Sun Pharma Advanced Research Company Limited (SPARC.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to SPARC's update on clinical programs and R&D pipeline conference call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jaydeep Issrani from SPARC. Thank you, and over to you, Mr. Issrani.

Thank you, Nirav. Good evening, ladies and gentlemen. My name is Jaydeep Issrani, and I head the Business Development and Investor Relations at SPARC. On behalf of SPARC, I welcome you to SPARC's yearly update on strategy and program updates. I'm joined by our CEO, Mr. Anil Raghavan; and members of SPARC's senior management team for the call today. As we have done in the past, we will be using similar format for our discussion today. That is, the presenters will walk you through the slides, after which the call will be open for questions and discussions. The presentation for today's discussion was shared earlier. If you have not received, you can download the presentation from our website, which is www.sparc.life. Before we start today's discussion, I would like to remind you that our discussion today includes forward-looking statements that are subject to risks and uncertainties associated with our business, and actual results may be different from those projected in today's presentation. I will now hand it over to Mr. Anil Raghavan for his presentation. Over to you.

Thank you very much, Jaydeep, for kicking this off. Hello, everyone. It's my pleasure to welcome you to SPARC's 13th annual portfolio update. As always, we are immensely grateful for your continued encouragement and support. That means a lot to us. Thank you for taking the time to be with us today. I'm sure most of you have been regulars on this call, so you know the routine. We have the SPARC's management team with us today on the call. Most of us are on these calls for some time, but we have a new addition that's Dr. Venkata Palle who joined us as the Head of Drug Discovery and Preclinical Development late last year. Dr. Palle comes with an impressive trail of achievements, and we are very lucky to have him leading charge in Discovery and Preclinical Development. In terms of our agenda today, we will begin by covering certain important elements of our strategies. I will also give a bit of lay of the land of our late-stage portfolio and provide some guidance on what to expect in the short- to medium-term, after which we will spend much of our time today on 3 things: Dr. Siu-Long Yao will talk to us about the clinical programs, that's vodobatinib in PD and CML, and vibozilimod in atopic dermatitis and psoriasis. Dr. Vikram Ramanathan and Dr. Nitin Damle will provide updates on the progress of 2 important programs, which we introduced to you last year, that's SCD-153 and SBO-154. We will conclude the presentation with brief comments on our financial situation and cash burn from our CFO, Chetan Rajpara. So with that, let's go to Slide 5, please. Here, we have a recap of the shift that we have taken in the last few years from being a primarily delivery system-focused company to an approach which embraced the risk profile of a modern biotech fully. In that sense, towards the portfolio of assets holding significant promise of improving the standards of care and making an impact on the lives of patients we hope to serve, while carrying multiple layers of risk. But our model differs from the contemporary biotech business model on many fronts. And we have spoken about some of these differentiating factors at length in the past. Our captive operations is one of them and low cost of failure, breadth of our portfolio, compelling founder vision and the founder group's willingness to back it up with appropriate financial commitment and so on. We've also spoken about our efforts to narrow our therapeutic focus and sharpen our execution. So I don't plan to go over these foundational elements of our pivot in more detail today. But I would like to highlight 2 other points before we go into the rest of the presentation. In the last few years, we have made a significant push towards strategic partnerships with Tier 1 academic research systems globally to access high-quality early signs. We can clearly see the impact of that sustained effort in terms of collaborative programs moving to clinic now. That is an important validation for a very important tenet of our strategy. We also have additional early-stage undisclosed preclinical programs in collaboration with some of the marquee institutions around the world. A productive bridge to external science has always been part of our vision and differentiation strategy, and we are hopeful that the bonds and competencies we have built in establishing these structures are going to be extremely useful in further building out our portfolio. We really look forward to that. I also want to touch upon an element, which is not specifically called out in the Slide. That's our change in mortality mix and the maturation of our Biologics Group. We have completely moved out of the NDDS programs which was our mainstay in the years past. Traditional small molecules though is a significant share of our effort and will continue to be so. We think small molecules will remain an important part of the therapeutic toolkit because of the larger swathe of intracellular targets that we can address with appropriately designed small molecules. We have made exploratory investments in building an in-house biologics capability, almost ground-up, under Dr. Nitin Damle's leadership. Those efforts are now turning real with its first asset, an antibody-drug conjugate approaching its clinical entry in 2024. But more importantly, we have built a competitive competency which can engineer antibody therapeutic constructs, be it traditional naked antibodies, drug conjugates or bispecific or multi-specific antibodies and scale them to clinic. We are also leveraging our understanding from the ADC effort to create small molecule-drug conjugates, which is emerging as an important therapeutic class. Additionally, we have several exploratory efforts in newer modalities and have taken some really meaningful bets around pushing our modalities even further. We look forward to bringing additional programs from the biologics basket for sure, and hopefully even from newer modalities in the short- to medium-term. So in recap, I want to emphasize one point I made during our call last year. For investors with an appropriate risk appetite and an ability to grapple with translational risk in pharmaceutical development, SPARC offers a contemporary story and a compelling one, rather, and that story is getting more real now than probably at any point in the past, and we have several important catalytic events coming up in 2024. So let's go to the next slide, Slide 6, to go over some of that. This slide has a straightforward listing of a series of data and phase transition events set up for the portfolio in the calendar year coming up, that's 2024. Some of them will have the ability to move the SPARC valuation substantially based on data, of course, either way. So let's go over the list. First up is PROSEEK interim analysis. We are doing an administrable interim analysis, which will give us the primary endpoint and secondary endpoint trends for 442 patients plus additional biomarker trends. The important business objectives of this administrative process is twofold: first, to initiate potential licensing discussions before the public release of the full data set; and secondly, to initiate planning and set of activities for the regulatory interactions and potential Phase III trials of vodobatinib in neurodegenerative disorders. We plan to maintain the study blind for everyone outside of small group covered under the very strict confidentiality commitment. We expect two more important program milestones in quarter 2 of 2024. SCD-153 will have its first data readout, which will help us develop an initial understanding of potential safety profile of the product. Also more importantly, an ability to move to MAD studies in patients, which can give us a lot of information regarding target engagement and efficacy markers plus some early indications of potential therapeutic dose. We will also cross out the patient enrollment for our atopic dermatitis program of vibozilimod in the second quarter. In the third quarter of '24, we will have PROSEEK fully readout. As you can see, that is probably the most important data catalyst for the company currently and certainly most keenly watched. That will lead to setting up the end of Phase II meeting with the FDA to agree on the registrational path for vodobatinib in PD. We will look to initiate the Phase III program in Q4 and start exploring the fuller opportunity, which I will touch upon in a moment in the rest of the slide desk. We will also look to conclude our partnership strategy for the asset. PROSEEK will also give us clarity in terms of our resourcing requirements and options, so that is a big data event. We have 3 significant milestones coming over the last quarter of the calendar. Our first biologics IND, our antibody drug conjugate program is currently tracking to their plan for an IND in Q4. We will then have Phase II data from atopic dermatitis study. And from a SPARC standpoint, that would set the stage for additional milestone payments from our licensee, plus we can initiate the FDA consultation and pivotal trial planning for atopic dermatitis. And finally, we will also have the multiple ascending dose studies started in Q4 of '24 for SCD-153. We've only listed the data and milestone events from our larger programs here in this thing. We will also have additional milestones like the refiling of Brimonidine and potential progress in enforcing our exclusivity for Sezaby. I'll come back to those programs towards the end of my comments. Before we go to the next slide, I want to summarize all these very briefly. So 2024, we'll see several big moments with SPARC, including opening the lid on a potentially game-changing program for the company and hopefully for the field. I can't overstate the significance, so I want to spend the next few slides -- next couple of slides to fully unpack the true meaning of these milestones with SPARC and its shareholders. Slide 7, please. First, the big news from last week, PROSEEK achieved its recruitment target late last month. We set out to recruit 504 evaluable patients. We ended up with 513. Siu will give you more color on both the state of the study and expectations going forward. But I want to recognize the team and the efforts that went into completing the accrual of the study, which is one of the largest Phase IIb program currently active in early stage Parkinson's disease globally. We started this trial in full swing when health system, around the world, unfortunately, began to shut down because of the pandemic. COVID created enormous challenges in prosecuting this program. But we're generally happy to be here and want to thank patients, their families, our investigators and site staff around the world, including some really passionate physicians in India, who supported this program wholeheartedly and our execution partners, and a large team here in SPARC, who drove this bright program with enormous zeal. As I mentioned in the previous slide, we expect the interim analysis completion by end of Q1 2024 and the full readout and Phase III initiation soon thereafter. And that, indeed, is something we look forward to. So why are we so excited? PROSEEK will give us probably the most definitive proof of concept for one of the most important hypothesis in the neurodegenerative diseases field, that is c-Abl inhibition as an approach for neuroprotection. The role of excessive reactive oxygen species and the redox imbalance it creates triggering a cascade of events that results in neuronal toxicity and death has been identified as a potentially intervenable pathway across the neurodegenerative spectrum for some time now. Dr. Ted Dawson of Johns Hopkins and several other groups around the world provided compelling mechanistic and pharmacological evidence supporting the c-Abl story. But this hypothesis has never been fully tested as this field lacked an appropriate specific agent with the relevant pharmacological properties, particularly good blood-brain barrier penetration and safe dose, that is the promise of vodobatinib, a sub-nanomolar inhibitor of c-Abl, ultra-specific to Abl1 and Abl2 and that crosses the blood-brain barrier sufficiently to ensure adequate coverage with a peripheral safety profile, which makes clinical exploration in neurodegenerative diseases, feasible. And importantly, that promise was delivered by vodobatinib in preclinical and early clinical studies. The totality of evidence we have from everything we have done so far in this program was directionally consistent and supported translation. So in that sense, PROSEEK promises the first real validation for the c-Abl pathway in a sufficiently sized global trial, which is the right patient setting, that's pre-L-Dopa patients with DAT-confirmed diagnosis and the right duration to see an effect beyond the placebo impact. 40 weeks in part 1 in our case, followed by a long-term extension period of another 40 weeks without L-Dopa. I want to talk about the broader implications of a positive outcome in terms of the opportunity it presents. But before that, from an operational standpoint, our immediate priorities coming out of PROSEEK is a finalization of the late-stage development plan, including closure of our partnership strategy and getting regulatory concurrence with FDA and other agencies around the world and initiation of its first registrational program. And those will be the most important execution priorities for SPARC next year if you see the data that we hope to see with PROSEEK. So now let's go to Slide 8, for a little bit of big picture on vodobatinib. The way to look at the opportunity PROSEEK validates, is to look at various layers of the hypothesis and see the context in which it is tested. At its core, PROSEEK gives direct validation to the relevance of c-Abl inhibition and oxidative stress response modulation in Parkinson's disease. So if inhibition of c-Abl means bending of the degenerative curve in a significant manner that not only slows the progression during the initial symptomatic therapy phase of that PROSEEK target but it can also extend the period of effective management under dopamine therapy. And at the starting phase of the spectrum which is the other end of the spectrum, biological understanding of prodromal PD and precursor conditions like constipation and REM sleep disorder can offer additional opportunities to intervene early and intervene proactively. So the inner core of opportunity for vodobatinib and maybe for other selective brain-penetrant Abl inhibitor is to become background therapy across the PD treatment continuum. The next layer comprises a set of diseases characterized by alpha-synuclein aggregation like the multi-system atrophy or Lewy body dementia. In these indications, several pathological hallmarks of PD are at play, but also some important differences like the areas of the brain that gets affected. We believe that a compound like vodobatinib, which can modulate or moderate oxidative stress response and get distributed uniformly across the brain is an agent worthy of testing in the immediate adjacencies. That basket, from an epidemiological and inadequate standard of care standpoint, offers them really large opportunities. Then there is an outer ring of possibilities driven by other culprits like activated tau or A beta or SOD in diseases like Alzheimer's and ALS. Our early studies in iPSC-derived neurons indicated some of those possibilities and we plan to continue studying vodobatinib and its promising backup series in these conditions. So summarizing the last 2 slides, we have reached a significant and important milestone with the completion of the enrollment targets with PROSEEK. We expect substantial data flow, which not only validates our hypothesis, but has the potential to teach us a lot more in terms of the disease biology and maybe the heterogeneity of the disease and response, correlation of several important candidate biomarkers and so on. That sets up multiple patient settings which can potentially make vodobatinib the backbone of the standard of care across the neurodegenerative continuum, and that's a huge deal, and we are understandably super excited about it. Now let's move on and examine the key what if questions, which I'm sure all of you have in your mind. So let's go to that. And Slide 9, please, Slide 9. Much of the current biotech landscape, if I can step back for a minute, consists of companies created to test one interesting hypothesis. Investors and teams move on, either cash out on success or move onto something else on failure to the next shot. That's the typical biotech story. But we are architected somewhat differently with a substantial internal discovery, translational and clinical development capability with a cost to failure advantage. We've designed to spread the risk across an actively managed portfolio, learn from our successes and failures, strive to improve the quality of our competencies and deliberately build optionality as we come to critical decision points like the one that we are approaching now. And we believe we have meaningful optionality. Let me take a minute to explain. SPARC optionality has 2 coordinates, at the program level and at the competency level. At program level, we have multiple options and combinations to pivot to if we need to. Immunology offers 2 high-value options in vibozilimod and SCD-153 and we expect to see additional value unlocking data from vibozilimod in the coming year. We will also see the data building up for SCD-153. We have a broader set of options to go to in Oncology, where the highest value bet probably is the MUC-1 platform, which can generate multiple products using the ADC and bispecific constructs. Vodobatinib CML, of course, offers a relatively lower value with significantly surer option to leverage the asset if we unfortunately fall short in neuro. But I think it is also equally important to consider the optionality provided by other part of the creation, which is our competencies. SPARC represents one of the most sophisticated translational lines in part of India, attempting to innovate for the world. Across the value chain and the ability to develop assets in multiple modalities to self-sufficiently in various pieces of translational development that too in multiple therapeutic areas and the ability to design and execute clinical programs globally. We have had substantial learnings from our successes and failures, and that is one of our biggest assets differentiating the program. I'll go over a few specific points on our program hedges in the next couple of slides. But let me say this in summary, investors evaluating SPARC should look at our portfolio as one substantial opportunity to move the standard of care in a very large medical unmet area, that's vodobatinib, backed up by a larger number of decent hedges across Immunology and Oncology, with many of them reaching important developmental milestones in the near future. Now let's go over to Slide 10 to take a look at the Immunology program. I've already spoken about these 2 programs in my earlier comments. Just to highlight a few points, I have a couple of observations. One, vibozilimod, proof of mechanism for S1PR1 agonist exist from competing clinical programs in dermatology and the wider swathe of indications outside of Dermatology, like IBD and Crohn's. As previously disclosed, we have reached target pharmacodynamic level at safe doses, which is well correlated with efficacy of this class. We have completed a pooled analysis of safety data from 125 patients across our atopic dermatitis and the psoriasis protocol and managed to remove most of the expensive cardiac monitoring initially required in this trial. And we will go over this in a little bit more detail during the clinical presentation from Siu. And we are now aggressively scaling this program with significant expansion to Europe and Canada, and we're also adding a substantial number of new sites in the U.S. From a competitive positioning standpoint, both in atopic dermatitis and alopecia areata, the current standard of care, the oral standard of care, I mean, consists mainly of JAK inhibitor, which carry a black box warning and significant safety complexities. Both vibozilimod and SCD-153 has the potential to be much safer options in alopecia areata and atopic dermatitis. And on a separate note, both these programs offer excellent examples of strategic partnering process. Vibozilimod, as you may know, was developed originally in partnership with a French biotech company called Bioprojet, and SCD-153 is an ongoing collaboration with 2 very accomplished groups, one from the U.S. and one from Czech Republic. We started our collaboration with these groups as a joint development program with an option to license their IP. And I'm really happy to announce that SPARC exercised that option to license the Intellectual Property supporting this program. You may have seen this press release earlier today announcing the definitely licensing agreement. And that allows us to move forward with SCD-153 as a fully-owned SPARC program. CML component of -- so let's move to Slide 11 now for Oncology assets. CML component of vodobatinib was always meant as a backup for the Parkinson's program. And we have had significant regulatory interactions recently about the nature of the data package the agency would like to see for registration. In line with FDA's broader strategic shift towards encouraging companies to explore marketing approval in earlier settings, FDA suggested a comparative trial in 2 line patients up against the last line that is the post ponatinib setting. We will go over additional details on the emerging design of the expected clinical study in the clinical segment. We're also reexamining the cost and time lines before deciding to go it alone or partner at this stage. But vodobatinib in CML, as I said earlier, this is a surer hedge, surer because of the clinical validation and alignment with FDA on a path to registration. And we will have clarity and readiness to move forward when we reach that decision point post PROSEEK. We've discussed the ADC program earlier, and Nitin will do a deeper dive later. But let me say this, we see enormous opportunities in antibody or small molecule targeted preferential delivery to cancer cells. These platforms can be leveraged for the delivery of a wide set of payloads ranging from small molecule, traditional cytotoxins, highly potent target therapies with limited safety margins and even RNA therapeutics. MUC-1 gives us a differentiated platform, which can open up multiple product opportunities. Our Oncology effort also carries additionally some significant interest in certain other targets classes, like new synthetic lethality pairs or exploring ways to intervene in the RNA process more broadly with other agents and other modalities. But before I look to summarize, I want to talk briefly about how our competency has evolved and how it offers another level of risk mitigation. Please go to Slide 12. As I said, we don't look at SPARC just as a portfolio program. So they are the key drivers in the current value. A significant part of our proposition is our process, which is refined over a long period of time, imbibing the learning from our successes and failures. We believe that SPARC development process in terms of the targets we seek to address, validation that we insist, developability considerations around the nomination of an asset, clinical strategy and execution and adoption with biomarkers and our overall development toolkit, all have come a long way since we spun out of SPARC -- I mean, spun out of Sun. Equally importantly, our portfolio management process evolved into a rigorous objective methodology, which puts a premium on establishing and enforcing smart data stage-gates, which allows us to kill unviable programs early and cheap and completely. So SPARC is not just a bet on a high-value portfolio, but on a system and competency which has been evolving and invested into over a long period of time. I hope you share our excitement and confidence beyond the here and now, which is certainly exciting, but also for the long run. Lets go to Slide 13, please. We will have some additional comments on our cash flow and burn from Chetan later on in his presentation. But I want to make a few observations on additional cash events outside of vodobatinib and other earlier-stage programs we spoke about here. Our partners have successfully launched Elepsia, Xelpros and Sezaby as current commercial sets in the U.S. Elepsia is commercialized by our partner, Tripoint, and we achieved early run rates, indicative of a fairly robust growth trajectory. Unfortunately, we have had supply disruptions from the Halol import alert, but we have managed to find an alternative vendor and are in the process of finalizing our plans to relaunch the product in the U.S. Sezaby, that's the benzyl alcohol-free formulation of phenobarbital, got approval in the U.S. last November. Sun is our commercialization partner and Sun has launched Sezaby in the U.S. during quarter 1 of 2023. As you may know, this product has a 7-year exclusivity and enforcement of that exclusivity is a key value driver for the growth of this franchise. We are working diligently to make the case for the agency and other stakeholders to enforce this exclusivity and also remove unsafe options from the market. Let me not go into the specifics of the numerous initiatives that we are undertaking here, and some of them are listed on this slide. And on PDP-716, we have commercialized -- we have completed the submission of the NDA. And as communicated earlier, we received the complete response letter from the FDA, indicating certain deficiencies with the external API manufacturing plant. There were no additional clinical data requirements indicated at this time. We have already identified an alternative API source and are in the process of planning a resubmission in 2024. And finally, as we mentioned earlier, we expect the top line and we initiate top line of Phase II and the initiation of Phase III program in Atopic Dermatitis for Vibozilimod that triggers additional cash milestone for SPARC. Plus, we believe that there will be opportunities to commute future revenues from this program to generate additional cash to support the development program that's required post PROSEEK readout. In the next 2 slides, at 14 and 15, we have summarized the portfolio and key milestone expectations. I don't plan to go over them in detail, except for one program. This is our oral SERD, Bexirestrant. We took the program into dose escalations in patients. Based on data from competing programs, it is becoming clear that effective clinical differentiation for this class as a whole is becoming a challenge. With small effect sizes, the program needed very large clinical studies and may not be the best use of capital for SPARC. So our portfolio review late last year, as we disclosed earlier, down-prioritized this program, and we can go into additional details if required during Q&A. With that, let me now transition the call to Dr. Siu-Long Yao, who heads up our Clinical Development Group for the next leg of the presentation. He will cover the clinical programs in a bit more detail, and I look forward to seeing you back during the Q&A. Thank you for your time. Over to you, Siu.

Thank you Anil. As Anil mentioned, my name is Siu Yao, and I'd like to add my warm welcome, especially to the many who have accompanied us over the years. I oversee see Clinical Development, and I'll walk you through our major clinical programs. So Slide 17. The first program I'll discuss is vodobatinib, our c-Abl inhibitor for Parkinson's disease. Slide 18. Okay. Thank you. This slide gives you some basic background on Parkinson's disease. There are a lot of people affected, approximately 7 million across the world, and the prevalence is growing. There are anticipated to be 14 million affected by 2040 actually. So in fact, the growth of the disease is outpacing total population growth, meaning that the market is enlarging. The therapy we have is one where we believe we can modify the disease and actually change its trajectory or course, rather than just treating its symptoms. So the pictorial at the bottom of the slide gives you an overview of the disease and what we're talking about. I'd like you to focus on the middle row first here. There, you have the disease starting from a prodromal stage on the left and progressing to diagnosis, maintenance treatment, complex treatment and finally, palliative treatment. On the other rows, both above and below the middle row, there are major clinical events depicted that need to be managed in the care of these patients. As Anil mentioned, we are initially studying vodobatinib in the prodromal/diagnosis stage. But if it works, there's potential to extend it to all stages of disease. Next slide, please. On Slide 19, this is a reminder of the design of the Phase II proof of concept study named PROSEEK that Anil alluded to. The study consists of 3 arms of placebo, a high dose of vodobatinib and a low-dose of vodobatinib. Part 1 is the key part of the study, where subjects are treated for 40 weeks and the effects of treatment on the primary endpoint of Part 3 of the UPDRS scale is assessed. The study is fully enrolled, as Anil mentioned, and we anticipate having some initial interim data in March 2024. Part 2 of the study is a long-term extension where subjects, who initially received placebo along with subjects initially treated with 384 milligrams, receive more treatment with 384 milligram for an additional 9 months. Subjects randomized to 192 milligrams continue at that dose during the extension. So right now, approximately 87% of the eligible Part 1 patients have rolled over into Part 2 and completion of the overall study is anticipated in May of 2025. So next slide, please. Slide 20 gives you an idea of the distribution of patients across the world. On the Y axis is the number of patients from each region and going across the bottom on the X axis is the region. Over 40% of the patients have come from the U.S., as you can see. Some additional detail about what we've seen so far is summarized in the other bullets on the right there. There were Grade 3/4 events in about 6% of the patients and GI events and rash were the most common AEs. We do have a data safety monitoring board, which is unblinded to treatment allocation and reviews all safety data in an ongoing fashion, and they have not recommended any changes in the conduct of the study following 6 interim reviews. Next slide, please. So Slide 21 summarizes some of biomarker plans for the study. The biomarker subgroup in the study consists of over 150 of the 504 patients in the study, which translates into over 50 patients per arm that will have biomarker data. But I just told -- what I just said there is a -- in fact, it's simplification, however. In fact, some of the biomarkers will be obtained in all subjects, but in general, we are targeting to get 50 subjects in each arm with all biomarkers. The biomarkers that will be obtained upon study entry and exit include dopamine transporter scanning and skin alpha synuclein content. Target engagement will be assessed by c-Abl and CRKL statuses, and neuronal death will be assessed through neurofilament light. Pharmacodynamics will be assessed through various downstream targets that you can see listed there. And we have smartphone-based measures for patient functional status. Slide 22. This slide provides a summary of the concomitant studies in the program. There's an ongoing carcinogenicity study, and we plan to perform a relative bioavailability study along with some drug-drug interaction study to support the Phase III plans. A human ADME study is also planned. Next slide, please. In Slide 23, there is a summary of some other related alpha synuclein based disorders that could benefit. And there are the other classical synucleinopathies such as dementia with Lewy bodies and multiple system atrophy, along with the prodromal synucleinopathies such as primary autonomic failure and REM sleep behavior disorder. On the right is a western blot that summarizes the activity of vodobatinib in the model of Alzheimer's disease. Molecular weight is depicted on the Y axis and treatments used are displayed on columns. In this case, treatments were done in duplicate so there are 2 columns for treatment with controlled DMSO and 2 columns for treatment with vodobatinib. As you may know, Tau is the protein of interest in Alzheimer's Disease, so I'll ask you to focus on the phospho-Tau and Total Tau rows in the middle of the blot. As you can see, treatment with vodobatinib significantly diminishes both, suggesting that treatment with vodobatinib may be effective for Alzheimer's disease. Slide 24. This slide transitions to our program with vodobatinib in chronic myelogenous leukemia. Next slide. On Slide 25 is a summary of the commercial landscape for CML. The graph on the left consists of rate per 100,000 on the Y axis and year going across the X axis. The top curve is the incidence of the disease, and you can see that it's steadily increasing over time. At the same time, the rate of death from CML is decreasing, so that overall the prevalence of the disease or patient population is actually increasing. In fact, the current market is valued at USD 3.5 billion. And you can see on the graph on the right gives you an idea of the major drugs used in the treatment of CML and their respective market shares. The next slide. Slide 26 summarizes more recent data we've seen with vodobatinib in CML. The figure you see is a summary of all the patients that we have efficacy data on. The rows represent a disease status of the patient population either at baseline in the top row or following treatment with vodobatinib in the second row. The percent of the population is represented on the X axis. As you can see, most patients were not in response at baseline. But following treatment, over 40% of patients have achieved response, which is really remarkable in this patient population, many of whom were resistant to ponatinib. Responses were very durable, as you can see in the last bullet, where median time on drug was over 32 months. Next slide. Slide 27 provides some preclinical data that supports our plans to do an earlier line study with a larger market potential. On the Y axis, you have tumor volume in mouse xenografts and on the X axis is time in days. The top curve represents results obtained with vehicle control. The line below that is the tumor size following treatment with nilotinib, a representative second-generation tyrosine kinase inhibitor for CML. You can see that there is some control of tumor size, but treatment with vodobatinib, either at a lower or a higher dose in the bottom 2 curves is much, much better. This, along with other data, suggests that we can beat existing second-generation treatment in earlier lines of therapy and capture a larger market share. In Slide 28, we've had discussions with FDA, and they are actually quite supportive of getting an initial approval on an earlier line of therapy. This is consistent, as Anil mentioned, with their project Frontrunner initiative. Our plans are summarized in the diagram below there. And we're planning to do a randomized study against one of the second-generation treatments for CML with a primary endpoint of major molecular response. On Slide 29. The remaining slides summarize vibozilimod, our sphingosine agonist, for the treatment of psoriasis and atopic dermatitis. Slide 30, please. As I mentioned, the 2 initial indications we're targeting for vibozilimod are psoriasis and atopic dermatitis. The prevalence of psoriasis in the U.S. is approximately 8 million, and the market is dominated by biologics. Though there are biosimilars, penetration has been limited to date. For atopic dermatitis, the U.S. prevalence is even higher, approaching 18 million. Though JAK inhibitors are available, as Anil mentioned, they're associated with several black box warning such as thromboembolism, cancer, major adverse cardiac events and even death. Slide 31, a summarizes the design of the Phase II dose ranging study for psoriasis. There are 4 arms consisting of placebo and various doses of vibozilimod. A primary endpoint is at 16 weeks, which is Part 1 of the study. In Part 2, we're evaluating the effectiveness of switching to higher doses if efficacy is suboptimal. And Part 3 is the safety extension. Currently, there 15 sites are active in the U.S. and 3 sites are active in Europe. Slide 32 summarizes the atopic dermatitis study. Again, there are the same 4 arms but this time we've eliminated some of the re-randomizations. The primary endpoint is also at week 16 and there are 18 U.S. sites and 15 European sites that are currently active. Finally, Slide 33 summarizes the major events for the atopic dermatitis study, consisting of a futility analysis in the second quarter of 2024, an interim analysis for the primary end point in the fourth quarter of 2024 and study completion in the second quarter of 2025. So this is my last slide. At this point, I'd like to hand you over to my colleague, Vikram, who will walk you through some very nice preclinical data with one of our up-and-coming drugs. Vikram?

Thank you, Siu, and good evening to everyone. My name is Vikram Ramanathan, and I oversee Preclinical Development at SPARC. And in the next few minutes, I'll be giving you an update on our compound SCD-153, which we are developing for alopecia areata. We are happy to share that the IND was filed in India recently, and we have approval from the DCGI for Phase I clinical studies. Slide 35, please. Alopecia areata is a disease with the body's own immune system attacks the hair follicles and thereby causes hair loss. There is a large patient population that suffers from the disease and current treatments are inadequate. JAK inhibitors have recently been approved, but they carry an FDA black box warning for cancer, stroke and death. The other alternative is steroids but these are also not preferred because they require intradermal injections in the scalp and have serious side effects. The picture show how the disease manifests. It disproportionately afflicts the younger population, less than 30 years of age, and causes them significant psychological stress. There is clearly an unmet medical need. Slide 36, please. So Slide 36 gives some background on the compound SCD-153, which is being developed as a topical therapy for alopecia areata. On the left is shown a healthy hair follicle. The hair follicle has so called immune-privilege, which means that it is shielded from the immune cells and the nearby vicinity. The alopecia areata diseased follicle is represented on the right. In this case, the immune privilege is lost and there are now disease-causing T-cells present at the base of the hair follicle in what is called a swarm of bees phenomenon. These T cells secrete inflammatory cytokines and damage the follicle and so hair falls out. SCD-153 inhibits this inflammatory process and can counter the disease. Importantly, SCD-153 has been designed as a topical agent. And so systemic exposure and systemic side effects would be minimized. Slide 37. So this slide shows preclinical data in an immune cell driven mouse model of alopecia areata that spontaneously develops hair loss. The disease here is caused by the CD8+ cytotoxic T cells, which is also the culprit in the human disease. The graph on the left shows the hair growth index on the Y axis and the time of treatment of SCD-153 on the X axis. Applying SCD-153 on the skin 3 times a week results in the animals recovery hair growth compared to the vehicle-treated animals. We have also studied other dose strengths and regimens of SCD-153 and have seen meaningful hair growth in those cases as well. The hair growth can be visualized in the photographs on the right. The hair growth index is derived from a software-based analysis of these photographs. The animals start out at a similar level of disease at week 0. The animals on the top row on the right received vehicle for 16 weeks and show continued disease with no hair growth. Animals, in the bottom row on the right, received SCD-153 applied to the skin for 16 weeks and showed good hair growth. We have also examined the skin samples under a microscope and found that the disease causing T cells are reduced after SCD-153 treatment. So these data demonstrate good single-agent therapy. Importantly, there is room now to look for combination therapies with SCD-153 for hair growth as well. And we have initiated combination studies with low-dose JAK inhibitors. Slide 38, please. So this slide shows quantitative PCR-based measurement of gene expression of inflammatory markers in the skin of the alopecia areata diseased mice. These are interferon signature genes associated with alopecia areata in humans as well. The Y-axis shows the relative fold increase in the mRNA gene transcript levels above the baseline. In each set, the first bar is the level in healthy mice. These are all very low because they lack disease. The second black bar in each case is a fold-increase in the diseased mice. And the difference between the first and second bar is the disease-associated change. In each set, the last 2 bars are from the diseased mice but which have this time received SCD-153 treatment on the skin, and a reduction in the transcript levels of these genes is evident. These data provide a mechanistic basis for how SCD-153 causes hair growth in this disease model. The marker shown here attract the disease-causing T cell to the site, and these then initiate the disease. We should particularly note the increase in chemokines, CXCL9, 10 and 11 in this slide, and we'll come back to the same CXCL9, 10 and 11 after a couple of slides. Slide 39, please. So Slide 39 summarizes the current status. Following Toxicology and Safety Pharmacology testing, the IND was recently filed with the DCGI. We now have approval for the Phase I in human Phase I study and the Phase I study has been initiated now in India. The single ascending dose study will be a randomized, double-blind, vehicle-controlled study. And as shown in the figure, we will have 5 ascending dose cohorts. As usual, there'll be in-house assessments up to 48 hours post dose and subsequent follow-up. The primary objective, of course, is safety and tolerability and plasma PK will also be studied. This will be followed by a multiple ascending dose study. Slide 40, please. Slide 40 is the last slide on SCD-153. We are now evaluating the potential of SCD-153 in another autoimmune skin disease: vitiligo. Vitiligo is a condition where skin pigment is lost and white patches develop. The chemokine CXCL9, 10 and 11, which we discussed just in a couple of minutes ago, also attract the vitiligo-causing immune T cells to the site in the epidermis. These then secrete inflammatory cytokines, that target and destroy the melanocytes which are the pigment cells. Inhibition of this cycle by SCD-153 suggests that the drug has potential in this disease as well. Vitiligo also causes a large psychological burden for the patient and available options are few. So we are in the process of testing this possibility in preclinical models. To recap then, we have shown that topically applied SCD-153 promotes hair growth in a spontaneous immune mouse cell model of alopecia areata. And SCD-153 inhibits inflammatory cytokine gene expression in the underlying skin of these mice. An IND has been filed with the DCGI and the Phase I study has commenced in India. I will now hand over to my colleague, Dr. Nitin Damle, who will share an update on outlook in the anti-body drug conjugates area. Nitin?

Thank you, Vikram, and a very good afternoon to you all. I'm Nitin Damle, and I oversee the biologics function at SPARC, and I'll be providing update on SPARC's first antibody-drug conjugate SBO-154. Antibody-drug conjugate field has exploded in the last 6 years, during which 12 novel ADCs were approved by the U.S. FDA as treatment options for cancer patients. As a result, the ADC strategy has blossomed into a commercially viable therapeutic strategy for strategic investments and the ADC market is projected to cross $25 billion in sales by 2028, with 24% increase in the compound annual growth rate during the next 5 years, as shown on Slide 42. During the last investors call, we had introduced SBO-154 as the first biologic therapeutic from SPARC and described preclinically its antitumor therapeutic potential. SBO-154 is a humanized antibody drug conjugate of microtubule disrupting cytotoxic payload, capable of potently inhibiting growth of actively dividing tumor cells. SBO-154 is designed to bind with high affinity to a broadly expressed tumor-associated antigen MUC-1 or Mucin-1. Both the cytotoxic payload and its linker have been clinically validated and are represented in already -- in some of the already market ADCs. Let me say a few words about MUC-1 as a tumor antigen. MUC-1 tumor antigen, that's the target of SBO-154 as shown on Slide 43, is synthesized as a single protein that undergoes autocatalytic proteolysis into 2 subunits, MUC-1 alpha and MUC-1 beta prior to its display on the cell surface. And when it's expressed on a cell surface it is expressed as a heterodimer of MUC-1 alpha and MUC-1 beta. While MUC-1 alpha is entirely extracellular in its display, it is tightly but not covalently bound to the transmembrane MUC-1 beta subunit that holds the entire MUC-1 protein on the cell surface. The region of MUC-1, where MUC-1 alpha binds to MUC-1 beta is recognized as the SEA domain identified in the MUC-1 cartoon on Slide 43. MUC-1 alpha subunit includes a variable number of tandem repeats, VNTRs, of about 20 ammino acid long peptide sequences against which a large number of monoclonal antibodies have been made and evaluated as therapeutics as naked antibodies, radio-immunotherapeutics or ADCs during the past 25 years. None of these therapeutics managed to provide meaningful clinical benefit in cancer patient in large part, believed to be due to the presence of cell-free or shed MUC-1 alpha antigen, both in circulation and also in the intratumoral compartment where it could effectively compete with MUC-1 antigen on the tumor cell surface, intercept anti-MUC-1 antibody therapeutics, and thus deny them the opportunity to target tumor-associated MUC-1 to cause therapeutic benefit. Our ADC, SBO-154, is a high affinity binder to the cell surface membrane proximal SEA domain of MUC-1, and as shown as circled in the MUC-1 cartoon on Slide 43. Unlike MUC-1 alpha domain that contains VNTR, the SEA domain of MUC-1 is not actively shed or shed in very small quantities, so as not to be able to compete with cellular MUC-1 SEA and intercept the SEA-targeted therapeutic entities such as SBO-154. We have further confirmed that the sera from cancer patients show minimal presence of MUC-1 SEA while continuing to show the sizable presence of MUC-1 VNTR antigen. Hence the shed MUC-1 SEA is far less likely to interfere with the binding and activity of SBO-154 against MUC-1 expressing cancer cells. The next slide, Slide 44, shows the relative strength of antitumor activity of SBO-154 evaluated against large xenografts of human carcinomas expressing different levels of MUC-1 SEA on their cell surface. Whenever the expression of MUC-1 SEA is high, SBO-154 is able to cause regression of pre-existing tumor xenografts. On the other hand, low MUC-1 SEA expressing xenografts although showed appreciable growth inhibition or disease stabilization, these xenografts fail to regress upon treatment with SBO-154. In contrast, an isotype-matched nonbinding control ADC of CD20-specific rituximab failed to show any growth inhibition in any of these evaluations. Thus, the antitumor benefit conferred by SBO-154 is preferential towards high MUC-1 SEA antigen expressing tumors. Our own immunohistochemical assessment of the expression of MUC-1 SEA in patient-derived tumor biopsies and human tumor tissue micro arrays suggest high-level expression of MUC-1 SEA in a wide variety of carcinomas and thus give an opportunity SBO-154 may be able to provide meaningful therapeutic activity in cancers with high expression of MUC-1 SEA. The SBO-154 program is currently in the preclinical development phase with the focus on manufacturing of the targeting antibody and the payload linker, and further the assembly of the ADC SBO-154. We hope to file the IND with the U.S. FDA in the second half of the calendar year 2024. While we advance this program through its preclinical development as shown on Slide 45, we have engaged the U.S. FDA via the INTERACT meeting to see guidance for various IND-enabling preclinical development activities, which serve as a prelude to our formal Pre-IND meeting sometime in 2024 ahead of the IND submission. We are looking forward to the FDA response from the INTERACT meeting sometime before the end of this month. I'll stop here and hand over the discussion to SPARC's CFO, Chetan Rajpara. Chetan?

Thank you, Dr. Damle. Good evening, everyone. This is Chetan Rajpara, CFO at SPARC. I plan to go over SPARC financials and cash position at a high level. Slide #47. During FY '23, total income was at INR 250 crores, equal to USD 31.1 million, while total expenses were at INR 472 crores, equal to USD 58.8 million, resulting into a net loss of INR 223 crores, equal to USD 27.7 million. Financial year '23 income was higher as compared to FY '22 on account of upfront and milestone payments received for out-licensing Sezaby and higher royalties on certain products. Let me update you on our financial results for the first quarter of FY '24. For Q1 FY '24, total income was at INR 34 crores, equal to USD 4.2 million, while total expenses were at INR 129 crores, equal to USD 15.8 million, resulting into a net loss of INR 95 crores, equal to USD 11.6 million. Next slide, please. So as you may be aware, the company had raised INR 1,112 crores, equivalent to USD 148 million in July '21 by way of a preferential issue of convertible warrants. The company has received INR 703 crores in January 2023 against the conversion of all warrants by investors. With this entire process of the preferential issue stands received. Cash and cash equivalents as at 30th September '23 was INR 363 crores, equivalent to USD 44 million. The company has sanctioned bank facilities for INR 175 crores, equivalent to USD 21 million in place, in addition to a line of credit for INR 250 crores, equivalent to USD 30 million from the parent company. Utilization of this limit as on September 30, 2023, is 0. The company has obtained shareholders' approval at the last AGM for raising a sum up to INR 1,800 crores, equivalent to USD 220 million, by way of a fresh issuance of securities. For FY '24, approximately 30% of our expenses are budgeted for the clinical costs. We are aggressively managing our costs and working to control non-clinical expenses. That's all from me today on financial update. A big thanks to all of you for joining the call. I will now hand over the call to Jaydeep for facilitating the Q&A.

Thank you, Chetan. Thank you, everyone, for patiently listening. We will now open the call for question and answer and discussions.

[Operator Instructions] The first question is from the line of Ketan Gandhi from Gandhi Securities.

Yes. So on Slide 9, can you please help us understand vodobatinib in CML recalibrating to a changing regulatory and market landscape?

Thanks, Ketan, for the question. I think what this refers to is a couple of significant changes in the way FDA is [indiscernible] that clinical programs in oncology. I mean if you go back to the prevailing paradigm in oncology for many years, the first registration window for a program is usually the last line setting. You have to basically test the compound in the last line setting. And FDA is now for many classes are actively encouraging sponsors to go to earlier setting through comparative trials as against an open label study in the last line setting. And this initiative is called the project Frontrunner. So that is one important regulatory change, which has consequences or implications for our program. The second change, a significant paradigm shift, is the way in which the agency look at acceptable doses. In the earlier setting, earlier paradigm, FDA always allowed going up to the maximum-tolerated dose and then coming down a step from maximum-tolerated dose and using that as a dose for clinical exploration of the program. But now they're seeing at least some randomized data to identify the minimally efficacious dose. And this is coming from recent experience across several classes where approved products, then manifesting significant level of toxicity in clinical practice. So both these as implications for us in terms of the path that we are following based on earlier set of recommendations from the agency in a prior consultation and what the agency would like us to do at this point, and that is the reset that we are alluding to.

So to understand it better way, it will cost us more and it will cost us more time also. Is my understanding right?

That is right. I mean if we -- see, okay, let me take a step back. See what happens is two-fold. One, we are -- I mean the current expectation for a registrational program in vodobatinib is completing a last line study. And that last line study may require fewer patients but they are far more difficult to recruit patients, right? And this would require more patients but they are in an earlier setting and therefore, may be an easier to recruit cohort. As I said in my comments, we are evaluating the cost and time line implications. And that will become a decision point post PROSEEK, right? Once we have results on PROSEEK, whether we will pursue a CML, is a strategic decision that we need to take. And we will also decide whether we pursue this alone as ourselves or in partnership. And one -- I also want to highlight one other aspect of this change, that is, this would be a comparative study, as in there will be an active comparator in this program as against an open label study where there is no comparator in the earlier setting. So in that sense, there is an opportunity for the cost to go up for sure. The time line implications will need to be assessed based on the design.

[Operator Instructions] Next question is from the line from Ishita Jain from Ashika Stock Broking.

So my first question is on the PROSEEK trial. In terms of the primary endpoint, we're measuring change in baseline on the MDS UPDRS scale. Can you quantify that?

Can you quantify -- can you explain -- can you give...

How many points of change would take us successful to the finish line?

I think Dr. Siu-Long Yao can give a little bit more detail on the MDS UPDRS Part 3. But if the question is about the design of the trial and what would be a meaningful change from a clinical perspective, the original study was designed against natural history data that we have from multiple natural history studies, particularly the MDS and Michael J. Fox Foundation study. So in that setting, if you take Part 2 plus Part 3 together, it's a 6.5-point deterioration over a 9-month period, which is the baseline deterioration that we assume, and the 35% improvement of over that is deemed clinically significant. And that is proportionately split between Part 3 and Part 2 even though a larger component of that Part 2, Part 3 aggregate is actually Part 3. So in that sense from points perspective, it's 4-plus points in Part 3 and around 2 plus in -- 2 in Part 2. So we still look for a 30% or 35% improvement on that trajectory, which is from our consultations with KOL deemed clinically significant if that's the question that you're asking.

Yes, absolutely. My second question is so -- slightly a broad-based question on PROSEEK. Inhibikase Therapeutics for their drug, risvodetinib, unblinded a part of their trial 2 weeks ago and there seems to be signs of efficacy. I think only for their highest dose is 200 mg. And they also got orphan drug designation for MSA, which is also an alpha synucleinopathy. So I do understand that you perhaps cannot comment on a competitor, but strictly from a proof-of-concept point of view, can you draw some parallels with our c-Abl inhibitor, vodobatinib?

I mean they clearly claim a positive trend line for their study, especially in the higher dose and that all goes well for our program. But we will take that with not just a pinch of salt, with a lot of apprehension because the sample sizes there are very, very low, I mean this is almost 11-patient data. And it's also -- if you look at the duration of treatment, it is a 12-week duration, and it is a known fact in the Parkinson's phase that the placebo response tapers only after 6 months, right? So we expected to see some level of moderation of the trajectory in that earlier phase. So we think that the overall treatment window and the patient size is inadequate to make the claims that they are making. And also, the lower dose did not have an effect, but that is to be expected to a certain level because the blood brain penetration requires substantial peripheral concentration. So in that sense, that's reasonable. But if you look at the window for treatment and also the number of patients involved, I think it's too early to kind of have the mission accomplished there.

Makes sense. If I could just squeeze in one more. So perhaps a little farfetched. What -- post our Phase II readout, what are we thinking in terms of Phase III? What would -- how big would Phase III be? We have about INR 300 crores cash on books. Will there also be an agency meeting before we initiate protocol for Phase III? And finally, will Phase III include L-Dopa or MAO inhibitors patients as well, which is slightly more advanced stages of PD? Or are we sticking to early PD?

It does. It's a small question and there are many things to unpack there. So let me take out most of this. Our registrational program for the initial registration will not have the baseline L-Dopa. We are allowing MAO-B for -- constant stable dose of MAO-B is allowed in the protocol currently, right? Now we will have an end of Phase II discussion sometime in November 2024 time frame based on our current projections. And that end of Phase II, we are going in with multiple possibilities. Some of them are really positive, and some of them, in the worst case, we may require 2 more Phase IIIs to get this into a registration depending on the data that we see and depending on the view the agency takes. But our final sign-off on our registrational study design can happen only after we have a consultation with the agencies, with the data from the full data readout in August. And we will have to wait and see how soon we can get to market. But we will not be going into additional settings because if we introduce L-Dopa as a background therapy into this, that induces a significant level of variability of response. That is certainly an avenue for us to explore and pursue at an appropriate time because if we are bending the trajectory for the disease, we will definitely have an impact on later stages of disease, but that's a different program. And our most important priority would be to replicate what we've done in PROSEEK and get this product to registration as soon as possible.

Fair enough. And if you can just give an update on Phase II for Lewy body dementia? And I'll just join back the queue.

So Lewy body dementia program is a single center trial out of Georgetown. And that's a very small trial with -- again, some of the issues that I thought were [indiscernible] program. And then the treatment phase is small and also very few number of patients. And we are looking at that trial for a biomarker guidance, and we will have data around the same time because Georgetown shut down their clinical trial activity for almost a couple of years during COVID. So there were significantly delays in that program. But from a proof-of-concept standpoint, for even Lewy body dementia, we think PROSEEK is a more relevant proof of concept because of both the mechanisms involved in both diseases and also the number of patients involved in PROSEEK trial. So we will consider PROSEEK readout as a trigger point or a stage gate for deciding on LBD.

[Operator Instructions] Next question is from the line of [ Chandpal Singh ], individual investor.

I have just one question regarding vodobatinib for Parkinson's. That -- are we eligible for the disease-modifying therapy -- drug under the disease-modifying therapy?

So disease-modifying therapy designation in the label is one thing. And actual disease modification is -- from a clinical experience standpoint is different. So let me comment on both. So disease modification or disease-modifying therapy designation on the label may require like a different design in the sense that you may probably need to have a delayed start design which will further delay the program. So that is something which we may not explore on day 1, and we may try to add to that later. And we will also have a consultation with the agency in terms of what we are seeing. I mean we will have significant endpoints here. If you look at the nature of data that we will have both in terms of the actual trajectory of deterioration and also the time to introduction of symptomatic therapies will give practical data and guidance on whether the drug is modifying the disease trajectory. So we hope to have a conversation with the agency in terms of disease-modifying nature of the program and make the case for including disease-modification designation in our label with this design. But if FDA has different views on that, then we will go ahead with the registration as a therapy in this disease before we pursue the disease-modification impact.

Next question is from the line of Jigar Valia from OHM Group.

My question pertains to vodobatinib. We have these catalyst events coming up in Q1, Q3. Just a clarification that this certainly would not affect any optionalities on LBD or even further on CML?

So I didn't fully follow the question, Chetan. Can you repeat the question, please?

So with regards to the catalyst events coming up for vodobatinib for PD, that shouldn't affect the optionalities with regards to the LBD indications or even with regards to the CML, which is again with regards to same modality?

Well, it will, in a sense that -- I mean, going back to my earlier response to Ishita, the MSA and LBD essentially will depend on a successful completion of PROSEEK in the sense that we are looking at PROSEEK as a definitive proof of concept for diseases driven by alpha synuclein. So if there is a negative readout on PROSEEK, then it is a negative proof of concept for not only Parkinson's disease but also for the mechanism more broadly, and that means across these diseases, but again as -- I mean, MSA and Lewy body dementia. It is not going to affect CML because in CML, we already have clinical proof of concept, as Siu explained in his slide deck. And we see CML as a hedge, even though a lower value hedge against the failure of the hypothesis.

Perfect. Very helpful, sir. Also, similarly with regards to SCD-044, would psoriasis or atopic dermatitis be either/or scenario and psoriasis as a hedge for dermatitis?

No, we will be driven by the data from their Phase II programs, and we will have to add in our commercialization partner. They have -- I mean, Sun Pharma is our commercialization partner. And Sun have the rights to take those decisions. And I'm pretty sure they will take appropriate decisions based on the data that they are seeing in these programs and the competitive landscape of these areas. So I don't think we can give a generic response about whether it is going to be either/or at this point without actually seeing the outcome from the Phase II programs, which will be coming soon.

Got it. Very helpful, sir. And sir, lastly, in terms of -- if you can -- I know if I missed, in terms of the incremental burn run rate for the coming year, $60 million, could be more?

So you see next year -- calendar year '24 or financial year '25 will be a true discontinuity from a trending standpoint for the burn rate because we have been having a consistent burn rate for the last few years because we've been pursuing in a certain number of clinical programs and certain number of preclinical programs and there is a certain level of predictability to that spend. But depending on what we do with vodobatinib and depending on how some of these early programs scale and also depending on the partnering strategy in terms of how much development is retained within SPARC. There is a potential for a bigger swing in development spend next year. So unfortunately, I'm not in a position to give you a trend guidance on operating costs for next year because we are going to have significant dependence and variability on some of the data readouts.

I totally understood. If I can just squeeze in one more. Any time lines for the site transfer for Elepsia, Xelpros?

Both Elepsia and Xelpros -- in the case of Elepsia, we are looking for a site transfer in the coming year -- in the next financial year. Xelpros has not gone out of supply at this point. So we are still waiting for an actual plan from Sun in terms of transitioning that to a different plan. So we don't have a definite guidance on Xelpros. But in Elepsia, we are looking at -- just one second.

[Operator Instructions]

Just wanted to go back. As I confirmed earlier, we are looking at financial year FY '25 -- as in financial year '25 as a target for tech transfer.

Next question is from the line of Manish Jain from GormalOne.

Really delighted to see the kind of biologics capabilities that have been built up. And ADC already really gunning for IND. So I would say hats off to the team. And I had three questions. The first one was, at what point -- can't we pursue vodobatinib both for PD and CML, if we license it to 2 separate people altogether?

So should I -- Manish, thank you for your comments on the ADC stage and the scale of the biologics. You want me to wait for all the 3 questions or you want me to...

I would do it one by one.

Okay. So this is an interesting question in terms of pursuing PD and CML together. There are 2 or 3 complicating factors here. One is, obviously, the commercial landscape and the price implications. If you take late-stage cancer and the price ranges are usually runs to several hundred thousands of dollars per year per patient. But Parkinson's and the neurodegenerative diseases spectrum being significantly large disease burden with significantly larger number of patients under management. Per patient per year pricing tends to be significantly lower. So if you have a product even at a high dose, as in the Parkinson’'s dose is going to be higher than the CML dose with much lower price, then the substitution risk for someone who is commercializing CML is quite high. Two, there are safety profile implications, in the sense the patients who are going to come to CML with this drug are significantly sicker than patients who you see in early-stage Parkinson's. So a lot of commercial partners will have trouble reconciling the fact that they have to deal with complex safety profile, which carries some of the encumbrances of last-stage disease in cancer in trying to market a drug in early-stage Parkinson’'s disease and in competing with programs which are not really encumbered with that kind of issues in leukemia. So there are some practical issues in terms of doing it both in terms of the cannibalization risk and also the risk of safety profile that we shared in Parkinson's.

Got it. Got it. And my second question was pertaining to Sezaby that is phenobarbital. So where are we going to manufacture it?

So we are in the process of inducting one more manufacturing plant. Currently, it's supplied out of one of the Sun's facilities. And this second facility that we are now -- our partner is now inducting is a third-party vendor outside of the Sun network. So as we kind of work towards enforcing market exclusivity, we will have 2 provider sources, one from the Sun network and one from outside. And that we believe will give sufficient business to the supply chain.

Excellent. Excellent. And last question before I join back the queue was related to PDP-716. So in terms of alternate API partner in -- how much time do we think before we can respond to the CRL?

So we have already identified an alternative manufacturing partner, and we are in the process of initiating the exhibit batches with alternative partner's API. It would require significant stability data, which is from a time line standpoint a killer, and we expect it to happen towards the end of -- I mean, the second half of next financial year.

Okay. I actually have a few more questions. I'll join back the queue.

Sure, Manish.

[Operator Instructions] Next question is from the line of Ishita Jain from Antique Stock -- from Ashika Stock Broking.

So moving away from PROSEEK, on PDP-716, the one with Visiox, what is -- I think that you already answered the time line. So Visiox also in-licensed Omlonti, which is for the same indication as PDP-716? And since SPARC is a shareholder of Visiox, can you give some color on how has the ramp-up of the scale up been for Omlonti?

No, we cannot comment on that program in this call. I mean we would like to stay with the SPARC program. Not qualified or equipped to comment on Visiox or other programs. Sorry, Ishita.

Got it. So on Vibozilimod, which is with Sun, I have a feeling you won't be able to answer this question either, but can you give us some color on just to better understand color on the terms of contract? So we can understand what is the payout, especially in calendar year 2024, which is we're expecting clinical proof of concept?

No, unfortunately, we can't. As you anticipated, we are not in a position to -- we haven't disclosed this. What I can say at this point is with the readout is a milestone event for us. And we also have substantial royalties expected from this program once we cross data thresholds in Phase III into a registration.

And the line for the participant dropped. [Operator Instructions] Next follow-up question is from the line of Manish Jain from GormalOne.

Yes. On the ADCs, I just wanted to know we have highlighted 1 or 2 indications. At what stage post-IND can we look at running 3, 4 or 5, 6 multiple indications?

I think the early-stage clinical program -- I mean, early-stage dose escalations in a program like antibody drug conjugates would have patients from multiple indications. So we will look for -- I mean, I'm clearly looking ahead here, because these are matters which are under discussion and finalization at this point. But we will look for certain threshold of expression of MUC-1. We will have a cutoff range, and we think that we can get patients from across III, IV tumor types, you have possibly breast cancer, lung cancer and a few other things. And there is a possibility to do this more as a basket trial as against going up in one program or one entity.

Next follow-up question is from the line of Ishita Jain from Ashika Stock Broking.

Sorry, apologies, I think I got dropped off. So just one last question on PROSEEK. I think I missed asking this. We have had 6 DSMB meetings. Were they all 100% green light to go head on both dosages?

Yes. We specifically asked if they would like us to change anything in terms of the doses used or the design or inclusion, exclusion criteria. They didn't want to change anything about the design or the dosages used.

Okay. Fantastic. And I also noticed that, I think, last month, we set up a whole-owned subsidiary called SPARC Life in the U.S. Can you comment on goal to create this? I mean, apart from monitoring clinical trials in the U.S., can this subsidiary someday become somewhat of a front end?

I don't want to get ahead of myself here. I mean we have an operation in the U.S., including Dr. Siu and others who spearhead our clinical activity. And I think from a regulatory and governance standpoint, it's cleaner to have them in a subsidiary. And we also have a brand structure. At the moment, it is part of a cleanup process. But that would become an operating entity for us in the U.S. And that we -- if we scale into a late-stage development program for vodobatinib, that will become a meaningful arm for us.

Next question is from the line of Tushar Bohra from MK Ventures.

I must congratulate the management a very, very comprehensive review and a lot of exciting developments, for sure. Sir, just regarding the PROSEEK outcomes, we mentioned that we are in touch with a soft potential collaborations or out-licensing opportunities or something on those lines. If you can highlight a bit more details who are the players we are approaching, what kind of interest we are seeing and anything around that will be useful?

So I won't be able to discuss who are the players that we are talking to because we are governed by fairly strict confidentiality commitments on these conversations. But what I can say is that right through this Phase II program, there have been consistent interest from large pharmaceutical companies. And we will initiate a process as we go towards data flow from this program to see what kind of partnership structures are possible. And we will also explore what is probably a smart way to split the value between us and a potential partner depending on where we actually land with the data. But I'm not able to give you a specific answer in terms of names that you're looking for.

I was looking for a number of players and the kind of players we are discussing with what kind of companies or whether you...

So we are looking at large commercial players, I mean, bigger pharma companies with the commercial footprint in the CNS space or larger companies with strategic intent in CNS space. And we have a fairly significant field which is interested.

Sure, sure, Second, if we were to proceed to a full-fledged Phase III clinical trial, assuming that we need one more trial for this after PROSEEK. Is there a range of an estimate as to how much resources you would need? And what would be the time lines possibly for this?

So it's clearly a function of what is the extent of pursuit that we can have, right, and what is the regulatory expectation. If we're going to have one clinical program, then -- one more clinical program, I mean, then we are talking about something in the range of $50 million, $60 million to do that one more clinical trial. And if you need to have two more, then we are talking in the range of something in excess of $100 million. But these are all very exploratory numbers. It's a larger question and probably a driver for collaboration is pursuing this program more fully. I mean we've gone to some length to describe some of the possibilities, both in late-stage disease and also prodromal disease, all the possibilities in the next ring of opportunities, which is MSA and things like Lewy body dementia. So if you treat PROSEEK as a proof of concept for synucleinopathies, then how aggressively you pursue this -- both the inner core of opportunity and also the peripheral set of opportunities is going to determine what is the kind of partnership or resourcing that is required and that will be a major consideration going into...

Got it, sir. And on the -- you mentioned that in the most conservative case, you could maybe need 2 more trials. But what about the most optimistic scenario, given the safety profile of vodobatinib, which is clearly -- at least as per the data up to now, clearly, very, very strong as well as the efficacy part, what is the most optimistic scenario that you guys are hoping for or are building in as one of the probabilistic scenarios?

I mean I don't -- I think we will be getting to a speculative realm at that point. I don't want to get into that issue with this group because at this point, we did not have any such that if conversation with the agency about the future of this program. So anything that I say is going to be based on my read of what is possible and what is not possible. And that could be misleading, and I don't want it to be misled by what I can say at this point.

Fair enough, sir. Maybe I rephrase the question. What are the possible scenarios after PROSEEK? Depending on the data, what are the pathways available from a regulatory standpoint and whichever one may happen?

You should look at -- see, PROSEEK is an initially large Phase II program. You have 504 patients and -- 504 evaluable patients. You have a clinical endpoint, which is what FDA has advocated for this disease indication for a long time. And we will also have some biomarker data -- significant biomarker data. And depending on the nature of samples like CSF or biopsies or blood, I mean, we will have fairly large numbers in some cases and smaller numbers in some cases. So this is a substantial data set. How FDA would actually look at this and how FDA will look at the disease is to be seen, because we don't have too many precedents in Parkinson's disease for neuroprotective therapies coming to a registrational path. FDA CNS division has been fairly progressive in dealing with indications like Alzheimer's and ALS. If you want to look for the most optimistic scenario, my guidance would be to take a look at what happened in ALS and AD recently. There are 3 approvals in AD and ALS. In the most optimistic scenario that can become a guidance benchmark for us with the agency. But I'm not saying that because there is no precedence and contours of this disease is somewhat different to like ALS and AD. So I think any speculation on what is possible is of limited value because of these differences in my mind.

Got it, sir. And one last, if I may quickly squeeze in. If you can highlight some of the newer drugs that you are either looking to in-license or at early series of development? You said in the beginning of the call that you're looking at multiple modalities extending into newer modalities. Maybe if you can just highlight a little bit more around that?

Yes. So I think if I look at our trajectory, we have a historical focus in smaller molecules, and we have added biologics as a competency in the last couple of years -- last 2, 3 years. And there are different possibilities with that broader area, antibodies both the conjugates, which has traditional cytotoxin, which is essentially much of the ADC field at this point. But we think that ADC will shift substantially with other kinds of payloads like other targeted therapies. And even other modalities, I don't want to speculate there, but even things like RNA therapeutics are all possibilities coming from the ADC kind of constructs. Plus, you will see bispecific or multispecific structures, both bispecific and multispecific stand-alone antibodies plus bispecific or multispecific ADC constructs, try to improve target expression by adding in another specificity. So there are different possibilities there. And clearly, one other possibility given our strengths in small molecule is, small molecules directed on cytotoxin. And since then you can use a small molecule of synthetic ligand to target to specific cancer cells, and that's something which we are definitely doing. And we have a program in consultation with UCSF. I think one of the slides have a reference to that. We already have a program in fairly late-stage preclinical program, and we will have news flow from that program going forward.

[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Jaydeep Issrani for closing comments.

Thank you, Nirav, and thank you, everyone, for being on the call today. In case you have any additional questions, feel free to reach out to us. We'll be available to answer your questions over e-mail or through discussion. Thank you again for being on the call today.

Thank you very much. On behalf of SPARC, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.