ARVN - NASDAQ

Thank you for standing by. My name is Gail and I will be the operator for today's call. At this time, I would like to welcome each and every one of you to the Arvinas first quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. [Operator Instructions]. It is now my pleasure to turn today's call over to Arvinas Vice President of Investor Relations, Jeff Boyle. Please go ahead.

Thank you and good morning, everyone. Thanks for joining us. Earlier today, we issued a press release with our first quarter of 2025 financial results, which is available in the investor and media section of our website at Arvinas.com. Joining the call today are John Houston, Arvinas's Chief Executive Officer, President and Chairperson, Noah Berkowitz, our Chief Medical Officer, and Andrew Saik, our Chief Financial Officer. Our Chief Scientific Officer, Angela Cacace, was scheduled to join us this morning but had an unanticipated personal event and will not be able to. Before we begin the call, I'll remind you that today's discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. These risks and uncertainties are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which I urge you to read. Our actual results may differ materially from what is discussed on today's call. And now I'll turn the call over to John.

Thanks, Jeff. Good morning, everyone, and thank you for joining us today. As you saw in our earnings release this morning, we have reached an important moment in Arvinas's progress as a company. We recently shared the first-ever positive, pivotal data for a prototype degrader, Vepdegestrant, which we are moving towards filing and registration. In addition, we continue making great progress with our pipeline and shared exciting first-in-human data for ARV-102, our LRRK2 degrader, and excellent preclinical combination data for ARV-393, our BCL6 degrader in hematology. We also recently received a safety procedure from the FDA for ARV-806, our KRAS-G12D degrader. We will discuss each of those items on the call today. Noah will review the clinical progress for Vepdegestrant, or VEPDEG, and for ARV-102. He will also then review our recent preclinical combination data for ARV-393 and provide an update on ARV-806. Finally, Andrew will provide a financial overview, including our capital allocation priorities and updated cash runway guidance. However, before we get into our data updates, I'd like to cover three important topics up front. First, we are making excellent progress towards our filing and registrational plans for VEPDEG in the second line plus ESR1 mutant breast cancer. Based on the strong data from the VERITAC-2 study, we have ahigh conviction that VEPDEG has the potential to be a best-in-class monosterectomy treatment for patients in the second line ESR1 mutant setting. We are on track to submit a regulatory filing with health authorities in the coming months. We believe there is an attractive opportunity for VEPDEG as a second line plus ESR1 mutant treatment in metastatic breast cancer, and we will discuss this opportunity in greater detail after our ASCO presentation in June. Secondly, we have aligned with Pfizer on the removal of the two phase 3 combination trials from our joint development plan that were planned for this year. The first of these trials was a combination with a CDK4/6 inhibitor in the second line setting, and based on recent discussions with health authorities and our observations from other trials involving biomarker selected populations, we believe ER therapies will be restricted to patients with ESR1 mutations in the second line plus setting. With this in mind, we have removed the second line ITT combination trial, which was planned to initiate in 2025 from our joint development plan. The second trial was the first line combination trial with atirmociclib Pfizer CDK4 inhibitor, which was also planned to initiate in 2025. After reviewing the totality of emerging information, including external data results, the evolving treatment landscape in metastatic breast cancer, and long-term capital allocation, we have aligned with Pfizer to remove this first line combination study from our joint development plan as well. We and Pfizer will continue to evaluate our ongoing combination studies in the second line plus setting and generate valuable data in metastatic breast cancer to inform our path forward. In addition, Pfizer is adding a VEPDEG combo cohort to their ongoing phase 1 clinical trial with our investigational KAT6 inhibitor. This trial will be operationalized and funded solely by Pfizer. As these trials complete, we will make data-driven decisions about whether further investment in each of these combinations is warranted. I look forward to sharing additional details in the coming months as our trials continue. The third major topic is our company-wide cost reduction effort. The recent challenges in the capital markets are prompting us to extend our cash runway and ensure our programs reach data milestones before additional capital is needed. An important step in this process is maximizing our efficiency and reducing our operating expenses wherever possible. We have implemented a restructuring that includes a workforce reduction of approximately one-third of the company, portfolio reprioritization, and overall cost reductions of approximately $80 million annually on a full-year runway basis. Although difficult, the workforce reduction, which will result in streamlined operations across the entire organization, is a prudent decision that we believe will appropriately size the company for future success. We have also reprioritized our research portfolio to focus on assets that have the greatest potential to deliver the most value for patients, physicians, and shareholders. Our clinical programs, ARV-102 in Neurodegeneration and ARV-393 in Hematology, remain on track to deliver important clinical data later this year. Overall, these steps will result in a combination of cost savings and cost avoidance of approximately $500 million over the next three years. The net results of these actions is a change in our guidance to extend our cash runway into the second half of 2028. We believe these significant cost savings and a refined capital allocation strategy in addition to a strong balance sheet will allow us to advance our early development portfolio in a timely and efficient manner, as well as ensuring a financially disciplined approach to commercial readiness. Before I continue, I do want to thank all the talented employees who are directly impacted by this decision. I'm proud of the progress we have made together and want to acknowledge their contributions and commitment to discovering and developing new treatment options for patients with life-altering diseases. We wish the best for these colleagues as they transition to new opportunities. I also want to thank the employees who are continuing the journey with [Arvinas], as each of them will be instrumental in helping us achieve the ambitious goals we have laid out for the company. I'll now turn the call over to the team to review our recent data and the details from the quarter. I'll return at the end of the call to review the milestones that we anticipate for the remainder of 2025, but for now, I'll turn the call over to Noah.

Thanks, John, and good morning, everyone. Together with Pfizer, we were pleased to announce positive phase 3 results from the VERITAC-2 trial earlier in the first quarter. These data, the first from a pivotal trial with a PROTAC degrader, represent an exciting and validating step forward for our platform. As John mentioned, we are excited to announce that data from the VERITAC-2 trial were selected for a late-breaking oral presentation at the American Society of Clinical Oncology, or ASCO, meeting in late May and will also be featured in the ASCO press program. The VERITAC-2 abstract has also been selected for inclusion in the 2025 Best of ASCO program in July. This program is important. It's run by ASCO to increase access to clinically impactful research for those who are unable to attend the annual meeting. Given our plans to present the full data set at ASCO, which imposes an embargo on the presentation, I will only be providing commentary on the information previously disclosed in the top-line data release. In patients with ESR1 mutant tumors, VEPDEG exceeded the pre-specified hazard ratio of 0.6 and demonstrated a clinically meaningful improvement in progression-free survival over[vepdegestrant]. Additionally, VEPDEG continued to demonstrate a safety and tolerability profile consistent with our previous studies. We believe VEPDEG has a best-in-class profile and our plans to seek global regulatory approvals remain on track. While we are no longer planning new registrational trials for VEPDEG, we will continue to generate valuable data in our ongoing combination trials, and we welcome Pfizer's addition of VEPDEG in combination with their KAT6 inhibitor to their ongoing Phase 1 trial. I'll now turn to our most advanced neuroscience program. We have designed investigational oral PROTAC degrader to cross the blood-brain barrier and selectively degrade leucine-rich repeat kinase II or LRRK2. LRRK2 is a large multi-domain scaffolding kinase that plays a critical role in effective endolysosomal trafficking. Unlike traditional small molecule inhibitors that only block LRRK2's kinase activity, LRRK2 degraders eliminate the pathological scaffolding function, the GTPase activity, and the kinase activity of LRRK2. ARV-102 is our lead LRRK2 degrader. We believe our LRRK2 degraders are particularly well positioned to be evaluated in two diseases, Parkinson's disease, or PD, and progressive supranuclear palsy, or PSP. Familial and idiopathic Parkinson's disease have been associated with LRRK2 on the basis of genetics and models of lysosomal dysfunction. PSP disease severity is associated with LRRK2 genetic findings. Additionally, we have published data associating the tau pathology of PSP with LRRK2-mediated endolysosomal dysfunction. Previously, we have shared preclinical data demonstrating ARV-102's superior target engagement, enhanced potency, and lysosomal pathway engagement when compared to LRRK2 inhibitors. In non-human primates, ARV-102 crossed the blood-brain barrier where it achieved LRRK2-targeted protein degradation in deep brain regions and reduced LRRK2 protein, as well as neuro-inflammatory biomarkers in cerebrospinal fluid, or CSF. I am now pleased to share with you that we have observed a similar pattern of activity in our first in human phase one clinical trial in healthy volunteers. These data were presented last month at ADPD. Our trial evaluated single doses of ARV-102 ranging from 10 to 200 milligrams and multiple doses ranging from 10 to 80 milligrams. We met our objective of 50% LRRK2 reduction in CSF after a single oral dose of at least 60 milligrams and once daily repeated oral doses of at least 20 milligrams. This indicates substantial central LRRK2 protein degradation. In the phase one clinical trial, ARV-102 was safe and well-tolerated with no serious adverse events or discontinuations reported after single or multiple doses. ARV-102 also demonstrated dose-dependent median reductions in LRRK2 protein levels compared to baseline in peripheral blood mononuclear cells confirming target engagement in the peripheral compartment. Taken together, pharmacodynamic changes of LRRK2 reduction in the CSF reduced biomarker levels in the periphery and an acceptable safety and tolerability profile support further study of LRRK2 degraders in PD and PSP. That further work is ongoing. Dosing of the phase one single ascending dose cohort in patients with Parkinson's has already begun and the multiple ascending dose cohort will begin in the second half of the year. We anticipate providing an update on PK, PD safety and tolerability from the phase one SAD cohort in patients with PD later in the year. The data I've shared demonstrate that we can make orally bioavailable protacts that are brain penetrant. While our lead program is focused on LRRK2 for PSP and PD, our discovery portfolio focuses on additional targets that may be relevant for Huntington's and Alzheimer's disease. We look forward to sharing updates on these in the coming months and years. Turning back to oncology, ARV-393 is our investigational oral protect designed to degrade B-cell lymphoma 6 protein or BCL6. BCL6 is a transcription factor, a master regulator of multiple cellular processes during B-cell development including proliferation, survival and apoptosis. Under BCL6 activity has been implicated as an oncogenic driver in several subtypes of non-Hodgkin lymphoma making it a rational therapeutic target. PROTAC mediated degradation has the potential to overcome the historically undruggable nature of BCL6. ARV-393 potently and rapidly degrades BCL6 protein with iterative activity which is critical to overcoming BCL6's rapid resynthesis rate and its sustaining anti-tumor activity. In 2024 we share preclinical data demonstrating that ARV393 drives tumor regressions in multiple in vivo models of B-cell driven non-Hodgkin lymphoma including large B-cell lymphoma. We are enrolling patients with non-Hodgkin lymphoma in a phase 1 clinical trial and are on track to share initial data by the end of the year. At AACR this past week we presented new preclinical in vivo data for ARV-393 in combination with standard of care biopsies and chemotherapy as well as oral investigational small molecule inhibitors. These new data highlight the potential of ARV-393 to drive synergistic anti-tumor activity across multiple aggressive large B-cell lymphoma xenograft models. ARV-393 enhanced tumor regressions when combined with current standards of care including Archop and various biologics. Notably ARV-393 monotherapy upregulated CD20 expression providing mechanistic rationale for synergy with anti-CD20 therapies such as rituximab. Similarly ARV-393 demonstrated enhanced tumor regressions when paired with targeted small molecule inhibitors of BCL2, ECH2 and BTK key oncogenic partners of BCL6. These results suggest that ARV-393 may enable highly effective chemotherapy free regimens whether in combination with biologics or as part of an oral therapeutic strategy. We will present new preclinical data in a patient derived model of angio-immunoblastic B-cell lymphoma or AITL at the European Hematology Association Conference in June of this year. This is an orphan indication with high unmet and limited treatment options. We believe this will be the first preclinical data to show human AITL dependency on BCL6. We also plan to present preclinical combination data with an emerging standard of care bispecific antibody in a model of aggressive large B-cell lymphoma in the second half of the year. And finally, we filed an IND for our KRAS G12D degrader ARV-806 and recently received a safe to proceed letter from the FDA. We anticipate beginning a phase 1 trial in patients with solid tumors harboring KRAS G12D mutations in the second half of this year. KRAS is a driver oncogene in several major tumor types and is associated with poor prognosis and resistance to standards of care. Our degrader has demonstrated high potency and differentiation from inhibitors and other degraders currently in the clinic. In addition to selectivity in the preclinical setting, ARV-806 demonstrates robust anti-tumor activity through dose-responsive degradation of KRAS G12D in mutated cancers including pancreatic and colorectal cancers. In preclinical studies, our protec degrader has demonstrated the ability to bind both the active and inactive states of KRAS G12D, ARV-806 will eliminate rather than inhibit KRAS G12D within vitro potency. And that potency can be 30-fold greater than inhibitors and degraders currently in the clinic. In totality, these preclinical data give us confidence and we intend to show differential biology of our KRAS degraders at a conference later this year. I look forward to updating you on our progress in the coming months. With that, I'll turn the call over to Andrew to review our quarterly financial information.

Thanks, Noah, and good morning, everyone. I'm pleased to share financial highlights for the first quarter ended March 31, 2025. As a reminder, detailed financial results for the first quarter are included in the press release we issued this morning. Let me start with the financial implications of the corporate restructuring and the removal of the two phase three combination trials from the VEPDEG development plan. The corporate restructuring and associated workforce reduction were difficult decisions to make and are impacting many talented employees. They were, however, necessary to meet our goals of reducing our cost structure and extending our cash runway to support our promising pipeline. The reductions were focused on reducing internal costs without having an impact on clinical stage programs that will drive value over the next several years. We estimate the restructuring will result in a reduction of our ongoing infrastructure costs of approximately $80 million annually with savings expected to begin to be fully realized in the fourth quarter of 2025. In addition, we anticipate cost avoidance of approximately $350 to $400 million over the next three to five years as a result of the removal of the two phase three combination trials from the VEPDEG development plan. These actions will allow us to continue progressing our promising pipeline without the need for a near-term cash infusion and maintain a strong financial position with a cash runway now into the second half of 2028. I'll now briefly touch on some key financial highlights for the first quarter of 2025. At the end of the first quarter, we had approximately $954 million in cash, cash equivalents and marketable securities on the balance sheet compared with $1.04 billion for the year-end 2024. Revenue for the three months ended March 31, 2025, totaled $188.8 million compared to $25.3 million for the three months ended March 31, 2024. The increase in revenue was primarily due to the accounting impact of the reduction in the VEPDEG collaboration agreements program budget due to the removal of the first and second line phase three trials from the development plan. The revenue recognition accounting for this agreement uses the percentage of completion method. As the budgeted costs serve as the denominator in the percent complete calculation, a reduction in that budget compared to the same actual incurred costs resulted in the higher percent completion and therefore higher revenue recognized in the first quarter. General and administrative expenses were $26.6 million for the first quarter compared to $24.3 million for the same period of 2024. Research and development expenses were $90.8 million in the first quarter compared to $84.3 million for the same period of 2024. The increase of $6.5 million was primarily driven by a one-time inventory charge of $10 million for VEPDEG partially offset by lower than expected VEPDEG development costs and an increase in the LRRK2 program of $5.2 million offset by a reduction in nonspecific research and personnel expenses of $3.6 million. As I mentioned earlier, taking into account the anticipated impact of the restructuring, the re-prioritization of the research portfolio and VEPDEG development plan and the anticipated launch of VEPDEG, our updated cash runway guidance is now into the second half of 2028. We believe our efforts are focused on areas that will maximize shareholder value as we move forward, as we move towards important catalysts in the coming months. With that, I'll turn the call back over to John for closing remarks.

Thanks, Andrew. These actions should offer significant clarity around our focus over the next few years and will allow us to hit a number of key data inflection points from our early development programs as well as the potential commercial launch of VEPDEG with our partner Pfizer. As we progress through 2025, there will also be many opportunities to showcase why our belief in our portfolio is strong. These include data from the VERITAC-2 trial in the late-breaking oral presentation at ASCO in June, the first phase 1 data for a LRRK2 degrader, ARV-102, in patients with Parkinson's disease, and first in human phase 1 data for our BCL6 degrader, ARV-393. We believe our progress will continue to demonstrate the potential of our prototype degraders to add meaningful value for patients, their caregivers, and our shareholders. As we embark on this new chapter, I want to thank you for your continued support. And with that, I'll turn the call over to Jeff to begin the Q&A portion of the call.

Thanks, John. Before I turn the call over to the operator, I do want to remind you that in order to comply with the ASCO embargo policy, we aren't able to answer questions about the VERITAC-2 data beyond the top-line results reported in our press release on March 11th. So with that, operator, will you please open up the queue?

[Operator Instructions] Okay, so your first question comes from the line of Michael Schmidt with Guggenheim. Please go ahead.

Hey, guys. Good morning. Thanks for taking our questions. I just had a few follow-up questions on VEPDEG. May it just help us understand a little bit more on how much of the decision to not advance the CDK4/6 inhibitor combinations was driven by emerging data on the class overall of the versus specifically the VERITAC-2 results? And in the second line setting, how do you think VEPDEG will be positioned relative to other oral certs and help us understand how much you need to invest in a commercial infrastructure as you potentially may be co-commercializing the product in the U.S. next year? Thanks so much.

Thanks. Great question. Yes, the first question in relation to is this a decision based on specific information related to VEPDEG or the class, I think we've had the general discussion with Pfizer as we, as you see, are served during the market as an ESR-1 mutant-only drug, saw some of the data coming from [indiscernible], which also had a very strong ESR-1 mutant-only profile. And clearly, the data we had for VERITAC, which we can't discuss in detail, but we have already told you it has strong ESR-1 mutant data, but we didn't hit ITT. So the general discussion we had with Pfizer was around whether or not, in that second line setting, would the drugs really just be ESR-1 mutant-only. And we came to the conclusion that's likely to be the case, and therefore, the design of the study that we had was for an ITT, a combination with CDK4/6, so we decided we would drop that. So I think that's a logical rationale for dropping that particular study based on the emerging data on in the second line setting of whether or not you're going to have just an ESR-1 mutant-only profile overall. In terms of positioning VEPDEG, I think, as Noah said, I think, again, you'll see the data at ASCO, where we believe we've got the opportunity to be the best in class of the degraders in that second line plus setting. And with that, our positioning would be, I think, very strong in terms of our overall data set in terms of tolerability and overall activity. So we have great confidence of actually be, if we get approval and get to the point of launch once we get through the regulatory hurdles, I think we'd be in a very strong position for positioning Veb in that marketplace. And I think the third question was the commercial investment. Clearly, it's a 50-50 [COCO] with Pfizer. We are the lead for that. What we've done is done a very kind of prudent approach to commercial build. It has been very small. It's all going to be data-driven and the point of approval. So yes, there will be a kind of significant back-end recruitment to get a sale force in place. But right now, our commercial footprint is really, really very small. We also have the ability to have ongoing discussions with Pfizer about the best way to take the molecule forward in a commercial setting, both in the U.S. and commercially. And we'll be able to update all of you on that as we complete those discussions.

Your next question comes from the line of Andrew Berens with Leerink Partners. Please go ahead.

Hi. Thanks. I'm sure you guys have had to make some difficult decisions over the last few weeks. So my question is about the future neuro efforts in LRRK2. You did give some color in the prepared comments about the role of LRRK2 in neuro diseases. But I'm wondering how much LRRK2 degradation you think is going to be clinically relevant and whether these would eventually be combination approaches.

Yes, I'll hand over to Noah for a specific answer to that. So we're very excited by the data we see so far with LRRK2, our first neurodegeneration asset, the first pro-tech in this space, and the first to show brain penetrance as well. So the profile we're seeing initially is very exciting. But Noah, do you want to add some more color to that?

Sure. So Andrew, thanks for the interest in what is a very exciting first neurodegeneration directed pro-tech for our company. So indeed, we think that there are a few opportunities for us to develop this here. And as I outlined earlier in the call, that's because there's both genetics that support it and then also underlying biology in these two diseases that were highlighted, PSP and Parkinson's disease. Your question around how much degradation we want to achieve, well, the goal right now, what had been and remains to achieve more than 50% degradation. We don't want to completely eliminate it because there's obviously functional – there's purpose to this protein in terms of endolysosomal trafficking. But when there's overexpression, when there's increased activity, you get mistrafficking. And that's tightly tied to the pathology of these diseases. We know that on average, Parkinson's disease patients have twice the level of LRRK2 in their CSF compared to age-matched controls. And so we think it's prudent therefore to target something in the 50% range. And so far we've seen in healthy volunteers that we can achieve that as well as achieve appropriate downstream signaling. So we know that it's on target. We think on mechanism. And the next thing is to really look at the data from the PD patients in the studies that are ongoing.

Okay. And do you think it will be a combination of those eventually?

Well, when you say combination, right now there really aren't disease-altering drugs in the – that are standard of care. So it's just a – this may be on top of L-DOPA, type of treatment for patients. But this is disease-altering. So I'm not sure what you mean by combinations.

Right. I'm asking whether you think it will be on top of standard of care currently.

Yes, yes. On top of standard of care, for sure.

Okay. Thank you.

Thank you. Yes.

Your next question comes from the line of Ellie Merle with UBS. Please go ahead.

Hi. This is Joseph asking for Ellie. Thanks for taking our question. What is your view on the market size of VEPDEG in the second line plus monotherapy setting alone? And I have a follow-up.

Do you have a follow-up? Do you want to ask now or?

Sure. So how do you think about the cadence of cost reductions from a modeling perspective and in terms of VEPDEG monotherapy after the VERITAC-2 data? Can you help us think about what milestones you might be entitled to from Pfizer on approval in this setting?

Sure. So the first question was related to the market size. Yes. So we've been thinking there's a really significant opportunity in that second line plus setting. There's 40,000 new patients in the second line setting every year. Of that 40% are ESR1 mutant only, and that's our estimate. Some others estimate around 50%. So that's 25,000 new patients in the second line third space each year. And drugs, as you know, like Orserdu are out in that space, they're probably capturing about a third of that. So there's a really significant opportunity there for a good profile of a degrader like Vepdegestrant to hopefully capture quite a significant part of that market. So we're very excited about the opportunity in that space. The second question, Andrew, I think it was more related to kind of a financial question.

Yes, sure. So with regard to the restructuring, notifications to employees have gone out this week. So the restructuring has begun. As with all restructurings, there's a combination of employee reduction and cost control. I stated in my prepared remarks that we would have the full impact of the reductions by Q4. We'll obviously start seeing benefit prior to that. So we're offering our colleagues severance packages that will be paid out in Q2, so you won't see a charge in our Q1 financial statements that the notifications went out in Q2. So it was a subsequent event for the purposes of our financial statements in the first quarter. But for modeling purposes, you can assume that you'll start seeing savings relatively quickly. Q3 will have a significant amount of savings and full impact in the fourth quarter.

And any color...

Your next question comes from the line of Derek Archila with Wells Fargo. Please go ahead.

Good morning. This is Simone on for Derek. Thank you for taking our questions. I just have two. So I know you said that after the walk-through, the greater you to see 50% degradation. But how exactly do you risk is the target? And what can we expect from the SAD cohort in PD patients in 2 out of 25?

Noah, do you want to take that?

Sure. I'm not sure I got the second part, but for the first one, it's about how do you de-risk. So in general, when you say do you de-risk, I guess that could focus us on what are some of the liabilities associated with that target, right? So we do know that there are findings with type 2 pneumocyte enlargement or proliferation that could be associated with collagen deposition in the lung. We also know that there's some vacuolization seen with – and these are all inhibitors, right? So vacuolization seen in the proximal tubule in the kidney. There's some typing going on in the background, so whoever's doing that, if you can pause, please. Thank you. So that's known, and that's been a challenge for inhibitors. For reasons that we have our own hypotheses, and it's probably too much to go into on the call right now, we have seen minimal evidence for the type 2 pneumocyte enlargement. We have associated the much reduced pneumocyte proliferation that we observe with our degrader rather than what's observed with inhibitors. We associate that with different profile of protein deposition in the [indiscernible]. So we think that we have a differentiated profile when compared to inhibitors, and we're tracking patients in the meantime in our study. We look at diffusion capacity in the lung, and we're measuring renal function on an ongoing basis, and so far things have been safe to proceed. In terms of – your second question had to do with the SAD cohort expectation, but I'm not sure what you meant by the expectation there in terms of timing or results?

Results. Like what type of results can we expect to see?

What could we see? Well, so as I mentioned earlier, PV patients have twice the level of LRRK2 protein levels in the CSF, and presumably in deep brain regions, compared to healthy volunteers. So we would expect in our SAD and our MAD studies, we can recapitulate what we saw in healthy volunteers. We could see now at higher baseline LRRK2 levels degradation that's achieving greater than 50% reduction, which is our target. And then on top of that, because they also have neuroinflammation and other signs of neuronal fragility or, that neuronal death, that we can capture some signals of this with 28 days of treatment in the MAD study. So we are looking at biomarkers, and this should – we would hope that we can see that signal in the MAD.

Thank you.

Your next question comes from the line of Akash Tewari with Jefferies. Please go ahead.

Hey, this is Manoj in for Akash. Just one question. Will you need any overall survival data trends for the regulatory submission, or like what's the expected timeline for market entry there? Just one more on like are you considering any partnership for like neuro programs there? Thanks.

Going back to that – I'm sorry, just going back to that first question, could you repeat that in terms of regulatory filing?

Any overall survival trend for regulatory submission?

Oral – what?

Overall survival data trend?

Overall survival data.

I'm sorry, yes. So overall we can't really talk about our data beyond what has been shared in our top-line results, and we recommend that you join us at ASCO to hear the presentation. Certainly in answer to your question about how that impacts submissions ultimately, regulators generally want to see that there are no adverse overall survival findings when it comes to PFS, which is a surrogate for OS, but it's something that is – there just isn't any – companies don't power for OS when they submit.

And then the second question you asked about neuroscience and partnering, clearly as we move forward in the space, both in PSP and Parkinson's disease, we've always said that this would be an area that could lend itself to having a strategic partner. These would end up being certainly in the Parkinson's area, quite significant-sized trials. But right now we're in a good position to be able to move our program forward to significant data inflection points, and we'll review potential partners at that point.

Thanks.

Your next question comes from the line of Jonathan Miller with Evercore ISI. Please go ahead.

Hi, guys. Thanks for taking my question. I'll do one more on VEPDEG, maybe since we haven't spoken about the first-line potential there. You were a little more vague about the rationales for not proceeding with the Atirmo Phase 3. Is your expectation that next-gen estrogen receptor-directed therapies are not going to be relevant in first-line in general, or is this more to do with VEPDEG's profile or more to do with Atirmo's profile or the data that you've seen in the combinations so far? Maybe I guess I'll start with that. Secondly, on the BCL6 program, how much data in NHL patients can we expect to see in the next handful of releases, and would you expect to be able to show ORRs or at least meaningful efficacy data that will allow us to come up to other recent NHL datasets?

Yes, great questions, and I'll take the first one, and Noah can take the second one. Certainly, big decisions like this around going forward or not with the first-line study, they don't happen overnight, so lots of discussion with our colleagues at Pfizer. I suppose the genesis of the final decision was Pfizer looking at basically our press release from our VERITAC-2 data, where we say that we've hit epsilon-1 mutant only, but we haven't hit ITT. And without going into the data, if you just take that as the opening gambit, it probably started a conversation around do ER degraders work against wild-type, either in the second-line setting, which is a reasonable question, but then I think Pfizer then took it to the next level, which is do they work in the first-line setting? So I'll give you the Arvinas view. We believe they do. We believe that Vepdegestrant will work very effectively in the front-line setting. For several years, we've talked about the difference between first-line and second-line disease. In the second-line disease, probably around 40% of the patients have ESR1 mutations that basically give them an endocrine sensitivity, and around 60% of the patients have tumors that have wild-type and other driving mutations that are largely endocrine and sensitive. Our hope with the second-line trial was that we'd be able to capture whatever endocrine-sensitive group of tumors that are in that broader ITT net, but in reality, what you saw was that we missed the ITT, which is telling you that there's not as many endocrine-sensitive tumors in that space. However, in the first-line setting, we believe it's a very different story. We believe that maybe ESR1 mutations represent maybe only 5% of what you see in the first-line setting. The vast majority of the tumors would be wild-type, but most significantly, we believe that those would be endocrine-sensitive and therefore available to be tackled by a drug like Vepdegestrant. So that's our belief. It still is, but we're in a partnership with Pfizer, and I think they want to have more mature data, not just from our internal programs and datasets, but also the external world. They want to see what's going to happen with gyridestrin, the Roche ER degrader, which is in the first-line. So if that comes out and it's positive in the first-line setting, that's going to be a great signal for all the ER therapies. Camizestrant as well, again, interesting data coming out from SERENA-6. More mature data there could also influence it. And of course, as our data matures overall, I think Pfizer also wants to see our current Atirmociclib VEP combo mature in terms of that dataset also. So yes, there's a number of different things that Pfizer would like to see in terms of maturity of data, both our internal data and the external data. And as I say, we're in a partnership. [indiscernible] partners can look at two different datasets and two different scenarios and maybe come out with different options. But we're going along with this decision from the team to opt out of the first-line study. And we move on. Basically, we have taken the money that was targeted for that study that's now out of the budget. It allows us to plan to fund the rest of our portfolio, which is a very exciting portfolio in a more aggressive way. And as data matures, if Pfizer come back to us and say they actually do want to do a first-line study, we could assess that at a later date. But right now, that is not in our plan, and we move on. BCL6?

Regarding BCL6, we're early in the dose escalation, but we've shared that we expect to share results later in the year. So I don't think we can offer any more guidance than that right now. Think of it as several cohorts.

Do you expect to be –

Sorry for that. One moment.

Yes. Do we expect – We would share where we are in terms of safety and efficacy within any data that we make up.

Do you expect to be in the active dosing range? Would you expect to be reaching dose levels that are where you want them to be from the perspective of the level of degradation you're expecting to drive efficacy?

We may be, yes.

Okay. All right. Thanks so much.

Sure.

Your next question comes from the line of Tazeen Ahmad with Bank of America. Please go ahead.

Okay. I have a few questions, as well. I think a few minutes ago, you had talked about the market opportunity for these VERITAC-2 patients that were positive in the study. You mentioned that, for Orserdu, one-third of the 25,000 patients are on that drug. Does your market data give you any feedback about what the profile of those one-third of patients are? And is there anything different about the other two-thirds that could make VEPDEG potentially more attractive for patients? And then, can you just provide any color on the remaining Pfizer milestones you expect to realize from here on out? And if there are any specifically related to the KAT6 collaboration. And then the last one, I'm sorry if I missed this, but are you still planning on exploring VEPDEG in first line, and is that a glass thing?

Yes. So, first of all, yes, in terms of the patient population in the second line, yes, so we think, based on our assessments and some of the other external data, 40,000 new patients in that second line setting, which we believe, as I said before, 40% are ESR1 mutant. So in that second line plus overall setting, that ESR1 mutant only, that's probably 16,000 to 25,000 patients that are then available. I think Orserdu has done remarkably well to capture a significant number of those patients. I think there's a growing opportunity in that market to have more effective drugs in there. And I think it's a growing space. So yes, we think, as I said before, a really significant opportunity. And we also believe it's a very good opportunity to have a very targeted launch into that space. There's probably around 6,000 oncologists that drive 70% to 80% of the prescriptions in the space. So we can also target this prescribing population, I think, very effectively. So I think, yes, a really significant, exciting opportunity. As it relates to KAT6 or general milestones in Pfizer?

Yes, so with regard to the Pfizer agreement, we are entitled to a milestone on first approval. I do not believe we've disclosed the exact amount of that. So I won't disclose it now. But we are entitled to something. And then I think you asked a question specifically regarding KAT6. There's certainly nothing in the contract specifically regarding KAT6. So no, it would be related to the first approval, which would be obviously VEPDEG. And then the final thing you asked was, I think, do you see any opportunity to test out VEPDEG in the first line? Well, my answer, clearly, the decision we've made right now with Pfizer is not to go forward in the first line setting. We've also said that, from an Arvinas perspective, we think VEPDEG would do well in that first line setting. So let's see how data matures over the weather period of time, the data needed to mature. But as I said earlier, right now, we move on. The money that we had sequestered for that first line study is now going to get moved to other parts of our portfolio. And we are very excited about those opportunities as well.

Your next question comes from the line of Peter Lawson with Barclays. Please go ahead.

Great, thank you. Thanks for taking the questions. Just a couple of questions on the commercialization. So VEPDEG, have you kind of worked through the size of the sales force you need? And then your comments just around VEPDEG in first line. Does the Pfizer partnership preclude you from going off and finding a different partner to run that first line study? If you could walk through that process of potentially rekindling for a first line study.

Yes, so starting off with the size of the sales force. As I mentioned, it's going to be a fairly targeted, I think financially prudent approach that we'll be taking. Obviously in a 50-50 setting, whatever we do, Pfizer will match in the US. 6,000 in colleges that we can target, which drive that 78% of prescriptions. So I think we're going to have an effective but appropriately sized sales force to hit there. In terms of other partners, absolutely not. No, we're in a partnership with Pfizer. We're very pleased with the partnership we've had with Pfizer over the last year. They've been very supportive. Good partners can also have different views. And that's right now, we've got a different view about the first line setting. But we agree overall with the decision. And we'll see what happens as data matures for Pfizer. But as I said, right now we take the money that we had sequestered for that and we move it into other things in our portfolio. And I think that's going to be a big value driver for our business.

Got you. Thank you. And then just on the KAT6 combination, is that under the same kind of profit share terms of agreement with Pfizer, or is that a separate entity?

Well, in one sense, yes, because everything they do with Vepdegestrant, everything we do with Vepdegestrant is in that partnership. KAT6 is wholly owned by Pfizer. So in that scenario, as we've talked about before, we wanted to profile VEP against a whole series of different potential combinations. So we're actually excited to see Pfizer putting VEP into that KAT6 study. They're paying for it. And if it works out well, we'll get the benefit through the Vepdegestrant side of that.

Great. Thanks for taking the questions.

Your next question comes from the line of Paul Choi with Goldman Sachs. Please go ahead.

Hi. Thank you. Good morning, everyone, and thanks for taking the question. I just wanted to ask if you have any sort of gating items or any remaining things to do prior to scheduling your pre-NDA meeting, and will that come presumably post-ASCO here? Just some clarity on the color of when you plan to meet with FDA would be helpful as part of your second half of this year filing timeline. And my second question is just on the LRRK2 program in Parkinson's, just sort of when the next sort of data update could potentially be expected from that program. I think the early data that you presented looked interesting and promising. Just curious sort of what timelines for the next data set might be. Thanks for taking our questions.

Well, thank you. Noah, do you want to take a look?

Sure. So we've met with the FDA for the pre-NDA meeting, and we feel that we're clear to move forward. And that's why we've conveyed in the prepared remarks that we're moving ahead with our submission enthusiastically. Regarding LRRK2 next data sets, we've said that we'll share information later this year. Even though we said that we'll strike them mad in the second half, I'm not sure if we can squeeze in those data at any meaningful conference by the end of the year. So we expect that we'll be sharing data from the SAD portion of the PD phase one. No naming conference yet.

Okay. Thank you very much.

Your next question comes from the line of Tyler Van Buren with TD Securities. Please go ahead.

Hi, this is Frances on for Tyler. So first question, are you still confident in Pfizer's commitment to the partnership to commercialize VEPDEG in the second line ESR-1? Are you in any discussions to reevaluate the details of the partnership such as selling the asset to Pfizer for royalties? And then my next question is, where do you envision the KAT6 combo in the treatment paradigm could potentially serve as a backbone treatment?

Yes, thanks for the question. And Noah can take the second one. No, all of the interactions we have with Pfizer on VEPDEG and the planning for regulatory filing, the NDA, getting ready for hopefully an approval and potential launch are all full blast. The joint teams are laying out significant plans as you'd expect for a launch that could be at some point next year, both from a global setting and from a U.S. setting. So that's going forward well. And as I said before, we think it's a significant opportunity. In terms of the change, there's no ambiguity. There's a change there overall in terms of the broader scope of what we initially had as a collaboration with Pfizer. When we started off, we were hoping for monotherapy, first-line adjuvant, which is quite a significant opportunity. Right now, we're going to be very focused on making VEPDEG the best ESR1 mutant degrader in that second-line plus setting. And I think, as I said earlier, we wait to see how data matures for Pfizer over whatever period of time. But as we move on, we move on in terms of making sure that we can get the best launch possible once we hopefully get an approval. And we develop an ESR1 mutant-only profile in that second-line, third-line opportunity. It's clear that physicians are looking for additional options in that space. And we believe VEPDEG will provide that, and we look forward to moving it forward. So yes, there's no change in the game plan with Pfizer.

Regarding the KAT6 question, so in the prepared remarks, you heard us mention that while there are no registration trials planned for VEPDEG, we continue to produce data from ongoing studies. And in fact, there is a new study, as it were, that will start. We're adding VEPDEG to KAT6. And I think it's well premature to project what that can lead to, because it's simply a Phase 1 study. But I think it just demonstrates that we're looking to combine VEPDEG as we march into the second-line space with other drugs to explore combinations that can bring more value to patients. So we'll have to wait to see those results.

Thank you so much.

Your next question comes from the line of Srikripa Devarakonda with Truist Securities. Please go ahead.

Hi, guys. Thank you so much for taking my question. I have a couple. First, for ARV-393, I know you're currently enrolling Phase 1 trials. Just wondering how easy it has been to enroll patients. You do seem to have a lot of centers open. And also, based on the recent preclinical combo data that you presented at ACR, are you getting a better sense of where you think the drug and the combinations might fit in the landscape? And then just a question on your FDA communications. With some of the changes happening at the FDA, is there any concern in terms of delayed timelines for meetings or review processes? Thank you.

Yes, I'll take the second one first, and then Noah can talk about 393. Clearly, there's a lot of external changes that we're monitoring in the space, and certainly with the FDA. From an advanced perspective, we have noticed no delay and no impact with our interactions with the FDA, which is great. But obviously, we're going to continue to monitor that. And as we've seen in the press, some other companies have had maybe a different experience. So far, so good with us, but I can say we'll monitor that going forward. Noah, 393.

Yes, so 393. I think we could say that while the study began last year, enrollment was slow at the beginning. This is a Phase 1 study, so by nature, it's slow. So it was, I think, a bit slow last year. There's a lot of enthusiasm, and we see that we can generate a backlog of patients now, and it's enrolling steadily. In terms of where 393 can fit into the landscape, well, certainly, depending on the data that we generate, there's the possibility of it being monotherapy. We'll have to see what the overall benefit-risk is as monotherapy. So what we're quite enthusiastic about from the preclinical models that we've shared recently is its ability to combine with many other drugs, but particularly with bi-specifics, and particularly because it also seems to increase CD20 expression, which could create a real synergistic opportunity.

Thank you.

Your next question comes from the line of Yigal Nochomovitz with Citi Group. Please go ahead.

Hi, great. Thank you very much for taking the questions. I have three questions. So the first one is, given the combo with the KAT6 and the VEPDEG, have you or Pfizer produced any preclinical work that would support that combo, or could you discuss the rationale for that combo on a scientific medical basis? The second question is, we haven't talked much about supply chain. Could you just review the structure and geographic location for the manufacturing supply chain for VEPDEG, as well as where the IT is domiciled? And then the last question, John, you gave a very comprehensive answer with respect to the rationale for Pfizer stopping the frontline study. I'm just wondering if the factors related to the novel-novel combo with the turbo, as well as the potential to do or need to do a forearm study, perhaps to tease out contribution of components, was a relevant factor in that decision or not. Thank you.

Thanks, Yigal. So, yes, the first one, did we do any preclinical work with KAT6 and VEPDEG? I think the answer to that is no. I think the rationale is really related to the fact that Pfizer is very excited by the profile of KAT6. I do think they see the potential of the combination with VEPDEG enhancing potentially what they see with KAT6 and positioning VEPDEG and KAT6 as being a really strong combination. Noah, anything you'd add to that?

Yes, just some experience with [indiscernible] that looks attractive.

In terms of supply chain, so Pfizer are accountable for the supply of VEPDEG that's based in [indiscernible] in Ireland. So we haven't had any supply chain issues. I think you asked the question, where does the IT reside? That resides here with us, with the US, with Arvinas. And then a really interesting question, Yigal, the novel-novel with the thermal composition of components. I'm sure that has factored into some of the thinking. The broader view I gave is maturation of data, the external environment. I'm sure that's part of the rationale that Pfizer want to see our current Atirmo-VEP data mature. That's in the second line setting, but they want to see what that looks like overall. So I'm sure that has factored into the broader decision making around data sets and changing landscape. But yes, great questions, thank you.

Okay, thank you very much.

Your next question comes from the line of Evan Seigerman with BMO Capital Markets. Please go ahead.

Hi, this is Mack [indiscernible], I'm for Evan. Thanks for taking our question. Thinking about the LRRK2 degrader again, I know Biogen just announced today that enrollment in their phase two study is now complete with results in 2026. I just wanted to ask how you are starting to think of the competitive positioning for your degrader versus others, and what your confidence is that yours could be differentiated versus slightly more advanced programs. Thank you.

Noah, do you want to take that?

Sure. Yes, so thanks. We certainly look at it as a Biogen-Denali partnership. Enthusiastically, we think it's validating to some degree. But validating for an inhibitor that doesn't get brain penetration and does not even deliver significant inhibition in the brain. And so therefore, with the degrader that gets significant brain penetration and can lead to more than 50% degradation, eliminating all functions of LRRK2, not just the kinase activity, we think that puts us in a very competitive spot. So we're looking forward to those results. If they – if it's successful, then I think we're – there will be a lot of enthusiasm for this program. If their study is, the phase three program fails, but it has some directional data that's supported, there's also going to be quite significant enthusiasm. But overall, we just do not believe that inhibitors get you there. And the fact, you'll see the continuing – our continuous updates from our studies to see the benefits from the degrader.

Appreciate it, guys. Thank you.

Your next question comes from the line of Li Watsek with Cantor Fitzgerald. Please go ahead.

Hey, guys. Thanks for taking our questions. Maybe a BD strategy question. Are you open to bringing in the external assets just given your balance sheet? And then you've got three earlier sides in the pipeline. If you talk a little bit about your conviction and development strategy there, it sounds like you're going to have some data later this year where you'll be making some decisions then. And then second, maybe just for the KAT6 problem, though, when should we expect to see the data? And then, what would be the bar that you have to head, given its early phase 1 trial? And then, okay, to clarify, is it going to be in the ESI-1, meal-term patients or is it going to be in all comers? Thank you.

Yes, Noah can tackle the KAT6 and that part of it. In terms of the BD strategy, I think overall we have always been out there looking at opportunities to supplement certainly our technology. And as we go forward, if there was an asset out there that complemented our lead programs, I think we'd be open to that. Obviously, we've been – our genesis as a company has been a platform-based company. We're very proud of that and our portfolio is replete with really exciting degraders. But, yes, if there was a significant opportunity to get an asset that complemented that, I don't think we'd have any issue with that. If there was another subset in there, I can't remember the subset of the question.

Yes, so regarding KAT6. So, again, just to frame this study, this is a phase 1 study that's just very exploratory, so there are no timelines associated with it. We haven't even dosed the first patient yet. It's really shared in the spirit of that we'll continue to look for nice combinations that can be practice-informing and continue to expand the attractiveness of our already potentially best-in-class VEPDEG in the second-line setting. And so that would be the case with this KAT6 combination also. It's Pfizer's wholly-owned drug. We don't call the shots there in any way, and we're just looking to see what we can generate with that combo. And right now the thought is for all commerce.

Okay, thank you.

Sure.

Your next question comes from the line of Jeet Mukherjee with BTIG. Please go ahead.

Great. Thank you for taking the question. I was wondering if you thought about potential NCCN guideline inclusion for some of your VEPDEG CDK4/6 data to support combination use, just given some of the notable PFS data you had shown at San Antonio 2023 and thereby allow doctors to use a CDK4/6 off-label in combination with VEPDEG in the second-line setting. And my second question was just around your G12D degrader. Can you maybe talk about how that compares to Estellis' degrader and some of the perhaps subpar efficacy and safety it had shown in the last year at ESMO? Thanks.

Noah, do I take that?

Sure. The first question, the second one was about G12D. The first was NCCN. Yes. So, look, we continue to generate – we're going to be sharing the maturation of our combination data sets. We will – this will be discussed with the commercial and medical affairs team about how to best share this information and be as practice-informing as possible. So I don't want to get ahead of myself and speak about NCCN guidelines. But overall, we would share whatever physicians need to make the best decisions, though obviously we're seeking a monotherapy label and that's the only way we will be marketing the drug for monotherapy use. Regarding the G12D degrader, I think I had mentioned in the prepared remarks that we've seen that we have 30 times the potency of some other inhibitors and degraders in the space. One of the challenges for a leading degrader in this space is the hepatotoxicity, or I guess as evidenced by [indiscernible]. And I just said it has been seen that may be limiting in the dosing of that drug. In our case, we don't believe that this will be a limitation for our drug ARC-806. But, of course, we're just starting our dosing of patients in the second half of this year.

Thank you.

Your next question comes from the line of Sudan Loganathan with Stephens, Inc. Please go ahead.

Hi, good morning, and thank you for taking my question this morning. I wanted to kind of dig deeper into the details for the ESR-1 mutant patients, again, that are naïve to treatment. I believe you mentioned earlier in the call that approximately 5% of ESR mutant is in the first-line setting. Is that gag with the monotherapy design actually going to be well positioned to be more of the standard of care, even also in the first line that kind of demonstrates the ESR-1 mutant as well? Or will there be some additional trials or anything else that needs to be done there? And then with the total of about 40%, I guess, of second-line patients that have ESR mutant, is that really specific to first-line patients that were treated on CDK4/6 inhibitors or also other treatments as well? Thanks.

Yes, so just for clarity, in the second-line setting, we believe around 40% of the patients have tumors that have ESR-1 mutant profiles. And that offers up a potential of 40,000 patients that could be amenable to a drug like Vepdegestrant. So that's exciting. That's a great opportunity. In the first-line setting, it's different. There's maybe only about 5% of the patients have tumors that have ESR-1 mutation. The rest have wild-type. And the biggest difference, we believe, is wild-type in the second-line setting is probably endocrine insensitive. But wild-type in the first-line setting is endocrine sensitive, so there's a significant opportunity there. So our belief is if VEP was in that setting, it would do well. But we've made this joint decision with Pfizer not to go there, and we move on to other things. And in the second-line setting, where we still see a significant opportunity, we'll be seeking approval for a drug in that setting and ideally then launching into that second-line setting along with a partner's Pfizer. So significant opportunity there. And as I said before, we wait to see what the maturing information is in the first-line setting, both from the point of view of our data, but also the data coming from other companies.

I appreciate it. Thanks for the clarity there.

Thank you.

And that concludes our Q&A session for today. I will now turn the call back over to John Houston. Please go ahead.

Well, thanks, operator, and thank you, everyone. We gave you a lot of information today to digest. It remains for me just to say that we're incredibly confident about the future direction of the company, and you'll be hearing more from us with additional updates through the year. So thank you very much for your time this morning. Thank you, everyone.