Zymeworks Inc. (ZYME) Earnings Call Transcript

Thank you for standing by. Welcome to Zymeworks conference call and webcast to discuss Zymeworks' portfolio updates. [Operator Instructions] I would now like to turn the conference over to Shrinal Inamdar, VP of Investor Relations. Shrinal, please go ahead.

Thank you, operator, and good afternoon or good morning, depending on where you're joining from. During today's call, Adam Schayowitz, our Head of R&D, will provide an overview of how our R&D strategy and the Roche partnership announced by much from prior list last week, both worked together as part of our broader business strategy. As a reminder, the Roche agreement remains subject to HSR clearance. Paul Moore, our Chief Scientific Officer, will then provide a deeper dive into the design of ZW209 and underlying platforms and technologies that made the design and home of this molecule possible. RatleSabin Mikan, our Chief Medical Officer, will provide an overview of the data presented at ESMO on ZW191 and zanidatamab by our partners, JasenB1. Ken Gabra, our Chair and Chief Executive Officer, will join us at the end as we open up for Q&A. As usual, I'd like to remind you that we'll be making a number of forward-looking statements during the call, including without limitation, those forward-looking statements are identified in our slides and the accompanying oral commentary. Forward-looking statements are based upon our own expectations of various assumptions and subject to the risks and uncertainties, including those associated with companies in our industry and at our stage of development. For a discussion of these risks and uncertainties, we'll refer you to our SEC filings as filed on our website and as filed with the SEC. I'll now pass the call over to Adam.

Thanks, Rene, and thank you all for joining us today. Following a busy weekend at ESMO, we're pleased to have the opportunity to share several updates across our portfolio. I could begin by stepping back for a moment and giving an overview of how we think the different components of our business model work together to create multiple pathways for long-term value creation. Our recurring cash flows from commercial products like Ziihera, YUPELRI and by provide greater flexibility to invest selectively in our R&D engine while our business development opportunities create additional opportunities to generate upfront payments, milestones, royalties, and licensing proceeds. This allows us to pursue attractive science without assuming that every program needs to be developed entirely on our own balance sheet. Important part of our strategy is to build a sustainable R&D organization, one that can contribute to the long-term net asset value into shareholder return while still balancing capital deployment. The partnering model that we're executing on today is central to that ambition. By working with our external partners to advance promising programs, we can access additional funding, expertise, sharing development risks, retain meaningful participation in future milestones and royalties. This R&D life cycle creates an opportunity to fund and to replenish our pipeline in a more capital-efficient way, while continuing to invest in novel science and generate the next wave of value-creating partnerships and opportunities. Our capital allocation approach reflects that philosophy. We intend to continue to invest in our internal R&D capabilities to selectively pursue acquisitions and royalty opportunities where we see strong strategic and scientific fit and to continue to return capital to shareholders through our share repurchase program when we believe it's appropriate. Over time, our goal is to build this diversified royalty portfolio, creating a more durable financial foundation that supports continued innovation while giving us multiple opportunities to participate in long-term success of the medicines that we help to develop. This strategy builds on a long history of successful partnerships in line works, and we believe the recent transaction just further demonstrates the potential of our model. With the recent acquisition of Theravance and the new partnership announced last Friday with Roche, of course, pending completion of HSR clearance, we continue to build on that track record. Across our partner activities, we have generated almost $1 billion in payments to date with the potential for substantial additional value over the coming years. Those future opportunities are linked to continued clinical development regulatory milestones and ultimately, the commercialization of additional candidates by our partners. Several partner programs have already advanced into the commercialization or Phase III development, illustrating how our partners' development capabilities and resources can help move Zymeworks originated science forward. We believe that this is an important differentiator for us. Our partners do more than provide capital at a particular point in time. They enable our programs to progress across development stages and geographies while allowing us to retain meaningful participation in their future success through milestones and royalties without the requirement for capital-intensive contributions at risk. We see this as a pleatable model, originate differentiated science, identify the right partner and structure and retain attractive economics as the program advances. What excites us most about our platform and partnering model is the opportunity to repeat this approach across the differentiated pipeline of multifunctional therapeutics. Our proprietary engineering capabilities have enabled us to generate innovative candidates that can be developed alongside leading pharmaceutical companies. These partnerships combine our scientific innovation with the development expertise, resources and commercial reach of our partners. For today's update, we'll start to focus most of our time on the 2 programs highlighted in this slide, including the latest clinical findings that you -- and what they mean and what they mean for future development. With that context, I'd like to turn our partnerships to our partnerships with Roche and explain how the economics and the division of responsibilities illustrate our broader strategy. The worst partnership is a great example of how we can combine our discovery capabilities with partners resources, development expertise and still retain meaningful participation in the program's future economics. Under the agreement, and of course, subject to successful completion of HSR waiting period, Zymers will receive an upfront payment of $55 million with a further $40 million payable upon initiation of the Phase Ib. Beyond those payments, the agreement includes up to $718 million in additional potential development, regulatory, and commercial milestones, together with tiered royalties. The royalty structure ranges from high single digits to mid-teens with the potential to extend into the 2040s, subject to the contractual royalty terms. Taken together, these economics create the potential multiples on invested total based on upfront fee and early clinical milestones alone. Of course, the ultimate return will depend upon the program's clinical progress, achievement of applicable milestones and ultimately successive commercialization of ZW209 by Roche. Another important aspect of this agreement is how the development responsibilities are funded and structured. Roche is expected to fund the program's research and development, including the Phase Ia study while Zymeworks will leverage its own development capabilities to conduct that initial global study. Roche will then assume responsibility for subsequent development and commercialization in accordance with the agreement. We believe that this structure allows us to advance our science to get the long-term capital burden on our own balance sheet and to retain meaningful upside if the program succeeds. The slide illustrates why we believe the collaboration once HSR clearance is obtained is strategically attractive for both Roche and for Zymeworks. ZW209 builds on Zymeworks proprietary and clinically validated Azymetric platform, which has generated multiple partner assets with a significant commercial potential. Our capabilities reflect years of work in antibody engineering, including extensive exploration of binding regions, molecular formats to identify and optimize our specific T cell engagers. With the IND clearance from the U.S. FDA complete, Zymeworks will conduct a global Phase Ia study with the first patient dose expected in 2026. This allows us to apply our established development capabilities and move efficiently into the clinic without the need for an immediate operational handover. It also reflects the trust that Roche places in our ability to execute early clinical development. While funding -- while the funding structure allows the program to benefit from Roche's broader resource and capabilities as it advances. Looking beyond the initial study, Roche can bring global clinical development capabilities and commercial experience in first-in-line extensive small cell lung cancer. Its established relationships with prescribers, with payers and clinical trial networks may help accelerate development and broaden the programs reach across potential lines of therapy. The opportunity is also worth highlighting that Roche has additional programs that may create future combination opportunities, potentially expanding the development options for the asset over time. By partnering with Roche before the commencement of the Phase II study following HSR clearance, Roche can help us shape the early clinical development programs and help us utilize and with us utilize our ability to execute the Phase Ia study, which means the program will not lose any time in a very competitive environment where combination regimens may need to optimize for patient benefit. We are also able to reallocate capital derived from the upfront payments and from the Phase 1 R&D costs that will be funded by Roche to drive additional value adding investments to our business. We believe this is a strong example of how we can advance innovative programs, how we can share risk, preserve and thoughtfully reallocate capital while participating in potential long-term value created by our R&D innovation. With that, I'll hand the call over to Paul, who will provide more background on the ZW209 program and our CoStim platform. Paul?

Thanks, Adam. So one of the key challenges with T cell engagers particularly in solid tumors, is that even when we successfully redirect T cells to recognize and attack cancer cells, the tumor macro environment can limit the effectiveness and durability of the response. In many solid tumors, there may be relatively few T cells infiltrating the tumor and the T cells that are present may be functionally exhausted, so it's going to limit the depth and durability of the antitumor response. There's been significant interest in how we can build additional functionality into T cell engagers to address these limitations. One attractive approach is to take inspiration from natural T cell biology. Effective T cell activation generally requires not just the initial signal that recognizes the target, but also a second cost signals that help support T cell activation, proliferation and survival. We have seen the importance of this principle in CAR-T therapies, we're incorporating costimulatory domains has helped improve their activity. The question is whether we can apply the same underlying biology to T cell engagers in a way that is effective, controllable and safe. One pathway that has attracted considerable interest of CD28, which provides an important costimulatory signal. There's been substantial exploration of CD28 directed approaches, including bispecific antibodies evaluated alone alongside checkpoint inhibition or in combination with conventional CD3 T cell engagers. However, translating cost stimulation into an antibody-based approach has proven challenging. The key is not simply to increase T cell activation -- it is to ensure that activation occurs in the right context while avoiding unwanted activation elsewhere. Tri-specific approaches offer an opportunity to integrate tumor recognition mediated T-cell engagement and co-stimulation into a single molecule. Early approaches, however, have highlighted the importance of carefully balancing binding affinity, format and conditional activity. This is where we believe our engineering capabilities can make a difference rather than simply adding a high-affinity CD28 binder to a T-cell engager, our approach has been to explore how the different components can be engineered together so that co-stimulation is conditional on the appropriate cellular context. The objective is to support a stronger and potentially more durable antitumor response by maintaining control over how T cells are -- how and where T cells are activated. That is the rationale underpinning our TriTCE Co-Stim2 platform. Achieving this balance requires considerable considerably more than selecting the right 3 targets: the geometry of the molecule, the relative binding affinities and the way its individual components interact can all influence both activity safety. To address this, we undertook a broad screening and optimization campaign the combined computational and AI-guided paratope engineering with our Azymetric platform, high-throughput format engineering and production, in vitro functional assessment and early developability testing. We evaluated hundreds of variants across different molecular formats, valencies, geometries, and binding affinities. This allowed us to assess not just whether a molecule can engage its target, but how effectively can generate the desired biological response and how differentiated that response was from alternative approaches. The strength of this approach is the integration of biology and engineering. We can examine multiple design variables in parallel and assess the trade-offs between functional activity, conditional activation, safety-related characteristics and the developability rather than optimizing any 1 property in isolation. Through this work, we have identified a differentiated design approach that we believe achieves the balances of features we were seeking. We are showing a representative format on this slide to illustrate the underlying design principles. Our preclinical work supports the potential of conditional cost stimulation to improve T cell function and an antitumor activity compared with conventional T cell engager approaches. Importantly, design is intended to enable CD28 binding and co-stimulation on the same T cell that has already been engaged by the CD3 binding vote of the molecule rather than providing unrestricted co-stimulation. Furthermore, as with traditional T cell bispecific T-cell engagers, primary T cell activation to this TCR remains contingent on binding to the tumor antigen. What is important is that the work has allowed us to move beyond a theoretical concept and establish an engineering approach that we can now evaluate across different target and indication settings. Looking ahead, we remain very interested in selected solid tumor indications for improving T cell activity and the durability of response could make a meaningful difference for patients. Our initial areas of interest include thoracic and digestive system tumors, colorectal cancer, and prostate cancer alongside the potential to address multiple solid tumor types with the underlying biology and target expression support the approach. We're also interested in the opportunity to extend the platform into hematological malignancies, including multiple myeloma and acute myelocyloid leukemia or AML. In EML, 1 of -- the challenge is it's heterogeneity, not just across the tumor cell population, but also between the bulk leukemia cells and the old luekemic stem cells that can contribute to disease persons and relapse. We believe it is worth exploring whether carefully engineered conditional T cell engagement could help address some of these challenges. That remains an opportunity to investigate rather than a demonstrated clinical benefit. More broadly, we see potential for our multi-specific engineering capabilities to inform additional areas of medicine, including other heme malignancies and overtime selected autoimmune and inflammatory diseases. These applications require their own target biology, molecular design and evidence of differentiation. They are longer-term opportunities rather than an assumption that the same construct will translate directly across disease areas. Our focus will be on selecting those opportunities with the biologic differentiated design and the potential therapeutic benefit come together most compellingly. We will continue to evaluate these opportunities against clear scientific safety and development criteria and consider the most appropriate development and partnering strategy for each program. Ultimately, we believe our platform gives us a way to apply Zymeworks antibody engineering expertise to difficult-to-treat diseases where retaining the flexibility to develop partner or otherwise advance individual opportunities in a capital-efficient way. Our next-generation DLL3 TriTCE Co-Stim2 program is designed to address an important unmet need in small cell lung cancer and other endocrine tumors. DLL3 is expressed in the surface of these tumor cells, but is really found in normal cells, making it an attractive target. Small cell lung cancer accounts for approximately 15% of lung cancer diagnoses in the U.S. each year. And while there has been progress, including the validation of DLL3 is a T cell engager with the approval of tralanumab, there remains a significant need for treatments that can deliver more effective and durable responses. Our approach combines simultaneous engagement of CD3 and CD28 on T cells with DLL3 targeting bringing tumor recognition, T cell engagement and conditional co-stimulation together in a single molecule. Using our Azymetric effect platforms, we have optimized binding affinities and molecular geometry to enable coordinated target-dependent activity. The design leverages obligate CIST cell binding and conditional CD28 engagement with the aim of supporting tumor-derived killing while limiting unintended T cell activation in practicide. In preclinical studies, 209 has demonstrated a differentiated pharmacology relative to DLL3 directed CDP Biospecifics, including trauma, and -- the integrated custom signal enhances target-dependent T-cell peevision survival and antitumor activity. Importantly, we have observed no T-cell activation, cytokine activation or T cell fratricide in the absence of DLL3 expressing cells and 2 was also well-tolerated high doses in nonhuman primates and demonstrated antibody-like pharmakinetics. Taken together, these findings support the potential of our conditional co-stimulation approach to improve the activity of DLL3 directed T-cell engagers. While these results remain preclinical, we believe this differentiated design provides a compelling foundation for further development in small cell lung cancer and other DLL3 expressing tumors. A key feature of our design is the obligate nature of CD28 engagement. CD209 occurs only in the presence of simultaneous CEC banding. This is clearly shown in the top left panel for control models, control molecules with either CD3 or CD28 binding knocked out, demonstrate that CD28 contribution is conditional in CD3 engagement. This obligate co-stimulation limits potential for unwanted T-cell cross-linking or fracture side and important safety and specificity advantage of our platform. Furthermore, the obligatumor engagement via LL3 ensures that 209 activity is precisely focused where it is needed, additional data presented at AACR in 2025, further supported this deal specificity. What's particularly encouraging is the strength and durability of the responses we are seeing in preclinical models. As shown in the middle top panel, the addition of the CD28 arm enhances T cell fitness and robustness in the presence of DLL3 positive tumor cells. Compared to control molecules lacking CD20 engagement versus the clinical benchmark, the MG 757 or trauma 29 provides more sustained tumor cytotoxicity across repeated rounds of stimulation, which is accompanied by expansion of T cells with memory phenotype. Under the more stringent conditions of low effector-to-target ratios the biological impact of 29 mediated T-cell activation and co-stimulation is reflected in the enhanced antitumor cytotoxicity across a range of DLL3 expressing model cell lines as shown in the bottom left panel. Here 209 outperformed benchmark controls, including tarlatumab, BI T cell bispecific engager and the Roche Chugai DLL3 CD3/CD1 TriTCE Co-Stim2. Efficacy studies in xenograft models of DLL-positive tumors bearing either impacted with human PBMCs or ad mix with naive T cells to exhibit antitumor activity with evidence of enhanced activity relative to tarlatumab. Beyond the data shown here, our AACR poster presented in 22, Forterra rise the safety profile of 29 incorporating results from a dedicated mouse model of cytokine release syndrome, complementary and metro cytokine releases and studies conducted in nonhuman primates. In those studies, repeat dosing of 10 mg per kg was well tolerated and 209 demonstrated an antibody like pharmakinetic profile characteristics that can be so more predictable behavior in clinical settings. Taken together, these data reinforce the significance of the CDGR28-arm in driving deeper and more durable T cell responses while maintaining stringent controls and safety through obligated engagement of both T cells and DLB expressing tumor cells. I'll now hand over to Sabeen to talk through the updated data for 191 as presented at ESMO this weekend.

Thank you, Paul, and good morning, everyone. ZW-191-101 is an ongoing study for a folate receptor alpha antibody drug conjugate, which involve participants regardless of let receptor alpha expression and no limit on the number of prior lines of therapies. Part 1 of the study was dose escalation and part 2 is dose optimization where participants were randomized One is ton of ZW1-91 at 9.4 or 9.6 milligram per kilogram given intravenously every 3 weeks. Today, I will present the efficacy and safety for both doses in patients with platinum-resistant ovarian cancer with a median follow-up of 7 months. Among the 80 patients, received 6.4 milligram per kilogram and 43 received 9.6 milligrams per kilogram. Vast majority of patients, 89% had high-grade serous carcinoma, while 11% now in head clear cell carcinoma. Patients were heavily pretreated and had received a median of 4 prior lines of therapy and have a wide range of folate-receptor alpha expression ranging from 0% to 100%. All patients had received prior platinum and taxane 84% had received bevacizumab, 56% had received a PARP inhibitor, and 5% had received mirvetuximab. ZW191 achieved a confirmed overall response rate of 65% at 6.4 milligram per kilogram and 55% at 9.6 milligrams per kilogram doses in high-grade serous platinum resistant ovarian cancer. Disease control was notable. It was 100% at 6.4 milligram per kilogram and 92% at 9.6 milligram per kilogram. As shown in the waterfall plot, responses for OXO across folate receptor alpha expression. Payments of patients with high-grade serous variant cancer with of FR high expression achieved a confirmed ORR of 69%, while those with intermediate and low negative groups showed ORRs of 50% and 55%, respectively. Among the 4 patients previously treated with mirvetuximab, 3 has shown impressive responses, including 1 Asian who experienced 100% reduction of all target lesions. Among patients with clear cell carcinoma confirmed ORR was 20% at 6.4 milligram per kilogram and disease control rate was 100% at the doses of 6.4 and 9.6 milligram per kilogram, respectively. The responses to ZW191 were deep and durable. The median duration of response was not met at this data cutoff at the median of 7 months and 45% of paid participants were continuing on treatment at this time. The 6-month PFS rate was 65% at both doses and hybrid serosaverian cancer and median PFS in the 6.4 milligram per kilogram was 7.9 months. Please note that -- at this point, the event rate was only 44% and majority of patients were remaining on treatment at this dose. Median PFS is immature and is expected to evolve for time. Overall, 191 has encouraging the FS outcomes at both doses with at 6-milligram per kilogram million at 9.8 months and pending further iteration of 6.4 milligram per kilogram estimate as the follow-up matures. For safety, CW 191 was well tolerated. Grade 3 or higher adverse events occurred in 54% and 6.4 milligram per kilogram and 74% and 9.5 milligram per kilo brand. A large number of these events were non-treatment related. As shown in the figure, nausea, neutropenia and anemia were the most common events. There were no unexpected toxicities. Grade 3 hematological toxicities were manageable at both doses. Notably, at 6.4 milligram per kilogram, the safety profile was very favorable with less grade 3 or higher absorbal hematological toxicities. And the rates of neutropenia were 11% for Grade 3, 8% Grade 3 anemia and no grade 3 thrombocytopenia. Those modifications and discontinuations were less at 6.4 milligram per kilogram dose as shown at table. And TEAEs leading to dose reductions or first 33% and the discontinuations noted versus 19% as there was no treatment-related study depth. In conclusion, ZW119 demonstrated impressive antitumor activity at both doses and heavily pretreated platinum-resistant ovarian cancer regardless of folded receptor alpha expression. As next steps, we will continue to allow this data to mature with additional follow-up and look for future opportunities to share additional clinical data. In addition, we continue to evaluate strategic options with our advisers, MTS to fund further development of external capital from partnerships and collaborations. Before passing the call back to Adam, I want to highlight the broader body of work presented at ESMO in addition to OCW191. Presentations from our partners, Japaraceuticals and B1 highlighted new and updated data from the final analysis of the Horizon GA 1 study. the presentation of this data at ESMO, Horizon GEA01 has now met all primary endpoints and demonstrated sustained survival a 3-year follow-up with the healer containing regimens and first-line treatment for HER2-positive advanced GEK. With 35.3 months of median follow-up, Tahira postuland chemotherapy achieved median OS of 27 months, the longest reported in a Phase III trial in this setting and reduced the risk of death by 35% versus trastuzumab luteal therapy. Nearly 40% of patients receiving Zehira plus tisle chemo were alive of 3 years compared with 22.9% of patients receiving chemotherapy. Safety and tolerability data demonstrated at diarrhea and treatment-related incidents generally decreased over successive treatment cycles. Together, these results cement the era as the new HER2-targeted backbone therapy in first-line HER2-positive advanced GE day. Adam, I will now pass the call back to you.

Thanks, Sabeen Thanks, Paul. To wrap up, we hopefully demonstrated on the call today tangible progress on our strategy and how we see this as a platform for future growth. We've made meaningful progress in building a stronger, more diversified business, combining durational foundation with the ability to continue advancing innovative science through our own research, through partnerships and through disciplined business development. The partnership with Roche on ZW29, which remains subject to HSR clearance is only one form of how we can integrate partnerships and collaborations into our diverse wholly owned portfolio. We'll continue to consider other opportunities, including R&D spin-offs and carve-outs that may provide an opportunity to partner with biotech investors in a dedicated vehicle with specific R&D portfolio assets. Alongside advancing our current pipeline of partner programs, we continue to explore new opportunities to apply our R&D capabilities to novel therapeutic approaches and areas of significant unmet need. There's exciting work underway at the preclinical stage. We look forward to providing further visibility into some of these emerging opportunities before the year end and at an R&D Day in the first quarter of 2027 as well. Ultimately, our objective remains constant. -- to build a durable, diversified business that can generate recurring cash flows, maintaining discipline in how we deploy capital and create additional value through innovation, through partnerships and selective business development. With that, I'll ask Ken to join us for Q&A.

That's great. Thanks, Adam. And so being a Paul. Operator, we're now ready to open for questions. .

[Operator Instructions] Our first question comes from the line of Yigal Nochomovitz of Citi.

Sabeena as now generating a positive Phase III data set in potnum-resistant ovarian cancer, how does that impact how you approach partnering strategy for Z what are the considerations to action bar regarding differentiation, for example.

That's great. Maybe, Adam, do you want to take that question with respect to our partnering progress.

Sure. Yes, happy to. I appreciate the question. Well, very encouraged to see that the data from Minas we're also equally as encouraged by the data from 191 that we walked you through from ESMO. I think always, as we said earlier, we will take a very disciplined approach to capital allocation and make sure that further investment in the portfolio is justified based upon partnerability and the interest. I think you've also heard us say that we're working with MTS and in terms of partnering that program and also looking to partner it actively and probably wouldn't be moving forward without a partner into a registration program. So the data is encouraging. We think we have a very competitive molecule certainly differentiation on a number of aspects and we'll work to actively partner that as we move forward as well.

Our next question comes from the line of Reni Benjamin of Citizens.

So just going back to that question with 191. Is there anything that you could see in the follow-up data that could show up that certainly you decide, you know what, we're definitely going to take this independently. We no longer need to partner this. And just a follow-up or a second question for Paul. Is there further tweaking of the tri-specific backbone construct continuing with the company? Is this -- are you looking at other co-stimulatory molecules or is it all about swapping out targets? And if it is the latter, does the success of 1 program kind of significantly derisk other target programs, but should we really kind of view that independently.

Yes. Thanks for the question,. I'll take the first one, and I'll pass the one back on to the second one, Paul, after I'm finished. But I think Adam's statement for the last question was very clear. I think we really like what we built with ZW191. We think it'll be competitive in the ovarian cancer space, it's obviously becoming increasingly competitive and I think ESMO disclosures have continued to show that just not with performance of different molecules, but moving to earlier lines of therapy and moving to combination regimens and for us, I think that means to us that in order to move this forward, we would look to a partner to be able to provide the types of resources that would be necessary to compete with the other molecules and necessary to be able to put together a different combination regimens, which are probably going to be likely to move forward into earlier patient settings. So I think that's why we've been very clear all year that we think that beyond the study you have right now, which can continue to mature and could be the subject of additional data disclosures that we think a partner at this time would be the appropriate strategy to be able to compete for this -- for market share in this space. I think we try to be very clear for that. So highly unlikely that we would be moving forward with any of our own capital to push this into multiple Phase III trials to try to compete with the other molecules that you've seen at ESMO make progress. And to increase the competitive and increasingly looking like combination regimens in early line settings are going to be relevant for that competition. So hopefully, we're clear on that between Adam's answer. And my answer. I think we have lots of available capital that there are other places that we can put it that we think will drive an appropriate return for us with the appropriate amount of risk that we want to take on behalf of our shareholders. And I'll pass that 1 over to Paul.

Thanks, Ken. Reni, regarding your question about where we see going next with T cell engagers and with our platform technologies. So we do really feel the CD3, CD28 platform can really open up a lot of opportunities in itself. And that's by then attacking different tumors through different targets like as you alluded to, and that is what we showed in 1 of the slides. We like CD28 a lot because of the biology, but also the temporal expression with CD3. So we think for the strategy that we wanted to deploy here, we had conditional activation of cost, conditional co-stimulation. Simultaneous with CD3 that CD28 was the perfect target to go after because they're co-expressed temporarily on the same T cell. That's not to say we're not interested in other approaches to enhance T cell engagers, either through other mechanisms, through cytokines or other co-stimulation. But this platform, we think the way we've built it is very available to actually target different tumor types because of its sort of universal strategy of targeting both CD28 simultaneously. So that's the thinking there. And you'll see more work coming from us in different areas. But for sure, we think we've got a lot of exciting opportunity with this platform.

Our next question comes from the line of Charles Zhu of LifeSci Capital.

I had a couple on CWT. What kind of early clinical signal will or as you need to observe in order to not only can via that you refer to the dosing is differentiated beyond atalaumab or other DLL3 T cell engagers in the space might those early clinical signals decisions at various stages in open?

I'll ask don't know if you want to answer that, and I'm sure Sabeen can add to that as well. .

Yes, happy to, Ken. So Charles, just so I'm clear, was the early signals that we'll see in 2019 that would differentiate to Costin, -- that was your question. It was a little hard to hear you. So look, I mean, if you much Phase Ia, Phase Ib study, you can appreciate that it's dose escalation, right? So I think predominantly, when you talk about earlier, let's kind of frame up what the time frame is associated with that the first handful of patients in this trial is really going to be safety based, right? And then we'll be looking at early signals of ORR. I think that when you talk about early signals of efficacy, you're really getting into the Phase Ib 1 population in terms of differentiation, response rate tolerability and combination that we're going to look at, I think they're pretty obvious in this patient population. But appreciating that the early signs of this are going to be a bit away, right? Like it's going to be into the -- well into the Phase Ia and then into the Phase Ib bot before we start seeing these signs of activity. Sabeen, not sure anything you want to add to that?

I mean, Adam been very, very comprehensive. So I would say that since this is a bill validated target, in small-cell-lung cancer in addition to very early efficacy signals and safety signals. I think they're going to be also looking at some translational early exploratory data to try to understand the mechanism as it translates from the preclinical to the clinical setting and to set the base forward for potential future combinations to take this into earlier lines of therapy. But having said that, usually Phase I trials are generally looking at baseline safety and seeing if there was any early signals, I would show that this was going to be better than tralatimab in terms of efficacy.

Our next question comes from the line of Yaron Werber of TD Securities.

Good morning, management. This is Steven on for Yaron. Congratulations on the data at ESMO. A couple from us on 191. The discussion at ESMO noted that it might be interesting to see data for the 8 mg per kg dose, given that the 6.4% performed better than the 9 million. Any plans to test that 8 mg dose in the future? It sounds like that might depend on what a potential partner might do, but some color on that would be great. And then more in general, why do you think the lower dose performed better than the higher dose -- then a follow-up on that would be just why you think the safety with kind of the limited seating talk and ocular talks that UC with 191 looks better than the other FRAC.

Sabeen, do you want to start on those and Adam add anything on top of that if you'd like.

Sure. So I think for C191 from a safety perspective. Well, starting with the dose perspective, it's pretty clear that we've seen at least as good efficacy with 6.4 milligram per kilogram dose as compared to 9.6% and definitely a better safety profile. Although we are pending further follow-up to see maturity of duration of response and PFS as well. I would say that when we selected doses, we were very careful in the 2 doses that we move forward with according to the protest OPTIMA guidelines. The reason for that was we saw that 9.6% was a very active dose and the safety was manageable at that and a lower dose 6.4 milligram per kilogram that we choose from clinical pharmacological perspective, that was around 30% to 31% lower PK compared to 9.6 mutual was 9.6 in we wouldn't have probably seen enough of a difference. This is less than 20%, which is considered equal voice. So we're relatively comfortable with the doses that we selected and moving forward with those optimization, whether or not we would like to test another dose would depend upon who we partner with and if they are interested, particularly in relation to combinations and further maturation of the efficacy data at 6.4 milligram per kilogram. But as of now, we are relatively very comfortable that we're seeing a really good efficacy or with a very manageable and actually a very favorable safety profile. So with that, what was the second part of your question?

Safe perspective with and thoughts.

Okay. Why are we seeing better efficacy at 6.4, we've chosen our ADCs due to higher internalization of the antibodies that we select and moderately toxic payload. So that's given us a very much wider therapeutic windows compared to many other ADCs, which have used toxic more toxic loads and off-the-shelf antibodies. So as you saw in our dose escalation, we started to see activity at 3.2% and continue to see activity all the way at 9.6%, which was manageable safety profile. This gives us more leverage to choose the right dose with the best balance of efficacy and safety. And one of the reasons we're thinking about why we still slightly better efficacy would be limitations in sample size. The other things that we are seeing is that the safety profile at 6.4% is better, which allow patients to be less dose reduced and to continue on treatment. And also, it could be target saturation at higher doses. Those are all things that we are continuing to evaluate and look at.