Greetings. Welcome to the Pieris Pharmaceuticals Third Quarter 2019 Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

At this time, I'll turn the conference over to Tom Bures, Vice President of Finance. Sir, you may begin..

Good morning, everyone. And thank you for joining us for our third quarter 2019 conference call and corporate update. You can access the press release issued this morning on the Investor Relations page of our website at www.pieris.com.

Before we begin, I would like to caution that comments made during this conference call may contain forward-looking statements involving risks and uncertainties regarding the operations and future results of operations of Pieris, including statements related to the timing and progress of our clinical trials and preclinical programs, our partnerships and our financial position and actual results or events that may differ materially from those expressed or implied by such forward-looking statements.

Factors that might cause such differences are described in our filings with the SEC, including our annual, quarterly and current reports. The information being presented is only accurate as of today, and Pieris undertakes no obligation to update any statements to reflect future events or circumstances.

I'll now turn the call over to Steve Yoder, our President and CEO..

Thank you, Tom, and thank you to everyone for joining us today for our 2019 third quarter earnings call. I would like to start my comments by introducing new voices on the call today. For those of you who know my voice, it sounds a little different today.

I think that's merely reflective of all the outreach we've been doing after our very positive data at SITC for PRS-343 and more on that in a few moments. You briefly heard from Tom Bures, our VP of Finance, who has been serving in that capacities since joining Pieris roughly two years ago.

After I share more recent pipeline progress and plans for the remainder of the year, you will hear once again from Tom who will walk you through our third quarter financials, which we believe continue to reflect an efficient deployment of capital at Pieris. Afterwards, we'll move to a Q&A session, providing an opportunity to hear from Dr.

Ingmar Bruns, who heads clinical development at Pieris, as well as Dr. Shane Olwill, who oversees translational science at the company. The recent biomarker-driven positive clinical readouts from both PRS-060 and PRS-343 are clear examples of the continued productivity of R&D efforts led by Ingmar and Shane.

At our R&D day in New York City on November 19, which will be webcast. We also intend to provide more details on programs as well as how these recent clinical data inform our thinking on investing in additional therapeutic programs.

Now moving to a brief recap of our technology platform and R&D strategy, I would like to remind everyone that Pieris has developed a proprietary class of next-generation therapeutic proteins, called Anticalin proteins.

Anticalin proteins are engineered human lipocalins, which are proteins that are naturally abundant in the body and serve the bind and transport various molecules.

Because lipocalins and by extension Anticalins are smaller and typically more stable and engineerable than antibodies, they offer unique advantages to other treatment options, such as inhaled delivery to treat respiratory diseases locally or creating more complex bispecific formats to drive a desired biology as we are doing in immuno-oncology.

PRS-060 and 343 are our lead programs in the respiratory and IO space, respectively. Now turning to the respiratory franchise first. This past year, we made significant progress showcased by very positive clinical data reported for PRS-060.

Last month, we presented data from our ongoing Phase Ib study of PRS-060 at the 2019 European Respiratory Society International Congress, ERS.

PRS-060, which was tested as part of a safety study in 30 subjects with mild asthma, but who had elevated, meaning greater than 35 parts per billion of fractional exhaled nitric oxide or FeNO was found to be safe and well-tolerated at all administered doses.

Moreover, PRS-060 both materially and significantly reduced FeNO related to placebo at all delivered doses ranging from 2 milligrams to 60 milligrams and showed dose-dependent systemic target engagement in the patients.

We believe that the potent FeNO reduction demonstrated by PRS-060 at all levels is unparalleled compared to other inhaled biologics and is an encouraging early sign of clinical efficacy, demonstrating the promise of a local intervention.

In terms of next steps, we have been busy preparing for a Phase IIa initiation by AstraZeneca to advance the development of PRS-060 in moderate-to-severe asthmatics. Pieris and AstraZeneca anticipate this study will start next year.

Upon completion of the Phase IIa study, which will be sponsored and funded by AstraZeneca, we will have options to codevelop and subsequently to co-commercialize PRS-060 in the United States.

Turning to our other clinical stage asset and demonstrating the breadth of the Anticalin platform, we are also pleased to report that we presented encouraging interim data from a monotherapy Phase I escalation study of PRS-343, our 4-1BB/HER2 immuno-oncology bispecific, including single agent activity at SITC this past weekend.

Notably, this was the first clinical data set from our immuno-oncology franchise and the results support continued advancement of this program. This also is the first comprehensive clinical data set presented for a 4-1BB bispecific anywhere, demonstrating Pieris' position of leadership in the area of T-cell costimulatory agonism.

Now more specifically, in the study, we enrolled patients with a variety of HER2-positive tumors, including gastric, breast and gynecological. The majority of the patients have been heavily pretreated, including with multiple HER2-targeted therapies.

We enrolled 12 cohorts with the predicted efficacious dose cohorts beginning with cohort 9, which was a 2.5 milligram per kilogram dose once every 3 weeks, and we went up beyond that through cohort 11B, which was and continues to be dosed in separate cohorts both in 11 and 8 mg per kg doses at different dosing schedules, either Q2 weekly or Q3 weekly.

PRS-343 was found to be safe and well-tolerated in all doses and schedules tested. The drug also demonstrated objective antitumor activity in a heavily pretreated patient population across multiple tumor types and showed a clear increase in CDA-positive T-cell numbers in the tumor microenvironment of responders.

Most encouragingly, in cohort 11b, which is the 8 mg per kg Q2 weekly regimen, we achieved as best response a disease control rate, or DCR of 100% in the 5 patients who were evaluable at that the time, which consisted of 2 patients with confirmed partial responses and 3 patients with stable disease.

We regard the presented data as very positive and believe that measured continuing investment in this program is warranted, which include a plan for next year to begin an expansion trial of PRS-343 in patients with gastric tumors, where we believe there is an unmet need.

Beyond continued escalation in the coming months, we are also exploring different dosing frequencies and pretreatment with the anti-CD20 antibody atezolizumab to access the impact of anti-CD20 pretreatment on plasma exposure levels for PRS-343 in a small cohort.

As a final update on the progress of our immuno-oncology pipeline, I would like to give a brief update on our partner programs.

We plan to file an IND application for PRS-344, which is a PD-L1 antibody fused to the same 4-1BB building block as PRS-343, and this is a lead program in our immuno-oncology collaboration with Servier, we plan to file this IND in the first half of next year.

Additionally, our Seattle Genetics immuno-oncology collaboration is progressing on schedule although we are not at liberty to provide any further details at that time.

Finally, I'm happy to remind everyone that we are hosting an R&D day in New York on Tuesday, November 19, next week, where we will present an overview of our lead respiratory and immuno-oncology programs as well as share emerging data highlights from our Phase I combination trial of PRS-343 with atezolizumab.

The event will feature presentations by 4 prominent thought leaders, Dr. Sally Wenzel; and Dr. Anuradha Ray, both from the University of Pittsburgh, and who will focus on asthma. And then also Dr.

Geoffrey Ku from Memorial Sloan Kettering Cancer Center, the principal investigator on the PRS-343 monotherapy study and the presenter at SITC this past weekend; and Dr. Michael Curran from MD Anderson Cancer Center, one of our immuno-oncology program advisers and a true expert on the 4-1BB pathway.

This concludes my prepared remarks, and I would now like to hand back over to Tom to guide you through our financial results for the third quarter of 2019. .

Thank you, Steve, and good morning, again, to everyone. Cash, cash equivalents and investments totaled $86.2 million as of September 30, 2019, compared to cash equivalents and investments totaling $128.1 million as of the end of December 31, 2018.

This amount excludes the $32 million in gross proceeds from the November 2019 financing, which I will discuss more in a minute.

Included in the company's cash spending during the third quarter of 2019 was a onetime $2.3 million payment to the Technical University of Munich for sublicensed royalties due on an upfront -- due on upfront and milestone payments related to collaboration agreement signed in 2017 and 2018.

R&D expenses were $13.2 million for the quarter ended September 30, 2019, compared to $11.4 million for the quarter ended September 30, 2018.

The company's increase in R&D expenses reflects higher, albeit reimbursable manufacturing activities related to PRS-060 as part of Phase IIa readiness activities for the program, as well as higher personnel and allocated facility cost due to growth in the company's R&D organization to support higher levels of preclinical and clinical activities.

G&A expenses were $4.8 million for the quarter ended September 30, 2019, compared to $4.7 million for the prior quarter ended September 30, 2018. There was no significant change in the composition of G&A expenses on a quarter-over-quarter basis.

Net loss was $2.6 million or $0.05 loss per share for the quarter ended September 30, 2019, compared to a net loss of $6.6 million or an $0.11 loss per share for the quarter ended September 30, 2018.

Last week, we completed a $32 million private placement led by BVF Partners with significant additional participation from EcoR1 Capital, Aquilo Capital Management, Surveyor Capital and Samsara BioCapital.

The placement consisted of units of shares priced at a premium to the prior days market closing price along with warrants priced at 2x the closing price or $7.10 per share. The warrants are intended to facilitate Pieris' exercise of its codevelopment option for PRS-060 following the conclusion of a positive Phase IIa study.

If the top line results of that study disclose achievement of the primary efficacy endpoint and the stock reaches a prespecified price, then the warrants will expire 60 days following such disclosure and may only be exercised for cash. Otherwise, the warrants will be exercised for a period of 5 years from the date of issuance.

We anticipate the to use -- the proceeds from the financing for measured -- for making measured investments in PRS-343, as Steve described, continuing codevelopment of PRS-344 and advancing a proprietary pipeline of inhalable respiratory drug candidates following proof of mechanism with respect to PRS-060, as well as for working capital and general corporate purposes.

With that, I will turn the call back over to Steve. .

Thank you, Tom. And in conclusion, just want to say we're really pleased with the encouraging data we recently reported for our lead partner respiratory program 060 for asthma ERS and for our lead IO program 343 in HER2-positive cancers at SITC last weekend. We're looking forward to hosting the R&D day next week in New York.

Hope you can all be there and participate. And we will present a detailed overview as well as updates on these programs. Thanks for joining us on the call, and we'd now like to take the time to open up for your questions. .

[Operator Instructions] The first question will be coming from the line of John Miller with Evercore ISI..

Congrats on the data over the weekend. I guess, I wanted to start by asking about your plans moving forward into expansion cohorts. I noticed that both responses that you've got in this dose escalation portion of the trial are in HER2 high expressers.

I wanted to ask how selection is going to be done for the expansion cohorts that you're planning? And I also want to get a little bit more granularity on the timing of the expansion cohorts you said, next year, do you have any more color on when you could start those and what the hurdles are there? Then just following up, I would like to ask about continuing to higher doses.

You've mentioned that you're continuing to enroll on cohort 11b, are you going to continue to escalate even higher than that?.

Jon, so two questions there just to recap, timing -- or actually 3. How we're thinking about HER2 levels in expansion, timing for expansion and then further escalation on the current protocol. So with that, I'm going to turn it over to Ingmar to take those one at a time..

Yes. So yes, as mentioned before, we will begin an expansion cohorts in gastric tumors, and we plan to get further details on the development plans beyond that expansion trial and after the conclusion of the ongoing Phase I escalation study.

You asked for timing, we think it could be possible to do this within the second quarter 2020, while we continue to look at higher doses in the ongoing escalations as well as alternative dosing schedules as mentioned. .

So the key here is going to be data-informed, because we are escalating proper color on that. We're going to push hard. I think Q2, midyear is what we're aiming for, but stay tuned for more details at the R&D Day on that point, and more color will come out as we have more data..

Our next question is from the line of Joe Pantginis with H.C. Wainwright..

Congratulations on the data as well. So with regard to -- you just said, you are going to continue escalating in the current study.

And if I recall the comments from SITC, I think they also mentioned you're going to potentially backfill some of the prior doses, is that true?.

Yes..

Okay.

And just to build the additional safety profile?.

Well, I think, the safety profile is pretty established. I think it's more to look for additional efficacy science, and we have the ability as we have mentioned before to backfill up to 10 patients per cohort..

Got it. Got it.

And then can you provide the rationale I heard in your prepared comments potential combination, the rationale for including Gazyva in the treatment continuum?.

Thanks, Joe, and Shane is going to take that one..

Yes. So as we reported at SITC, we've got about 27% of patients with autos probably in the active dose range. And we don't see any correlation between the autos and responses, but what we want to do is really test the molecule as much as possible in this escalation phase.

So what we're going to explore is a B-cell depletion strategy by testing a small cohort of pretreatment with anti-CD20 to assess any impact on drug exposure. And as you are may be aware, there is a lot of people in the bispecific space looking at this, including Roche. So we plan to report results from those studies next year as well..

Our next question is from the line of Madhu Kumar with Robert W. Baird..

So on this point about the antidrug antibodies, can you give a little more detail about these antidrug antibodies? Is their evidence they were neutralizing? When did they emerge in the course of therapy? Have you've gone where you've kind of assess what types of epitopes were being recognized by the antidrug antibodies? Any of that informations?.

Certainly. Well, Shane is going to -- thanks, Madhu. Shane is going to take that one as well..

Yes. So -- at the current time point, we are still evaluating a lot of the things that you've asked. In terms of whether they are neutralizing, what portion of the molecule that they bind to.

What I can say at the moment is, we don't see any correlation between the emergence of an antidrug antibody and impact on response or PD, but we will do judicious assessment of them, so that we're in the best place to develop treatment regimen that works for the drug going forward..

And what I would add, just guide there maybe 2 other flavor is, while we're really pleased with what we see already like in cohort 11b, so we don't think this is required. But we would like to look holistically at what the B-cell depletion regimen could do within our 4-1BB bispecific franchise.

So as we have the approval from the FDA to do this and as we have other programs coming forward, including 344, which is a 4-1BB PD-L1, this will be a very efficient way to look at what flexibility we might have in the future should the need arise, but we do not think it's necessary for go forward development with 343..

Okay.

Well, just to circle back, think when did the antidrug antibodies emerge in the course of treatment?.

So it's going to be different, it's not necessarily going to be a fixed time point for patients..

But it was done by a range of time points for treatment?.

Yes. Yes..

The next question is from the line of Chris Shibutani with Cowen..

Congratulations on the update over SITC. A question on 343 monotherapy side as well as on the combination side. In the monotherapy side, you state that you're going to be doing indication-specific expansion trial.

Can you give us a sense for how you're going to be trying to manage, which tumor types and what kind of denominator, or as a patient here you'll be trying to achieve with each?.

Yes. Shane, thanks for that, Ingmar can take that one. I think we mentioned, as we mentioned even at the recent panel at SITC this past weekend, gastric cancer is one we particularly like given biology and given the standard of care and emerging standard of care, how we think we could fit in there.

So I think may be Ingmar, can maybe answer that even in the context of the case study that was presented at by Dr. Ku at the presentation on Saturday..

Yes. So Chris, we -- as mentioned by Steve already, so we're -- we see certainly gastric -- gastroesophageal carcinoma. It's a good a target indication, and we'll pursue with his.

In terms of line and design of expansion cohort, let's say, we were, as Steve mentioned, very encouraged by the fact that the drug seems to be able to overcome even very powerful regimen, first-line regimen, like, what is now [indiscernible] which by no doubt is the most powerful regimen out there. It's for emerging standard of care.

And we think beyond that, patiently -- patients will eventually relapse and we'll look at the lines beyond that. So talking about second, third line and potentially beyond.

And that will translate into an expansion cohort, where we plan to make a measured investment, do a staged approach, with a relatively small patient size or a patient number in the beginning, and then futility in between.

Beyond that, we're interested in other indications as well, such as bladder, where we still see a potential in the current therapeutic landscape and medical need from patients..

I think the key thing to keep in mind, Chris and everyone else is, these are very fresh data. And so as we continue to overenroll and further escalate, we want to be informed by those data. And so stay tuned for more details, some on R&D day, but into early 2020 for more details, if that's not sufficient color for you today.

But I think just bear in mind, these are very fresh data and we want to make data informed decisions on the basis of more comprehensive data..

And then to help us set expectations for what kind of core emerging data will see for the combination? Can you remind us what doses the patients have been receiving for 343? And in particular, what kind of patient selection criteria you'll have there?.

Yes. So this is not very different from the monotherapy trial. We did do this some on parallel, but the FDA allowed us to start with in the higher dose because we had already cleared 5 dose levels on the monotherapy trial, so that's where the trial started. And we have explored up to the 8 milligram dose, but that's currently still enrolling.

So we don't have a complete dataset there but this will be available soon. And in terms of inclusion, that's, in that sense, similar, we require HER2-positivity, either for gastric and breast as per the society's guidelines, IHC and FISH positivity and for the other indications, institutional guidelines, which could also be NGS data and/or IHC.

And no PD-L1 positivity required for this trial, so we're rechecking this on the trial, but it's not an inclusion criteria..

And Chris, maybe one other point is just on the PD side, what other types of data to look for, is similar flavor to the types of data that we have with the monotherapy escalation. We are, of course, mandating pure biopsies and looking at CD8s, for example, after multiple cycles of therapy.

And I think that's an important piece to keep in mind when you look at different modes of action. Shane, you want to comment on that vis-à-vis, HER2 signal disruption..

Yes, certainly. So we were very encouraged by the CD -- the biomarker data we've observed in the monotherapy trial where we're seeing a significant expansion of TILs in the tumor microenvironment post treatment.

And it's very encouraging that it's something mechanistically that you wouldn't anticipate whether an antiHER2 therapy, like trastuzumab, nor would you anticipate the level of proliferation that we're seeing with 4-1BB agonism.

And if you look, that vis-à-vis what would be anticipated with a checkpoint inhibitor, where that proliferation is not as significantly -- is now observed that that's at significant levels..

Our next question is from the line of Biren Amin with Jeffries..

Congrats on the data over the weekend. So maybe just to start on the combination trial. As you said before, you're not selecting for PD-1 positivity.

What gives you confidence that you would be able to see a response in PD-1 negative patients, especially given that the Phase II [indiscernible] trial with Herceptin on top of Pembro showed a 0% response rate in HER2-expressing breast cancer patients?.

Yes. Biren, good question. I mean, I just want to remind everybody that, of course, the dose escalation trial and we felt it was for the initial key parameters that we look at an endpoints, would be sufficient to check in the [indiscernible] population, of course, defined by HER2 positivity.

And there is also the potential that 4-1BB effects PD-L1 expression in these patients, even if they try out to be negative in the beginning, and that's some of the questions we wanted to interrogate on the trial and so stay tuned for further readout. .

Got it.

And then, I guess, in addition to CDA T-cell, did you look at other pharmacodynamic markers in both the monotherapy and combination studies? So for example, tumor-infiltrating lymphocytes, have you looked at those within the 2 studies?.

Yes. It's a good question. And certainly, we are doing -- we've set up the trials to really mandate those paired biopsies, and we want to get as much information from as possible. We felt, in real time, it was very worthwhile to look at the CD8s levels by IHC.

It's a robust readouts that you can really -- you can then have a comparator across other immune modulatory agents.

In terms of other readouts, such as nanostring or may be more phenotypic assessment of what's going on in the tumor microenvironment, we're going to do batch analysis at the end of the study, where we will hopefully have a nice training sets of responder patients, nonresponder patients, where we can tease out or parse out some of the mechanistic detail..

The next question is from the line of Umer Raffat with Evercore..

Steve, I'm trying to understand how did you guys think about the dosing frequency in the first 11 cohorts? And I ask because the only responses we're seeing are both at every two weeks. And I realize you can't go by the half-life of 4, 5 days that you guys disclosed.

But I was just curious, are you open to weekly regimen as well? And I had a follow-up..

Umer, so, yes, look, I think your question implied maybe the answer, which is it's a small data set, right? Already so, we don't want to read too much into it. But yes, the objective, confirmed objective's response as we see in our Q2 weekly.

The good news is that the protocol affords us a lot of flexibility, both in terms of frequency and overall dose levels.

And we are as we alluded to in the prepared remarks and can confirm that here in the answer, we are exploring the benefits or the impact of dosing more frequently and are currently enrolling at Q weekly at the 8 mg per kg dose as well..

Got it.

And then secondly Steve, and just to lay these responses into context, can you speak to prior literature and/or trial data on HER2 reduction in heaviity pretreated patients?.

So a great question. I'm looking to Shane or Ingmar, who want to fill that one..

Yes, I can take that, Umer. Yes, I mean, again, you probably applying the answer a little bit here. I mean, there is -- in the past been the practice that, if you're out of all the therapeutic options that physicians often retreated with [trans]. That's become less popular over time, but I think it's in this data set of patient that we have.

There's also a significant number of patients have been heavily pretreated, where you're pretty confident that those are resistant. But it's a fair point, and I think that's all I can answer to that..

Now I would just supplement by saying we -- that's why we're so happy to have -- had the PD infrastructure for this trial. And so we're not aware of any examples of the responder to Herceptin or HER2-targeted therapy that also presents such an increase in CD8s.

And so having that correlation of PD to clinical benefit is what remains critical for us, which is why we're investing in that alongside or as part of the -- critical part of the trial, and we'll continue to do so..

Got it. And Steve, just in closing, what was the cutoff date for SITC? I'm just trying to understand how much incremental data you have in-house right now, especially considering that the responses we saw at the 12th dose, if I may, in the Cohort 11b appeared to have kicked in by as early as 6 weeks. So just curious. .

Yes. So the cutoff date was October 23. And yes, so that's a straightforward answer there. And we're looking to continue to get out incremental data as we go forward. We're going to have -- so maybe incremental data additional case studies at the R&D Day. And really be more focused on combos as this is the first time we'll present combo data.

But I think it's fair to say that our objective is to get additional data coming out in Q1 at ideally a medical conference, and stay tuned for that..

[Operator Instructions] The next question is from the line of Matt Phipps with William Blair..

One, just safety profile looks really good, but just could you say if that was spread out across the dose levels? Or was there any increased frequency at some of these infusion-related reactions at the higher doses or anything like that?.

Yes, Ingmar go ahead..

Yes, I can take that. So yes, we looked at the data as the analysis is normally done in the entire population. And it's not a material difference between the entirety of the study and the active dose range..

Got it. And then interestingly, Tecentriq also has a pretty high frequency of ADAs in clinical trials? And is there any concern just from giving 2 separate antibody therapies that have any that you almost get to increase the cost, both by combining them just from a more challenge, I guess, to the patient.

Does that make sense?.

Well, I mean, that's -- it makes sense as hypothesis. I think -- we haven't disclosed the data, but it's not -- it doesn't seem to be a concern..

Our next question is a follow-up from the line of John Miller with Evercore ISI..

I figured since nobody really is asking about 060, I might as well put in a follow-up on that.

Do you have any more granularity at this point on the timing of the Phase IIa? I know that's in Astra's hands, but maybe you could talk a little bit about the hurdles to starting that trial? And what might be required before we could see that get going?.

Thanks, Jon. Thanks for reminding everybody. We do have this nice platform, and not just an IO company. Look, as we said, we're pleased to be able to move forward with AstraZeneca, and we do believe we're going to start this trial next year. And we are still working through, what I would call, typical large Pharma governance.

They have a few more committees at Pieris, as you could imagine, and they just got to go through that. We also are continuing to get the maximum benefit out of this FeNO high Phase Ib multiple ascending dose trial. As a reminder, you saw we hit FeNO pretty hard even at the lowest doses tested.

And so one might say, we're even at the top end of the dose response curve. So we do feel that there was benefit. And looking at the impact of FeNO reduction potential even at lower doses. And so all of that would inform how to go forward in Phase IIa together with AstraZeneca.

I mean, what I think is pretty clear at this stage consistent with what we've said before, is that this -- there will be a Phase IIa study that will be a moderate to severe uncontrolled subjects. And I think we're going to look at where dupilumab shined in terms of patient stratification.

And that will largely inform how we're thinking of enrolling patients in Phase IIa. And it would be likely over the one month in-life phase inhaled twice a day where we would be likely assessing as primary endpoint FEV1 improvement.

And that would be the likely the Phase I endpoint, which would -- sorry, Phase IIa endpoint that would be the basis of triggering the warrant-based financing that we mentioned earlier, which is intended to be a self-financing mechanism if you want to go forward. Beyond that, I think, stay tuned. I know that 2020 has 365 days, no, it's not a leap year.

And we need to give you more color on that as we go forward and stay tuned at a further corporate update on specifically when..

The next question is a follow-up from the line of Matt Phipps with William Blair..

I'll also ask a 060 question, but actually around the financing structure. So assuming full warrant exercise after Phase IIa, I mean, it's a little over $60 million, I believe. If that is solely going to be used for opt-in to development.

Is there any -- can we read through what level of codevelopment that gets you guys on 060, and co-commercialization? Can you disclose anything around that?.

Yes. Thanks, Matt. I think, look, think about it as just an alternative financing or an optional financing mechanism, and we can do what we want with the money. It's not like it has to be earmarked for PRS-060 codevelopment.

But when you consider the way we structured the milestone payments from AstraZeneca, largely pegged to the initiation of phases of clinical development, we would believe that with the option exercise, which would be -- yes, $60-odd million, if those are fully exercised, plus a clinical initiation milestone, we have a fair bit of flexibility to take advantage of the one of multiple co-development scenarios that we have the option to do in that contract.

We haven't broken out specifically, how many they are and what the levels are, but it ranges from meaningful to approximately half and, of course, the more risk we take the more reward we can get.

And so we are really pleased to have not just that flexible structure, but with the quality of shareholders that came in to that deal in order to afford us as one other optional financing mechanism if the data are positive..

At this time, I'll turn the floor back to management for closing remarks..

Well, thanks everyone for the time today, the questions. Just wanted to thank you for your continued support and we look forward to keeping you updated on our progress starting next Tuesday, the R&D day. Thanks for joining, and have a great day..

Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation..