecule TYK2 inhibitor Sotyktu. Finally, in the second half of 2025, one can expect NDA filing of icotrokinra for psoriasis. So this decade-long journey with IL-23 blockers has also provided us a protagonist with very unique insights in the field of oral peptides that we are now successfully applying to multiple new programs starting with PN-881. With 881, as Newman summarized, we have the potential for a best-in-class overall agent and we anticipate initiating Phase I clinical studies with this peptide in the fourth quarter of next year. Besides 881, we believe we are on track to announce an oral peptide agonist against a validated target in the obesity space in the second quarter of next year and an oral hepcidin pathway-related ferrel protein blocker in the fourth quarter of next year. Finally, while not an oral peptide rusfertide, a first-in-class once-weekly subcutaneous injectable hepcidin memetic is also an equally valuable asset in our pipeline, that was partnered with Takeda earlier this year. The partnership is indeed going very strong, and we look forward to reporting the Phase III verify [ pole ] verify polycythemia vera study results in the first quarter of next year and assuming a positive outcome and NDA filing by the end of 2025. So clearly, it is going to be a very, very busy 2025 for protagonist, full of new and highly significant disclosures. And in a way, we have none other to thank then our outstanding team of highly talented and dedicated pool of about 120 employees. We are also ever so thankful to our pharma partners, our vendors, consultants and advisers and the investigators and all the human volunteers who have participated in our clinical studies. So with this overview now, I would like to thank you all again for your participation on this call today and hand it back over to the operator.

[Operator Instructions]. Our first question comes from the line of Brian Cheng with JPMorgan.

Lots to digest, not just today, this week, and really congrats on the progress. A couple of questions from us. I guess one is, given the similarity to BMI, how do you think about the differentiation of is clinical profile ultimately compared to FI. And as you kind of think through the potential risk of suicidal ideation that you see on the BIM label, do you think your drug can improve on that specific risk? And then we have a follow-up.

Thanks, Brian, much appreciated. If I got your question about the differentiation, right, I think just a focus on trying to be the best oral targeted therapy has been serving us very well. And we are going to be boring and repetitive in a very profound manner by just continuing with that slogan. So was our approach with icotrokinra, and that is also going to be our approach with PN-881. In terms of the ideation component that you see and maybe Sam Saks will comment a bit more -- but in talking to the KOLs, and this is the KOL feedback, it's like if it or anything, that's an overreaction and there is almost nothing to it.

It's too early to predict, obviously, what would look like for this new agent. And to what extent FDA will think about class effects of IL-17 inhibitors versus us being a unique oral agent. But as Dinesh said, that I would reinforce the unique differentiation here is to be oral. And we actually think in some of the disease areas where IL-17 is effective in injectable form there's actually less oral alternatives available than in psoriasis.

And the marketing research that has been done by our partner in the context of block our icotrokinra clearly suggests just a strong preference for an oral pill in the derm community, and this is something that is reinforced in our conversations with the KOLs as well.

And then just maybe one last 1 as you work through your upcoming work with IL-17? And I mean, you just had a great experience with JNJ, right? Do you think that you will ultimately need a partner to take this all the way to the finish line? What's your latest thinking on partnership on those specific assets?

Yes. As you know, Brian, we have always been open to all different possibilities that will be in the best interest of our stakeholders. But the beauty over here is like we don't have to do anything in desperation. We have a great cash runway. All the way at least through 2028. And that does not even count the new potential milestones that we could be earning from both partnerships. So we can assure you and others that will be open to the idea of doing the right thing at the right time, but there is no desperation or urgency.

Our next question comes from the line of Roger Song with Jefferies.

Great. Add my congratulations to second good news within a week. A couple of questions from us. Maybe the first one relates to the PK profile. I'm not sure if I missed that, so can you just elaborate on the potential PK profile in terms of the once day or others? And then maybe a little bit descriptive around the Cmax, AUC will be very helpful.

Yes. No, I think it's a great question, Roger. What I would say is that, I mean, we did do a little glimpse of what we see in -- that is very encouraging concentrations over 100 nanograms per mil at doses as low as 2.5 mg per kg, which kind of at an allometric scaling is equivalent to 50 mg daily dose in humans. So that is all super exciting. And roughly speaking, things are certainly guiding towards a 1 daily. But as you know, the real determination comes at the end of the day after you see the Phase I clinical data in humans. Newman, would we like to add anything?

I think you summarized it nicely. We see -- we're very impressed with the systemic levels of this particular peptide that we're seeing in animal models, we're very encouraged about the half-life that we're seeing. As Dinesh said, we think that, that does open up the possibility, but until we see the of once daily dosing, but until we see the data in humans, we don't want to overpromise and under deliver.

Got it. Yes. And then given today is the DC in then AA1. And then are you continuing to work on additional compounds as you know more about the property for oral peptide IL-17 potentially you can nominate additional DC before you move into the Phase I?

As my wife would say, [ Jim ], we are barely enjoying the birth of our first child and my mother in law is already inquiring about the second one. But jokes are aside right now, high priority is on 881 obviously. But look, I mean it's just very prudent for big pharma as well as for Protagonist to always have a plan we always have a backup compound and that has served us well. So yes, that's a part and parcel of what we do behind the scene. Sorry, Sam, go ahead.

I was going to say, as we told you in the past, this was a bake-off between various choices that we had to elect this molecule. So we had choices and that gives us the ability to have backup molecule.

Actually, that's a great point. I mean, in all honesty, for the last 4 months or so, we have been doing a very stringent comparing contrast of 3 potential candidates, and this is the winner by all measures.

Got it. Yes, we are enjoying multi children family. So maybe just last one -- and in terms of the cash runway right now into 2028, can you just give some color how much the current and how many current operational plan already embedded in this cash runway and how much is related to the IL-17?

Great question, and I'll pass it on to our CFO, Asif?

Roger, thanks for the question. Yes, I think all I'll tell you is we've told you, you've got 4 years of cash on hand. We've not disclosed our assumptions, but as Dinesh pointed out, if you look fully into our corporate deck, you see there was a vast magnitude of potential inflows that's not factored in. So I think while we're not disclosing the assumptions, it gives us the confidence. Yes, you're addressing needs as they arise, capital allocation.

Yes. And maybe what we can disclose in a qualitative sense that certainly for PN-881, we have baked in all the preclinical 3-month talks and clinical studies up to clinical POC.

Correct.

Congrats again.

Thanks, Roger. Sorry, we missed out on your conference, but now you know why.

Our next question comes from the line of Kripa Devarakonda with Truist Securities.

Congrats once again for this week's success. I hope you guys made some time to celebrate. So when the IL-17s have primarily approved in derm and room indications. And it looks like that's the plant direction for 881 as well. So I was wondering how you think this fits in with ICO opportunity, especially given you just saw really good positive data in psoriasis. Is there any way you can carve out a population with an order 17 could become a preferred option based on what you know about the market? I mean one of the things we learned from API that was held a few days ago, is also that IL-23s are becoming not just injectable, but in general IL targeting IL-23 is becoming more popular in psoriasis space. So I was wondering how you're thinking about the whole space? And then I have a follow-up question, maybe more about the platform. You talked about 3 molecules that were in the bake-off before you picked one. If you can talk about any lessons learned through the process of developing the last few oral drugs that helped you zone in on these? That would be great.

Yes. Maybe I'll answer the second question first. And yes, it's definitely the very kind of close and tight bake-off amongst the 3 candidates. It really encourage us to take a deeper dive into extensive preclinical studies. I'm sure you must have noticed we did the mini pig study, evaluating skin concentrations in the minipigs based on the directions we got from some of the psoriasis, KOLs and things like that. But in terms of the lessons learned and that kind of thing, so that is something we have been slowly, steadily accumulating over the past 14 years. And with each new program, certainly, there are new challenges, but definitely, there are more efficiencies that get created in the new program versus the previous one. That much we can certainly save its certainty. And as I mentioned before, I mean, there are 2 things. One is, of course, the core technology platform. into which, by the way, we have started adding new tools as well. And of course, no surprise, AI is definitely another component that we are adding in our toolbox as a new tool. So we would like to stay at the cutting edge and but the best way to demonstrate that is to come up with real oral peptides nominating them as development candidates. Now getting to this kind of tug of war between IL-17 versus IL-23, as I mentioned in my prepared remarks, I think for Protagonist, it's like we have a presence in both areas. So that's our huge advantage of course, with ICO, we have a partial ownership, but a very, very significant one. And of course, that's the most advanced asset whereas with 881, it is on be beginning, but it is fully owned by us. And the antibody drugs are already doing the homework for us in a way in terms of which class of drugs is going to get what type of market share and prominence in different disease indications. So for example, HS and spondyloarthritis will belong to oral IL-17 antagonists or IL-17 antagonist in general, whereas IBD might be contraindicated and that could belong dominantly to the IL-23 blocker. So -- and psoriasis and psoriatic arthritis, time will tell. Maybe it's a coin flip.

I'll just add one thing. So these are going to be the 2 dominant pathways in psoriasis, the foreseeable future. We've tried to understand how the dermatologists differentiate between the -- and 1 key differentiator to IL-17 has a more rapid onset of action. So if you have a patient who needs a rapid onset of action, then IL-17 is probably going to be preferred. IL-23s tend to be less frequently administered. So there are a number of things that distinguish the 2 -- in terms of the subcutaneous products. We'll have to -- we're...

We may be in a totally different territory with the oral component -- so time will tell yes.

I would just remind you that JNJ is going to be making all the commercial decisions for the IL-23 receptor inhibitor so that -- how they choose to commercialize that and move that forward, that's going to be all them. And as Dinesh said, this is the kind of market where ultimately, if we're successful after we've added value with proof-of-concept generation, we would seek large pharmas to help sell here because this requires DTC advertising, heavy marketing lift, all that sort of thing. If someone is going to go up against JNJ is likely not going to be us, and that person is likely going to determine what that commercial strategy is and how to do it versus not only UCB, but JNJ and everyone else in the combined space, including Abbott, -- so we're happy, I guess, I should say.

Yes. By the way, I mean, in summary, it's like the beauty is we have presence in both a very distinct presence with the best oral targeted therapy in each category. And it's already evident that there are some areas of overlap, but at the same time, there are some areas of non overlap. So I think net-net, it's all very good for Protagonist.

Our next question comes from the line of Tara Bancroft with TD Cowen.

This is Ikenna Okafor for Tara Bancroft. I have a question here about dosing. I was wondering what kind of food effect do you anticipate with 881? And do you expect patients will need to avoid eating before and after taking 881 similar to what they had to do with 2113?

It's a great question, and we will just have to see what we learn in the actual clinical studies, but the observation is a very good one. Because if you think about oral peptides in general, including the experience more recently with oral obesity agents. It kind of loosely points towards, hey, take the drug once daily with an empty stomach for 30 minutes, something like that. But time will tell. But again, it's not a showstopper, right? I mean, it's one of the easiest recipe to follow, take your drug with an empty stomach and don't eat anything for 30 minutes.

You look at the EADV data that JNJ just recently published an IL-23 receptor inhibitor, patient satisfaction is great. So method of administration Dinesh just outlined, is very well received by patients because it's at the bed side as he said, you take it on a rising before you go anywhere else. And but it's not you're ready to have your breakfast, you're okay.

And there are no weird nuances like you have to like flat in bed or anything like that, right? So that's simple.

Our next question comes from the line of Julian Harrison with BTIG.

Congratulations on all the recent progress, including the first Phase III data set of a protagonist molecule earlier this week. First, I'm curious why in this upcoming Phase I trial, you are most interested in to tell you whether or not you're on the right track. And sorry if I missed it, on half-life, is your base case twice a day dosing for 881.

In general, things are loosely pointing towards once daily, actually, more than loosely. It's strongly pointing towards once-daily dosing. But as you very well know, the real finding will be when we conduct the Phase I studies in healthy volunteers. That is what will enable us to sharpen our dosing regimen.

Is the target was the target product profile for the Discovery Group.

The ones daily, yes.

Yes. Excellent. That's very helpful. And then oral preference in psoriasis and psoriatic, arthritis seems pretty well characterized already. I'm wondering if you have a good read on what fraction you expect oral preference to be in hidradenitis and axial spo?

Yes. I think we can admit that we don't have definitive semi-quantitative marketing research back material, things like that. These are still early days for our 881 asset, but the KOLs that we talk to. They don't just treat psoriasis, they treat all derm conditions. And they are clearly mentioning that hey, don't ask us why necessarily, but it's like in our space, oral is strongly preferred.

Yes. As was mentioned earlier, a slice of this market is the rheumatology community, and that's a little bit different doctor population, and that will need to be addressed as well.

Our next question comes from the line of Douglas Tsao with H.C. Wainright.

Congrats on all the progress. I guess maybe as a starting point, you noted in your comments specifically about dermatologist sort of preference for oral agents, certainly over injectables. And so does that lead you to sort of focus on dermatology-focused indications for the IL-17 program, initially. And then I guess the other question I have is when you mentioned sort of your position or sort of the strength our balance sheet to take this further into proof of concept. How do you think about that versus finding a partner who may have a bias in terms of sort of input in terms of the strategic direction they want to take the asset potentially? Meaning that if you go in one direction with your own proof-of-concept program, that might diminish somebody's interest because they would have preferred to go in a different direction at first.

Yes. No, I think those are excellent considerations. And again, as I mentioned before, we will be very carefully evaluating all different options at any given time, and we will do what is in the best interest of stakeholders as well as a program, as you are pointing out. Now the good thing, though, is like as I also mentioned in my prepared remarks, we are working on those targets that have ample validation through both clinical and commercial validation, right? So this is a path that in a way has been well traveled before us, but with injectables. But that kind of takes away the strategic suspense from but approach, meaning it's already known that with a new agent with a new IL-17 blocker, you would do a psoriasis study first, get an understanding of the PK/PD, the biological effect, that kind of thing. And then that will give you a very nice translation into how to go after not just psoriasis, but with other indications. So we'll be tempted to follow that kind of recipe and that kind of approach over here.

So I'll make a couple of comments. Number one, I don't think that the oral preference is limited to psoriasis. I think it's across all indications. So I think that this strategy will be appropriate for all the IL-17 mediated diseases. The reason we chose psoriasis first is because that's how we can learn the quickest and develop this molecule the quickest. So that underpins most of our thinking as to why we're going into psoriasis first.

It has the highest response rates. So other people with injectables have used it the same way we are as a target validation because you need to see very high response rates to be able to play in that pool. So it only takes a small number of patients to know what you've got.

And I had mentioned it uses will leverage the psoriasis data to gate rapid decisions about other indications. We think this is -- studying psoriasis is enabling for other indications as well.

Of course, we'll get safety information, which we would think would largely extend.

Our next question comes from the line of [indiscernible] with Wedbush.

Congratulations on the progress. Maybe a follow-up question on indication selection. I hope it's not redundant. I think -- so I just want to confirm that it is possible that after Phase -- sorry, the next study in psoriasis, depending on the profile, you might make a decision to switch to a different indication if you deem it to be more appropriate. I think given that there is going to be probably IL-23 oral for psoriasis, and I think Sam talked about this advantage of 23 inhibition versus 17 inhibition in psoriasis.

Yes, absolutely. The idea would be that once we get the signal that we want to achieve the -- in psoriasis, as Newman mentioned before, we would be very tempted to trigger multiple studies in all the relevant indications, meaning HS and spondyloarthritis, in particular. As you know, we don't have cash constraints. So that's a wonderful thing. And of course, we have all the resources and our employees are used to working very, very hard anyway.

Okay. Then another question on the partnership. So your existing partnership with JNJ, does it provide J&J with any advantage when it comes to partnership discussion for this IL-17 oral program?

Well, the way I would answer that question is IL-17 is fully owned by us and none of our partners, whether JNJ or Takeda, has any privileged rights to IL-17.

Our next question comes from the line of Catherine Okoukoni with in JMP.

This is Catherine on for John. I just have a quick question about us any benefits on safety that you might expect to see with your candidate relative to kind of what's out there given the potency? Is that kind of -- yes, I guess that's my question. On any safety advantages you might back.

Yes. I think clearly, when we were creating targeted the target product profile, what we want to achieve was combined the best of both worlds, meaning try to grasp the extraordinary potency of the best antibody that is out there, and that is BIMZELX, which has amazing potency, not just against [ AAs ] of dimer but also against the AF and FF dimers. So -- and we believe we have achieved that with 881 in our product profile. Now how this translates to its own unique advantages as an oral agent that is something we will learn over a period of time. But I mean, to make it very clear, and you're pointing out a good thing, this is about as good as it could get with an oral agent. And we -- our team has been able to achieve that.

When you add the F activity to the A activity, what's been known clinically is you get a small increase in the rate of oral candidiasis or it's called thrush, which can be easily treated, the KOLs don't think it's a big deal, but that is one thing you get a little bit more of when you add the activity, who in our product be, have a little bit less of that is possible, but it's way too early to say that. But we have no reason to believe it would have any more of that than other agents like BIMZELX have the F activity.

I think that's a great point because by virtue of being an oral agent, right, unlike injectables, where there is a huge high concentration bolus injection on day 1, we don't go through that. We go through a very steady-state dosing and exposure of our drug.

Thank you. We have reached the end of the question-and-answer session. I would like to turn the floor back to CEO, Dinesh Patel for closing remarks.

Yes. Again, thank you, everybody, for participating. As you can tell, this has been a great day, actually, a great week for Protagonist team, and we are at a very promising and powerful junction. And thank you all for your support to Protagonist today and in the future with the -- and we will try to do justice to our assets over the coming months and years. Thank you.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.