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Zymeworks on Rethinking Risk, Royalties and R&D · Vanguards of Healthcare by Bloomberg Intelligence

0:29
Speaker 1: So welcome to another episode of Bloomberg Intelligence Vanguards of
0:33
Speaker 1: Healthcare podcast, where we speak with the leaders at the
0:36
Speaker 1: forefront of change. And that's particularly relevant here because this
0:40
Speaker 1: zime Works has gone through a meaningful change recently in
0:42
Speaker 1: the healthcare industry. My name is Sam Fazelli and I'm
0:46
Speaker 1: a bi farmer analyst at Bloomberg Intelligence, which is the
0:49
Speaker 1: in house research arm of Bloomberg. I'm thrilled to welcome
0:52
Speaker 1: Ken gol Breath here, the CEO of zime Works. We're
0:55
Speaker 1: going to be talking about zion Works. It's a fantastic story.
0:59
Speaker 1: Over the history, It's seen tough days, it's seen good days,
1:05
Speaker 1: and now we're in a new era with a new
1:08
Speaker 1: approach which I think I finally got my head around.
1:11
Speaker 1: And there isn't I says fantastic because it covers all
1:14
Speaker 1: the gamut of all the things that that can hurt
1:17
Speaker 1: and all the upside and downsides and trials and tribulations
1:21
Speaker 1: of a biotech company. So I'm pretty particularly pleased to
1:23
Speaker 1: have Ken here, right, Ken, So welcome to the podcast.
1:26
Speaker 2: No, thank you, thanks for the invitation.
1:28
Speaker 1: Sam, it's a it's a pleasure. Let's let's talk a
1:31
Speaker 1: little bit about the background of zame as I'm having
1:34
Speaker 1: just said what I said, if you want to talk
1:36
Speaker 1: us through, I mean, you've not been involved in the
1:37
Speaker 1: story from day north, but it'd be nice to know.
1:41
Speaker 1: I'm sure there's all the stories around the company. What
1:44
Speaker 1: what's the company, how did it start, what was the
1:47
Speaker 1: technology that ready was that was on which it was
1:50
Speaker 1: based to start with? Is that technology still there? And
1:53
Speaker 1: obviously what was the business model before the change? We
1:56
Speaker 1: will get to it in a minute. And any any
2:00
Speaker 1: I mean experiences from how to manage a difficult time
2:03
Speaker 1: would be great, absolutely happy to share that.
2:06
Speaker 3: You know, Zomeerx is little more than twenty years old,
2:09
Speaker 3: and I think some people forget since my CEO appointment
2:12
Speaker 3: three a half years ago. That was actually on the
2:14
Speaker 3: board of the company from two thousand and seven to
2:16
Speaker 3: twenty sixteen. And the reason I got interested was I
2:19
Speaker 3: was very interested in the development of b civic antibodies
2:21
Speaker 3: in our space and their potential power. And zomeers had
2:25
Speaker 3: taken a computational approach to designing complicated antibody structures and
2:30
Speaker 3: that became what's known as our asymmetric technology platform. And
2:34
Speaker 3: so it was a really interesting competitional platform. You would
2:36
Speaker 3: call it AI, but we didn't. AI wasn't talked about
2:39
Speaker 3: back then, but it really was one of the first
2:41
Speaker 3: uses of AI in our sector to think about how
2:43
Speaker 3: we designed these complicated antibodies. We used it as kind
2:47
Speaker 3: of a business with multiple pharmaceutical companies that we let
2:50
Speaker 3: use our platform to design different antibody structures, and we
2:55
Speaker 3: learned how to do it through working with others, and
2:58
Speaker 3: we still have a number of those partnerships in place
3:01
Speaker 3: now in a number of products in clinical development, including
3:03
Speaker 3: PAS we to make with J and J, which I'm
3:05
Speaker 3: happy to talk about later. And then we decided to
3:07
Speaker 3: use the platform to design something for ourselves to develop,
3:11
Speaker 3: and that's where ZW twenty five became Xenadata, MAB became
3:16
Speaker 3: now Zahira, just an amazing biparatopic or bispecific antibody in
3:22
Speaker 3: the hurtwo in the HER two space. Still really the
3:25
Speaker 3: only company who's developed a product modality like this in
3:28
Speaker 3: the HER two in the HER two space. And that's
3:32
Speaker 3: where we transitioned from twenty fifteen to being kind of
3:35
Speaker 3: a platform company to being something that was developing our
3:39
Speaker 3: own molecules. Starting with Xanadata MAB, which when I came
3:42
Speaker 3: on board in twenty twenty two, it was still really
3:44
Speaker 3: the only thing that we had in development. We were
3:45
Speaker 3: really a one product company at that time. But we
3:48
Speaker 3: had amazing assets behind that amazing ip, behind that amazing
3:52
Speaker 3: capabilities we just weren't getting to And I felt it
3:56
Speaker 3: was a very valuable deep science company that had the
3:58
Speaker 3: wrong business strategy of how do you extract value in
4:02
Speaker 3: our biotech business from all of those assets while controlling
4:06
Speaker 3: things like capital risk and dilution risk and not being
4:10
Speaker 3: able to get a partner to help you along the
4:11
Speaker 3: way risk. And so we found a way, I think,
4:15
Speaker 3: to marry all of that scientific potential that I always
4:17
Speaker 3: thought Zimors had got this up before with the right
4:21
Speaker 3: business model. And if you look forward from three and
4:23
Speaker 3: a half years when I started, we've extracted a tremendous
4:25
Speaker 3: amount of value for our shareholders from the decisions we
4:30
Speaker 3: made about how to get Senadata map to the marketplace.
4:33
Speaker 3: And now we're trying to do that again and try
4:35
Speaker 3: to how do we not just retain that value but
4:38
Speaker 3: grow it in a way that makes sense for our shareholders,
4:41
Speaker 3: which is a part of what the new strategy does.
4:43
Speaker 3: So it's really it's not getting away from biotech. It's
4:46
Speaker 3: not getting away from the risk you have a biotech
4:48
Speaker 3: of having to sit in front of a screen one
4:50
Speaker 3: day and look at a blinded fase re study being
4:52
Speaker 3: shown to you, which we had to do recently with
4:54
Speaker 3: Horizon jo one study, and fortunately that was extremely positive
4:58
Speaker 3: and we got a tremendous value value improvement for our
5:01
Speaker 3: shareholders by still hanging onto that risk and being paid
5:04
Speaker 3: for that risk in the way that we structured milestone
5:07
Speaker 3: and royalty payments from Jazz and being one of our
5:09
Speaker 3: partners around that. So those are things we'll still do
5:12
Speaker 3: and try to deliver amazing returns for shareholders around innovations
5:16
Speaker 3: we make, but we'll do it in a different context
5:19
Speaker 3: with different risk return relationships you might see in a
5:23
Speaker 3: traditional NASPEC traded biotech company.
5:26
Speaker 1: Yeah, so I'm going to come to that, but I
5:27
Speaker 1: think before we go there, let's talk about what the
5:31
Speaker 1: past three years that you've had there. Obviously, as a
5:33
Speaker 1: hero Sandidelta mab is a is a key milestone for
5:36
Speaker 1: the company, for any biotech company to get a product
5:39
Speaker 1: to market, right, And it's not obvious, right, I mean,
5:43
Speaker 1: this is a world where her too was the playground,
5:47
Speaker 1: for want of a better phrase, the arena in which
5:50
Speaker 1: large farmer played, and it comes up by a text saying, actually,
5:54
Speaker 1: I've got another little tweak on it, and so I
5:57
Speaker 1: wouldn't you know, it doesn't surprise me that for a while,
6:00
Speaker 1: maybe some people didn't believe that you could do it,
6:02
Speaker 1: but you obviously engineered an antibody that can differentiate itself
6:06
Speaker 1: from what's already around. And so I'd like to talk
6:10
Speaker 1: to that a little bit. You've got partners, you've got indications,
6:13
Speaker 1: you've got peak sales, you've got milestones. Took us through
6:16
Speaker 1: those How did you choose the partners? Did you have
6:19
Speaker 1: a choice? I mean, it's a difficult one to answer, right.
6:21
Speaker 1: Was it as easy as it sounds? I mean, but
6:23
Speaker 1: sometimes we don't choose the partners and they choose us.
6:27
Speaker 1: So it just took us through those four elements, the partner's,
6:30
Speaker 1: the indications, the peak sales, and the milestones for the hero. Yeah.
6:34
Speaker 3: So yeah, I mean, so here's a you know, a
6:36
Speaker 3: very differentiated antibody. I think was very unappreciated, even back
6:42
Speaker 3: in twenty twenty two. I think the thought of trying
6:44
Speaker 3: to beat her Subtan and projeta long standing standards of
6:47
Speaker 3: care and her two space and exactly go with a
6:50
Speaker 3: single antibody which would combine you know, two elements of
6:53
Speaker 3: that in a single structure that gives you a differentiate
6:55
Speaker 3: mechanism was unappreciated. No one else was trying it. So
6:59
Speaker 3: sometimes when you're differentially it seems like you're on your
7:01
Speaker 3: own and what are you doing? Everyone was trying to
7:03
Speaker 3: follow on, you know the impact of her too as
7:06
Speaker 3: a her too, you know, her too targeted ADC. So
7:09
Speaker 3: we were, you know, the only bipara topic anabody trying
7:12
Speaker 3: to do what we were doing in a ce of
7:13
Speaker 3: ADC structures, everyone trying to compete with her two, even ourselves.
7:16
Speaker 3: We had switched priorities to trying to work on a
7:19
Speaker 3: Zeny ADC version to try and compete with everyone else
7:23
Speaker 3: in a product modality, and in the end we at
7:26
Speaker 3: least focus back on being differentiated as a structure. Getting
7:30
Speaker 3: different mechanisms might get you different clinical responses than others,
7:34
Speaker 3: and being able to be combinable with chemotherapy combinable checkpoint
7:38
Speaker 3: inhibitors was the real value. It just took a number
7:40
Speaker 3: of years and the clinical data we announced recently for
7:44
Speaker 3: people to see that, and so I think it just
7:47
Speaker 3: tells you you can be different, you can be behind.
7:49
Speaker 3: But if you have something that's unique enough to generate
7:52
Speaker 3: better clinical responses than seen, you know, anywhere before in
7:55
Speaker 3: the her two positive gea patient population, that's valuable. I
7:59
Speaker 3: think back in twenty twenty two, we didn't really have
8:02
Speaker 3: a good partnering strategy or a real clear strategy. We
8:05
Speaker 3: had partnered earlier on with Beijing now known as B
8:07
Speaker 3: one and Asia Pacific Markets because we felt with the
8:10
Speaker 3: patient population in GA being Predomination Pacific, we would need
8:13
Speaker 3: access to clinical populations and we couldn't do it ourselves,
8:16
Speaker 3: and so B one is an amazing partner for us
8:18
Speaker 3: to be able to execute on Zani. We wouldn't be
8:20
Speaker 3: able to get this far without them. Outside of Asia Pacific,
8:23
Speaker 3: it wasn't clear what our strategy was other than we
8:26
Speaker 3: were following the path that some biotechs do, which is
8:28
Speaker 3: you should keep it and take it to Bila yourself
8:30
Speaker 3: and try to become a commercial entity, which is just
8:33
Speaker 3: not always the best strategy. And so we decided we
8:35
Speaker 3: would take a partnering strategy with Senate Data Map. We
8:39
Speaker 3: would decide that we wouldn't sell it off for a
8:41
Speaker 3: single price. We would try to keep a share of
8:44
Speaker 3: success that as it developed further from twenty twenty two
8:46
Speaker 3: to now, we would keep a good share of success
8:48
Speaker 3: for our showers and be able to get a nice
8:50
Speaker 3: value appreciation beyond thinking about just holding a royalty in it.
8:54
Speaker 3: And that's the way we structured that. I think that
8:56
Speaker 3: partnering strategy allowed us to get capital from in this
8:59
Speaker 3: case Jazz Pharmaceuticals, to work alongside B one to really
9:03
Speaker 3: do things that we were just not in a position
9:05
Speaker 3: to do from capital constraints, to bring about dilution risk
9:08
Speaker 3: for our shareholders of what it would cost to get there.
9:11
Speaker 3: So we structured that partnership. I think it was underappreciated
9:13
Speaker 3: at that time what that would look like, and it
9:16
Speaker 3: took us almost three years to see the value from
9:19
Speaker 3: some of the decisions we made back in twenty twenty two.
9:22
Speaker 3: Jazz was a perfect partner for us. I mean they
9:25
Speaker 3: offered the best deal so that you know, money talks.
9:28
Speaker 3: It was a really really you know, important point to
9:31
Speaker 3: make sure that we got the full value in the
9:32
Speaker 3: structure that we wanted. So we did want considerable upside
9:35
Speaker 3: and the success of Sanadata Map and retain that we
9:38
Speaker 3: were able to in that structure. I think it's a
9:40
Speaker 3: perfect product for Jazz and their stage of development that
9:44
Speaker 3: they're trying to grow their business in a different way,
9:47
Speaker 3: and I think Xanadata Map gives them an amazing peak
9:49
Speaker 3: sales potential to add to their oncology business, but in
9:52
Speaker 3: indications that are comfortable for them, like billary track cancer
9:55
Speaker 3: and GA which are smaller oncology indications, but being the
9:59
Speaker 3: standard of care and the in those indications is really important.
10:02
Speaker 3: And now we see a setting for xanadata Map and
10:05
Speaker 3: metastatic breast cancer that's probably much more interesting than we
10:08
Speaker 3: thought in twenty twenty two and could make dnadata Map
10:11
Speaker 3: as a brand a much higher peak sales potential with
10:14
Speaker 3: those indications. Some of those clinical studies are ongoing.
10:17
Speaker 1: Now what is that? What is that current peak sales?
10:19
Speaker 1: I think Jazz is given a number. You've you've spoken
10:21
Speaker 1: about a number. What is the current number?
10:24
Speaker 2: Yeah, I don't have a current number.
10:26
Speaker 3: I mean a couple of years ago, Jazz talked about
10:27
Speaker 3: Zenadeta not being a you know, two billion dollar plus
10:30
Speaker 3: peak sales opportunity. But that's when we were more focused
10:32
Speaker 3: on GI indications both to the GEA that we just
10:35
Speaker 3: read out in the billity track cancer which.
10:36
Speaker 1: Is nothing nothing for the other you know HCC or.
10:41
Speaker 3: Yeah, metastatic press. There's other indications which would be relevant.
10:44
Speaker 3: We also have a pan tumor study ongoing now which
10:46
Speaker 3: is similar to the perographic halfway that it heard two follows.
10:49
Speaker 3: It's pretty interesting. So I think the structure of what
10:53
Speaker 3: we did and how that's worked out for us the
10:55
Speaker 3: past couple of years led us to think that maybe
10:58
Speaker 3: the strategy we should pursue as a company and with
11:01
Speaker 3: PAS Media making there as well, is thinking about extracting
11:04
Speaker 3: our value from the innovation that we do, maybe through
11:07
Speaker 3: more of a partner approach where we can reduce the
11:09
Speaker 3: capital risk and dilution risk, but not give up the
11:11
Speaker 3: upside potential returns that you would get from success or
11:15
Speaker 3: retain some of the development risk and get paid for it.
11:18
Speaker 3: And we could do that not only on things that
11:20
Speaker 3: we invent ourselves, but maybe we can do that with
11:22
Speaker 3: other assets we see outside the company that we're invented
11:24
Speaker 3: by someone else, they might be licensed by someone else.
11:27
Speaker 3: But if you can patiently wait for products to develop
11:30
Speaker 3: so that the stream of milestones and royalties that you're
11:32
Speaker 3: entitled to can grow and develop in a way that's
11:35
Speaker 3: much more substantial than thinking about an income return. That's
11:38
Speaker 3: really we think it's really valuable, and so that's what
11:40
Speaker 3: we're trying to pursue for our shoulders. We've shown it
11:42
Speaker 3: works in the past three years with Zenadata Map in
11:45
Speaker 3: the way that we developed that partner and it held
11:47
Speaker 3: on to it will still hold onto those royalties and
11:49
Speaker 3: milestones in the future because they'll grow dramatically and create
11:52
Speaker 3: great TSRs for our shahoulders over the longer term. Maybe
11:56
Speaker 3: we can think about doing that with other products that
11:58
Speaker 3: are outside the company in a way that it is
12:00
Speaker 3: different because our strategy is different than maybe some of
12:02
Speaker 3: the biotext holding other Yeah.
12:04
Speaker 1: I mean again, we're definitely going to come back to that.
12:07
Speaker 1: But talking about sending it out a map. I've had
12:10
Speaker 1: some conversations with bio Tech CEO's hits of R and D.
12:13
Speaker 1: From R and D is that that, you know, trying
12:16
Speaker 1: to dissect the luck from design. Now, you did talk
12:20
Speaker 1: about your platform, but how would you apportion percentage wise
12:24
Speaker 1: out of one hundred percent to the success of getting
12:28
Speaker 1: this molecule? How much of it was luck, and how
12:30
Speaker 1: much of it but design? And of course the next
12:33
Speaker 1: question then is how easy do you think it is
12:35
Speaker 1: to apply that to the next So you can't control
12:38
Speaker 1: the luck side, you can't control the design side.
12:41
Speaker 3: Yeah, I think if we look back now, I mean,
12:43
Speaker 3: there's always some serendipity that goes along with great scientists,
12:46
Speaker 3: and I think for Zata map that's certainly the case.
12:49
Speaker 3: And we were creating a unique piece of biology that
12:51
Speaker 3: wasn't represented by using her septant bridgeta in A in
12:54
Speaker 3: a combination. And some of the mechanisms that came out
12:57
Speaker 3: of that were just not predictable. I mean, the compliment
13:00
Speaker 3: dependent set of toxicity was not something we thought would occur.
13:04
Speaker 3: That the her three blocking, you know, it was not
13:07
Speaker 3: something that we expected to occur. We understood with Sanny
13:11
Speaker 3: that you would clear her too in a different way.
13:13
Speaker 3: This capping and clustering mechanism was different than what you
13:17
Speaker 3: saw with any other HER two agent. Just didn't know
13:19
Speaker 3: what would that be beneficial for, how important would that be,
13:22
Speaker 3: how important that would be in different tumor types. And
13:25
Speaker 3: it turns out it's much more important than maybe we
13:28
Speaker 3: even realized back then, And the combination of almost unique
13:30
Speaker 3: mechanisms is really what differentiates SANNY to be completely different.
13:34
Speaker 1: And can some of that is alisteric I assume in
13:36
Speaker 1: terms of the way that it binds to her to
13:38
Speaker 1: recept her, and some of it is the biology that
13:41
Speaker 1: you've uncovered. But how much of that learning are you
13:44
Speaker 1: going to be able to put into the next design?
13:46
Speaker 1: Does any of that map success give you an extra
13:50
Speaker 1: layer of understanding in the next antibody I do. I'm
13:52
Speaker 1: going to specifically focus in this direction, putting the two
13:55
Speaker 1: epitopes here and there, et cetera.
13:57
Speaker 3: If that is the direction you go, yeah, I mean
14:00
Speaker 3: the real power of that asymmetric platform, which was the
14:02
Speaker 3: base of the company, is the ability to really, you know,
14:05
Speaker 3: work on multiple geometry structures and formats of that anti body.
14:09
Speaker 3: So when you look at Zenodata map, there were multiple
14:11
Speaker 3: ways that we could have constructed that bipaar topic or
14:14
Speaker 3: bi cific antibody. Asymmetric seems to put you in the
14:17
Speaker 3: right direction as something which will drive civic activity. You
14:22
Speaker 3: control tolerability in a way that we couldn't do without
14:25
Speaker 3: that platform. You know, shown that again if you look
14:28
Speaker 3: at PASWA to make from J and j and the
14:29
Speaker 3: outcome of that that was the power of asymmetric getting
14:32
Speaker 3: them to a design of what was their target as
14:34
Speaker 3: a KOK two and a C three format, and so
14:37
Speaker 3: we think there's a lot more power around that. We're
14:40
Speaker 3: using that asometric in how we're designing our try specific
14:43
Speaker 3: antibodies in multiple formats, and so our first one is
14:46
Speaker 3: going to go on the clinic nexture. That's interesting we're
14:48
Speaker 3: now using it when we look at our dual sided
14:50
Speaker 3: kind of engineered agents that we're putting in the clinic
14:53
Speaker 3: nexture for COPD, the Aisle four receptor and Aisle thirty three,
14:55
Speaker 3: you know that construct is going to work quite differently
14:58
Speaker 3: than thinking about using do picks in with another Aisle
15:02
Speaker 3: three thirty three antibody in combination. It's a unique piece
15:05
Speaker 3: of biology. You always get something more, you know, in
15:08
Speaker 3: Zenni's case, we got something that was unintended that was
15:11
Speaker 3: extremely positive for pas Me to maybe see the same thing.
15:15
Speaker 3: It's just when we think about asometric and the way
15:17
Speaker 3: I've been able to show that it is a really
15:20
Speaker 3: meaningful platform that could be used because you can study
15:23
Speaker 3: different geometris and formats and the more complicated the antibody structure,
15:27
Speaker 3: the more valuable that pieces. And if you think back
15:29
Speaker 3: to the Xenidata maps competition, no one else is developing
15:33
Speaker 3: a biperatopic bicific antibody in the HRT two space. So
15:36
Speaker 3: that engineering feat driven by asometric might be more difficult
15:40
Speaker 3: than you think, because there's great protein enginers out there.
15:43
Speaker 3: I mean, if you think about something like Roche who
15:46
Speaker 3: had hercepted in per Jetta, you know they weren't able
15:49
Speaker 3: to construct a bicific antibody to get the same mechanism
15:53
Speaker 3: that we have with Enidata, and others haven't. So maybe
15:56
Speaker 3: that asymmetric platform allows you to do things that others
15:59
Speaker 3: can't do or can't do with the same probability, And
16:02
Speaker 3: so that's really interesting for us to continue to pursue.
16:06
Speaker 3: It's it's very strange in our business, especially today, prober
16:09
Speaker 3: the format like xenadata map or there aren't twenty other
16:12
Speaker 3: folks trying to do exactly the same thing. So maybe
16:14
Speaker 3: there's something more unique about what we did there, and.
16:17
Speaker 1: How much of that is nohow and how much of
16:19
Speaker 1: it is something that whoever goes and has a good
16:22
Speaker 1: look at the pattern for any can go well, I
16:25
Speaker 1: can I can back engineer in that because there's there's
16:27
Speaker 1: value in this. I don't think biotech companies don't tend
16:30
Speaker 1: to get value for their platforms, and a lot of
16:33
Speaker 1: people as who and the reason they exist is because
16:35
Speaker 1: of the platforms. They come up with a new idea,
16:37
Speaker 1: I'm going to do this, and of course it's you
16:40
Speaker 1: know a lot of times it doesn't work out, and
16:42
Speaker 1: sometimes it works out. Then you go, wow, that's interesting.
16:45
Speaker 1: But is it easy if I went to if I
16:48
Speaker 1: started a company tomorrow and I said I'm going to
16:49
Speaker 1: really dig into that pattern and go I'm going to
16:51
Speaker 1: work or have you filed patterns on the platform or
16:53
Speaker 1: as it's so nohow?
16:55
Speaker 3: Yeah, I think there's some know how related to is
16:57
Speaker 3: a metric, but not a lot. I mean we you know,
16:59
Speaker 3: we've done multip partnerships on asymmetric where we train from
17:02
Speaker 3: souco companies on it and they're able to make great
17:05
Speaker 3: basithing atabodies like Jane j did with Pezri to make
17:07
Speaker 3: so it's something that can be transferred. I think if
17:10
Speaker 3: you look at Zanta data map itself, I mean we
17:12
Speaker 3: you know, there should have been people who could have
17:14
Speaker 3: taken some of the publicly available information and patent disclosures
17:17
Speaker 3: and trying to engineer what we did it just it
17:20
Speaker 3: just can't have been that easy because no one's done it.
17:24
Speaker 3: So just so you never really know that until retrospect
17:28
Speaker 3: you think, well, maybe what we did was more complicated
17:30
Speaker 3: and and maybe it really is so different that it
17:32
Speaker 3: is more difficult to capture with just public information. And
17:37
Speaker 3: so I think there's a lot more people have been
17:38
Speaker 3: able to do, you know, Tobo base her two ADCs
17:41
Speaker 3: to try to match in her too, that's been something
17:44
Speaker 3: that's been done significantly, but not not with Zanny, And
17:48
Speaker 3: so that's really interestant for us to think about that.
17:51
Speaker 3: If our platform can make really good, you know, novel medicines,
17:54
Speaker 3: that's importance of a platform. But if it can do
17:56
Speaker 3: it in a way that's harder to duplicate because that
18:00
Speaker 3: platform is so unique and ip producted as well, then
18:04
Speaker 3: that's a really instant construct for us to do more
18:06
Speaker 3: of that and do more of that for partners if
18:08
Speaker 3: we can.
18:09
Speaker 1: Yeah, And that's the point I want to make is
18:11
Speaker 1: that by tech companies are especially the ones we end
18:13
Speaker 1: up with the product, people forget about the platform, and
18:17
Speaker 1: I think part of the technology the strategy change that
18:20
Speaker 1: we're going to come to ups that value or makes
18:24
Speaker 1: it more of as visible as as time goes up.
18:26
Speaker 1: So there's just done just as any the Horizon Horizon
18:31
Speaker 1: I like that GAO one press release obviously was positive.
18:34
Speaker 1: I mean everyone's got excited. I think my team is excited.
18:38
Speaker 1: We have specialists who literally covers that space only and
18:43
Speaker 1: we're all hoping that Asco g I will be where
18:45
Speaker 1: we get the data. Is that a decent hope.
18:47
Speaker 2: Yeah.
18:48
Speaker 3: We have a confirmed oral presentation of the Horizon GEO
18:51
Speaker 3: one study which will be done at Asco GA and
18:54
Speaker 3: San Francisco the week before JP Morgan this year. So
18:57
Speaker 3: doctor Alamova, the leader author, will be presenting that data and.
19:01
Speaker 1: We should get os and all the detailing there, right.
19:03
Speaker 3: Yeah, I would expect you'll get a substantial amount of data.
19:07
Speaker 3: You know, it's a very data rich study. So I
19:09
Speaker 3: think there's multiple presentations that will flow out of that
19:11
Speaker 3: over the course of next year. But I think you'll
19:14
Speaker 3: get some sense of why we're so excited that this
19:16
Speaker 3: is practice changing.
19:17
Speaker 1: I think a lot of people, some of my friends
19:18
Speaker 1: on the sales side, have already got there, which is great.
19:21
Speaker 1: I mean, so basically the onus is on you now
19:24
Speaker 1: not to disappoint them.
19:27
Speaker 3: Well, yeah, I think, yeah, I think whenever you can,
19:30
Speaker 3: you know, look at a study and presented on the
19:32
Speaker 3: basis that's going to be practice changing for a pretty
19:34
Speaker 3: substantial population.
19:36
Speaker 1: So on that point, do you think you'll get a
19:37
Speaker 1: PDA one agnostic Do you have a shot at the
19:40
Speaker 1: pedio one agnostic approval?
19:42
Speaker 2: Do you think? Well?
19:43
Speaker 3: I mean the pressure release which summarized the data, I
19:46
Speaker 3: think was pretty clear that we you know, we see
19:48
Speaker 3: a benefit regardless of P one expression in this patient population.
19:51
Speaker 3: That was always our belief was Sandy. We never believe
19:53
Speaker 3: that this patient population was driven you know, success was
19:56
Speaker 3: driven by PD one expression. So zanny gets you a
19:59
Speaker 3: tremendous benefit and you know you'll see that in January
20:01
Speaker 3: regardless of P one expression. You know, you certainly can
20:04
Speaker 3: see that there's some additional benefitness in the press lease
20:07
Speaker 3: of having a PD one in combination with ZANNY and chemo.
20:12
Speaker 3: And it's you know, it is what we expected, is that,
20:15
Speaker 3: you know, the checkpoint an ambition has an ability to
20:17
Speaker 3: get you a benefit usually beyond the median and Zanny,
20:21
Speaker 3: you know, so powerful, you can get a great benefit
20:23
Speaker 3: regardless of P one expression, there's some other benefit beyond
20:26
Speaker 3: the median. That's where checkpoint inhibition you know, does well.
20:30
Speaker 3: But you know, certainly, you know, it's not been the
20:32
Speaker 3: current regulatory framework with looking at P one expression this
20:36
Speaker 3: patient population. It's not what KOLs have thought about ever
20:39
Speaker 3: since the Kenot eight eleven data came out with looking
20:41
Speaker 3: at adding pembrolesm APP to TRAS and chemo. There's this
20:44
Speaker 3: impression that P one expression was was relevant. You know,
20:48
Speaker 3: as you look at our press lease, that's not the
20:50
Speaker 3: case with SANNY. So we see a clear benefit regardless
20:52
Speaker 3: of P one expression, and so that'll be up to
20:55
Speaker 3: regulators and pairs and KOLs to determine. But you know,
20:59
Speaker 3: zenad map is a to be a really you know,
21:01
Speaker 3: we think is a really powerful tool for patients to
21:03
Speaker 3: use across the spectrum regardless of PENA one expression.
21:07
Speaker 1: Okay, And in terms of you know, commercialization, obviously this
21:10
Speaker 1: is this is in your partner's hands mostly. But you
21:13
Speaker 1: had a small indication relatively speaking to start with, and
21:18
Speaker 1: the drug was priced I would say for that indication.
21:22
Speaker 1: Now you're going bigger. Imagine you go into breast cancer.
21:24
Speaker 1: How do you think that's going to evolve. Is it
21:26
Speaker 1: something that the efficacy warrants it or is it just
21:30
Speaker 1: something that you have to wait and figure out with
21:31
Speaker 1: payers when the time comes.
21:32
Speaker 3: Yeah, I think I mean obviously we you know, we're
21:34
Speaker 3: not commercializing, so pricing is up to our partners, you know,
21:37
Speaker 3: Jazz and b One.
21:39
Speaker 2: You know.
21:39
Speaker 3: I think if you know, if you look at the
21:41
Speaker 3: price that Jazz established in the US marketplace for the
21:44
Speaker 3: initial wants in billary tract cancer, you know that was
21:46
Speaker 3: priced in the context of the expected clinical benefit for
21:49
Speaker 3: senate data MAP in multiple indications, not just in billary
21:52
Speaker 3: track work where there's a really strong survival benefit in
21:55
Speaker 3: billity track cancer. You know, I think obviously you'll see
21:57
Speaker 3: the data we think is a really strong PFS and
22:00
Speaker 3: OS benefit was enidated MAP versus the current standard of care.
22:03
Speaker 3: That that certainly justifies the pricing that's already in the
22:07
Speaker 3: US market and from metasthetic press cats. I don't think
22:09
Speaker 3: we think any afferently. As long aside of the continues
22:12
Speaker 3: to show the strength of what it can do compared
22:15
Speaker 3: to standard of care and gets you a strong survival
22:17
Speaker 3: benefit advantage, I think that that usually justifies the the
22:22
Speaker 3: pricing that we've.
22:23
Speaker 2: We've selected to bear a partners that's elected.
22:26
Speaker 1: So I'm just going to start talking about pipeline. Maybe
22:28
Speaker 1: you want to, I mean sort of kind of internal
22:30
Speaker 1: pipeline as opposed to the partner of pipeline, which but
22:33
Speaker 1: I do sense you're excited about the JJ collaboration, so
22:36
Speaker 1: maybe just talk to us a little bit about that
22:38
Speaker 1: and where where's that drug now? And what's the next
22:41
Speaker 1: miles done on that?
22:43
Speaker 3: Yeah, So we did a we did a whole host
22:45
Speaker 3: of partnerships around the asometric platform, you know, starting more
22:49
Speaker 3: than a decade ago, and those are always multi product collaborations.
22:52
Speaker 3: They were really driven more by our partners than ourselves.
22:55
Speaker 1: So you're never I mean I've ken off count the
22:58
Speaker 1: GSKJ and J Bristti Merk is that right?
23:02
Speaker 3: Yeah, And you know you're never quite sure what's what's
23:05
Speaker 3: gonna happen with those because there's obviously portfolio prioritization. You know,
23:08
Speaker 3: we had another program with J and J that they
23:10
Speaker 3: work on as a bi specific they got deprioritized a
23:13
Speaker 3: couple of years ago. I think for the KOK two
23:17
Speaker 3: T cell engager. I don't think I could have spelled
23:20
Speaker 3: Paswya mank a year ago. I didn't I didn't know
23:22
Speaker 3: if it was worth anything was going to progress, and
23:25
Speaker 3: that's come along pretty quickly with the first phase one data.
23:28
Speaker 2: Is that Yeah, and prostate cancers, I think, you know,
23:31
Speaker 2: we knew the target.
23:32
Speaker 3: It was a target that jan j had been working
23:35
Speaker 3: on in KOK two. I think they were the only
23:36
Speaker 3: people pursuing that target, so they were pursuing differentiation. And
23:40
Speaker 3: when that happens, you wonder if it's such a great target,
23:42
Speaker 3: why are others not studying it?
23:43
Speaker 2: Well, they think they have.
23:44
Speaker 1: An amazing guy running the Prostate Research Group, right.
23:46
Speaker 3: So yeah, it's really you know, but I think everyone
23:49
Speaker 3: there was trying to take you know, a traditional PSM,
23:51
Speaker 3: a targeted T cell engager, try and make it better
23:54
Speaker 3: with masking technology, et cetera.
23:57
Speaker 2: And I think they had the idea that they could.
23:58
Speaker 3: Go beyond that. And KK two is an amazing target.
24:01
Speaker 3: Now when you look at the data, it should be
24:02
Speaker 3: so clear that it's a great target for prostate cancer.
24:05
Speaker 3: It's going to bring novelty to that space. Their Phase
24:07
Speaker 3: one data that they published earlier this year, it's pretty
24:10
Speaker 3: phenomenal from not just an activity side but the side
24:13
Speaker 3: effect profile. It does not look anything like a t
24:15
Speaker 3: Sell engager with respect to CRS, and I think it's
24:19
Speaker 3: just amazing what they were able to design, which gives
24:22
Speaker 3: an ability to do an outpatient basis in a community centers.
24:25
Speaker 3: I think it's great, And the most important thing is
24:27
Speaker 3: I think they took the idea that combination regimens with
24:30
Speaker 3: a way for the future for prostate cancer. They obviously
24:33
Speaker 3: have a whole host of other agents that they have
24:35
Speaker 3: in their portfolio for prostate cancer. Adding a strong t
24:39
Speaker 3: Sell engager to that is pretty interesting and now looks
24:43
Speaker 3: if you look at the Phase three studies they're developing,
24:45
Speaker 3: looks like it could be the core of different regimens
24:48
Speaker 3: that they might apply in prostate cancer because I have
24:50
Speaker 3: a lot of activity without a lot of additional tolerability,
24:54
Speaker 3: and being able to have t SELL engagers work in
24:56
Speaker 3: combination with the other classes of agents that they have
24:58
Speaker 3: are really really interesting. That moved very quickly from phase
25:01
Speaker 3: one data disclosure to now multiple Phase three started already
25:04
Speaker 3: and they still have a lot of combination work going
25:06
Speaker 3: on that would allow them to study additional combinations. So
25:10
Speaker 3: that's come a long way in a year. I couldn't
25:12
Speaker 3: have predicted this, and obviously we have a financial interest
25:15
Speaker 3: in the success of that because it was built using
25:17
Speaker 3: our platform. So it just gives us another sense that
25:20
Speaker 3: there's more than one stream of milestones and royalties coming
25:23
Speaker 3: our way.
25:24
Speaker 1: And actually, on that point, you know, I counted, I think,
25:27
Speaker 1: am I right to more buy it dollars?
25:28
Speaker 2: Right?
25:29
Speaker 1: More than four billion dollars? And how much of that
25:32
Speaker 1: is associated to Jane Inger? Because this sounds like the
25:34
Speaker 1: most advanced. Is this the most advanced program out of
25:37
Speaker 1: the partnerships? Now this is the most advanced.
25:39
Speaker 3: Now, I mean there are a few others of those
25:41
Speaker 3: that are in phase one clinical studies and that's where
25:44
Speaker 3: has read me it was a year ago, but now
25:46
Speaker 3: that's moved into phase three. It's a much more valuable
25:49
Speaker 3: thing to think about a milestone and royalty strip when
25:51
Speaker 3: you're already in phase your partner's already in phase three
25:54
Speaker 3: working their way to our readout in a couple of
25:56
Speaker 3: years and potential commercialization of something. They've got it to
26:00
Speaker 3: one to five billion dollars in peak annual sales, So
26:04
Speaker 3: that's great.
26:04
Speaker 2: You know, we would hope some.
26:05
Speaker 3: Of the other ones can can mature in the same
26:08
Speaker 3: in the same way, but it's a little unpredictable. I
26:11
Speaker 3: mean it brings us. It brings us a couple of
26:13
Speaker 3: million dollars of milestones along the way that we hadn't
26:15
Speaker 3: counted on a mid single digit royalty based on the
26:20
Speaker 3: asometric platform being utilized to design that that molecule. But
26:24
Speaker 3: if it's a five billion dollars peak sales opportunity, that's meaningful.
26:27
Speaker 1: And fifty million a year is quite nice. Yeah, And actually,
26:31
Speaker 1: again I suspect that the fast progress of the click
26:35
Speaker 1: to program with J and J did feed a little
26:38
Speaker 1: bit into your decision as to this is the right
26:41
Speaker 1: time to change strategy. And I'll come back to that.
26:43
Speaker 1: I promise I'll come back to that, right, But I'm
26:45
Speaker 1: really keen on the pipeline, So and I'm going to
26:47
Speaker 1: do this kind of rapid fire like the questions that
26:50
Speaker 1: are stuck in my head, which may not be great questions,
26:53
Speaker 1: but you can tell me some that's not the one
26:55
Speaker 1: I want to answer. It's a better question than that
26:57
Speaker 1: you didn't ask.
26:59
Speaker 2: So two five to one.
27:01
Speaker 1: Obviously, from what are my colleague who focuses on liver
27:04
Speaker 1: cancer says, is that you're going to be the first
27:07
Speaker 1: ADEC to deliver clinical data in HCC. But GPC three
27:11
Speaker 1: itself is obviously a target that I think about a
27:13
Speaker 1: year or two years ago, I can't remember. At the
27:15
Speaker 1: conference Ashal Zeneca had their car T focused on GPC three,
27:19
Speaker 1: which was quite interesting to see the data. Four And
27:23
Speaker 1: how as you look ahead to asco G I read out,
27:26
Speaker 1: which is I think we're expecting there, right, what do
27:29
Speaker 1: you think we should look for as a key differentiators
27:31
Speaker 1: for two five to one, mechanistically, clinically, whichever way you
27:35
Speaker 1: want us to.
27:35
Speaker 2: Look at it.
27:36
Speaker 3: Yeah, and I think ASCOG I were just presenting a
27:38
Speaker 3: trial and progress Okay, I wish we had you know,
27:42
Speaker 3: complete data set from Yeah, but we're still still working
27:45
Speaker 3: on that. But you know, it's GPC three is obviously
27:48
Speaker 3: a target that's been of interest in HCC for a
27:51
Speaker 3: long time. They there's different product modalities that are trying
27:53
Speaker 3: to look at that target, from t selengators to cart
27:56
Speaker 3: to radioligan therapy. We just looked at and thought that
27:59
Speaker 3: the ADEC, you know, the ADEC platform that we built
28:01
Speaker 3: over the past few years, has this idea of being
28:04
Speaker 3: able to drive activity with much better tolerability and much
28:08
Speaker 3: easier combinability. And we're starting to show that now and
28:11
Speaker 3: in gynecological tumors with c B one, nine and one
28:14
Speaker 3: when you look at the dose we're able to get
28:15
Speaker 3: to in the tolerability profile of that. So we felt,
28:18
Speaker 3: you know, ADCs aren't used in HCC and just as
28:21
Speaker 3: as mire of a tuxamb revolutionized bringing ADCs and technecological tumors,
28:25
Speaker 3: we think the same thing about ACC and I think
28:28
Speaker 3: to do that an ADC approach could be very valuable
28:30
Speaker 3: if it can be drive activity and be combinable with
28:33
Speaker 3: standard of care in an early patient setting. So if
28:36
Speaker 3: you think about standard care being a plus B as
28:39
Speaker 3: a starting place, trying to combine an ad C in
28:42
Speaker 3: with you know, a PD one and VEJF combination could
28:46
Speaker 3: be really meaningful to patients in earlier line settings because
28:50
Speaker 3: we don't use chemo as a as a regimen there,
28:52
Speaker 3: and so using an ADC as a way to really
28:55
Speaker 3: target chemo in a way that has been unsuccessful before,
28:59
Speaker 3: but do it in combination with standard of care in
29:01
Speaker 3: an earlier patient setting because the toll ability is good
29:04
Speaker 3: at that That's really what we're trying to do. We
29:05
Speaker 3: need we need to show that in the clinic. But
29:08
Speaker 3: I think, you know, we try to take the same approach.
29:10
Speaker 3: There's a lot of interest in the target. There's a
29:11
Speaker 3: lot of other people ahead of us with different product formats.
29:14
Speaker 3: A ADCAC approach differentiates us in the way we think
29:16
Speaker 3: about this and it could really provide an amazing additional
29:21
Speaker 3: tool for physicians to use in combination of the standardy
29:24
Speaker 3: care they have now versus replacing it's not so easy
29:26
Speaker 3: to do car tea in combination with other product modalities
29:29
Speaker 3: when you think about it, and I think the earliest
29:31
Speaker 3: line setting is where we really think the most benefit
29:33
Speaker 3: will be in. An ADC format may be able to
29:36
Speaker 3: get you that better than some of the other product
29:39
Speaker 3: formats that are being developed against the.
29:40
Speaker 1: G So when do you feel we might have some
29:44
Speaker 1: some data to start getting a teth into.
29:46
Speaker 3: Well, see, I think if you look at you know,
29:48
Speaker 3: our clinical execution on ZW one nine one, our first ADC,
29:51
Speaker 3: you know, the fully receptor alpha targeting in gotecological tumers.
29:54
Speaker 3: You know, went from first patient in to first data
29:57
Speaker 3: disclosure in you know a little under eleven, which is
30:00
Speaker 3: pretty fast. You know, we just started recruiting the GPC three,
30:04
Speaker 3: ADC and HCC.
30:06
Speaker 2: You know, last month.
30:07
Speaker 3: Whether we can keep on track with that same clinical coxcution.
30:10
Speaker 3: I'd love that because I'd love to see some evidence
30:12
Speaker 3: to support the hypothesis we have about bringing adecs into
30:16
Speaker 3: HCC tumors the same way that MERV did and gynecological
30:19
Speaker 3: tumors next year. But we don't guide on that officially.
30:22
Speaker 3: We just wait until we've got a data sets that's
30:24
Speaker 3: interesting and presented at a peer reviewed meeting. And usually,
30:27
Speaker 3: as we did this year with DW one nine and one,
30:29
Speaker 3: people didn't find outbout it until our titles published, and
30:31
Speaker 3: then you know we're presenting data. And that's the way
30:33
Speaker 3: we like to guide around peer reviewed presentation.
30:36
Speaker 1: That sounds like twenty twenty six is possible perhaps near
30:39
Speaker 1: the end of it. I don't know if it's peer reviewed,
30:42
Speaker 1: though it might be different right, yeah, and one nine
30:45
Speaker 1: to one fr alpha for lit recept alpha. There's obviously
30:48
Speaker 1: some competition there. There are companies who believe they have
30:51
Speaker 1: their best in class, like arena S from gen Map.
30:55
Speaker 1: How would you again guide us to think about differentiation there?
30:59
Speaker 1: What does it need to be the appreciated It definitely
31:01
Speaker 1: needs to be differentiated. I think you know there are
31:03
Speaker 1: a number of compounds ahead of us in phase three.
31:06
Speaker 1: So we're obviously not in front, but I think you've
31:10
Speaker 1: show them with enodai a mab and also you can
31:12
Speaker 1: see with pesaramig that you know, being the best means
31:15
Speaker 1: you don't have to be out in front. You can
31:16
Speaker 1: eventually be the leader in a category.
31:18
Speaker 3: And so we think that way, and we still think
31:20
Speaker 3: there's a room in that space, you know, very you know,
31:23
Speaker 3: in gynecological tumors, just looking at again earlier treatment settings
31:28
Speaker 3: than p rock combination strategies, we think that's really where
31:32
Speaker 3: the patient benefit is the greatest. And we always have
31:35
Speaker 3: a number of companies pursuing the same route that Merva
31:38
Speaker 3: tuxamab took and looking at platinum resistance O varying cancer
31:41
Speaker 3: and monotherapy to try and drive patient benefit. But we
31:44
Speaker 3: think there's an earlier setting, but that's going to require
31:47
Speaker 3: great activity, but much better tolerability to be able to
31:49
Speaker 3: combine with other agents, to be able to be utilized
31:52
Speaker 3: in that earlier setting, but also be able to utilize
31:55
Speaker 3: in a longer maintenance setting. Then maybe we think about
31:59
Speaker 3: with ADCs, and so we had this approach. We thought
32:02
Speaker 3: we could design something that was completely different than others.
32:05
Speaker 3: We get to a much higher dose in phase one
32:07
Speaker 3: that seems to be optimum biologic dose. You can see
32:09
Speaker 3: that in our data are ready, So we do think
32:12
Speaker 3: higher dose will drive better exposure and more activity and
32:15
Speaker 3: that patient population.
32:16
Speaker 1: A lot of these drugs are limited at that I mean,
32:19
Speaker 1: the tweaks are very small between doses, but you hit
32:22
Speaker 1: side effects really quickly.
32:24
Speaker 3: Yeah, and we're you know, we're a much higher at
32:26
Speaker 3: least so far, we're a much higher level of antibody
32:28
Speaker 3: dose on board of an ADC. We think that's important
32:31
Speaker 3: for activity. But if you look at our tolerability profile,
32:33
Speaker 3: it's quite different. I mean, if you talk to our
32:36
Speaker 3: KOLs have used all of these agents and clinical studies,
32:39
Speaker 3: you know. I think when they looked at Z one
32:40
Speaker 3: nine one, they thought, oh another fully receptor alpha target ADC,
32:43
Speaker 3: why do we need one? But when they start to
32:46
Speaker 3: use it in phase one, they can say, this one
32:47
Speaker 3: is different the way I think about the challenges of
32:50
Speaker 3: managing tolerability.
32:51
Speaker 2: Obviously, we need to.
32:52
Speaker 3: Characterize that better, which is the subject of what we're
32:54
Speaker 3: doing with our next phase one study that's ongoing right
32:57
Speaker 3: now for ZWE nine one, But so far the early
33:01
Speaker 3: signs are it looks different than all the other ones,
33:04
Speaker 3: and it looks different in a way that might be
33:05
Speaker 3: better suited to an earlier patient setting and combinations. And
33:08
Speaker 3: if we can get to that, then we will be
33:11
Speaker 3: potentially dusting class. And so we need to make sure
33:14
Speaker 3: with additional data that we can keep that thought in
33:17
Speaker 3: our minds. But if we can, that'll be really intersing
33:20
Speaker 3: for us, I think, because we're behind, you know, a
33:23
Speaker 3: partnership will be important for us to get the resources
33:25
Speaker 3: and speed to catch.
33:26
Speaker 2: Up to others and stay ahead.
33:29
Speaker 1: If we have that hypothesis, and there I suppose, okay,
33:33
Speaker 1: we'll see who that. I'm assuming that all of the
33:35
Speaker 1: assets that we're talking about here are adventure because and
33:38
Speaker 1: then we are slowly encroaching our conversation about the new
33:41
Speaker 1: strategy are going to be assets that you would be
33:45
Speaker 1: looking to partner. Is there anyone and I'll come back
33:49
Speaker 1: to it. Let me just finish the last one at
33:51
Speaker 1: least on my list two o nine. I'm doing small
33:54
Speaker 1: cell myself, so I actually know a little bit more
33:57
Speaker 1: about it, so I won't say anything stupid like having
34:00
Speaker 1: data ask a g I where it's just a trial
34:02
Speaker 1: in progress. But there we do have quite a few
34:08
Speaker 1: so I've got to latom APP six oh seven O,
34:11
Speaker 1: there's the one and z g zers. There's six which
34:14
Speaker 1: I think just had some data at ASMO Asia, and
34:18
Speaker 1: I think that's actually by specific DLL three CD three engagers.
34:23
Speaker 1: So the space there are plenty of ADC's two right,
34:28
Speaker 1: B seven H three, there's ad DLLL three, ADCs, there's
34:31
Speaker 1: APP these A d C. I think the question with
34:34
Speaker 1: with this small cell it feels like when you speak
34:36
Speaker 1: to as they say, oh no, but pretty much you
34:39
Speaker 1: throw anything at small cell, you get a response. The
34:41
Speaker 1: key is that duration of response and keeping that spider
34:44
Speaker 1: plot from starting to rise again. Engagers seem to be
34:49
Speaker 1: better placed to do that than ADCs are. So how
34:53
Speaker 1: do you feel about how two or nine will show
34:57
Speaker 1: some differentiation there? I mean, I can see you've got
34:59
Speaker 1: the I in the expectation for age one twenty six,
35:02
Speaker 1: but from the preclinical comparisons analysis done, how do you
35:06
Speaker 1: think that's going to get differentiated?
35:08
Speaker 2: Yeah?
35:08
Speaker 3: I think I think Z two nine is our first
35:11
Speaker 3: chance to show clinically that there's some benefit of having
35:14
Speaker 3: a more complicated antibody structure. Going to a try specific
35:17
Speaker 3: instead of a buy specific is meaningful. So obviously adding
35:20
Speaker 3: a third arm to an antibody structure, you know, creates
35:23
Speaker 3: elements of complication, but we think there are tremendous benefits
35:27
Speaker 3: that can be gained by looking at a try specific
35:29
Speaker 3: approach that buy specific. In this case, we're incorporating a
35:31
Speaker 3: costimulatory C twenty eight factor into a traditional bispecific.
35:36
Speaker 2: There's no independence signal.
35:37
Speaker 3: It is controlled by engagement of CD three, So I
35:41
Speaker 3: think in that context it's you know, it's only activated
35:43
Speaker 3: when you when you need to be activated.
35:45
Speaker 1: Which you need to because otherwise it could be dangerous.
35:47
Speaker 2: Yeah, we think the thing.
35:48
Speaker 3: Yeah, the signals are just too messy, but it's kind
35:50
Speaker 3: of our first approach to say, you know, where we
35:52
Speaker 3: have a good benchmark with Turdlada map and we have
35:54
Speaker 3: other approaches. You know, does a try specific really get
35:56
Speaker 3: you something more than a bispecific? And again we're not
35:59
Speaker 3: just trying to get better initial activity. It's can you
36:02
Speaker 3: get a more durable effect from t sell activation then
36:06
Speaker 3: you get with a bispecific and so pre clinically, we
36:09
Speaker 3: certainly see that, We certainly see what we're trying to
36:12
Speaker 3: achieve with the tri specific structure again, getting the relevan
36:15
Speaker 3: affinities of the three arms correct is important. Getting the
36:18
Speaker 3: geometry of those three arms is really important. That's what
36:22
Speaker 3: asometric allows us to do because we can look and
36:24
Speaker 3: screen multiple geometries and multiple product formats with that platform.
36:29
Speaker 3: That that's where it does the best. More more complicated
36:31
Speaker 3: the structure, the more asometric provides power to getting you
36:34
Speaker 3: to the right choices.
36:35
Speaker 2: And so I think we've made the right choices.
36:37
Speaker 3: The two A nine you know in the clinic, we
36:39
Speaker 3: need to see the translation or preclinical data showing it's
36:42
Speaker 3: different than Carlada map. Can you get more durability without
36:46
Speaker 3: giving up more activity? And can you also make sure
36:49
Speaker 3: you don't give up tolerability like trying to achieve at
36:52
Speaker 3: least is get tolerability hopefully better more durability, not giving
36:56
Speaker 3: up the activity that you can generate with a T
36:58
Speaker 3: cell engage because I think you can still need to
37:01
Speaker 3: prove that. So it's our first chance to show that
37:03
Speaker 3: we have a range of other targets and solid tumors
37:06
Speaker 3: he monk, even autoimmune where we think that stained strategy
37:11
Speaker 3: be beneficial.
37:11
Speaker 1: This is just this is the test.
37:14
Speaker 3: This is this is the test and and deal A
37:15
Speaker 3: three is a you know is a is A. It's
37:18
Speaker 3: a very clean target, so it's a good place to
37:20
Speaker 3: look at this approach, but it has a lot of
37:22
Speaker 3: benchmarks and standard of care that are developing, so it's
37:25
Speaker 3: not a it's not a low standard. I mean, we're
37:27
Speaker 3: going to have to really beat Carl out of MAB,
37:29
Speaker 3: show that we can get durability it's better than ADCs,
37:32
Speaker 3: and also show combinable with other other product modalities that
37:36
Speaker 3: might be used in small cell lung cancer, and so
37:39
Speaker 3: all of those things we need to prove. It's a
37:40
Speaker 3: it's a it's a tough thing to do, but that's
37:44
Speaker 3: what we need to do.
37:45
Speaker 2: You need to have these high standards.
37:47
Speaker 1: But but if it works out, it opens the door
37:50
Speaker 1: to a whole bunch of other ones, right.
37:52
Speaker 3: Yeah, whole range, a whole range of other uses and
37:55
Speaker 3: across pretty diverse populations, not just solid tumors but in
37:58
Speaker 3: g I but also in heat and also an autoy
38:01
Speaker 3: where we think about as well, where the same same
38:03
Speaker 3: strategy could be beneficial. So it's really important study not
38:06
Speaker 3: with for small cell but for the platform itself.
38:09
Speaker 1: And the CD twenty eight binding is conditional on CD
38:12
Speaker 1: three binding.
38:13
Speaker 3: Correct, Yeah, I mean, I mean you have to obviously
38:16
Speaker 3: buying the TAA, you've got to buying CD three when
38:18
Speaker 3: it's activated. There's a conditional activation of CD twenty eight
38:21
Speaker 3: against it's not you know, I think we've learned a
38:23
Speaker 3: lot about you know, by cifican T selling agers over
38:26
Speaker 3: the years, and so I think we understand the relative
38:28
Speaker 3: affinities and and what you need to push on. It's
38:31
Speaker 3: not a lot of a push when you think about
38:32
Speaker 3: CD twenty eight signal. It's got to be conditional, but
38:35
Speaker 3: it just it's just a little bit that seems to
38:37
Speaker 3: really drive a lot of activity. Like we've learned a
38:39
Speaker 3: lot about how to utilize the CD three and CD
38:42
Speaker 3: twenty eight together to get the most out of that
38:44
Speaker 3: T cell activation engagement process.
38:47
Speaker 1: Okay, so I'm looking forward to taking that data and
38:49
Speaker 1: putting them my massive table that compares them all. It's
38:53
Speaker 1: obviously hoping that they are the data comes out positive.
38:57
Speaker 1: I guess the things that end up looking for would
38:59
Speaker 1: be the depth and then durability. Right, there's nothing right,
39:02
Speaker 1: you know, the orri hope that stays at the high end.
39:05
Speaker 1: And of course, so I kind of really syndrome et cetera,
39:07
Speaker 1: that that is something that we have to do okay,
39:09
Speaker 1: So out of the assets, somebody's the one that I
39:11
Speaker 1: didn't mention that you're in love with? And why not?
39:14
Speaker 1: Did dimension? Did you not mention that?
39:17
Speaker 2: Uh, well, i'd love you know.
39:18
Speaker 3: Also, next year we've got plans to bot I and
39:21
Speaker 3: D for ZBA fifteen twenty eight, which is our you know,
39:23
Speaker 3: our approach of bringing bispecifics into autoimmune conditions, especially COPD
39:27
Speaker 3: and asthma. So I think we've you know, we've turned
39:29
Speaker 3: our asometric platform into looking at autoimmune disease and where
39:33
Speaker 3: we can be helpful there with with a bispecific approach
39:37
Speaker 3: with known biologies. We've obviously built a structure with using
39:41
Speaker 3: ALF receptor anti body and ASL thirty three in a
39:44
Speaker 3: bispecific structure. So we're we're trying to get the power
39:47
Speaker 3: of depicts in plus something else but in the same
39:50
Speaker 3: anti body structure, and and it's a new piece of biology.
39:53
Speaker 3: It's what we did was anidated maps and it was
39:56
Speaker 3: not percept and projetted together. And we think the structure
39:59
Speaker 3: is not just due B plus all thirty three. It
40:01
Speaker 3: gets you something completely different in a more traditional bispecific structure.
40:05
Speaker 3: And so that's really interesting for us to think about
40:08
Speaker 3: we have a whole platform there of also looking at
40:11
Speaker 3: other things we can combine with the alphour receptor antibody
40:14
Speaker 3: that would be interesting in different different therapeutic communications in autoimmunes.
40:18
Speaker 3: So we are trying to do a super dupe kind
40:22
Speaker 3: of approach to this. I think everybody's looking for the
40:25
Speaker 3: next innovation from dupexant to follow along. And you've got
40:29
Speaker 3: you know, oral stat six degraders, you've got other approaches
40:32
Speaker 3: of novel targets that are being utilized as by civics.
40:34
Speaker 3: We think depictionels a really amazing molecule. We use that,
40:38
Speaker 3: you know, we use our own antibody, an our four
40:40
Speaker 3: receptor as the anchor because I think that's really powerful
40:43
Speaker 3: and adding something else to it, which in combination gives
40:46
Speaker 3: you something different, is really interesting. So it's great that
40:49
Speaker 3: biologics are and CPD now and in asthma, we think
40:53
Speaker 3: bicyvic approaches maybe get you a broader patient population, might
40:57
Speaker 3: get you something more. So we're really interested about taking
41:00
Speaker 3: our bicivict approach into audi immune therapeutic area at the
41:03
Speaker 3: same time as we're moving solid tumors in hemonkin to
41:06
Speaker 3: try specifics and away from biospecifics. So we're still using
41:09
Speaker 3: approaching engineering skills, asymmetric platform working with kind of known
41:13
Speaker 3: targets but in novel structures to try to drive differentiated mechanisms.
41:18
Speaker 3: That's right on strategy for us. So we're really excited
41:20
Speaker 3: about looking at that program next year as well.
41:23
Speaker 1: Excellent in all this work, you obviously interact with the
41:26
Speaker 1: FDA quite a bit. How have you found that? And
41:30
Speaker 1: I'll preface this and I'm not you could say obviously
41:33
Speaker 1: whatever you think and you like, but I'm sitting here
41:36
Speaker 1: watching these changes at the Cedar Seber. You know, everybody
41:43
Speaker 1: got in the world of biotech. Actually, there was a
41:47
Speaker 1: big chunk of move in the S and P five
41:50
Speaker 1: hundred biotech in THEETF index XBI that was associated with
41:56
Speaker 1: the rig Pastor being which of course I'm pretty sure
41:59
Speaker 1: you know, because he the oncology guy, was being made
42:03
Speaker 1: head of Caediar and then a couple of weeks three
42:06
Speaker 1: four weeks later and he's gone. So from our side,
42:09
Speaker 1: when I don't interact with the FDA, obviously I'll just
42:11
Speaker 1: watch this. It looks like there is a certain amount
42:14
Speaker 1: of disorientating uncertainty about how who's in charge of what's happening.
42:20
Speaker 1: But of course there's an army of people beneath this
42:23
Speaker 1: surface who do the work, which of course everybody forgets about.
42:27
Speaker 1: So what has your experience been in terms of dealing
42:30
Speaker 1: with the FDA and getting answers said, do you trust?
42:34
Speaker 1: Let's say this way if you believed before one hundred percent?
42:37
Speaker 1: They said, this is it, these are the end points.
42:39
Speaker 1: We're happy with. You go ahead, and then that's six
42:43
Speaker 1: nine months, twelve months later, because that's the uncertainty that
42:45
Speaker 1: that makes it difficult for us to make decisions and
42:47
Speaker 1: your sides to invest and we invest in yours right
42:50
Speaker 1: in your stock for example. What's your perspective there, what
42:54
Speaker 1: have you been What would you say to people if
42:56
Speaker 1: they're beginning to worry about this onstability at the FDA?
43:01
Speaker 3: Yeah, I mean my perspective is, you know, I've been
43:04
Speaker 3: in the botic business for thirty eight years now, developing
43:07
Speaker 3: drugs and devices and be involved with multiple approvals of
43:11
Speaker 3: small molecules biologics devices around the world. So I've had
43:14
Speaker 3: a good interaction with regetary agencies on a global basis
43:18
Speaker 3: for a pretty long time period.
43:19
Speaker 1: You know.
43:20
Speaker 3: I remember f the interactions when there was no PADUFA.
43:22
Speaker 3: You made a filing and you just you waited. I mean,
43:25
Speaker 3: there weren't the safe types of regulations that we have today.
43:28
Speaker 3: I think people forget about the uncertainty of making a
43:29
Speaker 3: filing and not sure whether it will take three years
43:32
Speaker 3: to get an approval. But I think, you know, generally
43:34
Speaker 3: all my experiences with regretary agencies around the world and
43:39
Speaker 3: is no different over a long time period. You know,
43:41
Speaker 3: they're full of amazing people who have a difficult job.
43:46
Speaker 3: They've got a drug safety mandate to make sure that they,
43:51
Speaker 3: you know, protect the way that we market medicines and
43:53
Speaker 3: make sure that the ones that get to patients are
43:56
Speaker 3: shown to be safe and effective. And that's a really
44:00
Speaker 3: it's a really important mandate for us in our business.
44:03
Speaker 3: But they're also full of people who would love to
44:05
Speaker 3: get innovative medicines to patients. I mean, they're really facilitators
44:09
Speaker 3: and they're always, always trying to be helpful. So we've
44:13
Speaker 3: always taken the approach they're actually trying to help us,
44:16
Speaker 3: and we just need to listen, and they're trying to
44:19
Speaker 3: do their best to have both of those mandates be done.
44:23
Speaker 2: Justice and.
44:25
Speaker 3: Being drug safety advocates but also trying to find a
44:27
Speaker 3: way to get innovative medicines to market. And that's the
44:29
Speaker 3: same on a global basis, And they're usually full of
44:33
Speaker 3: lots of different people who who have that ability to
44:37
Speaker 3: do both of those at the same time and be
44:38
Speaker 3: helpful to us.
44:39
Speaker 2: And I think.
44:39
Speaker 3: If you partner with them in the right way, you listen,
44:44
Speaker 3: you do the right work, you follow the regulations in
44:48
Speaker 3: a way that makes sense. Never had any difficulty with
44:51
Speaker 3: any regulator in trying to get innovative medicine to patients
44:55
Speaker 3: as fast as we can provided the data justifies that
44:58
Speaker 3: it should be a approvable you know in FDA sometimes
45:03
Speaker 3: you know in some regulataries, the FT is no different.
45:05
Speaker 3: You'll come across someone super special like doctor Paster, who
45:09
Speaker 3: I think was an amazing advocate for both drug safety
45:13
Speaker 3: and patients getting innovative medicines as quickly as possible at
45:16
Speaker 3: the same time for a pretty long career. We've had
45:19
Speaker 3: interactions with him on multiple products. He's a pretty special
45:24
Speaker 3: individual the way that he was able.
45:25
Speaker 1: To I think from our side, we will all miss him.
45:30
Speaker 3: Yeah, I think he was pretty special. But I think
45:32
Speaker 3: you know, the FDA and other agencies we deal with
45:35
Speaker 3: around LOLAD are full of people who have those same
45:39
Speaker 3: objectives that are take their job seriously and have been
45:43
Speaker 3: really facilitators of innovative medicines and getting into patients as
45:48
Speaker 3: soon as they can. Provided it's justified that that's not
45:51
Speaker 3: going to change. I think regulations will change. I think
45:55
Speaker 3: heads of these agencies will change. You know, a lot
45:57
Speaker 3: of the heads are politically appointed, not just in the
45:59
Speaker 3: US but but elsewhere. But underneath that, there's a pretty
46:02
Speaker 3: strong substrate globally of people working in these regultary agencies
46:07
Speaker 3: who I think are doing their best and doing really
46:10
Speaker 3: well to take the innovations we've had in biotech, and
46:12
Speaker 3: this is thirty eight years of experience in my standpoint,
46:16
Speaker 3: and getting making those available to patients as soon as
46:18
Speaker 3: they as soon as they can, and that's not going
46:22
Speaker 3: to change. I'm not worried about innovative medicines being stalled
46:25
Speaker 3: in that context. It's unfortunate with somebody so amazing like
46:29
Speaker 3: doctor Paster leaves, but people have finite careers in these
46:33
Speaker 3: regretary agencies and at some point it's going to happen.
46:36
Speaker 3: But I'm pretty confident with the substrate we have below that.
46:39
Speaker 3: And I've obviously lived through lots of political political situations
46:44
Speaker 3: globally over thirty eight years, with different heads of government
46:47
Speaker 3: and different policy changes. But great medicines will find their
46:51
Speaker 3: way to patients through those regulatory agencies. I'm not not
46:55
Speaker 3: worried about that.
46:56
Speaker 1: Oh I love the optimism. I'm going to thattch onto
46:59
Speaker 1: that for a bit so new strategy. Why a lot
47:03
Speaker 1: of So you've got all this revenue coming in. Most
47:06
Speaker 1: buy tech companies eventually want to get to this is
47:08
Speaker 1: my product. I want to put it to market and
47:11
Speaker 1: get it to market and market and become a fully fledged,
47:14
Speaker 1: all encompassing You haven't ruled that out. There was a
47:17
Speaker 1: specific question to you from one of my self sized
47:20
Speaker 1: friends on the call, and you haven't ruled that out,
47:23
Speaker 1: that there might be a drug that we keep and
47:25
Speaker 1: we take to market. But you've changed something here. And
47:27
Speaker 1: if I am not wrong, when I and you did
47:30
Speaker 1: a very nice one of the slides has tick tick tick,
47:34
Speaker 1: and I think that clarified thing. So, but what was
47:36
Speaker 1: it that drove it? I mean, you're not exactly in
47:39
Speaker 1: a situation where you need to preserve cash. I mean,
47:42
Speaker 1: of course, every buyte company is to preserve cash. You
47:44
Speaker 1: could keep investing any assets, but you've got these potential
47:47
Speaker 1: masters coming. Even you put a probably a success of
47:49
Speaker 1: thirty percent on it or twenty five percent on it,
47:52
Speaker 1: there's still a billion dollars and this product is going
47:55
Speaker 1: to give you zandiedelamb is going to give you royalties.
47:58
Speaker 1: Why did you do this? I'm going to be provocative.
48:00
Speaker 1: Did you get to up I think I really never
48:03
Speaker 1: want to go through a drug failure that takes seventy
48:07
Speaker 1: percent off my market cap. I want to be so
48:09
Speaker 1: broad that.
48:10
Speaker 2: So what was it?
48:12
Speaker 1: Was this something that you did say? Again, is something
48:14
Speaker 1: that evolved over time? But why?
48:17
Speaker 2: Yeah? I think this?
48:18
Speaker 3: I mean the start of it was back in twenty
48:19
Speaker 3: twenty two and we had to make this decision about
48:22
Speaker 3: Xenadata mab and what was the best thing to do
48:23
Speaker 3: for the drug, what was the best thing to do
48:25
Speaker 3: for our shareholders, And it was definitely that we should
48:26
Speaker 3: partner that with someone else who had resources to be
48:29
Speaker 3: able to optimize the value Enadata mab, and the structure
48:32
Speaker 3: of the deal allowed us to share on the upside
48:34
Speaker 3: and reduce our risk at the same time. Totally, and
48:38
Speaker 3: some of it's historical I mean, I've been doing this
48:39
Speaker 3: for thirty eight years. I have a number of context
48:41
Speaker 3: where we've been able to drive significant value from an
48:44
Speaker 3: initial innovation for our shareholders by not having to commercialize
48:48
Speaker 3: it with our own commercial force. We did this with
48:50
Speaker 3: VISIONID in our first company, QLT where we developed the
48:54
Speaker 3: first drug treatment for AMD partnered with Ciba Vision We
48:57
Speaker 3: never sold it with our own salesforce and were able
49:00
Speaker 3: to get to five billion dollar market value and we
49:02
Speaker 3: certainly got our share of the success from innovation. We
49:05
Speaker 3: did this with hand Tech, where we made the first
49:07
Speaker 3: drug a looting stent, the taxes stent, and we partner
49:09
Speaker 3: that with Boston Scientific and Cook and the structure of
49:12
Speaker 3: the arrangements for us, you know, generated a multi billion
49:14
Speaker 3: dollar market valuation. So I think there are ways to
49:18
Speaker 3: think about, you know, getting you know, value from innovation
49:21
Speaker 3: and biotech like risk without having to think about being
49:26
Speaker 3: a fully integrated commercial entity. You know, we don't give
49:30
Speaker 3: up all the risk. We keep returns that are you know,
49:32
Speaker 3: they're not royalty like, they're still venture or biotech like.
49:36
Speaker 1: I mean, I have to say, Ken, I'm not I'm
49:38
Speaker 1: not at all. What is in my question is related
49:41
Speaker 1: to you developing an outlcency. I get that that is
49:44
Speaker 1: the business model of most biotics until the day that
49:48
Speaker 1: they're able to take their own a step. It's more
49:50
Speaker 1: about this new element you've added. You've added the inlicnsed,
49:55
Speaker 1: not in licensing. That's also what some biotics. I mean,
49:57
Speaker 1: there are all bunch of biotics that are doing new
49:59
Speaker 1: code based on asset. I mean, you've just had one
50:01
Speaker 1: Mattera just sold. It was essentially a bunch of assets
50:04
Speaker 1: that were coupled together very successfully, clearly, But the getting
50:09
Speaker 1: into the royalty space, that's the thing that that that
50:13
Speaker 1: confuses me. I do understand that you've got all this
50:16
Speaker 1: in house expertise. I get it that maybe during a
50:19
Speaker 1: period where the market financialing market was so tough that
50:25
Speaker 1: it was not a you you know, a lot of
50:27
Speaker 1: companies needed this. But right now we've just had this week,
50:31
Speaker 1: we've had close to two billion dollars of money raise
50:33
Speaker 1: from companies one to three six companies. Do you do
50:36
Speaker 1: you still think there's going to be a major appetite
50:38
Speaker 1: for this. Are these going to be special relationships not
50:42
Speaker 1: just an ordinary royalty deal of taken your royalty, Thanks
50:44
Speaker 1: very much, carry on developing your asset. Are you you
50:48
Speaker 1: putting in expertise into these and then if that's the case,
50:52
Speaker 1: what is your bandwidth for that?
50:54
Speaker 3: Yeah, I mean I think if you look back in
50:55
Speaker 3: twenty twenty two, I mean, I think you know, what
50:58
Speaker 3: we've done the last three years is what we've we
51:00
Speaker 3: intend to keep doing. We just do it with external
51:02
Speaker 3: assets in addition to internal So if you think about
51:05
Speaker 3: the partnering, was that a data MAAPBA. It really set
51:07
Speaker 3: up the structure where we were going to be get
51:09
Speaker 3: this valuable milestone and royalty. At some point we still
51:12
Speaker 3: had approval risk, We still had a Phase three risk,
51:15
Speaker 3: and we just lived through. So the returns we're getting
51:17
Speaker 3: are consistent with the risk that we still maintained. It
51:20
Speaker 3: was not something that we just walked away from all
51:22
Speaker 3: the risk and accepted a much lower return. We've got
51:24
Speaker 3: tremendous value out of that partnership with with Jazz. That
51:28
Speaker 3: add on at B one that I think, you know
51:31
Speaker 3: was the right thing to do, regardless of the cost
51:32
Speaker 3: of equity back in twenty twenty two and what it
51:34
Speaker 3: might be today. I think it was actually the right
51:36
Speaker 3: thing to do to get that value. At the same time,
51:38
Speaker 3: we took the upfront payment of three and seventy five
51:40
Speaker 3: million dollars and we put that into the unencumbered R
51:43
Speaker 3: and D portfolio we have right now that we've been
51:46
Speaker 3: discussing and so that's all unencumbered. It gives us optionality
51:50
Speaker 3: for partnering additional assets. We have PASWE to MAIG, which
51:54
Speaker 3: looks like it could be another valuable royalty and milestone.
51:57
Speaker 3: The stream for us, we have to live through a
51:59
Speaker 3: Phase three study that janej is embarking upon and the
52:02
Speaker 3: risk associated with that. So we're not away from that risk,
52:05
Speaker 3: but the returns of letting that mature through those risks
52:08
Speaker 3: generates a really interesting annualized return that I think is
52:13
Speaker 3: as competitive as anything else in biotech. Now that we
52:18
Speaker 3: have those streams is to here and pas WE to
52:19
Speaker 3: make there's some valuable appreciation for our company's shareholders if
52:23
Speaker 3: we hold on to those streams, let them mature, let
52:26
Speaker 3: them get to their peak sales potential. So that that's
52:28
Speaker 3: what we would like to do. If you look inside
52:32
Speaker 3: our internal R and D organization right now, it's very capable.
52:36
Speaker 3: Everything we work on there is things that we did ourselves.
52:38
Speaker 3: They're all internal inventions. If you look at PAS we
52:40
Speaker 3: to make and zena data map, which is kind of
52:44
Speaker 3: our licensed product portfolio. Those are both things that we
52:46
Speaker 3: invented and we licensed ourselves. You know, there are other
52:50
Speaker 3: opportunities for us on both licensed products and our n
52:52
Speaker 3: D assets that we could get from outside. They don't
52:58
Speaker 3: have to all be invented by us, maybe not license,
53:01
Speaker 3: Maybe some come license and we can add them to
53:03
Speaker 3: our portfolio. The way we think about it, So think
53:05
Speaker 3: about what we did is that on a data map,
53:07
Speaker 3: we took a company that had some great assets, some
53:09
Speaker 3: great capabilities, some great ip in the wrong business structure
53:13
Speaker 3: that was just going to dilute shareholdered interest even if
53:15
Speaker 3: the product was successful. And we through the partnering strategy,
53:19
Speaker 3: the capital location, the R and D strategy, working with
53:23
Speaker 3: licensed products the way we did it, you know, we're
53:25
Speaker 3: five times the value we were back in twenty twenty two,
53:28
Speaker 3: same assets, different strategies. So find a way to create
53:32
Speaker 3: substantial value for our shareholders in appreciate of the assets
53:36
Speaker 3: in a different model. I think there are other bout
53:39
Speaker 3: to companies who if they'd done the same thing back
53:42
Speaker 3: in twenty twenty two, would be more valuable constructs today.
53:45
Speaker 3: And that's regardless of whether the cost of equity is
53:48
Speaker 3: high or maybe a little bit lower as it is today.
53:50
Speaker 3: I think through cycles, I think we've found ourselves in
53:54
Speaker 3: just a one way street of how you think about
53:56
Speaker 3: extracting value from invention and getting appreciation and value along
53:59
Speaker 3: the way. And I think we've found a model that
54:02
Speaker 3: works for us because of what we have in front
54:05
Speaker 3: of us, with existing royalty and milestone streams which have
54:07
Speaker 3: a lot of upside for Cheryls even from the current context,
54:11
Speaker 3: and unencumbered our NEE portfolio we have right now that
54:14
Speaker 3: can be the subject of future partnerships to add additional
54:17
Speaker 3: royalties and milestones, and I think that's a pretty interesting
54:21
Speaker 3: model for us to take. We still have the same
54:24
Speaker 3: risks of holding these till maturity, holding them through risks
54:28
Speaker 3: that other biotechs would have, But I don't have the
54:31
Speaker 3: capital risk. I don't have the dilution risk, you know,
54:34
Speaker 3: I don't have the risk of working on something for
54:36
Speaker 3: a long time and being irrelevant, not being able to
54:38
Speaker 3: partner to continue to market. I mean, there are other
54:40
Speaker 3: risks that I'm avoiding, but I've still got enough risks
54:43
Speaker 3: that I'm happy to accept to generate returns that are
54:46
Speaker 3: more VC and biotech like and not income or royalty like.
54:50
Speaker 3: And so as long as we're able to do that,
54:52
Speaker 3: and if we can do that with other assets outside
54:55
Speaker 3: Zion right now and bring them inside to maybe change
54:58
Speaker 3: the strategy means the way we're thinking about cap allocation
55:02
Speaker 3: that I think that's really interestingt construct for us to
55:04
Speaker 3: continue this. And if we can do that, we can
55:06
Speaker 3: we can try to compound the returns we generated from
55:09
Speaker 3: doing that inside zimers the last three years. With assets
55:12
Speaker 3: that are both internally generated and externally access to us,
55:16
Speaker 3: we can compound what we were able to accomplish at
55:18
Speaker 3: Zion with other products, both ours and outside. I can
55:23
Speaker 3: compound those returns for sharelders in a way that's really significant,
55:26
Speaker 3: And so we're thinking about that just scaling that strategy.
55:29
Speaker 3: By accessing external assets, it gives us more diversity and flexibility.
55:34
Speaker 2: Not everything that we partner.
55:36
Speaker 3: Has to be invented by us, Not everything we might
55:38
Speaker 3: hold maturity have to be invented and partnered by us.
55:42
Speaker 1: All that I completely understand the bit that I'm trying
55:45
Speaker 1: to understand how it layers into this is finance royalty
55:49
Speaker 1: financing of other So unless I'm misunderstood, because when I
55:53
Speaker 1: hear royalty financing, I hear roaty Pharma or Zoma or
56:00
Speaker 1: if getting the company like hand, I'm gonna a company
56:06
Speaker 1: X out there has got something and I'm going to
56:10
Speaker 1: buy the royalties or or finance them through a royalty.
56:15
Speaker 1: Let's say the latest one was that's a big one
56:18
Speaker 1: was Royalty Farmer and Revolution Medicine, where roalthy farmer is
56:22
Speaker 1: just literally handling them some money for a future peace.
56:26
Speaker 1: Am I did I misunderstand? That is not part of
56:29
Speaker 1: this future business?
56:31
Speaker 2: No, We're yeah, we're not. We're not.
56:33
Speaker 3: We're differentiated in the way that Zanni is differentiating from
56:36
Speaker 3: other stuff in there too. We're differentiating our approach. We're
56:38
Speaker 3: not just a financial buyer of royalties that exist. I mean,
56:42
Speaker 3: we we have capital, but I think that's a market
56:45
Speaker 3: that's well fulfilled. I think, you know, the ability to
56:48
Speaker 3: get better returns some licensed products depends on your ability
56:52
Speaker 3: to actually understand the development risks, manage development risks, sometimes
56:58
Speaker 3: taking a licensed asset that you know, or taking an
57:00
Speaker 3: asset externally that probably should be partnered, but the bouta
57:03
Speaker 3: company doesn't have the strategy to do that, or just
57:05
Speaker 3: can't find that way to do that with their investor profile.
57:08
Speaker 3: I've got the ability, so I can take on an
57:10
Speaker 3: unpartnered asset. I can work on it a little bit
57:12
Speaker 3: in R and D, maybe do another clinical study, and
57:14
Speaker 3: then partner that out, and the multiple return I can
57:17
Speaker 3: get is pretty substantial. If I can structure something some
57:21
Speaker 3: of the way we've done previously, I can drive a
57:23
Speaker 3: lot of appreciation for shareholders as that product continues through
57:27
Speaker 3: development a commercialization that's different than the returns you might
57:30
Speaker 3: get on monetizing a royalty from somewhere else on a
57:33
Speaker 3: commercial asset where everything's understood already. So I think there's
57:37
Speaker 3: a way that we can do that in a different
57:38
Speaker 3: way because we're not just a royalty financing party. We're
57:42
Speaker 3: an active R and D organization that has made inventions,
57:45
Speaker 3: has developed agents that are interesting, has partnered them in
57:48
Speaker 3: unique structures. And I continue to do that for my
57:51
Speaker 3: own portfolio. But if I can access things externally that
57:55
Speaker 3: might be interesting for us to have the ability to
57:58
Speaker 3: do that, and so we're setting up the capability strategy
58:01
Speaker 3: to do that. So I doubt you're going to see us,
58:03
Speaker 3: you know, in a auction process to monetize some royalty
58:08
Speaker 3: with Royalty Farmaut and Blackstone and others. I think, you know,
58:12
Speaker 3: doing stuff in an earlier stage that then allows you
58:15
Speaker 3: to let a potential royalty mature and grow a lot
58:19
Speaker 3: in value, which is what happens was the here, it's
58:20
Speaker 3: what's hopefully going to happen with the President Greek. That's
58:23
Speaker 3: a sweet spot if you If you look at Ligan
58:25
Speaker 3: for an example, which you know has been in the
58:27
Speaker 3: royalty business for more than ten years since they decided
58:30
Speaker 3: to do that, their largest returns and irs are on
58:34
Speaker 3: things that are development stage where they can understand and
58:39
Speaker 3: handicap the development risk, be willing to accept it and
58:42
Speaker 3: bring it to that stage. That drives a substantial amount
58:44
Speaker 3: of their irs. Way more an excessive having a royalty grow,
58:48
Speaker 3: you know, ten to fifteen percent a year as revenues grow.
58:52
Speaker 3: I think others would like to do that, but Royalty
58:55
Speaker 3: Farmat doesn't have an R and D operation, Others don't
58:57
Speaker 3: have that same context. If I can can use that
59:00
Speaker 3: to my advantage to be neither a straightforward biotech around
59:04
Speaker 3: your organization and neither a straightforward royalty player, but be
59:08
Speaker 3: a combination of the two. The value accretion I can
59:12
Speaker 3: get from continued innovation is much better otherwise, But I'm
59:18
Speaker 3: still controlling the risk to protect the value that I've
59:20
Speaker 3: already achieved with Zahra and I hope to achieve with PAS.
59:24
Speaker 3: Doing for us that model suits us entirely. I don't
59:28
Speaker 3: think it suits every biotech to do it. It doesn't
59:30
Speaker 3: suit every royalty player to try to duplicate what we're doing.
59:33
Speaker 3: We might be uniquely positioned in the marketplace to do
59:37
Speaker 3: something that neither a strict biotech or a strict royalty
59:40
Speaker 3: player can do. And if if we can get that right,
59:44
Speaker 3: then there's appreciation in both existing products I have, but
59:49
Speaker 3: there'd be a lot of appreciation and our ability to
59:51
Speaker 3: allocate capital back to other things that I can earn
59:54
Speaker 3: milestones and royalties from, whether it's an R and D
59:57
Speaker 3: component to that or not.
1:00:00
Speaker 2: And so really excited about the way that that models
1:00:02
Speaker 2: out for us. We have to execute it.
1:00:04
Speaker 3: We have to show people how it's different, the deals
1:00:06
Speaker 3: are doing here, different how we're competing against those players.
1:00:09
Speaker 3: But already, having had discussions, you know, since we talked
1:00:12
Speaker 3: about this with straight out royalty players and with other biotechs,
1:00:17
Speaker 3: there's considerable interest in looking at what we might be
1:00:20
Speaker 3: able to accomplish it just to squeeze more value out
1:00:22
Speaker 3: of assets IP and capabilities that already exist. They're just
1:00:26
Speaker 3: not in the right context of the business approach, whether
1:00:28
Speaker 3: it's capital, location, strategy, investor profile. And I've got all
1:00:33
Speaker 3: those things behind me because we've showed that already. So
1:00:35
Speaker 3: we just try to scale that up and compound the
1:00:39
Speaker 3: effect we've already had for the hero without risking and
1:00:42
Speaker 3: giving up the upside that we already had.
1:00:44
Speaker 1: Well, I've overstayed my welcome. We're into the hour, but
1:00:48
Speaker 1: I have to say this has been really enjoyable. You're
1:00:51
Speaker 1: always a wonderful person to speak to, very clear, and
1:00:56
Speaker 1: I'm excited for zime works and looking forward and I
1:01:01
Speaker 1: think again quite a lot of my friends on the
1:01:04
Speaker 1: cell side are too. To see some of these deals.
1:01:07
Speaker 1: I think then we can better understand how they fit
1:01:11
Speaker 1: into the ecosystem that we've all got used to in
1:01:14
Speaker 1: terms of farmer does deals with biotechs and small biotechs
1:01:18
Speaker 1: try and get some cash to carry on doing their
1:01:21
Speaker 1: work through royalty financing, et cetera, et cetera, et cetera.
1:01:24
Speaker 1: So I'm really looking forward to it. And of course
1:01:27
Speaker 1: at the same time, all the normal biotech stuff is
1:01:29
Speaker 1: going on because there's all these drugs with all these
1:01:31
Speaker 1: data that's coming, so there's a lot, a lot of
1:01:34
Speaker 1: room for excitement. And I really appreciate your time.
1:01:36
Speaker 2: Ken.
1:01:37
Speaker 1: I hope maybe maybe I'll see you at AACR again
1:01:40
Speaker 1: like last year. It's it's crazy that it's exactly well
1:01:42
Speaker 1: it's not exactly yea, but it will be a year
1:01:44
Speaker 1: in April since I saw you last, and look forward
1:01:48
Speaker 1: to all the updates and we could rest assured that
1:01:51
Speaker 1: we'd be writing on most of them. So it's going
1:01:54
Speaker 1: to be a pleasure. Thank you for your time.
1:01:56
Speaker 2: No, no, I appreciate that.
1:01:58
Speaker 3: I mean R and D innovation, you know has always
1:01:59
Speaker 3: been hard as ionworks, and still as we wouldn't be
1:02:02
Speaker 3: in the position we are now without our folks in
1:02:04
Speaker 3: our labs, you know, inventing things like the asometric platform
1:02:08
Speaker 3: or making Zen a data map. It's given us the opportunity,
1:02:10
Speaker 3: So that aren't the innovations always be at the heart.
1:02:12
Speaker 3: I just think we have a different business model now
1:02:14
Speaker 3: about how to you know, create value in that innovation
1:02:18
Speaker 3: and have that value flow down to our shareholders in
1:02:20
Speaker 3: a way. That provides, you know, outsized long term returns
1:02:24
Speaker 3: in our sector in a way that we couldn't do
1:02:27
Speaker 3: in a different model.
1:02:28
Speaker 2: But it's still at the heart.
1:02:29
Speaker 1: You know.
1:02:30
Speaker 3: We've been in a bunch of abstracts to ACR. I
1:02:32
Speaker 3: can't talk about them unill they're accepted, but I think
1:02:34
Speaker 3: we have a whole, the whole other innovative things to
1:02:37
Speaker 3: talk about at ACR, and so we're looking forward to
1:02:40
Speaker 3: doing that.
1:02:41
Speaker 1: Excellent. That'd be fantastic. Thank you very much, Ken for
1:02:43
Speaker 1: taking the time to speak with us, and maybe in
1:02:47
Speaker 1: a year we can, after you've done some of these
1:02:49
Speaker 1: deals and et cetera, and more data under your belt,
1:02:52
Speaker 1: we can have an update. I would love that, would
1:02:55
Speaker 1: love to do that. Thank you very much, Ken.
1:02:57
Speaker 2: Thanks em.
1:03:31
Speaker 3: Uses as.
1:03:37
Speaker 1: Bases US bases