Sareum Holdings plc (SAR) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Sareum Holdings plc trading update investor presentation. [Operator Instructions]. I'd also like to remind you that this presentation is being recorded. Before we begin, we'd like to submit the following poll. And I'd now like to hand over to Tim Mitchell, CEO; and John Reader, CSO of Sareum Holdings plc.

Good morning, Mark, and good morning to everybody else listening again. Thank you for taking the time to listen to and watch our trading update. So this is based on the announcement we made earlier this week with an update of our development status and a little bit about the financials for our financial year, which ended at the end of June at this year. And if we move on -- past the disclaimer on to Slide 3. So this is a reminder, really -- so I've got a couple of introduction slides. So for new investors and investors who aren't so familiar with the company. Sareum is a specialist small molecule drug development company. So we design and develop new drug candidates, which we take into late preclinical or early clinical stages and then look to license them on to larger pharmaceutical and biotechnology companies who will then complete the more complex and expensive later-stage clinical trials and put them onto the market. I'll expand on our pipeline in a later slide, but as a pre instruction, we have a combination of internal assets that we're currently focusing on and then partnered assets where we've done our development work and have licensed them on to a partner for this further development. So on the left, in gold are the internal programs. So these are the 2 TYK2/JAK1 programs, SDC-1801 targeting autoimmune diseases and SDC-1802 targeting cancers. And actually, I'll just head off a pretty submitted question on this about the differentiation between them. So without going into a lot of technical detail there, examining the data packages as a whole, we've concluded that SDC-1801 has a better overall profile for autoimmune diseases, and 1802 has a more suitable profile for cancers. We've also been investigating the possibility of looking at the severe inflammatory response that can be a problem with coronavirus and other viral infections. And there seems to be some good literature evidence out there that a TYK2/JAK1 inhibitor could be useful in this stage. And we've applied first of all some grant money to go into some initial studies in this area. Moving on to the partner programs then. The first program here partnered was the TYK1/kinase program, which was SRA-737, excuse me, which was licensed in 2016 to Sierra Oncology. This has since completed or nearly completed 2 Phase I/II trials, and we'll give an update on the status of that towards the end of the program. And then the FLT3+Aurora program. So this is in preclinical stage, and we announced earlier this year that we've licensed this to a Chinese specialty pharma company that has special expertise in formulation development, which was a problem we come across in the development of this program. We have a very flexible and outsourced R&D model. So in-house, we design molecules and work out what needs to be done to them to get them through the various preclinical and into the clinical stages. And then all of the royalty work takes place in the laboratories of either fee-to-service DROs or collaboration partners with some sort of revenue share co-development arrangement with us. And this model has been validated by the FLT3 and the -- FLT3/Aurora and the TYK1/Kinase1 program that we've taken through to the preclinical and early clinical stages and then licensed on. So these out-license programs are now 100% funded by our programs. We receive upfront and milestone revenues plus sales royalties. And obviously, we look forward to updating our shareholders as those events are developed through the program line. Internally, we have a very experienced Management Board and advisers. I'll talk about that in the next slide. Between us, we have a very deep understanding of molecule design, drug development and the requirements of potential partner companies. So that is an interaction the company. If we move on to the next slide, I'll just briefly run you through the Board and management. So starting at the top with Stephen Parker, our non exec Chairman, Stephen has a long career working in healthcare and pharma, but particularly in the corporate finance side, with many investment companies and also, for example, Chief Financial Officer at Oxford Glycoscience and also holds a number of non exec positions at other pharmaceutical companies. Myself, I learned my research career at SmithKline Beecham, now GSK, of course, before moving into senior R&D roles at Millennium Pharmaceuticals and Cambridge Discovery Chemistry. John, our CSO, so 20 years experience in pharmaceutical research. First career, at the U.S. company called Pharmacopeia and then we -- well, we worked alongside each other at both Millennium and Cambridge Discovery Chemistry. Michael Owen, Nonexecutive Director, reasonably -- recently joined the company. So a long career at GSK. So a senior research -- a Senior Head of Research in the biopharmaceuticals R&D division. And then also Co-founder and original CSO of Kymab, a biotechnology company based in Cambridge. And then as you'll see, serves on the boards of a number of pharmaceutical companies and also an adviser to Abingworth, a Specialty of life sciences and fiber. And then Clive Birch, second non exec. So has a long career as an audit partner at PricewaterhouseCoopers and a nonexecutive Cambridge Innovation Capital. So that is our Board. If I move on now to our pipeline, if we start at the top, we've mentioned these programs briefly. We're just looking at the stages and the applications of these programs now. So the 2 TYK2/JAK1 programs, well, 2.5 would be the COVID program in the wings there. So SDC-1801, the autoimmune disease program targeting psoriasis, rheumatoid arthritis, lupus, inflammatory bowel disease, and I suppose mention multiple sclerosis. Getting towards the end of the preclinical stage, I think we'll talk about this in various other slides, but we're looking to complete preclinical development by the end of this year. Below that, SDC-1802, the TYK2/JAK1 program for cancer. Initially, we were looking at T cell acute in lymphoplastic leukemia. I suppose that's still an area of interest, although it's quite a small market side. But I think more recently, the immunotherapy applications have become -- come to the fore, and I think that's really where we're directing the program. And then I mentioned the COVID-19 applications. So we're looking for some grant money to tackle the acute respirator symptoms of arising from viral infections such as COVID. The FLT3+Aurora program is targeting AML, that's acute myeloid leukemia and other leukemias. So that's still in its preclinical stages and licensed to the Chinese-based specialty pharmaceutical company. And then the CHK1 programs, as you see, there's a number of applications where this program can potentially be used. So the monotherapy Phase II trial targeting a range of solid tumors has completed, but we haven't seen the final study reports from that yet. The low-dose gemcitabine trial was due to completely late last year, but is still a little bit active on the clinicaltrials.gov website. In the middle of last year, the license partner of Sierra Oncology, I reported some -- so it's an interesting and proof of efficacy results in anogenital cancers, and that's a potential indication for this particular combination. And then at the preclinical stages, there's some data generated in the literature and by our partners at the Institute of Cancer Research, looking at combinations with PARP inhibitors for prostate cancer and in combination with immunotherapy, particularly as a triple combination with low-dose gemcitabine in lung and colon cancers. Okay. So that completes the instruction to the company. I'll talk through the recent highlights, particularly the ones that we highlighted in the trading update of earlier this week. So with the TYK2/JAK1 programs -- so the preclinical IND-enabling studies are progressing. As I said, we're aiming to complete at least 1 candidate by the end of this year. But for 1801, the autoimmune disease program then we've shown excellent tolerability in toxicity studies. We're progressing into longer-term tox and dose-finding studies. As we note in the trading update, we're looking to achieve some very high doses, to achieve a maximum tolerated dose, and this has been proving a little bit tricky. Just because the compound appears to be very well tolerated, thus, we're having to go to extremely high doses and that post some formulation problems, which we're -- we have tried and have still to try a number of solutions for that. For SDC-1802, targeting cancer, so formulation and manufacturing activities are ongoing towards initiation of pox and dose-ranging study. So this one is a little bit behind 1801. I'll take this opportunity to answer one of the presupplied questions about 1802 -- well, it's -- so the confidence in achieving an MTD for these programs, as I've said, we have plenty more opportunities to try. So yes, we're still confident that we'll be able to achieve this MTD and be able to -- in its position to file an IND by the end of this year. Obviously, if that changes, we will update the market. 1802, we don't expect to have quite the same formulation issues on 1801. So we'd expect that would have a slightly easier ride. And then finally, for 1802, we presented the immunotherapy data at a poster at the AACR-EORTC-NCI cancer conference in Boston in October last year. And then in the update, you also announced that we've submitted a grant to UKRI, that's U.K. Research and Innovation to fund the initial studies of TYK2/JAK1 inhibitors against the inflammatory response caused by COVID and other viral infections. Moving on to Aurora/FLT then. We already mentioned the global licensing deal with the Chinese specialty pharma company that was announced in March. Within that agreement, there was a small upfront payment and then there's a potential for a GBP 900,000 near-term milestone payment, which would expect early next year, plus further milestone payments and the share of any commercialization revenue from that program. For the CHK 1 SRA-737 program then we were interested to note in Sierra's financial reports very fairly deeply, but they were certainly there that they were exploring options that included internal funding to support further development. So the previously Sierra said they were looking for what they call non-dilutive options, which we took to read as out licensing, but there does seem to be a slight change as emphasis, and they're exploring the potential of getting some internal funding for this work, which I think we see is encouraging. I've mentioned the trials monotherapy is complete and the low-dose combination trial is expected to complete shortly. We've talked about the PARP inhibitors. We also announced earlier this year, I suppose, another potential application with some -- a further set of inhibitors of DNA reputation and repair that is reported by our colleagues at the Institute of Cancer Research. And then on the financial side, we reported cash as of the end of June this year of GBP 1.8 million. That was helped by a GBP 1 million fundraise in June by Hybridan and the crowd sourced organization PrimaryBid. I just got a quick note here about the impact of COVID. So this is sort of separate to any research areas that we're doing in this area. So in terms of the direct impact on the company, we've been following U.K. government advice to minimize risk staff. So currently, we're working from home. But as we're very used to working with remote teams, as I talked about when we talked about our R&D model, but that's having very little impact on the way we work. Our network of contract research organizations report very minimal delays, maybe some delays in delivery of intermediate solvents, but nothing terribly significant. So time lines have not really been affected by the COVID outbreak at all, and we remain fully operational, obviously, we will report any changes in that. So if we move on to the internal work then. So we're focused now entirely on our TYK2/JAK1 inhibitors. So I'll provide a brief introduction to this area. And then I'll hand over to John, who'll take us through the TYK program and also the Aurora/FLT program. The JAK inhibitors are emerging targets of increasing interest to the pharmaceutical industry. TYK2 and JAK1 form part of the JAK cell signaling family, which is important for maintaining a healthy immune system. And our competitors in this area that BMS, Bristol Myers Squibb and Pfizer have shown strong clinical validation in psoriasis clinical trials, but we believe there's room for improvement there. BMS and Pfizer are also conducting mid and late-stage clinical trials for lupus, ulcerative colitis, Crohn's disease and vitiligo, they had been reporting readouts this year, although the COVID impact I think is delaying clinical trials across the board. So those readouts may get delayed. And I've talked about the role of modulating inflammatory responses after coronavirus and viral infections. From our internal research, but I think we're also interested to see that several JAK family inhibitors are now being tested or prepared for clinical trials in COVID-19 patients. So this area provides a clear opportunity for Sareum. So there are no marketing products out there with TYK2 and JAK1 selective profiles. So that's important for differentiation against other JAK inhibitors on the market. There are no TYK2 inhibitors currently in clinical trials for cancer. So we have a first-in-class opportunity there. And again, we talked about the TYK2/JAK1 inhibition for addressing the cytokine storm caused by viral infections. In terms of the license deal sizes, that we can see -- well, that we've seen in this area. I've highlighted 3 examples here: 1 in preclinical; 1 in Phase I; and 1 in Phase II. And as you'll note, the license deal size significantly increases in value as the development stages go further towards getting onto the market. From the left, it's an undisclosed molecule in preclinical stage developed by a U.S. company called Theravance and licensed to Pfizer. So this is a topical inhibitor that targets all the JAK family members designed for dermatology. So licensed to Pfizer in December 2019. The deal terms included a $10 million upfront and up to $240 million in milestones plus royalty payments. A bit further down the line as a Phase 1 deal example. Again, this is Theravance, molecule called TD-1473. This was licensed to Janssen. It is part of the Johnson & Johnson Group. Again, it's a pan-JAK inhibitor, and it's a molecule that stays in the gut. So it's targeting inflammatory bowel diseases such as ulcerative colitis and Crohn's disease. So this was licensed at the end of Phase 1. And as you see for a much larger upfront payment, $100 million in this space and up to $900 million milestones and double-digit royalties there. And then at an even later stage, so this is a molecule called Filgotinib. So this is developed by the Dutch-Belgian company, Galapagos and then licensed onto Gilead so this is a JAK1 selective molecule. It's systemic and it's an oral molecule that is distributed throughout the body, targeting rheumatoid arthritis and other inflammatory diseases. So in December 2015, at the end of Phase II, it was licensed to Gilead. And as you see, a very healthy $300 million cash plus $425 million equity investment plus well over $1 billion in milestone and over 20% royalty payment. So this molecule is going now through the approval process. So it's completed Phase III. They're looking to get the molecule on the market. Presumably Galapagos are doing very nicely out of it. Okay. I'll hand over to John here to take us through the TIK2 and the Aurora/FLT in a bit more detail.

Okay. Thank you, Tim, and good morning, everybody. So I'll address the slide advancing our next-generation TYK2/JAK1 inhibitors. You've heard about SDC-1801, which is our autoimmune development candidate and SDC-1802, our cancer candidate. And there was a question submitted earlier concerning the difference between the 2 molecules and referring to cell activity. And I'll just add a little bit to what Tim said there. So selectivity profile is important that both of these molecules have a good selectivity within the JAK family. So primarily they inhibit TIK2 with some JAK1 activity and then are clean against JAK2 and JAK3. We also consider the selectivity profile against for broader kinase all the other kinases as that are expressed in the system. And then other off-target receptors, other enzymes, all sorts of things. So it's a broad consideration around selectivity profile. But also other things such as the pharmacokinetic profile, the pharmacodynamic profile that helps us to select between these 2 molecules. Perhaps the most important is the relative efficacy of the 2 molecules in the relevant disease models that we've looked at. So 1801 performs the best in the autoimmune disease models. And 1802 performance better in the oncology model. So that's part of our thinking about how we've selected the appropriate molecule for the appropriate therapeutic area. Key molecules are orally delivered. It's, of course, a very advantageous, particularly in the autoimmune space. We use them twice daily in mice. That's because mice metabolize molecule reasonably rapidly. But because modeling suggests that humans will metabolize the molecule more slowly, we believe this show potential for once-daily dosing in humans. And we've talked about the selectivity profile within the JAK family, and I'll just draw your attention to our requirement to be clean against JAK2 and JAK3 kinases. So compared to tofacitinib, which is primarily JAK1/JAK3 inhibitor and baricitinib, which is JAK1/JAK2 inhibitor. There are some black box warnings associated with both of those molecules, primarily to do with thromboembolism and infections. And so we wanted to steer clear of inhibition of both of those 2 kinases. We think there is a favorable profile inhibiting TYK2 and JAK1. We were very happy to be able to announce recently that the Department of Defense in the U.S. had issued the report from SRI International, our codevelopment partner into a lupus model that they had run. And the results were encouraging. We saw reductions in anti-double-stranded DNA and IgG. Good signs -- that is worth pointing out again that this disease model was run with SDC-1802. So obviously, not our preferred autoimmune disease candidate. Nonetheless, results were very encouraging. And then I have a slide coming up where we'll talk a little more about the potential for these molecules to treat cytokine storm overreaction in COVID-19 patients. So our time line and development strategy, our internal focus is entirely on completing the IND or CTA or clinical trial application enabling studies for 1801 and 1802. The manufacturing group for 1801 is complete, 1802 users the same chemical steps, but with a slightly different input. We haven't devoted any more attention to these, since of 1802, we're not anticipating any difficulties and we have plenty of material in hand to conduct the toxicity studies. Toxicity studies are in progress. You've heard about the issue with SDC-1801, where even at very high doses, we were unable to achieve an MTD. And Tim addressed to the fact that we're looking at different formulation solutions to that problem. I would just say, if we're not able to increase the exposure further than we have so far then we need to show the regulatory authorities that we've exhausted all potential ways of improving that exposure really, they're looking for ensuring that we don't have excessive doses in humans that we could not predict. So that's really what the issue is all about. I'm saying as a way around the problem if we can't increase exposure further. We're aiming to complete at least 1 of these studies by the end of 2020 such that we can submit to the regulatory authorities to initiate a clinical trial next year. Obviously, this is dependent on successful progress. We are seeking development partners for commercial licenses at the late preclinical or early clinical stage, and the strategy is to balance the costs, the risks and the potential returns of an early versus later licensing stage. So further we take it, we should increase the value in the program. But of course, there's a requirement for additional funding. Moving on to next slide then just specifically about the potential application of TYK2/JAK1 inhibitors and the COVID-19. And other coronavirus diseases such as SARS, MERS, influenza. They can all be fatal due to the cytokine storm overreaction of the immune system. And many of the key cytokines that have been found to be elevated in COVID-19, intensive care unit patients. And these are elevated relative to less sick COVID-19 patients and to healthy subjects. They signal via JAK family kinases there are clinical trials in progress of JAK inhibitors, including ruxolitinib, tofacitinib and baricitinib, primarily inhibitors of JAK1/JAK2 or JAK1/JAK3 in COVID-19 patients are either in progress or planned. We believe our inhibitors have a potential to be less toxic. There is particular reason to be concerned about the potential for embolism caused by the JAK2 inhibitors when you consider that COVID-19 patients are suffering from a variety of blood coagulation disorders so that's certainly something to keep an eye on. There's also a mechanism whereby inhibition of TYK2 has been shown to reduce bacterial pneumonia following an influenza infection. And we believe the same mechanism could operate in SARS-CoV-2 with infections, cause of COVID-19. So that's something we're keen to investigate. Grant application has been submitted to UKRI to fund some preliminary laboratory studies. These are primarily cellular studies and then mouse disease models, where we'll be looking at the cytokine response following dosing of our molecules in animals infected with SARS-CoV-2. And we'll also be looking to study the effects of our molecules on the secondary bacterial pneumonia. So these are quite involved and specialist assays. And we think grant support would be extremely useful in helping us to take these models forward. If they are successful, then this could, of course, be included as a Phase Ib clinical trial later in 2021. You heard that the global license for FLT3 and Aurora inhibitors was signed with a China-based specialty pharma company listed on the main market in China. We have shown that our inhibitors demonstrate excellent activity in models of acute myeloid leukemia. They inhibit wild-type FLT3 internal tandem duplication mutants and quizartinib-resistant FLT3. quizartinib is a late clinical stage FLT3 inhibitor. We deprioritized this work in 2018 because there were some significant formulation difficulties that needed to be overcome. And we decided to focus on our TYK2/JAK1 programs at that stage. So license to a Chinese company who had some formulation alongside clinical development and commercial expertise. Their focus is on developing orally bioavailable FLT3 and Aurora kinase inhibitors. We're eligible for an approximately GBP 900,000 milestone on certain development milestones being achieved. And that would be expected in Q1 of 2021, if they are able to solve those problems. And then there are further success-based milestone payments and potential share of any commercialization revenues as the program progresses. So I will hand you back to Tim just to wrap up the current status of SRA-737 and to conclude the presentation.

Tim, you've got -- that's perfect.

Yes. Yes. Yes. Thank you, John, sorry. I haven't -- I muted my phone. Yes, SRA-737 is potent highly selective already bioavailable molecule of Checkpoint Kinase 1, which is a key regulator of self cycle checkpoints and a mediator of the DNA Damage Response network and has proven to be an important oncology target. So we licensed this deal at the very start of 2 Phase I clinical studies to U.S.-based Sierra Oncology. The monotherapy study is complete. As I mentioned earlier, we're awaiting the final readout. These -- the status of reporting of these programs is entirely in the hands of Sierra Oncology, unfortunately, we don't really have any leverage on them to publish these works, but obviously, we wait with interest. The 737 plus low dose gemcitabine combination trial, we expect to complete shortly. And again, we're waiting the final readout on this. And we've talked about the preclinical data combination with PARP inhibitors and also the combination with immune checkpoint inhibitors and also the -- another family of DNA repair enzymes, the B-family DNA polymerases. Very recently, Sierra, a new CEO has been appointed. And then, again, as I mentioned earlier, they recently announced -- or were not necessarily announced, but so buried in the notes of the financial reporting was the several notes that they're exploring options including securing funding to support the continued advancement of SRA-737. So obviously, we look forward to further announcements in this area with interest. And then just a reminder where we are with the current deal. So we work alongside the cancer research UK-funded organizations. To get this program into clinical trials as a minor partner in the operations. So we're eligible for 27.5% of any revenues that are generated by the program. So this equates to $5.4 million on achievement of the next likely milestone in the clinical trials process here. And that's the first patient dosed in a randomized Phase II trial. And again, we look forward to any announcements from Sierra on where they're going with that with interest. And then in total -- sorry Sareum eligible for $88 million in milestone payments plus a share of the royalties. And so we'll announce any updates as soon as we hear anything further from Sierra Oncology. So I'll just -- I'll wrap up now as a final slide before moving on to answerer to any questions with just some notes of what we can expect in the next year or so. So for the TYK2/JAK1 program, obviously, we'll be reporting on any preclinical studies as they advance. So these are the IND-enabling studies that we hope to complete by the end of this year for at least 1 of these programs. We're looking to publish some cancer data on SDC-1802 versus solid tumors. And we're hoping that this paper will come out at the -- in this year. I think there was a question on that pre supply. So we'll announce, which journal it is and what the data actually involves when the paper comes out, so I say we're looking for paper to come out, hopefully, in -- by the end of this year. We've talked about the IND submissions, I hope -- expecting at least 1 by the end of this year. We are still talking to potential license partners. I think there's some questions about that, which I will address then. But aren't really in a position to say when that deal -- if or when that deal would be struck. And then John talked about the grant awards for the COVID-19 research. For the FLT3 and Aurora program, again, we'll publish any significant updates on any IND-enabling pox studies as well as Chinese partner advances to work in this area. And there is the potential for potential milestone payments that we -- as a maximum, we'd expect one, if it is going to arise early next year, and actually, I've just seen a question here, could it be paid early, if progress is successful? And the answer is yes. If they hit a development milestone early, then the milestone gets triggered straight away. For CHLK1 so as I've mentioned on that previous slide, we're looking for clarity on the future development funding and plans for SR-737. We're looking to see the data readouts from the clinical studies that have been running. With the health warnings that this is very dependent on Sierra Oncology successfully progressing the programs. There's the potential for future milestone payments. There's the potential to initiate further clinical trials, the PARP combination and the further either preclinical or clinical data on the combination with immune checkpoint blockers. And then just to reiterate the financial position, $1.8 million in at bank, which we believe is sufficient to fund the planned ongoing preclinical development of the TYK2/JAK1 program. So that's the end of the formal presentation. Mark, I think you're going to take us through the Q&A.

Tim, sorry for cutting across you was a bit premature. [Operator Instructions]. I guess, Tim, John, before we go into the questions that have been submitted during the live event, we had a number of questions that were pre submitted. And I know that you've taken on a couple. So forgive me if I ask you -- just move me on to the next. But the first question we had was since SDC-1801 and SDC-1802 are such exciting candidates. Why are larger pharmaceutical companies not looking to co-develop therapies based on these molecules with Sareum?

Okay, Mark, so as we've indicated to the market, we're continually having discussions with potential interested companies regarding the future development of 1801 and 1802. So I suppose the quick answer is they are looking for -- to co-develop the therapies based on these molecules. These companies always have their specific angles in these discussions, a number have indicated that they'd like to see molecules developed further before they get properly engaged with license discussions. So we can't comment on the status of any of these ongoing discussions, but we're obliged to make an announcement should a license or any other deal to be concluded.

We addressed a question regarding the differentiation between SDC 1801, 1802. Next question we have is which journal publication will be the upcoming SDC-1802 data be featured in? Do you have a date for this?

Yes. So we've covered off this 1 during the publication. So just to reiterate then, we're looking -- we're hoping that the publication will come out by the end of this year, but these events aren't entirely under our control, and we'll give details of where it is if and when it does get published.

Perfect. Next question, we have noticed a U.S. institutional investor being listed as a shareholder, for example, on the FT website. Can you confirm you successfully onboarded an institution? And what levels of ownership they are anticipating?

Okay. So we can't really comment about any 1 particular investors or group of investors. If an investor acquires a notifiable interest, that's 3% or greater. They will be required to notify us in accordance with DTRs, following which we'll make the necessary announcement.

Perfect. Next question, are you packaging the TYK2 and JAK1 assets, the SDC-1801 and 1802 together for a license or separate?

So we're currently marketing 2 TYK2/JAK1 programs as separate assets. But if a potential licensee company should be interested in both, obviously, we'd be very happy to license them together as a single package.

Okay. The question about maximum tolerated dose. I think you touched on in the presentation. Is that correct?

Yes, that's right. That we'd answer that.

Yes. I think it's a quite long-winded question. So I'll move on to the next question. Has the pending COVID-19 grant application caused any delay to any preclinical license deal due to the grant funding in progress, phase I trials for what would have been previously the licensors costs?

Yes. So we're not letting the COVID grant application process, delay any licensing discussions. But I think, yes, this grant should be seen separately, because there's no guarantee that the grant will be successful.

Okay. Sareum, currently has in the pipeline between the SDC-1801 and SDC-1802. Are you planning on bringing some compounds back into development as Sareum extremely talented to fuel -- set on core skills on molecule design are now not getting utilized.

Great. Well, thank you for that very kind question. So if and when we receive license income from any of our current programs, we then look to either start new programs internally or acquire them from other organizations. So for the time being, all our cash resources is being devoted to the 2 TYK2/JAK1 program.

You've mentioned that FSC against human skin sample forms part of the preclinical package for SDC-1801. Why has the data not been released yet?

Yes. So as required by the various rules and regulations such as MAR and AIM rules, we'll make any applicable announcements to the market. But not all information is required to be disclosed in accordance with these regulations. And I think people should be aware that in these circumstances and for reasons of commercial confidentiality, it's not appropriate for us to announce every detail of our research program.

Yes. Perfect. Next question, can you expand on the grant application? How much is it for? And what are the primary objectives of the grant?

Yes. So we've touched on this in the presentation then. So it's the fund preliminary studies into COVID-19 applications of our TYK2/JAK1 inhibitors. It's been submitted to U.K. Research and Innovation and we'll announce further details if and when the grant is awarded.

Next one, was the Aurora and FLT3 license COVID therapy related?

So the primary focus of the program is acute myeloid leukemia and other leukemias, although the Chinese company has -- it isn't restricted to any disease area, so could develop it in other applications, if it wish to do so. Our understanding, though, is their primary focus is to complete the IND development of the molecule.

Okay. The next question, SAR-20347. Is that 1 that you've addressed through the presentation? Or should I bring that into this?

No, we haven't.

Okay. Well, let me bring that in. So SAR-20347 interleukin 15 facilitates muscle regeneration through modulation cell common signal 1642 (2018). Will you please provide details on the role of SAR-2034 in the above reference paper with a follow-on question, have these findings been reported by Sareum? If not, why not? And what is the current status of this molecule? So plenty there to answer.

Okay. So this is quite a technical question. So yes, so SAR-20347 is 1 of our earlier lead compounds, which we've not progressed into formal preclinical development. So we keep a close eye on the scientific literature relating to all of our research interests, but we don't and can't comment on every journal article that makes reference to our compounds or our target of interest. If we believe a paper is of particular quality and relevance, then we'll make note of it either by Twitter or RNS or RNF Reach.

With that can I add just a couple of things?

Yes, of course.

Yes. I mean I think that paper uses SAR-20347 as a sort of tool compound and they use it at a very high concentration. They refer to it as a _pan-JAK inhibitor, which, of course, we don't think it is, although the very high concentrations at which they use it, it probably is acting that way. And the other thing just to add is that, that work was carried out entirely independently of us, SAR-20347 is commercially available, and they just bought a sample and run their experiences with it.

Thank you very much, John. Thank you. Down to the last 2 questions that have been pre submitted. Of course, I can see quite a few coming through in the live Q&A. So perhaps I could address this one. SAR-737 in the March 2020 proactive interview, you stated patients were still on trial, receiving benefit even though the trial was due to end. In December '19. Can you confirm the patients are still on the trial as clinicaltrials.gov is showing the trial is as active?

Yes. Again, we've touched on this in the presentation. So yes, so as we've noted, the trial is still listed as active on clinicaltrials.gov. So this is a website that lists the status of all ongoing drug clinical trials. So to the best of our knowledge, this implies patients are still on trial. So Sierra are running these trials. We don't we don't really get any updates on progress except through Sierra's public disclosures.

Okay. And finally, re SRA-737 in the August '19 trading statement, it was stated, we continue to believe based on a very promising clinical data that has been generated to date that Sierra should have every chance of finding a suitable solution to progress the development of SRA-737. Do you believe that SRA-737 will be progressed by Sierra Oncology to the point where milestones are triggered? And on what information do you base that assumption?

Okay. Again, I think we've briefly touched on this in the presentation. So again, just to reiterate, as we noted in the trading statement earlier this week, the license holder share oncology noted in -- look, stated in the notes that its 10-Q quarterly report, you can find that online on their website. So this was announced on 6 of August. That is exploring options to fund the continued development of SRA-737, but obviously, no guarantee that these funds would be acquired. So we're continually monitoring that the statements made by Sierra, and will issue any updates as they come along.

Thank you, Tim and John for those. Obviously, just -- I mean just mindful of both time as well. We've got about 10 minutes, and I know that you're very keen to receive investor feedback about the company. So I will allow a little bit of time to drift on to those. But obviously, investors have had the opportunity to submit some questions. And I think some of these may overlap with what you've already gone through today. And of course, there are some questions as being a listed company, you simply won't be able to respond to. Perhaps, guys, if I could ask you to take a look at the ones where you can. And obviously, I'd like to remind investors that of course, what we would do is, the company to review all questions submitted during the live event and where it's appropriate, we'll be publishing responses where it's appropriate to do so and you will all be notified when that is available for your viewing. And so John, Tim, perhaps I could just hand over to you. If I could ask you just to read out the question obviously because investors can't see any other investors' questions and perhaps give your answers where it's appropriate?

Yes. Okay. Thanks, Mark. Yes. Okay. So I'll start with a couple of questions about licensing deals. So there's a question about where we see Sareum in the spectrum of investments in big pharmaceutical companies? So I think this is -- refers to the deal example slides I showed in the middle of the presentation. So currently, TYK2/JAK1 at the preclinical stages. If we chose to do so and have access to the appropriate funding, we could take the molecule through Phase I stage. I think at the moment, we probably don't plan to take it into Phase II, but I guess we should never say never. So I think our current intention would be to license either preclinical or Phase I bearing in mind the risk of investment versus deal size that John talked about. Then there's a further question about how does the licensing deal work? And I think it's very much like the examples that I showed of licensing deals. So there is -- there'll be an upfront payment there'll be some success-based milestone payments generally for success or either starting or successfully completing various clinical trials and then for approval for marketing, sometimes there's milestone payments for achieving certain sales levels. And then on top of that, there will be royalties as a percentage of sales. Yes. There's a question about payment for the Aurora milestone being paid early, if it is successful, and I covered that one off. So the answer is, yes, the milestone event is triggered, then it gets paid immediately. And so there's a question about using the milestones that we receive from various programs to look to acquire new programs for licensing in. So the question is confirming that such a move not compromise the current focus on TYK2. And I think, yes, I think I'm happy to confirm that, that our primary goal is to advance the TYK2 programs. And so we wouldn't divert any spending from TYK2 on any new programs at present. I'm just looking to -- there's some questions there that I think we're either -- it's difficult for us to answer, and I will obviously note those ones. And there's some just rely a little bit of thinking about. And I don't want to say something we later have to regret.

Absolutely, and that's the benefit Tim of investors being able to submit the questions, so you can give clarity either during this event itself or perhaps a more measured response post the event. So what we can do, as I say, I can see that there are a number of questions, some of them are duplicated in terms of the content. So it probably would make sense to put a I guess, a more measured response. And just to reiterate to investors that this will be sent to you as soon as the company has had a chance to review these post the meeting. So Tim, if there -- are there any others that you can or would like to, if not, what I'll do is I'll ask you to wrap up. And then perhaps I can direct investors for feedback.

Yes. Okay. No, I'd say a couple more, which I think I can take here. So there's a question on whether cancer research technology, Cancer Research U.K. has any influence over the progress of SRA-737. So I mean, the license deal, it's a global license with -- Sierra Oncology funding the future development. So CRT do have some influence in -- there's the standard commercial due diligence requirements in the license deal. But I think with the new change of emphasis from Sierra regarding internal funding. I think we'll -- I think we're happy to see that one play out. Yes, I think if I leave it at that. In terms of sorry, I'm trying to read and speak. There's a question about TYK2 -- JAK1/TYK2 inhibitor differentiating from others available in the market. I think there's 2 aspects of this. So there's drugs that are currently marketed and job note som time the JAK inhibitors like tofacitinib and baricitinib. So those are both target JAK2 and JAK3, which we think are responsible for the black box warnings associated with those products. So I think our inhibitor would be expected to have a much cleaner safety profile than drugs currently on the market. In terms of other molecules available for licensing, I mean, actually, there are very few TYK2/JAK1 profile molecules from smaller biotechnology companies that are in the market. So I think there's not a lot of competition in terms of small companies developing inhibitors in this area for licensing. But of course, there are the big pharma products from BMS and Pfizer. And I suppose we have a very similar profile to the Pfizer molecule. There's a question about a big pharma company? Could they buy us, lock, stock, and barrel? And I suppose the answer to this 1 is, I mean, if they made an offer that was suitable to the Board and investors, then obviously, that happened as a public company. That's always an option.

Perfect. Well, look, Tim, as I said, we've got a few minutes until the session ends. Perhaps I could ask you to perhaps wrap up. And then what I'll do is I will divert investors to give feedback.

Right. Okay. Well, thank you, Mark, and thank you, everybody, for listening in today. I think as -- well, hopefully, we've given you an update of where we are of being able to answer most of your questions. As Mark says that we'll review all the ones that have been asked during the session today and also the ones we can. So this is -- this presentation is about a trading update of our year-end to June 2020. And the next scheduled financial event is our full year results being published in full, and we expect to be doing that in October this year. So I'll finish by thanking you again for listening in today.

Brilliant. Thank you very much, indeed, and thank you to John as well for updating investors today. Could I ask investors not to close this session is you'll be redirected for the opportunity to provide feedback. If you access this presentation through our website, the web page would appear for you. If you have applied through the link sent in e-mail, you'll be locked off. But if you just wait a few moments the feedback logging page will appear. So on behalf of Sareum and Investor Meet Company, I'd like to thank you for attending today's session. That now concludes the presentation. Thank you once again.