Immunocore Holdings plc Q4 FY2023 Earnings Call

Greetings. Welcome to the Immunocore Fourth Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I'll now turn the conference over to Clayton Robertson, Head of Investor Relations. Thank you. You may begin.

Thank you, Darryl. Welcome everyone to our Q4 and full year 2023 financial results call. Before we begin, I would like to remind you that this call will contain forward-looking statements within the meaning of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. These include expectations, plans, concerning future events, prospects, and performance, including with respect to commercialization, clinical development and trials, regulatory approvals, and financial results. Actual events may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those disclosed in our filings with the SEC. Such statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. With that, I'm now pleased to introduce Immunocore CEO, Dr. Bahija Jallal.

Thank you, Clay. Hello, everyone. With me today are Ralph Torbay, our Head of Commercial; David Berman, our Head of R&D; and Brian Di Donato, our Chief Financial Officer. We will be happy to take your questions at the end. At Immunocore, we are driven by a clear mission to bring transformative immunomodulating medicines to patients. In 2023, we continue to advance our three strategic pillars of maximizing the potential of KIMMTRAK, advancing our clinical portfolio, and continuing to innovate for sustainable growth. Let's look at the first one. On KIMMTRAK, last year, we achieved $239 million in net KIMMTRAK sales. Going into 2024, we see three growth opportunities. First, continued commercial growth driven by the U.S.; second, mid-term growth driven by Q4 data from the TEBE-AM trial; and third, long-term growth with the ATOM trial expected to start recruiting this year. The second pillar on the portfolio, we continue to advance our clinical portfolio with the announcement of our first PRAME Phase 3 trial in first-line advanced cutaneous melanoma. We intend to randomize the first patient in Q1. PRAME clinical data updated for melanoma, ovarian, and lung will come throughout 2024. In reflecting our enthusiasm for the PRAME targets, we are advancing two new candidates into the clinic this year. In December, we submitted the CTA for a first-in-class candidate targeting PIWIL in colorectal and GI cancers. And we continue to pursue a potential functional cure in HIV with Phase 1 data expected for the first or second half of 2024. The third pillar is innovation. And last month, we announced that we had added two novel tissue-targeted autoimmune programs, one for type 1 diabetes and the second for dermatology indications. You will hear more about each of these exciting programs from David. These additions expand the therapeutic areas we aim to treat to three. And now, I'm happy to hand over to Ralph to share more information about KIMMTRAK.

Thank you, Bahija. Hello, everyone. 2023 was a catalyst year for KIMMTRAK. In less than two years from our first approval, we have transformed medical practice in metastatic uveal melanoma and established its pioneer in TCR medicine as the first-line standard of care across all launch markets. We have treated over 2,000 patients globally since the start of our first clinical trial, and I'm very proud of this team’s achievements and commitment to patients. KIMMTRAK is currently approved in 38 countries and launched and reimbursed in 12. With the publication of KIMMTRAK’s long-term three-year overall survival in the New England Journal of Medicine, we continue to raise the bar of survival, and I look forward to the impact the team will have in 2024 leveraging this statement. I will now take you through the figures and financial performance in more detail. For the full year 2023, KIMMTRAK generated $238.7 million in net revenues, which represents a 70% year-on-year growth. In the fourth quarter, we reported $67.6 million in net revenues, which represents an 8% increase from the prior quarter. This growth was primarily driven by continued commercial progress in the United States. In Europe, we launched in six new countries and reached pricing agreements with Italy and Germany. In France, we have been recognizing revenue since day one and have been accruing for an expected negotiated price. In the international region, we signed pricing agreements with Canada and Australia, which we are launching through the first half of the year. Our goal in 2024 is to continue our growth momentum in the United States and reach more patients globally, including our next country, Spain. We're also excited to potentially expand the benefit of KIMMTRAK through additional indications with our clinical program, which I will take you through in the next slide. We believe KIMMTRAK has significant potential for additional growth in the medium and long-term, driven by two registrational clinical trials. The TEBE-AM study builds on the KIMMTRAK Phase 1/2 cutaneous melanoma data that has shown a 76% survival rate at one year with an acceptable safety profile. Enrollment is going well, and we expect top-line results from the Phase 2 portion in the fourth quarter of this year. All of the evidence with KIMMTRAK points to our platform being potentially transformative in the early disease settings. We were honored to work with EORTC to launch the only ongoing registrational adjuvant study in uveal melanoma, the ATOM trial. We anticipate randomization to start in the second half of this year. Now, let's bring it all together in the next slide, please. Today, we're only at the beginning of the KIMMTRAK journey, where the benefit is focused on 1,000 patients with metastatic uveal melanoma. With the TEBE-AM trial, we see the potential to help 2,000 to 4,000 additional patients with second line plus metastatic cutaneous melanoma. With the ATOM trial, we could be unlocking the early-stage uveal melanoma potential and bringing the benefit of KIMMTRAK to up to 6,000 patients across all three indications. On a personal note, I am excited about our future because of this past year. I had the privilege to meet one of the first patients in our clinical trial, a parent of four, that has been taking KIMMTRAK for seven years and is doing well. I also met our first patient in our early access program who remains well and on treatment, and a physician who expanded their practice to handle the volume of patients who are now surviving. These people remind us every day of why we need to persevere in helping patients and advancing the science. I'll now hand it over to David to talk more about our pipeline.

Thank you, Ralph. I'm happy to share an update on our clinical stage portfolio, and let's start with PRAME. Our PRAME opportunity spans across multiple solid tumors including melanoma, ovarian, lung, and endometrial carcinoma. By the end of this year, our franchise will include three clinical programs targeting PRAME, including a program for HLA-A02 with a half-life extension and a program for patients who are HLA-A24 positive. Today, I will focus on the leap program F106C. Across the four major tumor types we are studying with F106C, the melanoma data matured first and provided confidence to launch the Phase 3 PRISM-MEL301. We will share the melanoma monotherapy and anti-PD1 combination data in the second quarter. After melanoma, the ovarian monotherapy and chemotherapy combinations have been maturing, and we are on track to share this data by the third quarter. For lung, we are currently enrolling monotherapy and combinations. Unlike ovarian and melanoma, where we enrolled all comers, for lung, we have focused on select subsets where we would expect to see initial signals before expanding more broadly. This data will continue to mature in the first half and will be shared by the fourth quarter. Additional exploration continues, including endometrial, contract combinations, and dose confirmation. Several data points led to the initiation of the Phase 3 trial in first line melanoma, including F106C monotherapy activity in heavily pretreated patients, the ability to combine with anti-PD1 and insights that our platform works best in early-stage disease. We have opened clinical sites for the Phase 3 trial and expect to start randomizing patients in the near future. We are pleased to have a clinical trial collaboration and nivolumab supply agreement with BMS for this trial. I will now turn to highlight the power of our target discovery engine with a novel first-in-class target against PIWIL1. R117C is the first immunotherapy to target PIWIL1, a protein which is expressed in colorectal carcinoma, a tumor that has historically been insensitive to checkpoints. PIWIL is an attractive target since it is not expressed in normal vital tissues, is a negative prognostic marker, and has broad expression in about a quarter of colorectal cancer patients. The CTA in Europe was submitted in December of last year, and we are on track to start the trial by the second half of this year. Turning now from oncology to HIV. In addition to redirecting T cells to kill cancer cells, we believe that our technology can be used to redirect T cells to kill virally infected cells. For HIV, the current standards of care of antiretroviral therapy block replication that cannot eliminate the virus, which hides it as a reservoir in CD4 T cells. In the single ascending dose portion of the M113V trial, we demonstrated safety and biomarkers indicating target engagement. The goals of the ongoing multiple ascending dose portion are to demonstrate antiviral activity, including one, reducing the reservoir in blood and two, delaying the viral rebound. As we round out the clinical pipeline, I will transition to highlight further the versatility of our platform. We validated that our ImmTAC technology can recruit and activate T cells against cancer. We are using the same T cell activation approach to target HIV and chronic HPV. Today, I will share the third platform called ImmTAAI, which has a different goal of turning off inflammation and is intended to treat autoimmune and inflammatory diseases. The current standards of care for autoimmune and inflammatory diseases are systemic immune suppression, which can lead to systemic toxicity. Our vision for the future is down modulation of the immune system focused only on the organ or tissue which is under immune attack. As part of our cancer peptide discovery work, we have been mapping the normal human peptidome. Therefore, when we want to develop a program to downmodulate the immune attack in a specific organ, we have a large preexisting library of peptides that we know are tissue specific. On Slide 20, you can see our ImmTAAI molecule. The blue targeting end tethers the ImmTAAI to the target tissue. The purple effector end is a PD-1 agonist, which presses on the PD-1 brake to turn off the T cell. There is also an Fc fusion, which prolongs the half-life and enables less frequent dosing. Our first application is for patients with type 1 diabetes, which remains a large unmet need. Type 1 diabetes results when autoreactive T cells kill pancreatic beta cells, which normally secrete insulin. To protect the pancreatic beta cells, we designed an ImmTAAI that binds to a peptide from the preproinsulin protein, which is only expressed in beta cells. The PD-1 agonist effector will turn off these autoreactive T cells. As seen in the data on the right, we see protection against autoreactive T cell killing only when using an ImmTAAI that tethers to the beta cells. Our second candidate is for skin inflammatory diseases, including atopic dermatitis and psoriasis, among others. We designed an ImmTAAI that binds specifically to a target that is only expressed on antigen presenting cells in the skin. In a T cell stimulation assay, we observed inhibition of T cells only for an ImmTAAI that tethers to the antigen presenting cell. This candidate has another exciting feature: it is universal and not HLA restricted. This is an example of how our technology can be broadened to all populations. This is certainly an exciting and productive period at Immunocore as we continue to pioneer TCR bispecifics for cancer, for infectious diseases, and now for autoimmune diseases. I will hand over to Brian.

Thank you, David. Good morning, everyone. Earlier today, we released our financial results for the fourth quarter and year-end of 2023. Please refer to the press release and our latest SEC filing on Form 10-K for our full financial results. This is the first time that we report financials as a U.S. domestic filer, and the comparisons I will discuss are now all in U.S. GAAP. The accounting difference between U.S. GAAP and IFRS is not significant, less than $1 million net in each of the last three years. I will now share some of the key highlights. In our second year of launch, 2023 has been an impressive year of KIMMTRAK sales, with net revenues growing to $67.6 million in Q4 from $62.6 million in Q3, primarily driven by the 13% growth in the United States. Total sales for the year at $238 million were an increase of 70% over 2022. As Ralph mentioned, we continue to make best estimate revenue recognition assumptions and associated accruals for France until we achieve final price agreement. In line with the expansion of our portfolio, we have seen R&D and SG&A expenses increase marginally throughout 2023 with a net loss for the year of $55 million or $1.13 per share. We expect expenses to marginally increase in 2024 as clinical development for late-stage PRAME and KIMMTRAK programs accelerates. On Slide 25, you see our net cash position increased to $443 million in 2023. Additionally, in February, we completed a six-year $402 million convertible bond offering with a 2.5% interest rate and net proceeds of $389 million. We intend to use $50 million of these proceeds to repay our Pharmakon Loan in November, which has a rate of 9.75%. Taken together, after this financing, we estimate a pro forma cash position of $782 million. Our KIMMTRAK sales and current cash put us in an excellent position to transform outcomes for patients by accelerating this portfolio with multiple clinical opportunities across three therapeutic areas. I will now pass back to Bahija.

Thank you, Brian, David, and Ralph. As you have seen, we have multiple data readouts and study starts planned for the remainder of 2024. It will be a very busy year. Reflecting now on the pipeline, Immunocore has an industry-leading bispecific TCR pipeline that now spans three therapeutic areas and reflects the large potential of our innovative platform. In the last five years, Immunocore has evolved from a research organization to a revenue-generating, sustainable company. We look forward with excitement to the next five years when we will maximize the value of KIMMTRAK, expect to launch our PRAME targeted therapy, and advance our other programs in oncology, infectious disease, and autoimmune disease. Now, the full team will be happy to answer questions. Thank you.

Thank you. We will now be conducting a question-and-answer session. Our first question comes from the line of Michael Yee with Jefferies. Please proceed with your question.

Hey, guys, thanks. Good morning and great update. I had a question on the KIMMTRAK advanced melanoma study, which has a readout at the end of the year. I wanted to understand, as part of this Phase 2/3 design, how you think about the primary endpoint and what you would expect the scenarios to be appreciating that I guess you could sort of go to the Phase 3, or there could be trends and you would still go to the Phase 3. Tell me about the types of different outcomes there at the end of the year, given the Phase 2/3 design. Thank you.

Thank you, Michael, for your question. David, you want to take this one?

Michael, thank you very much. The Phase 2 part of the study has dual primary endpoints of ctDNA and overall survival. At the end of the year, the ctDNA will be mature and the survival will be directional. We believe it will be able to inform us on a couple of key questions, Michael. One is, can we drop one of the arms? Do we really need to include a PD-1 or not? The second question we're going to ask is, can we resize the study? Are our assumptions correct? So I think at the end of the year, we'll have a top-line of ctDNA, overall survival trend, and insight into the next steps in the Phase 3.

Thank you. Our next question comes from the line of Jessica Fye with JP Morgan. Please proceed with your question.

Hey, guys, good morning. Thanks for taking our question. I was hoping you could walk through in a little more detail the various PRAME updates we can expect throughout the year, with details like the number of additional patients we should expect for cutaneous melanoma, how many patients we'll see for ovarian, and maybe a range for how many we'll see in lung. And when should we expect any update from the endometrial cohort? Thank you.

Great. Thank you, Jess. David, you want to take this one?

Yes. Jess, we haven't commented on numbers, but I'll walk through the different readouts. For cutaneous melanoma, which matured the fastest, we'll be presenting the data that supported our decision to move to Phase 3, the data that we shared with the FDA and with KOLs, and we can talk more about that if you'd like. For ovarian, we're still enrolling patients there. That enrollment was a little bit behind melanoma. We're still enrolling ovarian, but that data will be available in the second quarter. With lung, it has been a little bit different. We're enrolling all comers with ovarian and with melanoma. With lung, we have taken a methodical approach to focus initially on subsets where we think will see signals before expanding more broadly. For both melanoma, ovarian, and lung, in addition to monotherapy, we have combinations. For melanoma, it's PD-1 combinations; for ovarian and lung, it's going to be the chemotherapy combinations.

Thank you. Our next question comes from the line of Tyler Van Buren with TD Cowen. Please proceed with your question.

Hey, guys, thanks for taking the question and congrats on another great KIMMTRAK quarter. Just to follow up on the second quarter PRAME melanoma update. If I'm not mistaken, there was only one cutaneous melanoma patient ongoing as of the update during the second quarter 2023 earnings. So should we expect more cutaneous monotherapy patients with the second-quarter update or not? And regarding the PD-1 combo data, how heavily pretreated are these patients, so we can understand what the bar should be that we should compare to?

Thank you, Tyler. Another one for David.

Yes. For the first question, at the update last year, we just shared the update of the original ESMO patient, so we certainly will have more cutaneous melanoma patients, and it will be sufficient to inform and provide reasons to move for the Phase 3 trial. With regards to the second question, I missed which tumor you were referring to.

Yes. For melanoma with the PD-1 combination data, how heavily pretreated will they be so we can understand what bars could be?

Yes, Tyler, I can address that. So it's a mixture. Some patients could be PD-1 naïve, but many of them were previously exposed. So it's a mixed population because the primary endpoint is just safety and feasibility.

Okay. That was Mohammed, our CMO.

Thank you. Our next question comes from the line of Eric Schmidt with Cantor Fitzgerald. Please proceed with your question.

Thanks for taking my question and congrats on the quarter. Maybe one on KIMMTRAK in the Phase 2/3 relapsed/refractory melanoma study and the Phase 2 readout toward year-end. I think you've commented that if the data are favorable from the Phase 2 portion, they could support a compendia listing. How should we think about a compendia listing with an endpoint that's survival-driven as opposed to response rate-driven? Thanks.

David, you want to speak?

Eric, very good question. So this is something that we'll have to decide on a data-dependent fashion. The survival data will mature in 2025. Typically what happens, Eric, is that you submit that you write a paper or a presentation, and you submit that to NCCN. We will try and submit it, and it's up to NCCN to decide whether or not to accept it. The benefit, of course, is we already have a therapy which has shown a survival benefit, albeit in a different type of melanoma.

Thank you. Our next question comes from the line of Michael Schmidt with Guggenheim. Please proceed with your question.

Thanks for taking our question. This is Paul on for Michael. Mine are also on PRAME. So maybe for David, what is your current thinking on the PRAME registrational opportunity in late-line cutaneous melanoma? Is this still a focus area, given your initiation of the frontline Phase 3? And if so, how do you think about response benchmarks? Does the recent accelerated approval for ImmTAC review on the setting? And then just a quick follow-up on PRAME in lung, can you expand on which particular subsets are in focus and overall strategy here? Thank you.

Thank you, Michael, first for the questions. David, would you start, and then Mohammed can go ahead?

Michael, sorry, Paul, yes. So in terms of the PRAME, we as a small company have to focus. And so what we have decided is to focus where we believe is both the best opportunity from a technical point of view but also which is the largest opportunity. For PRAME, we're focused on first line. In the late-line setting, where PIWIL was recently approved, that's where we have KIMMTRAK in an opportunity, and that trial is progressing well. That trial has a survival endpoint, which will lead to a full approval, whereas the recent PIWIL was an accelerated approval. With regards to the lung question.

Yes. Mohammed, do you want to take that?

Sure, happy to do that. With lung, we know it's a very heterogeneous disease and there are distinct molecular subsets. So based on well-known and well-described subsets, the cohorts that David alluded to that we're exploring are sort of run along those lines.

Thank you. Our next questions come from the line of Graig Suvannavejh with Mizuho. Please proceed with your question.

Hi, this is Avantika for Graig. Congrats on the quarter. I just had a question on KIMMTRAK. It appeared that the ex-U.S. sales were a little bit flat, I would say. Is there a reason for this? And how do you intend to keep growing this? And how do you also intend or how much more growth do you see in the U.S.? Thank you.

Thank you, Avantika. Ralph, you want to take this one?

Avantika, thank you for your question. We’ve had a very successful set of years in Europe where we've launched in Germany, France, significantly, but also in Italy and six other countries. So we're really at this phase where we've established KIMMTRAK as a standard of care, and we are well penetrated. We do see a relatively flat future with some of the launches incrementally adding to the growth there. The primary driver of growth will be the United States, and that will be driven mainly by us continuing to penetrate into the community and identifying patients earlier.

And as you know, in Europe it's about country-by-country for pricing, so we're continuing that.

Thank you. Our next question comes from the line of Peter Lawson with Barclays. Please proceed with your question.

Great. Thank you. Thanks for taking my questions and congratulations on the quarter. Just as we think about revenues this quarter, kind of what drove the growth in the U.S. business? Any one-timers we should think about and any guidance around how we should be thinking about Q1?

Great, Peter. Great question. Ralph?

So, Peter, we had a great 13% quarter-over-quarter growth in the U.S. The main driver for that, if you recall, at the beginning of the year, we said we're going to be focusing on the community, and that community penetration, and that's what we did. Now the majority of our scripts are coming from the community, and that's what's driving really the main part of our growth. We're also seeing duration of therapy in sustained with patients being really on progression. What we expect in 2024 is the growth to incrementally continue in the U.S. Beyond 2024 in the mid-term, we're expecting, as David has mentioned, TEBE-AM study data in addition to the long-term ATOM trial, which we're very excited about.

Thank you. Our next question comes from the line of Jack Allen with Baird. Please proceed with your question.

Hi, this is Charlie on for Jack. I was just wondering if for the ovarian in the PRAME franchise, could you give us a little more color in terms of the size of the data set you're expecting, as well as duration of follow-up and what you would consider the bar for success there.

Great, Jack. Thank you. David, you want to take this question?

Yes, Charlie. With regards to size, we haven't been commenting on numbers, but what we have said is that we will show data that is sufficient in order to inform the level of activity, and the duration of follow-up, we believe will also be sufficient. In terms of the bar for success, we’re looking at answering two questions, which is traditionally what we do in drug development: is the drug active and does that clinical activity support registrational additional trials? So we know the drug is active. Here in terms of clinical activity, we'll be looking at partial responses, durable tumor reduction, PFS, disease control, and, of course, ctDNA reduction, which is emerging as a consistent theme for our platform.

Thank you. Our next question comes from the line of Jeet Mukherjee with BTIG. Please proceed with your question.

Hey, thanks for taking our question. This is Jeet on for Justin. Was hoping you could just help us think about the efficacy bar for relapsed free survival for the adjuvant setting and just any thoughts around the neoadjuvant setting as well for uveal melanoma. Thanks.

Great, Jeet. David, you want to take this one and maybe you can comment as well, Ralph?

Yes. I'll focus on the neoadjuvant first. In the original trial when we looked back, we did have a couple of patients with residual melanoma in the eye, and interestingly, when we looked at those lesions, there was actually a reduction in those tumor lesions. I think neoadjuvant is an exploratory program, and we have a couple ESRs with regard to that. In terms of your first question, what is the bar for success in terms of relapsed free survival, what would the control arm be? This is a high-risk population.

And I think Mohammed can comment on that.

Yes, I'm happy to comment. The key point is that there is no standard in the adjuvant setting, so there's no established benchmark. What we understand is that the median time to relapse in this high-risk population, which is our target group, is around three years. Our goal is to achieve improvements beyond that. This is how we approach a trial in the adjuvant setting, which involves a global randomized trial concentrating on the high-risk population.

Okay.

Thank you. Our next question comes from the line of Patrick Trucchio with H.C. Wainwright. Please proceed with your question.

Thanks. Good morning, and congrats on the progress. I have a follow-up on the PRAME Phase 3 program. I'm wondering if you can discuss in more detail the strategy around pursuing first-line treatment, as well as a design that includes that combination with nivo. How should we think about the contribution of PRAME in this regimen and understanding the studies expected to randomize the first patient this quarter? When do you anticipate initial data like ctDNA data to emerge? And what read-through should we anticipate from that data for the program's success on the primary endpoint of PFS?

Hey Patrick, thank you for the question. I think David and Mohammed can take that.

Yes. In terms of the Phase 3 PRAME first-line trial, there are multiple data points that led to that. The monotherapy activity of F106C, which we'll share; the ability to combine with anti-PD1; and then knowledge for our platform that immunotherapies in general always see higher activity as you move from late to first line. In fact, with ctDNA clearance and KIMMTRAK, we see a tripling of clearance as we go from second line to first line. In terms of the design and the contribution of components, the design is claim plus nivolumab versus nivolumab. So that already has built in the contribution of components because we have PRAME on top of nivolumab. There will be a minority of patients in the control arm who do get Opdualag, but most of the patients will receive nivo monotherapy, so we'll have contribution of components there. The primary endpoint is progression-free survival, which is globally accepted for regulatory approval. The secondary endpoint is overall survival. We do have an exploratory endpoint of ctDNA, but that won't be available until the trial is open.

Thank you. Our next question comes from the line of Gil Blum with Needham. Please proceed with your question.

Good morning, and thanks for squeezing me in. Maybe a quick one on your new PIWIL asset and CRC, so generally, CRC is an immune desert. Could that be a potential issue for agents of this type? I mean, we've seen a lot of activity for TEBE-AM and PRAME assets in more T cell infiltrated tumors. Thank you.

Yes. Thank you, Gil, for this question. I'll pass it on to Mohammed. But I just want to remind you that uveal melanoma is a complete cold tumor as cold as it gets. So that’s, I think, where our platform — you want to talk a little bit, Mohammed, about that?

Yes. This is part of the reason why we're so excited about the PIWIL program and our mechanism, which is very distinct from checkpoints, where we don't need preexisting immunity or infiltration by the immune system into the tumor. What we've shown with TEBE, as Bahija was alluding to, is that we just need functional T cells in the periphery, and our mechanism drives T cells into a non-inflamed or immune desert. This is one of the reasons why we're excited about this program and its potential application in CRC.

And then I'm going to let the data tell us.

Thank you. Our next question comes from the line of Naureen Quibria with Capital One Securities. Please proceed with your question.

Hi, good morning. Congrats on the quarter and thanks for taking my question. Just to follow-up on the KIMMTRAK Phase 2/3 TEBE-AM study. Obviously, you're going to be looking at the ctDNA and the trends with the OS. I'm just curious, what kind of reduction in ctDNA do you expect in this setting, sort of to help you inform the decision to drop one arm? How big of a delta are you looking at? And are you going to be comparing between the two arms, or is it just baseline from the specific arm?

Great. Naureen, thank you very much. David, you want to take this one?

Yes. We have three arms, just as a reminder: we have tebentafusp monotherapy, tebentafusp pembrolizumab, and then, of course, the control arm. The primary dual endpoints are ctDNA and survival. In terms of ctDNA, we believe it directionally gives us information, but since it's still exploratory in cutaneous melanoma, we will rely on survival as well. Although the survival will not be fully mature, we have done some simulations showing that we will have sufficient power to see trends in order to drop one of the arms. The size is about 40 patients per arm, and we think we have enough power to make that decision integrating ctDNA and survival.

Thank you. Our next question comes from the line of Jeffrey Hung with Morgan Stanley. Please proceed with your question.

Hi, this is Michael Riad on for Jeff Hung. Thank you for taking our question. Could you talk a little bit more about ctDNA's predictive power on OS and advanced cutaneous versus uveal melanoma? How far in the treatment course do you need to go to have confidence in its predictive power? And does that power get stronger as you move into earlier lines? Thank you.

Thank you, Michael. David, you want to take it?

Yes. The association with survival we have validated in uveal melanoma in two independent trials. So when it comes to uveal melanoma, ctDNA, we have really strong confidence. With cutaneous melanoma, as we have emerging confidence, but we, of course, don't have randomized trials, and we don't have long-term survival. So we will be looking both at ctDNA directionally as an early potential surrogate and at survival in parallel. We hope that this trial will begin to set up the associations we have seen in uveal and cutaneous melanoma. But we acknowledge that we'll need to see both ctDNA and survival and integrate both of those at this early time.

Thank you. Our next question comes from the line of Ahu Demir with Ladenburg. Please proceed with your question.

Good morning, thank you so much for taking my questions and congrats on the quarter. Two questions from us. First one is on the PRAME melanoma readout in the second quarter. In terms of the patient follow-up, could you give us a sense of the majority of patients, how long they were followed-up for? The second question I have is expectation for the HIV med study. What does success look like?

Thank you, Ahu. David, and maybe Mohammed as well.

Yes. In terms of the PRAME melanoma, I do think we have sufficient follow-up in order to show durability. I don't have the exact follow-up with me right now, but I would say Ahu that it's going to be sufficient in order to interpret the data. The reason I say this is because we enrolled a lot of those patients throughout 2023. In terms of HIV, it's a good question because no one has ever been able to show a reduction in the reservoir or a functional cure. For the reduction of the reservoir, we'll be looking in the blood to see whether we can reduce CD4 T cells with HIV. In terms of what success looks like for that, I think we're going to have to generate the data, share it with the KOLs, and then we'll share that data and we'll be able to interpret what success looks like. Any sign of the delay in rebound that we can attribute biologically to the drug would be a success as an initial step in HIV treatment.

Thank you. Our next question comes from the line of Rajan Sharma with Goldman Sachs. Please proceed with your question.

Hi, just a quick one on KIMMTRAK and just kind of thinking about how confident you are in maintaining pricing in a scenario where you do get these additional settings that you've talked to, which obviously potentially significantly increases the number of patients on therapy. This time you flagged 6,000 potential patients versus 1,000 currently. So I'd be keen to understand how you see that playing out.

Hi Rajan, thank you. I think it would be a good problem to have, but go ahead, Ralph.

I agree. Thank you for the question. Look, the way we look at pricing is really the value that it brings to patients, the value that it brings to society. It's a little early for us to comment on that. Once we see the data, we hope that this is bringing significant value. Therefore, the price erosion would be minimal.

Thank you. There are no further questions at this time. I would now like to hand the call back over to Bahija Jallal for any closing remarks.

Thank you very much. So, in closing, I would like to express my gratitude to our patients, to our shareholders, and to the team. This past year has been a testament to our drive to bring care to patients, our innovation in bringing more novel targets and entering a new therapeutic area, and our commitment to patients by working with a sense of urgency. As we move forward into the next fiscal year, we remain steadfast in our mission to drive growth, create value, and deliver results. I would like to end this call by thanking all of you for your support. Thank you.

Thank you. That does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.