Terns Pharmaceuticals, Inc. (TERN) Earnings Call Transcript

Good day, and thank you for standing by. Welcome to the TERN-701 Investor and Educational Webinar. [Operator Instructions] Please be advised that today's conference is being recorded and that slides available on today's webinar need to be self advanced by the viewer. [Operator Instructions] I would now like to hand the conference over to your speaker today, Amy Burroughs, Chief Executive Officer.

Good afternoon, everyone. I'm Amy Burroughs, Chief Executive Officer of Terns Pharmaceuticals. On behalf of the Terns team, I thank you for joining us today for our educational webinar on TERN-701, our investigational next-generation oral Allosteric BCR-ABL inhibitor that is being evaluated for the treatment of chronic myeloid leukemia or CML. Today, we will touch upon TERN-701's potential best-in-class profile, relevant benchmarks for assessing our upcoming Phase I data expected next quarter and potential position of TERN-701 and an evolving treatment landscape for CML. Before we begin, let me draw your attention to the fact that throughout the course of today's program, we will be making forward-looking statements. I invite you to our SEC quarterly and annual filings to review our forward-looking statements, disclaimers and important risk factors. Finally, please note this webinar event is for informational and educational purposes only and is not intended for the media. So let's begin on Page 3. We're excited to focus today's discussion on why we believe TERN-701 has best-in-class potential for the treatment of CML and how to assess and benchmark CML data sets in the context of the Phase I trial. We will also share our thoughts on how the treatment landscape is evolving with the rapid uptake of the first Allosteric TKI to market, how TERN-701 may potentially fit into a treatment paradigm as the second marketed allosteric and the development path required for TERN-701 to gain FDA approval. Importantly, our primary goal today is to equip you with the knowledge needed to calibrate and thoughtfully assess TERN-701's profile versus Asciminib and other therapeutic agents in development for CML. Finally, we will open the event to Q&A with our analysts. Joining me on today's call are Emil Kuriakose, Chief Medical Officer; and Scott Harris, Chief Development Officer at Terns. I would like to quickly acknowledge Emil, Scott and their teams for rapidly progressing TERN-701 in the CARDINAL study. Thanks to their efforts, we've made meaningful progress towards our ultimate goal of bringing this new therapy to patients who need it. Moving on to Page 4. CML is a chronic disease where there is meaningful unmet medical need and most patients require therapy for the rest of their lives. In 2001, the introduction of imatinib, our first-generation active site tyrosine kinase inhibitor, also called TKI, transformed CML from a life-threatening cancer to a chronic disease. Yet despite the impact of imatinib and the subsequent approval of multiple improved second-generation active site TKIs, there remains a significant unmet need for better efficacy, safety and tolerability. Approximately 40% of CML patients on these active site TKIs switch therapy within 5 years due to lack of sufficient treatment response or side effects. We've also learned the chronic use of active site TKIs is associated with a variety of serious adverse events due to off-target effects, including pleural effusion and life-threatening cardiovascular issues. Emerging scientific and real-world evidence supports that Allosteric TKIs offer the opportunity to once again transform the CML standard of care. Novartis' Asciminib is the first Allosteric BCR-ABL inhibitor approved to treat CML and has demonstrated significant improvements on efficacy, safety and tolerability over the active site TKIs. Asciminib has had substantial and rapid uptake in the market since gaining approval in all lines of therapy, including achieving 15% share in frontline 2 quarters after frontline approval and 35% of new-to-brand share across all lines of treatment. Novartis has expressed confidence in $3 billion in peak sales potential for Asciminib with some analysts projecting even higher. On Page 5, although Asciminib is better than any other approved CML therapy today as the first-in-class allosteric, there remains meaningful opportunity for TERN-701 as a next-generation agent to improve across efficacy, safety and convenience. To assess efficacy in CML, we look at major molecular response or MMR, a measure of improvement in disease burden that is the primary endpoint in CML clinical trials. In the Asciminib frontline trial, 32% of patients do not reach MMR at 48 weeks. In the trials in the second and third-line settings, 57% and 75% of patients do not reach MMR at 24 weeks, respectively. From a safety AE standpoint, the warnings and precautions section of the label highlights the risk of pancreatic toxicity and hypertension. Lastly, another issue specific to Asciminib is that dosing with food drives a 60% reduction in AUC plasma exposure, thereby requiring patients to fast for 3 hours around dosing. This fasting requirement is both a challenge for many patients and a potential risk to efficacy in the case of noncompliance. We already know that TERN-701 is more convenient as it can be taken once per day without regard to food. Moving on to Page 6. The founders of Terns understood the science of Allosteric BCR-ABL inhibitors well and sought to design a better allosteric that could lead to meaningful improvements for people living with CML. We believe that our next-generation Allosteric BCR-ABL inhibitor, TERN-701 has potential to provide meaningful improvements to efficacy, safety and convenience, overcoming some of the limitations of Asciminib. With that, I'm going to ask Emil to describe our preclinical and clinical rationale supporting TERN-701's best-in-class profile and to outline how to calibrate and benchmark our upcoming data in the fourth quarter. Emil?

Thanks, Amy. Shown here on Page 8 is the study schema for the CARDINAL Phase I study of TERN-701 in patients with chronic phase CML. This 2-part study enrolls patients who have had failure or intolerance to at least 1 prior TKI, including prior Asciminib. Once daily doses of 160 milligrams up to 500 milligrams were evaluated in escalation using a BOIN algorithm for initial safety assessment with subsequent enrollment to backfill cohorts at each dose to obtain additional safety and efficacy. The dose escalation enrolled rapidly with completion of initial safety evaluation of all doses by January 2025. Based on the totality of data from escalation, we selected the higher doses of 500 milligrams and 320 milligrams for randomized dose expansion, which commenced in April and can enroll up to 80 patients. The study is currently enrolling the Part 2 as well as the Part 1 backfilled cohorts. Since both parts enroll essentially the same patient population, the upcoming data in the fourth quarter will include all patients dosed in escalation and expansion in a pooled fashion. Moving to Page 9. This page summarizes the 3 reasons we believe TERN-701 has the potential to achieve best-in-class efficacy and safety based on preclinical data and early clinical data from the CARDINAL study that was disclosed last year. First, preclinical data demonstrate that TERN-701 has not only very high target selectivity, consistent with allosteric inhibition, but also numerically greater potency than Asciminib against multiple BCR-ABL variants. Second, clinical PK data demonstrate that all doses of TERN-701 appear to achieve higher target coverage than the approved dose of Asciminib, which we hypothesized could support rescue of clinical response in the setting of Asciminib failure and rapid deep molecular response in 2G TKI failures as we observed anecdotally in our early clinical data reported last year. Third, TERN-701 may have a wider therapeutic index, allowing us to reach clinical doses that achieve higher target coverage than Asciminib as evidenced by the lack of DLTs in dose escalation and the totality of data from escalation supporting selection of the higher-end doses for dose expansion. We believe these 3 properties support the potential for best-in-class MMR achievement rates and safety. Please turn to Page 10. CML is driven by the abnormal fusion of 2 proteins, BCR and ABL. Slide 10 illustrates how allosteric inhibitors achieve selective inhibition of BCR-ABL. A highly selective BCR-ABL inhibitor inhibits the disease-causing BCR-ABL fusion protein without interfering with the activity of hundreds of normal kinases. All kinases, including BCR-ABL have highly similar active site domains where ATP binds to facilitate phosphate transfer to other proteins. Active site inhibitors block this interaction in BCR-ABL as well as multiple normal kinases due to the similarity of their active site domains, which can drive toxicity. Allosteric inhibitors bind to a different site on the kinase domain that is unique to ABL kinases called the myristate pocket that's normally occupied by a myristoyl group located at the N-terminus of the protein. As shown on the left side of the slide, binding of the myristoyl group in this pocket acts like a key that locks ABL kinase in an inactive state until it is recruited for cell signaling by other proteins. In the BCR-ABL fusion protein, the myristoyl group of ABL is replaced by BCR, as shown on the right, leaving the myristate pocket open. With no key to enter the lock and inactivate the kinase, BCR-ABL kinase activity goes unchecked, resulting in uncontrolled cell growth in CML. Allosteric inhibitors like TERN-701 enter the unoccupied myristate pocket of BCR-ABL, essentially replacing the function of the missing key and inactivate the kinase. Importantly, because the myristate pocket in BCR-ABL is always open and there's nothing else in the cell that competes for binding to the pocket, allosteric inhibitors are able to inhibit BCR-ABL at very low concentrations, resulting in high potency. In contrast, the intact myristoyl group in wild-type ABL effectively blocks the drug's access to the myristate pocket. As a result, wild-type ABL inhibition requires drug concentrations several orders of magnitude higher than those needed for BCR-ABL inhibition that are well beyond concentrations achieved at clinically relevant doses. This is the biological mechanism behind the exquisite selectivity of the allosteric class for BCR-ABL over wild-type ABL and other kinases. And the next slide shows data from experiments that quantifies how much more selective allosterics are versus active site inhibitors. Inhibition of wild-type ABL1, ABL2 and other kinases has been shown to increase the risk of cardiovascular and other toxicities. Slide 11 illustrates the sheer magnitude of the difference in target selectivity between allosteric versus active site inhibitors for BCR-ABL over wild-type ABL1 and ABL2. In biochemical kinase inhibition assays, both TERN-701 and Asciminib had over 10,000x weaker potency against wild-type ABL1, ABL2 and over 450 normal kinases compared to their potency against BCR-ABL. In contrast, the active site inhibitors are by design equally potent against wild-type ABL1 and BCR-ABL and at best, only 30x weaker against wild-type ABL2 compared to BCR-ABL. Higher target selectivity of allosteric inhibitors is a key driver of the improved safety profile of Asciminib compared to active site drugs as shown in randomized Phase III clinical trials. Additionally, there's now over 10 years of long-term safety data on Asciminib from clinical trials and real-world evidence that further corroborates this improved safety profile relative to active site drugs. Moving to Slide 12. While TERN-701 and Asciminib show similar target selectivity in preclinical assays, TERN-701 differentiates from Asciminib on the important parameters of potency, target coverage and therapeutic index, as I'll cover in these next few slides. In cellular cytotoxicity assays, TERN-701 showed numerically greater potency than Asciminib across multiple BCR-ABL resistance mutations in the kinase and other domains. Moreover, early data from dose escalation showed that TERN-701 free drug concentrations, particularly at doses of 320 milligrams and above, exceeded the in vitro IC90 for most of the BCR-ABL mutations shown here on this plot. Although BCR-ABL resistance mutations occur in fewer than 1/3 of CML patients, these data support 701's potential to show better clinical responses than Asciminib in the setting of specific resistant mutations, particularly in mutations other than T315I and in non-mutated BCR-ABL, for which TERN-701 may have another key advantage over Asciminib on the parameter of target coverage, as shown on the next slide. Moving to Slide 13. Target coverage roughly quantifies how effectively a TKI inhibits the BCR-ABL target in patients at clinical doses. As shown on the left, a commonly used method to assess target coverage is to compare the exposure at a dose in patients to exposures in a mouse model at which the drug showed robust tumor growth inhibition by simply calculating the full difference between the two exposures. The approved dose of Asciminib in non-T315I mutated CML is 80 milligrams once daily. The selection of this dose was supported by the observation that exposures at this dose in patients exceeded the maximally effective exposure in a KCL-22 cell line xenograft. Based on clinical PK data for Asciminib reported from the Phase I study, the average plasma concentration or C average at 80 milligrams once daily is approximately twofold higher than the reported effective concentration in the KCL-22 xenograft. Calculating target coverage at clinical doses of TERN-701 using the same reference mouse model shows that the average plasma concentration in patients exceeds the maximally efficacious concentration in the KCL-22 xenograft by approximately 4 to 14-fold as you go from the 160 milligrams to 500-milligram dose of TERN-701, as shown on the right. This is roughly two to sevenfold higher than the target coverage we calculate for Asciminib 80 milligrams, based on the previously reported clinical and preclinical data. This led us to hypothesize that the clinical doses of 701 may drive higher response rate than Asciminib 80 milligrams since improved target coverage has been shown to correlate with higher clinical response based on studies with other TKIs. Turning to Slide 14. A good clinical test of the higher target coverage hypothesis would be to see if TERN-701 can rescue response in a patient who has treatment failure on Asciminib 80 milligrams. This is indeed what we observed with our very first patient enrolled in the clinical trial at the lowest dose of 160 milligrams. This 35-year-old male who was previously treated with dasatinib, ponatinib and Asciminib 80 milligrams. The patient's BCR-ABL transcript levels had not decreased to below 1% after a year on Asciminib 80 milligrams, thereby meeting criteria for treatment failure as defined by the ELN guidelines. On TERN-701, the patient deepened his response to less than 1% within 5 cycles, supporting the hypothesis that TERN-701 is achieving more effective target coverage than Asciminib at 701 doses of 160 milligrams Q daily and above. Moving to Page 15. Doses with superior target coverage would not be clinically viable unless they're supported by a safety and tolerability profile that allows patients to stay on these doses long term. The early safety data from TERN-701 dose escalation on Slide 15 showed no dose-limiting toxicities all the way up to the maximum dose of 500 milligrams. In contrast, multiple DLTs were seen with Asciminib in dose escalation. And in clinical studies, there was a notable trend towards increased AEs, including pancreatic toxicity and hypertension at higher doses of Asciminib with longer-term follow-up. These data support TERN-701 having a potentially wider therapeutic index than Asciminib, which would enable doses that achieve higher target coverage to drive improved efficacy without compromising safety and tolerability. Early data from 701's dose escalation showed no clinically meaningful changes in pancreatic enzymes, LFTs or vital signs. Additional safety data with more patients and longer follow-up could further support a differentiated safety profile if these trends continue to hold. That takes us to the next section on how to assess our upcoming more mature CML Phase I data set. Please go to Slide 17. This slide shows an overview of how molecular response is assessed in CML and defined some key terms. First, as shown on the left, molecular response is defined as a decrease in the levels of BCR-ABL mRNA assessed by RT-PCR in peripheral blood measured as a percentage on a standardized log scale. BCR-ABL less than 0.1% is major molecular response or MR3, which is the regulatory approval endpoint in pivotal studies. In Phase III studies, only patients without MMR at baseline are allowed to enroll based on regulatory precedent, whereas in Phase I studies, patients with or without baseline MMR can enroll. Patients without baseline MMR enroll because of treatment failure or intolerance to their TKI and those with MMR or better enroll due to TKI intolerance. The treatment goal in patients without MMR is to achieve MMR, while the goal in those with MMR is to maintain a durable MMR. Accordingly, there are 3 defined clinical endpoints to assess MMR in Phase I studies as shown on the right, MMR achieved, MMR maintained and the sum of the two, which is the overall or cumulative MMR. Importantly, the MMR achievement rate at 6 months is the approval endpoint for pivotal studies in relapsed/refractory CML. The next few slides provide a guide for assessing and benchmarking data in CML Phase I study, particularly considering the shifting treatment landscape with Asciminib's recent approval in frontline. On Page 18, the table outlines key questions to ask within the broad categories of baseline demographics, efficacy and safety and comparing a mature data set from a single-arm Phase I study to other contemporaneous or historical Phase I studies. First, one must appropriately calibrate the baseline demographics to ensure that the patient populations are comparable. The 2 axes on which this calibration is done are CML treatment history and baseline disease characteristics measured by BCR-ABL transcript levels and mutation status. Second, when assessing MMR, the key parameter to look at is achievement of MMR by 6 months in all evaluable patients as well as achievement in key subgroups with more refractory disease. Finally, longer-term safety data in more patients with longer duration of treatment provides clarity on the safety profile of the molecule relative to other TKIs. Moving to Page 19. The key parameters to compare when calibrating baseline disease characteristics of a Phase I study population are shown in this table. They can broadly be divided into baseline leukemic burden, response to last TKI and resistance mutations. Baseline disease characteristics of patients in CML Phase I studies over the past decade have remained fairly consistent. More than 50% of patients in Phase I studies have high leukemic burden, delineated historically as baseline transcript greater than 1%. And generally, less than 20% of patients enrolled have a baseline MMR or better. The majority of patients in Phase I studies have lack of efficacy to their last TKI as opposed to intolerance and about 15% to 30% have a BCR-ABL resistance mutation with the active site gatekeeper T315I mutation being the most common. It's important to point out that historically, T315I mutated and non-T315I mutated patients are separated for efficacy reporting in Phase I CML trials, including that for Asciminib. Non-T315I mutant patients represent more than 75% of the overall CML patient population. The second parameter to assess when calibrating baseline demographics in the Phase I study population is the prior TKI exposure, as outlined on Slide 20. The key difference between Asciminib Phase I studies and the CARDINAL study of 701 is that the CARDINAL study enrolls patients who had treatment failure or intolerance to Asciminib, whereas the Asciminib trials had an allosteric naive patient population, thereby making CARDINAL a more refractory population than the Asciminib studies. The similarities between Asciminib Phase I and CARDINAL are that they both enroll patients with prior failure or intolerance to imatinib, 2G TKIs and ponatinib and both primarily comprise third-line plus patients. The other contemporaneous Phase I study in a Western population that enrolled an Asciminib-exposed patient population is the ongoing ENABLE study of ELVN-001, an investigational active site inhibitor. Therefore, it's reasonable to expect that the CARDINAL patient population will be more like the ENABLE population than the Asciminib studies with regard to prior TKI exposure. Table on Slide 21 shows the 6-month MMR rates reported in the Asciminib studies and recently reported MMR rates from ENABLE in a post-Asciminib patient population. The 6-month MMR achievement for Asciminib was around 25% and stayed very consistent from Phase I to Phase III, demonstrating the strong read-through of this endpoint to Phase III. The recently reported interim Phase I data from ENABLE study showed a 32% MMR achievement by 6 months in a contemporaneous patient population like that in the CARDINAL study. Overall, our cumulative MMR by 6 months, which includes MMR achievement and maintenance has ranged from 37% to 47%, respectively, in the Asciminib and ENABLE studies. While cumulative MMR is not a regulatory approval endpoint, it still provides a meaningful assessment of efficacy if the drug durably maintains MMR for 6 months or longer or further improves response to deep molecular response defined as MR4 or better. While MMR achievement and overall cumulative MMR in all evaluable patients provides the most robust benchmarkable assessment of efficacy relative to other studies, it's important to look at these same endpoints in patient subgroups with more refractory disease, namely those with prior Asciminib, ponatinib and lack of efficacy to their last TKI. While we plan to report data on these subgroups, there's limited data from the listed studies on MMR achievement in these more refractory subgroups. Although seeing MMR achievement in these refractory subgroups is generally a good indicator of meaningful efficacy, subgroup analysis should be interpreted more as informative trends rather than robust benchmarks due to their smaller numbers. Finally, 6-month DMR achievement rate in the Phase I and III Asciminib studies in third-line plus patients was below 15%. Moving to Page 22. The other important breakdown of the overall MMR rate is to evaluate the molecular response across the range of BCR -- of baseline BCR-ABL transcripts. This is best done using a molecular response shift table as shown on this slide. The shift table breaks down the response evaluable patient population according to the baseline transcript level category on the top row and captures the best molecular response shift on treatment from baseline in the columns. An improvement from baseline is captured as a number of patients in the cells above the diagonal. As shown in the table, patients without baseline MMR are divided into 3 categories of greater than 0.1 to 1%, greater than 1% to 10% and greater than 10%. Achieving 6-month MMR is more challenging with increasing baseline transcript levels. In patients with baselines greater than 10%, transcript levels must decrease by 3 logs as opposed to just 1 log in those with the baseline of 0.1% to 1%. To put that in perspective, the 6-month MMR achievement with Asciminib in the Phase I study was roughly 8% to 10% in patients with a baseline transcript above 10% compared to approximately 45% achievement in those with a baseline of 0.1% to 1%. Therefore, seeing shift to MMR within all 3 categories indicates robust efficacy as does seeing upward shifts across all baseline categories, including those with baseline MMR improving to deep molecular response. That brings us to Slide 23, which summarizes the key differences between previously reported early dose escalation data from CARDINAL last December and the upcoming Q4 2025 data set. Put simply, last year's data showed clinical activity, excellent PK properties and encouraging safety in a small number of patients with compelling responses in patients with highly refractory disease and a safety profile that allowed us to select the higher-end doses to take forward to expansion. The upcoming data aims to show benchmarkable efficacy and safety in more than 50 patients with a comparable patient population to ongoing Phase I studies, allowing for a more robust assessment of 6-month MMR achievement and should also provide meaningful clarity on potential emerging safety differentiators for Asciminib. Now let me turn it over to Scott to discuss the future of CML and our development path ahead. Scott?

Thanks, Emil. I'll start on Slide 25. As you've heard, we at Terns are excited about the potential for TERN-701 to set a new benchmark for efficacy and safety in CML and move the profile up and to the right on this graph. With Emil's presentation, we hope we have given you the knowledge needed to calibrate and thoughtfully assess TERN-701's profile versus Asciminib and other therapeutic agents in development once we release 701 data later this year. Next, I'd like to briefly talk about how the treatment dynamics in CML are poised to change the treatment algorithm with the availability of a second potentially best-in-class Allosteric TKI. Please turn to Page 26. Here, I'll step you through how patients in the future might move through various lines of CML therapy when there are two approved allosteric TKIs and potentially the availability of new active site inhibitors. For simplicity, we think about the treatment selection in each line as either being an allosteric shown in light green or an active site, whether branded or generic in white. For newly diagnosed patients, our research indicates that up to 60% of patients will start on the best available therapy, which may be 1 of the 2 Allosteric TKIs, namely 701 or Asciminib. The remainder in frontline would receive generic active site TKIs due to cost or access reasons. Compared to those who start on active site drugs, patients who start on an allosteric inhibitor in frontline are expected to stay on treatment longer with a 50% lower chance of needing to switch therapy. This is supported by data from the randomized Phase III frontline study of Asciminib, which showed that at 2 years, the discontinuation rate in the active site arm was twice that of the Asciminib arm. Based on this, we expect that second-line setting will have a disproportionately higher number of patients who are switching from a generic active site drug than from an allosteric. TERN-701 is expected to launch with a second-line plus indication, given a trial in this population is the fastest path to market. For frontline patients whose CML has progressed on a generic active site drug, our market research indicates that physicians will switch classes to the allosteric with the best efficacy and safety profile. Our research also indicates that for patients whose disease progresses on Asciminib in frontline, physicians would prefer a best-in-class allosteric if it has demonstrated rescue of response in Asciminib failures. Therefore, we believe TERN-701 will be well positioned to be the preferred TKI of choice in the second line. When a patient has progressed beyond 2 Allosteric TKIs, they are likely to receive an active site in the third line and later settings. Of course, there may be situations where an allosteric is prescribed in later settings, such as for patients who had active site inhibitors in earlier lines. Finally, with strong pivotal data in a frontline setting, we believe TERN-701 has the opportunity to compete for a significant share of frontline as well. Our goal is to advance TERN-701 quickly through development and generate data to support a label in all lines of CML therapy. Moving to Slide 27. We show a high-level overview of our potential full clinical development path. When we have sufficient data from the CARDINAL study to select 1 of the 2 expansion doses, we expect to initiate a registrational study in a second-line plus CML patient population similar to the one currently enrolling in CARDINAL. We would aim to start a frontline pivotal study in parallel to the second-line plus study with a slightly staggered start to maximize feed to a frontline approval. It is worth noting that the CARDINAL study will continue to provide long-term efficacy and safety data for TERN-701 that would serve as additional supportive data for registration and provide meaningful data catalysts as the pivotal studies are ongoing. In summary, on Slide 28, we continue to see a compelling potential opportunity for TERN-701 in CML, including a potentially superior mechanism of action and best-in-class allosteric profile, broad opportunity across all lines of therapy, accelerated development with a clear regulatory pathway and limited competition within the allosteric class. Now I'll turn it back to Amy for a few closing comments before we open for Q&A. Amy?

Thanks, Scott. We hope today's presentation has been informative on why there is a significant need for better therapies in CML that could potentially be addressed by TERN-701. This is personal for me. CML has affected my family and several close friends. When we released our early data last December, we said it would take until fourth quarter of this year to have enough patients on therapy for a long enough duration to allow for comparison of the performance of TERN-701 to other therapies with Phase I data sets. We plan to deliver on that promise and want to thank the patients who have enrolled in the CARDINAL trial and the staff at the dozens of clinical sites around the world who are participating in the study. Without you and our incredible team at Terns, we could not explore the possibility of a better therapy for people living with CML. Now I'd like to ask the operator to open the line for questions. Operator?

[Operator Instructions] Our first question comes from Ritu Baral with TD Cowen.

Thanks for laying everything out so clearly today for expectations. A couple of questions from me. Amy, can you guys go over exactly how many patients that we should expect 6-month MMR from at essentially 6 months evaluable MMR from the 320-milligram and the 500-milligram dose?

So in terms of doses, we said that we've been backfilling in dose escalation. And so you will see meaningful data at those higher dose levels. We've also said that we have over 50 enrolled patients across escalation and expansion. I can't guide to a specific number of efficacy evaluable overall or by dose, but I can say that we will have enough to benchmark the data to other Phase I data sets.

Understood. And then a quick follow-up on that one patient that had the inadequate response to Asciminib, but a good response to 701. Was there something about that patient's mutation profile or, I guess, a lesson learned about mutation profiles in general that may set up patients that wouldn't respond to Asci but would respond to 701?

Yes. Thanks, Ritu. Great question. I'll turn that over to our oncologist, Emil.

Yes, Ritu, no, that patient actually did not have any BCR-ABL resistance mutation. So this is a non-mutated patient. And again, this is -- that patient is an example of the patients who comprise the vast majority of patients in CML. And here, again, the approved dose of Asciminib is 80 milligrams. And that -- we think that's a clear demonstration of why target coverage matters, and we think that's the primary reason for the improved response.

Our next question comes from Graig Suvannavejh with Mizuho.

Really helpful. Two questions, if I could. My first is I just wanted to revisit this idea of following frontline use of Asciminib, whether you believe the practice will adopt a strategy of going with another allosteric or perhaps following a class switching approach. We've heard various things from KOLs that we've spoken to. And so I just wanted to get your understanding of what second-line standard of care might look like and the reasons for or against using an allosteric versus an active site TKI? That's my first question. And then my second question really has to do with once you do get the Phase I or the next set of Phase I data, how specifically those data will help you inform of how to design either the second line plus study and also the first-line study.

Great. I'll take the first one, and I'll turn the second one over to Emil. On, Graig, your first question, we've also spoken to a lot of KOLs and treating physicians. And Graig, as with most things in therapeutics, it's really going to be based on the data. So for many years, physicians have used active site TKIs after active site TKIs. And as we said, allosteric -- Asciminib has shown to be both more effective and safer. And with supportive data, again, showing effective treatment post Asciminib, we believe that a second allosteric would be a treatment of choice due to efficacy and safety and demonstration of that in this patient population, which with our trials in second line plus we'll have the opportunity to potentially demonstrate. And for the second question, Emil, would you like to take that?

Absolutely. So I think your question was around how the data in terms of the MMR numbers would inform our design of the second-line plus pivotal. And so yes, based on -- given that we already said that MMR achievement at 6 months is the regulatory endpoint, that's the key number to look at. And so based on what that number is relative to historical data with 2G TKIs, which has been sort of the control arm in essentially all second-line, third-line studies that have been done recently, including those with Asciminib, that would sort of be the default design where you take 701 versus that same control arm where we know that the data on 6-month MMR is most robust. And we know that 2G TKIs in a second-line plus patient population perform about a 15% to 20% 6-month MMR rate. And so based on what our numbers look like, we'd be able to gain confidence in terms of the probability of success of controlling that historical control arm.

And then any color on how that might impact how you think about the frontline study?

Yes. So the frontline study, again, we would anticipate doing a very similar design to what Asciminib did in ASC4FIRST, which again was a control arm where you had a blended mix of Gleevec and 2G TKIs, which is very reflective of real-world practice with regard to frontline therapy. As Scott outlined, we think that 50% of patients will still be getting a generic 2G TKI or Gleevec as their therapy. And that also provides a good benchmark in terms of comparison with Asciminib when you use the exact same control arm to be able to rank the drugs against each other.

Our next question comes from Jay Olson with Oppenheimer.

Since you had no DLTs in dose escalation, does that suggest that you could go to even higher doses with 701 than 500 milligrams?

Emil?

I could take that. Yes. So we did not reach a maximally tolerated dose. And based on that, yes, it is possible that we could go to higher, but we don't think we need to again based on the fact that we see the target coverage at 500 is at least estimated to be two to sevenfold higher than what you achieved with Asciminib 80 milligrams. And part of the reason that we were able to select the 500-milligram dose is, of course, the safety profile, not just DLTs, but overall incidence of adverse events, but also sort of a dose relationship in terms of response rate. And so putting that together, we think that the 500-milligram dose is -- has excellent PK properties and shows really good target coverage. So we don't think we need to go higher than 500 based on the data we have today.

Okay. Understood. And then when you considered some of the safety advantages for 701 compared to Asciminib, what are the most clinically significant safety differentiators that you'll be looking for?

Asciminib is cleanest drug right, sorry, go ahead.

That's okay. Go ahead, Emil.

Okay. Yes. Asciminib is the cleanest drug available for the disease today, but it still has issues with regard to safety. And the most common things, at least with Asciminib that you see are pancreatic enzyme elevations, clinical pancreatitis, hypertension. In fact, these are on the warnings and precautions section of the label. In the Phase I study, as you saw on that slide, there were several pancreatic DLTs in cycle 1. But over a long-term follow-up, the incidence of pancreatic enzyme elevations, all grade approach 40% to 45% in the Phase I study with grade 3 approaching 20% to 30%, and there was a dose relationship seen with that. And so we think that, that's number one. Number two, hypertension is also in the 20% to 30% all grade and did show a dose relationship as well. Again, we didn't see any evidence in the early data we disclosed last year of any changes in pancreatic enzymes, LFTs or vital signs. So we think those are important and meaningful differentiators on safety, especially given that patients have to stay on these drugs lifelong.

Great. That's super helpful. And then maybe one big picture question. How would you define a next-generation Allosteric TKI? And what would you like to see from 701 to position it as a next-gen Allosteric TKI?

Yes. I think as it's been defined for the active sites, it's really been about a step-up in efficacy. And I think it goes back to kind of Scott's Slide 25 about sort of taking it to the next level on efficacy, in particular, and safety.

Our next question comes from Silvan Tuerkcan with Citizens.

Thank you for putting up this clarifying event. My question is also a little bit bigger picture, maybe about the patient population you're looking at here more near term in the second-line plus setting. What's the principal reason for progression here? Is it tolerability issues? Or is it disease progression? And within 701's better target coverage or selectivity, what's more important here in the clinic for that compound?

So the first part of your question, Silvan, I would actually refer you back to the slide where we have lack of efficacy to last TKI. If you look across Phase I studies, I think it's on Page 19, greater than 60%, if you look across the CML studies over the last decade in these refractory populations or lack of efficacy to last TKI. And I'll let Emil take the second half of the question.