Verastem, Inc. (VSTM) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Verastem Oncology Conference Call. Please be advised that this call is being recorded at the company's request and will be available on the company's website for a period of 90 days from today. At this time, I would like to introduce Mr. John Doyle, Vice President of Investor Relations and Finance at Verastem Oncology. Please go ahead.

Welcome, everyone, and thank you for joining us this afternoon for Verastem Oncology's Defactinib Update. Before we begin our formal comments, I'll remind you that we will be making forward-looking assertions during today's call that represent the company's intentions, expectations or beliefs concerning future events which constitute forward-looking statements for the purpose of the safe harbor provisions under the Private Securities Litigation Reform Act of '95. All forward-looking statements are subject to factors, risks and uncertainties such as those detailed in today's press release announcing this call and in our filings with the SEC, which may cause the actual results to differ materially from the results expressed or implied by such statements. In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update any such statements. With that, I would now like to turn the call over to Brian Stuglik. Brian?

Thank you, John. Good afternoon. Happy New Year, and welcome to Verastem Oncology's Defactinib Update, that now includes a RAF/MEK combination program. We look forward to walking you through the specifics of our exciting KRAS program as well as the deal that we announced this morning to acquire the worldwide license to CH5126766, a novel RAF/MEK inhibitor, which we will refer to as CH for the remainder of the call. On the call today, we're pleased to be joined by Dr. Udai Banerji, Professor of Molecular Cancer Pharmacology at the Institute of Cancer Research and Honorary Consultant in medical oncology at the Royal Marsden NHS Foundation Trust, London, England, and lead investigator of the clinical study involving defactinib and CH. Professor Banerji is the deputy Head of the drug development unit at Royal Marsden, where he is involved in running the portfolio of more than 40 Phase I trials. He plays a key role, bridging preclinical and clinical drug discovery, designing and conducting clinical trials. We're also joined by my colleagues at Verastem: Dan Paterson, President and Chief Operating Officer; Rob Gagnon, Chief Business and Financial Officer; and Jon Pachter, Chief Scientific Officer. As we've shared, our 625 corporate plans includes broadening indications for COPIKTRA, adding additional marketing products and developing a robust pipeline of assets. And we've been moving this strategy forward on all fronts, including our recent presentations at the American Society for Hematology, where Dr. Steven Horwitz from Memorial Sloan Kettering Cancer Center shared positive results from the Phase II PRIMO study, evaluating duvelisib in refractory peripheral T-cell lymphoma as well as new and compelling data from an investigator-sponsored Phase I study exploring duvelisib in combination with venetoclax in relapsed or refractory chronic lymphocytic leukemia or small cell lymphocytic lymphoma, which has now been expanded into a Phase II study with many prestigious sites joining principal investigator, Dr. Matthew Davids at Dana-Farber Institute in this effort. In addition to COPIKTRA, we've been actively progressing our FAK inhibitor, defactinib, as a key part of our pipeline and our plans for longer-term growth. We recognize this has been an area of interest, and we have been working to align internal plans with recent developments prior to communicating on its status broadly. To that end, when we became aware of the exciting data that we generated in KRAS mutant tumors from the defactinib study in combination with CH, we work with our collaborators to supplement our original intellectual property to include this FAK/MEK combination. We also have expanded the terms of our partnership with the Institute of Cancer Research in the U.K., where the combination trial of defactinib plus CH is ongoing. From there, we work to secure the worldwide rights to CH from Chugai, which we are discussing today. The agreement was compelled by the striking synergy seen with the defactinib and CH combination in a growing body of preclinical and clinical research, along with the best-in-class potential for both compounds, individually and in combination. CH in combination with defactinib is currently the subject of a clinical study with the expansion cohorts now ongoing in patients with KRAS mutant advanced solid tumors, including low-grade serous ovarian cancer, non-small cell lung cancer and colon cancer. The results of this trial are planned to be presented at a scientific conference in the first half of 2020. And the company plans to initiate regulatory discussions in the first half of 2020 to further define the initial registration-directed study for the combination. Given the significant unmet needs in treating KRAS mutant cancers and the large commercial potential of the opportunity, the company will be evaluating various partnering strategies. However, the focus of today's call is on the scientific rationale for this combination. We will provide additional details around the clinical development time lines, financing requirements and partnering prospects later in 2020. I'd now like to introduce Dan Paterson, President and Chief Operating Officer, who will moderate today's discussions.

Thank you, Brian. We're obviously very excited. We've been working in this area on KRAS mutated tumors with FAK and MEK for a number of years. And we really appreciate the work the team has done as well as our collaborators with Dr. Banerji's team at the Institute for Cancer Research and Chugai. The agenda we'll walk through today is I will give a brief overview of the agreement with Chugai, then I'll hand it over to our Chief Scientific Officer, Jon Pachter to go through an overview of KRAS and FAK. And then he and Dr. Banerji will talk about the FAK-MEK overview and Dr. Banerji will give more details on the combination of FAK in this unique RAF/MEK inhibitor, we'll then open it up for questions. I just want to briefly go through our defactinib pipeline. So defactinib is our first-in-class FAK inhibitor that's been in a number of combination studies. We have 5 studies ongoing right now. And through 2019, a number of them have gotten through the dose escalation phase and moved into expansion cohorts. The one we'll talk about the most today is the one on advanced solid tumors with the RAF/MEK inhibitor, and again, that's in an expansion phase right now. Turning to the deal itself. And so the fundamental construct of the deal is we acquired worldwide development and commercial rights to the RAF/MEK inhibitor, CH5126766 or CH from Chugai with an upfront payment of $3 million and royalties to Chugai. Interestingly, on deals like this, many people focus on the upfront because that's typically the main thing that's disclosed and judge the deal based on that simple metric. It really doesn't tell the story here about the importance of the deal and how both parties worked very hard to put in place a deal that met the needs of both parties. What's most important to remember is that both companies were committed to a deal that would advance this combination as quick as possible for cancer patients around the world, and that meant both drugs having a single developer to facilitate this. So there's a number of unique aspects associated with the deal. First, we retain worldwide rights to defactinib, which is a first-in-class FAK inhibitor. There are a number of MEK inhibitors. We've been working on MEK/FAK for a number of years and are familiar with a number of them, and we have issued IP on the combination of MEK and FAK. We do believe the fact that CH is a dual MEK/RAF inhibitor, makes it unique. And both Dr. Banerji and Jon Pachter will walk through that, and that was very attractive to us. Second, it was very important to Chugai that they'd be able to have the option to market CH in their territory, should they choose to. And it was very clear that the upfront economics would be far more impactful for us than Chugai. Both of these considerations played heavily in the structure of the deal and impacted the upfront payment. As a result, Chugai has an option that they can exercise, to market CH in Japan and Europe. Just briefly, I want to go through the opportunity. So the area of KRAS mutated tumors or more broadly -- and this is an important part of the story that Jon will go into, where the RAS-, RAF-, MEK-, ERK-driven cancers in that pathway. That's 30% of all human tumors are driven by these mutations. Patients with these mutations in this family have an overall worst prognosis. Multiple approaches have been taken, both direct targeting, blocking downstream signaling and really try to have results focused on this, but there's been modest progress to date and there's some notable ones most recently, you've probably read about that directly target -- these targets. Single agent therapies associated with the development of resistance to these, and that will be a big part of the mechanism that Jon talks to. And tolerable combinations with MEK inhibitors have been challenging. They have been combined with RAF inhibitors, but there's been a lot of challenge with getting safe regimens for MEK inhibitors that could be combined. I'm going to turn it over to Jon to talk a little bit more about specific cancers where the RAS-pathway is important.

Thank you, Dan. As Dan just described, RAS is the most commonly mutated oncogene in human cancer. As shown here, activating mutations in KRAS, NRAS and BRAF, for example, occur with relatively higher frequency in many of the major cancer types. And these cancers become addicted to the RAS-, RAF-, MEK-, ERK-pathway to drive their tumor growth. Accordingly, inhibition of this RAF/MEK pathway represents a large unmet need in the treatment of cancer. In contrast to drugs that specifically target one mutant form of KRAS, such as G12C, the program discussed today may have broad applicability to numerous KRAS, NRAS and BRAF mutations as well as the cancers driven by MEK or pathway through additional mechanisms. Next slide, please. So I'd now like to describe our FAK inhibitor program and tell you how we decided to focus on combination with RAF/MEK inhibition. FAK or focal adhesion kinase is the key signaling molecule downstream of cell attachments, growth factors and other cancer stimuli. FAK plays key roles in metastasis, drug resistance and in immuno-oncology. Because of the role FAK plays in drug resistance, we believe that FAK inhibitors have great promise when used in combination with other anti-cancer drugs to block resistance to those drugs. And accordingly, clinical trials are now ongoing with defactinib in combinations with pembrolizumab or PD-1 inhibitor, with chemotherapy and with the RAF/MEK inhibitor, CH. So this slide describes defactinib, which is the first-in-class FAK inhibitor that has been studied in more than 300 patients and has generally been well tolerated to date, making it an excellent combination partner. As shown on the left, defactinib is a potent inhibitor of FAK and cancer cells. And on the right, you can see that in patients who have been treated with defactinib, FAK activity is effectively shut down in the tumors of those patients. Our initial interest in the use of defactinib for treatment of KRAS-mutated tumors came from work from UT Southwestern, which was published in 2013, as shown on the left. In human lung cancer cell lines, the investigators found that FAK inhibition was particularly effective to block cancer cell viability in cells with mutant KRAS. And based on this preclinical finding, a clinical trial was initiated with defactinib monotherapy to treat patients with KRAS-mutant lung cancer. The results were presented at World Lung in 2015 and also published just about a week ago this year. The endpoint of the trial in this aggressive KRAS-mutant lung cancer population was 12-week progression-free survival rate. As presented at World Lung, you can see that defactinib monotherapy showed comparable clinical activity with other active agents. It should also be noted that the defactinib patients were heavily pretreated with a median of 3 prior lines, suggesting the sicker patients. In his presentation of these data at World Lung, Dr. Gerber, who was the PI, concluded that defactinib is an active and generally well tolerated agent. And that it may be best used to treat KRAS-mutant cancer in combination with other agents. So we then moved on to start to think about which other agents would make the most sense. And BRAF/MEK inhibitors became quite interesting in this regard. So because the RAS, RAF, MEK, ERK pathway is an essential driver of proliferation and survival of cancer cells, one key theme that you'll see in the slides is that when you block this pathway, the cancer finds ways to get around the blockade to reestablish tumor growth. For example, as I'll show in a couple of slides, MEK inhibition can induce the cancer to double down on stimulation of MEK to drive through that blockade. Dr. Banerji has also found, both preclinically and clinically, that MEK inhibition in KRAS-mutant cancer cells induces compensatory activation of FAK. This activation is detected as phosphorylation of FAK, shown here as PFAK in the diagram. And once FAK is activated, it can drive cancer cell proliferation and tumor growth through multiple pathways, including ERK, RhoA and YAP pathways to get around the MEK blockades. This is the rationale for combining a FAK inhibitor with a RAF/MEK inhibitor to block cancer growth more effectively and prevent drug resistance. So accordingly, we found that our FAK inhibitor, defactinib, is synergistic with MEK inhibitors, and especially with CH, in numerous human cancer cell lines. Synergy means effectively that 1 plus 1 equal 4 or that 2 drugs together are more than additive in their anticancer effect. In this synergy model called the [ LOI ]model, the blue line in the diagrams shows the expected cancer growth inhibition if the drugs are merely additive and a red line below the blue line indicates synergy. So as you can see, in cancer cell lines with mutant KRAS, mutant BRAF or other mechanisms to activate the MEK/ERK pathway, we found that defactinib is highly synergistic with MEK inhibitors, and especially with CH. Accordingly, Verastem has issued -- has an issued patent on FAK/MEK inhibitor combinations, as Dan mentioned. Okay. So I'd like to now turn to describing CH, which we believe is a unique agent and may be superior to other standard MEK inhibitors. Please bear with me as I go into a bit of scientific detail to explain this. As you can see in the upper right, CH prudently inhibits MEK activity because it's unique among MEK inhibitors in that it also blocks RAF activity, as shown. Neal Rosendorf at Memorial Sloan Kettering Cancer Center elegantly described a feedback mechanism that limits the activity of standard MEK inhibitors. So looking at the diagram on the upper left, showing the pathway where RAS stimulates RAF, RAF stimulates MEK, MEK stimulates ERK and ERK then drives proliferation survival in tumor growth. When one blocks MEK with a standard MEK inhibitor, such as PD0325901, which is shown in the right -- the bottom right, a Pfizer compound. What you see is that when you block MEK, ERK feeds back -- ERK says, "Why am I not getting a signal anymore?", and can feed back to activate RAF to then stimulate MEK again. And you see that in the western blot on the lower right, where Phospho-MEK or pMEK indicating activated MEK has actually increased by that MEK inhibitor because of that feedback regulation. And that limits the -- both the degree of ERK inhibition and ultimately, the degree of tumor growth inhibition by standard MEK inhibitors. In contrast, CH when it blocks MEK may also stimulate ERK to feedback to RAF, but because CH can uniquely block both MEK and RAF, CH -- for CH, you don't see that increase in Phospho-MEK, that compensatory mechanism in that shows a better inhibition of phospho-ERK, as shown, and we believe can lead to better tumor growth inhibition. And finally, in contrast to agents targeting only a single KRAS mutation, you can see that CH here has brought activity across various KRAS, HRAS and BRAF mutations as well as in cells with wild-type RAS and RAF. So we believe it represents a broad opportunity. And with that, it is now my pleasure to introduce Dr. Udai Banerji to discuss the clinical activity of CH alone and in combination with defactinib. Thank you.

Thank you, Jon. I'll just be few. Follow the slides, so I'll go through them. So this was for our clinical -- investigator-initiated clinical trial we did. I've been involved in the CH compound for a long time, I've worked in multiple different MEK inhibitors in the past, including the one of the first studies on trametinib, and then further on MEK-162 combinations. And I took part in one of the CH study, which was initially run as 3 particular schedules where they were given as daily continuous or 4 days on 3 days off, and 7 days on, 7 days off, it just was the conventional standard of trying to overcome toxicity in the early days. However, preclinical expense in my lab seems to suggest that actually you could give breaks between treatment. And this drug has a unique, I guess, property of having a half-life of close to 50 to 60 hours. So based on this, we started an investigator-initiated study to give this drug either thrice a week, spaced out, or twice a week, but not Monday, Tuesday, but Monday, Thursday, for example, or Monday, Wednesday, Friday. And that's -- I can show you some of the results of this, which we presented at ASCO in 2017. So this was schedule of the clinical trials that we ran. So we ran a twice a week and thrice a week schedules. And what we found was the treatment was actually quite well tolerated. If you give it twice a week, so 4-milligram twice a week. So those of us who worked in the MEK field know that there's the same actuator high toxicity, so you can't get past a certain dose, that was 4 milligrams. So what was the best way to depreciate PD and toxicity to be able to give that. And as you can see from this slide, there was a grade 3 toxicity if you gave it of 3 times a week. But if you actually gave it twice a week, it wasn't as bad. If you move on to the next slide, please. So this was -- we -- once we established a dose of giving the drug twice a week, we expanded in a few baskets. I'll show you one of the basket. This was a KRAS-mutant lung cancer basket. So this included patients who have had multiple lines of chemotherapy. And this included patients who had all types of KRAS. And in our experience, we did not have that many patients with G12C. As you know, there's been activity with G12C inhibitors recently. But in lung cancer, it's set to be about 50% to 60%. In our hands, we didn't find many. And this is a waterfall plot on the left of 10 patients with KRAS-mutant lung cancer, you can see we saw 3 definite responses. What is also very interesting is, actually, patients had durable responses. So you can see on the right, there were not a lot. And the x-axis, you have the number of weeks of a progression-free survival of 24 weeks is, approximately, 6 months. And obviously, some patients have actually gone on for more than 2 years on the treatment. So I think it shows 2 things that one there's activity as a single agent, but it's also durable activity, and it's in a biomarker specified -- biomarker specified cohort. So the next thing was, we looked at a few other, sort of, cohorts, and I'll show you, we looked at gynecological cancers, and that's on the next slide. And in gynecological cancers, there are multiple areas where there are RAS-mutant tumors those are obviously the classical high grade tumors of ovarian cancer does not have KRAS mutations. However, low grade -- as one of the slide Jon showed previously, a low grade ovarian cancer has both KRAS and then RAS mutations and to some extent BRAF as well and certain endometrial cancers also have that. So this is just a small basket of 5 patients on RAS-mutant gynecological cancers. You can see here there were responses in BRAS-mutant ovarian, KRAS-mutant ovarian and endometrial cancer. And again, as you can see, there were patients that actually keep on study for not just 2 months or 4 months, but closer to 6 months and above. The longest patient goes up to 8 months. So in our hands, this is the way. As a clinical investigator, the thinking was, well, actually, we've got -- we've done something different, we've given the drug only twice a week. We have in biomarker activated cohorts, we've actually seen responses, not just responses, durable responses, this got us very excited. So the next step was, well, how do we go from here? Where it is exciting results. Both in checkpoints and amount of [ duration ] show a short patient benefit. So while in my lab, one of my areas of interest is drug resistance and proteomics. And I think the next slide does show some data where we were treating exposing KRAS. So we discuss the slide here. To conclude about the Chugai drug was well tolerated twice a week, which is quite different from what's been done before. We've seen multiple responses in KRAS and BRAF malignancies. And we're seeing some single-agent activity in myeloma as well. So this was the slide I was talking to you about my interest in drug resistance. And we've exposed RAS-mutant cell lines to 8549. And we've ran drug screens on KRAS-mutant cells to see what does the feedback looks like on classical signal transfer mainly that is a effect clinically relevant concentrations that we've had commit, maybe on PI3-kinase. We ran [ dabrafenib ]. And we ran [ dabrafenib ], for example. So this is just an example showing you that phospho-FAK actually did come up repeatedly in multiple dabrafenib-cell lines, when they were exposed to trametinib. So that was one part of the hypothesis. The other part of hypothesis is completely independent of us. There's a group up in Edinburgh with Margaret Frame, who are working on the immune aspects of FAK with Verastem. And this is a really interesting paper in cell, which shows that actually FAK inhibition reduces Tregs and reduction of Tregs obviously leads to increased CD8. So these are the 2 sort of big, sort of, hypotheses, we'd said we have to try and now so Margaret's seen exciting results with single agents, but if you want to definitely move from 30% response rate to maybe 50%, 60% response rate, which is definitely registerable, we said we need to combine this. So this was, at least, from ours and investigator, these were the 2 areas we wanted to actually -- 2 areas we wanted to investigate. And we designed a clinical trial on this. So the clinical trial runs the defactinib continues to be for 3 weeks and 1 week off. And the RAF/MEK inhibitor twice a week, 3 weeks on, 1 week off. And we've found a dose, which is tolerable currently. And this is work from Verastem and this shows in KRAS-mutant ovarian cancer phenograph model that we can get in the growth inhibition that trametinib, you can get growth inhibition with the FAK inhibitor. But the combination is actually shows regression. And I often -- revolving drug discovery and development being -- we've been doing -- seeing growth delay in a lot of experiments that don't actually translate into clinical wins. But actually, when you start seeing regressions, you are in a more comfortable position. So this is the Phase I study we're currently running. And we're pleased to say, we've actually got tolerated dose, which we're going to hopefully present at the [ ACL ]. And we've got multiple cohorts of RAS-mutant cancer. So we've got on small cell-lung cancer, low-grade ovarian cancer. You've heard about -- in ESMO, there was a presentation about trametinib being active. So we're very excited in that area. In lung cancer, of course. And there is more than half, at least in our hands, more than half of lung cancer KRAS are non-G12C. So yes, I'm very excited about the G12C compounds and for my patients. But I think there's quite a large segment of patients or non-G12C who needs some treatment. And of course, the common cancers like colon cancer and other cancers, myeloma, a few others. I think colon cancer, one of the things in the RAS-mutation that has been frustrating is that there hasn't -- we haven't seen a response. One of the things is possibly stroma, and again, because of FAK inhibition. So we are doing a very quick and dirty, 10 patients, to see whether we see any activity. And these patients are all in a Phase I setting. So they have actually had multiple -- multiple-lines of treatments before this. And interestingly, some patients have actually had previous MEK inhibitors. So that's an also exciting PC activity. So Jon, do you want to go through this. Or...

No go ahead.

So from our point of view, we've seen both these compounds had independent clinical activity. And this is completely different hands. So it's not like one person is running it or one company is running. It's -- we've come across with the MEK inhibitor in our own hand and obviously we did some FAK inhibition combination work with the PH kinase, but the groups showing activity here in that line are completely different from us. I think there is a growing -- in our proteomics experiments there seems to be a theme that RAS-mutants are likely to have a feedback loop for phospho-FAK, with the MEK inhibitors, obviously, we are exploring this, which we're very excited about. So we've got biopsies before treatment. We've got biopsies after the CH compound and then biopsies after the combination. So we've got phospho-FAK, and we should be -- will be presenting that. We're excited about the data. And the combination of this is fairly tolerable. They've got non-overlapping toxicity, so defactinib doesn't have rash as a side effect. MEK inhibitors have -- classically, have acne from rash and mild [ 3PL ] elevations. So in that sense, there is no overlapping toxicity. And we've -- we've got a patient who is on this treatment for close -- just over 2 years now. So it is definitely tolerable. And there, obviously, the clinical data will be presented at [ ASCO ]. We will be submitting it to [ ASCO ], but okay. It should -- it depends on however what interests the community takes.

All right. Thank you, Dr. Banerji. I'm going to turn it over to Brian maybe to summarize. And then we can open it up for some questions.

Yes, again, thank you, Professor Banerji. In closing, this is a broad opportunity that we believe will contribute significantly to our 625 strategy. It will also require strategic choices as the data emerges. The level of investment required to fund this combination is dependent on the outcomes of the clinical trials, discussions with regulatory authorities and the resulting design of the registration-directed trials. We will also be considering partnering strategies based on the size and scope of the opportunity. Overall, we recognized a significant patient unmet need in KRAS-mutant cancers. And a lot has been learned about the RAS pathway over the decades. MEK inhibition has been clinically promising but insufficient on its own, which is why a combination approach is key. The preclinical synergies observed between defactinib and CH are translating into the clinic. We are encouraged to see the results from Dr. Banerji's study, including the promising objective response rate and manageable safety profile. And we plan to quickly move forward, including data presentation and initiation of regulatory discussions in the first half of 2020. Thank you, and we'll now take questions.

[Operator Instructions] Our first question comes from the line of Alethia Young with Cantor Fitzgerald.

Congrats on the collaboration. So maybe 3 questions for me. I guess, one, can you talk about there are any clinical examples of potential combination. I thought like Glaxo had done something like this in the past, but maybe frame that for us? That's question one. Question two, when you think about KRAS inhibitors as single agents, maybe to be used in combination with a single agent, what we've seen so far. But Amgen and Mirati, I mean, how do you think about what the clinical bar is for the combination? And then the third question is, as far as biomarkers, are there any that you might be able to use here to kind of interest the [ reservation ] of the population?

Yes. So Jon, why don't you take the first one, and then I'll ask Dr. Banerji to take the second question on kind of the bar needed then?

Yes. So Alethia, you remember correctly that Glaxo was very excited about a FAK/MEK combination as well. They try to combine their FAK inhibitor clinically with trametinib. Unfortunately, they -- with their specific drugs, they had a tremendous amount of issue with drug-drug interactions. And they were forced to reduce the levels of those drugs so that they got in complete inhibition of targets. And I think, to my knowledge, that hasn't been moved forward further on their part. But the rationale for the combination, certainly still holds.

And maybe Dr. Banerji could comment on your view on kind of what the bar is for response in these agents compared to what's been seen in kind of the more narrowly focused, targeted agents like Mirati or Amgen that are focusing in on KRAS?

Sure. So I think I'm very excited about the Mirati and Amgen compounds as well. We've been trying to drug KRAS for like 20 years. And that's very good. I guess the question is single-agent activity of this -- of those compounds are going to be confined to a very small subset of -- if you look at the TCGA subsets, they say lung cancer has got 60% or 50% KRAS12 G12C. But in our hands, with less than 20% of the truth is probably somewhere in between. But there's a huge lot of other cancers, like colon cancer and low-grade ovarian cancer where G12C is only a very small minority, and we're talking about 20%. So there's a vast number of patients who need treatment. As to the question about the bar, as I showed you with a single agent, we are seeing a 30% response rate with a single agent, we're seeing inhibition get up to 24 weeks, 6 months. As an investigator, what will get me excited would be more than a 50% response rate, and that's what we aim to achieve in this study. And I think if we get more than a 50% response rate, we will be happy, and that would be in a larger population than Amgen and Mirati. So the G12C -- if the patient has a G12C, I probably would probably be okay to have the G12C compound first because that gives you a response rate and the mechanism of resistance sort of probably be covered by this FAK and RAF/MEK. So it doesn't really matter. But in the vast majority of patients with RAS mutations, they are not G12C. So if we get a 50% response rate, they are in a non-chemotherapy or immunotherapy setting, I would be very happy, and I would be quite confident that further trials have a high likelihood of success.

And Jon, do you want to speak on the biomarker enrichment? I mean, essentially, we're talking about targeting the pathway and mutations in the pathway but...

And Udai, you can speak to this as well. I mean, we -- I think you've been looking routinely and it's really a standard clinical practice to look at KRAS mutation these days as well as BRAF. So I think that it would be those mutations that we would look at. There are other drivers in RAS, for example, that Udai mentioned, that were also a great interest. Udai, anything you'd like to add to that?

Yes. I mean, in the, sort of, single-agent study with CH compound, it seemed to be quite widespread activity that we've seen, we presented that at ASCO. We've seen single-agent activity in myeloma with patients, so it's RAF mutation and RAS mutation. We've seen single agent activity HRAF. But we have seen activity. But I think for me that the lung cohort is 30%, and I'm not 100% sure that if 30% is enough to make it. It has to move one step further. And I think that's why I would want a combination. But biomarker-wise, I think, fairly standard targeted NGS for RAS and RAF would be enough. We are doing -- in the clinical trials, we're doing a baseline. We give a single dose of the CH compound to about 3 after that? And then 2 or 3 weeks of -- put the combination, we do a third bar, obviously, where we're mainly looking at the immune findings of the, sort of, FOXP3 cells, which is T-REGs and CD4, CD8. But we're also doing a phospho- protein, so Phospho-FAK and phospho-ERK and multiplex proteomics. So we might try something more. But I think we have -- biomarkers-wise, we have a sort of fairly standard staple, which is good enough. If we get a 50% of those biomarkers that should be quite easily actionable. We find something more, which is more complex, all the better.

Yes, can I ask a follow-up though on the first point, you made around drug interactions with the Glaxo compounds. I mean, how barely have you guys investigated these compounds together? Or is that kind of the work that will be done over 2020 to be confident that you might not have some sort of similar issue?

Yes. So we've done PK of both compounds. And obviously, we've compared them with the single agent PK in previous studies, and they don't seem to be wildly out. They seem to be roughly in the same range.

Our next question comes from the line of Robert Hazlett with BTIG.

Congratulations on the deal, first and foremost. Just to be clear, you've mentioned the upfront -- the modest upfront and then royalties. Are there any other milestones based on development of achievements with this deal?

No, there are not.

Okay. Congratulations. And then just a little bit more clarity, and I appreciate all of the incremental detail that's been provided about the combination. But as it stands now or which settings -- and which, I guess, the settings have the potential for rapid progression to registration, as you see the data evolving as it stands now?

Yes. So we're looking at a number of different areas where this makes sense mechanistically. The ones we'll look at first are obviously the ones that are being explored in the current basket study where we'll have data. And then based on discussions we'll have with regulators this year. We'll see if the magnitude of the effect and the available therapies is such that we can do single-arm versus randomized studies to seek approval. But that's going to be depending on the discussions with the regulators, and we just need the data that's going to be presented.

Okay. And then could you just elaborate a little bit more, maybe the physician on what data we should be expecting? A little bit more on the details of the -- at least the breadth of the data? And then if you could also talk a little bit more about the dose-limiting toxicity and the tolerability of this molecule? I know you mentioned it previously, but just a little bit more about how the patients -- excuse me, about how the patients were able to manage the combination?

Sure. No, great question. I'll let Dr. Banerji address both of those.

So I think that 2, sort of, the [ gruber ] -- broad groups of toxicities with each class of agents. So the MEK/RAF inhibitors have acne form rash and diarrhea. And if you go very high, which we haven't done, so you can get ocular toxicity. And under -- with defactinib, you could get asymptomatic changes in liver functions. And that's completely asymptomatic, it's goes away. It's a machination of the drug. So the combination we have come through. We've had lots of hands-on experience of the CH compounds. It's only twice a week. So with that, we've had patients, I'd say, now more than 2 years. And in single agent, we have patients on for 3 years. So it is definitely tolerable. And the good quality of life being maintained on that. So that's about it, obviously, we'll present the detailed toxicity in the presentation. And the basket groups that we showed on slides were KRAS-mutant lung, KRAS-mutant colorectal. And what we have done, we've initially treated only KRAS-mutant ovarian. And obviously, we will get exact results, which we'll be able to show. But just to make sure that it's all KRAS story. We've put on a few patients without KRAS in patients with a low-grade ovarian cancer. So just that will, I think, help us and Chugai to further investigate it. But actually I'd much rather people only treat -- if the activity is only in RAS mutant low-grade ovarian, then I'd say, rather get a 70% or 80% response rate in that subgroup rather than to get a 40% or 50% of that all low-grade ovarian. So you should get data of about 10 to 15 patients of low-grade ovarian and some small-cell lung by March or April that we hope to present. And we should have finished then colorectal by then as well.

Okay. Thank you. We'll be looking forward to that. And then just one other follow-up for me. The -- do you think you're close to the recommended Phase II dose in any of these settings? And could you actually talk about the dosing that you've reached so far?

Yes. So we have declared. Before we open the expansions, which I've spoken about, we've actually got to an MTD. Yes. We've got our expanded dose. Yes.

Oh, maybe I missed that, is that's the 4 milligrams or the 400 milligrams?

So I can't tell you exactly what it is because we haven't presented it. But we have -- with the way we run this study, we had one -- we start with 3.2 and 4 and then we went up, and we had to adjust. So we'll present that data. But we have got the -- as you say patients on for more than a year on the recommended dose.

[Operator Instructions] Our next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright.

Congratulations on the deal. I have a couple of quick questions. One is just on the CH molecule by itself as a monotherapy, what has been done, either in the preclinical or clinical, just to make sure that we don't see some of the issues that we have seen with that previous MEK/RAF inhibitors? That's question #1. And question #2. I know you spoke about data going to be presented during the first half or first quarter of 2020. Can you give us some more clarity as to what we should be expecting in this data, so we can understand what to expect?

So Jon, why don't you take the first question. And then...

Yes, okay. So I showed some of those data. There are 2 really elegant papers from Neal Rosen, showing the advantages of CH in detail. And again, I showed an example figures showing that you don't see that feedback activation of Phospho-MEK with CH that you see with the other MEK inhibitors. So that's one of the principal differences and also the fact that you get more complete inhibition of phospho-ERK, which seems to lead to better efficacy. So that's the answer to your first question, I think.

Yes. And I think on the second question on what data will be presented. I think Dr. Banerji addressed that earlier. This -- it will be a scientific meeting, first half of this year. I don't know if you want to give any more color on the types of data you'll be presenting. I know it's been embargoed and it hasn't been released yet.

So if we put data, MTD, we have PK, we have biopsies -- triple biopsies in patients, and obviously, how actively -- we should be able to present activity in about 10 patients minimum on each of the cohorts. And not more.

And then on the slide deck, sorry, I joined the call a little late, so I might have missed some of the details. On the slide deck, I noticed that you're looking to expand in maybe one or more indications. So is that expansion plan part of the current ongoing study? Or will that be -- become the Phase II study that you're projecting to have?

No, that's ongoing right now and that's -- those patients are the ones he's referring to that will be reported in the first half of this year.

This concludes today's question-and-answer session. I would now like to turn the call back over to Brian Stuglik for closing remarks.

Yes. Thank you very much, and thank you for joining us today. As you can tell, we're very excited to share this opportunity with you, and we look forward to providing additional details later in 2020. Thank you, and have a good evening.

All right. Thank you, everybody.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.