Earnings Call Transcript - KURA Q1 2021

Operator, Operator

Welcome to the quarter one 2021 Kura Oncology, Inc. Earnings Conference Call. My name is Jenny. I'll be your operator for today's call. [Operator Instructions] I will now turn the call over to Pete De Spain. You may begin.

Pete Spain, President

Thank you, Jenny. Good afternoon, and welcome to Kura's Oncology's First Quarter 2021 Conference Call. Joining me on the call are Dr. Troy Wilson, our President and Chief Executive Officer; and Dr. Marc Grasso, our Chief Financial Officer and Chief Business Officer. Jim Basta, our Chief Legal Officer; Dr. Stephen Dale, our Chief Medical Officer; Pearson Flowers, our Chief Commercial Officer; and Kathy Ford, our Chief Operating Officer are also with us and available to answer questions. Before I turn the call over to Dr. Wilson, I would like to remind you that today's call will include forward-looking statements based on current expectations. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from expected results. Please refer to Kura's filings with the SEC, which are available from the SEC or on the Kura oncology website for information concerning risk factors that could affect the company. With that, I will now turn the call over to Dr. Troy Wilson, President and CEO of Kura Oncology.

Troy Wilson, CEO

Thank you, Pete, and thank you, everyone, for joining us this afternoon. Over the past quarter, we've continued to make significant progress as a company, and we believe the relative positioning of our menin inhibitor program KO-539 has improved meaningfully. We've also witnessed a number of new developments in the space, including updated clinical data from a competitor program that further validated menin in MLL as a therapeutic target in AML, as well as the emergence of two additional clinical stage programs. This heightened activity speaks to the mounting excitement surrounding the menin inhibitor space and the significance of driving meaningful clinical activity in genetically defined subsets of AML. It's also served to highlight our leadership position while underscoring the value of an aggressive clinical development strategy and the importance of operational execution. We believe KO-539 is well positioned as a potentially best-in-class and first-in-class menin inhibitor. This confidence is supported by a growing body of clinical data, compelling activity, a favorable safety and tolerability profile, and a wide therapeutic window. As such, we intend to conduct a comprehensive clinical development plan for KO-539, both as a mono-therapy and in combination aimed at providing the greatest benefit to patients with acute leukemia. A critical component of our development plan is the determination of an optimal Phase II dose. In order to better inform a recommended Phase II dose and beyond, we've amended our KOMET-001 trial of KO-539 to include two Phase Ib expansion cohorts, one at a higher dose and one at a lower dose, each enriched with NPM1 mutant and KMT2A rearranged, relapsed and/or refractory AML patients. These expansion cohorts should enable us to maximize the benefit risk for KO-539 in our target populations, similar to what has been done previously with other targeted therapies in AML. We expect to enroll at least 12 patients in each of our two Phase Ib expansion cohorts and assess those patients for safety and tolerability, PK and PD, and efficacy in order to determine the recommended Phase II dose. In addition, the amended Phase Ib protocol gives us flexibility to enroll up to an additional 18 patients per cohort as appropriate. Importantly, we believe patients enrolled in the cohort selected as the recommended Phase II dose have the potential to be included in the subsequent registration-directed portion of the KOMET-001 trial. The amended protocol has been submitted to sites for IRB approval, and we will shortly begin enrolling patients in the Phase Ib expansion cohorts at both existing and new clinical sites. Meanwhile, we continue to engage with our key opinion leaders and global steering committee to further define a comprehensive clinical development plan for KO-539. Additional opportunities include front-line combination studies, additional genetic subtypes, a pediatric development strategy, and other indications, such as acute lymphocytic leukemia and myelodysplastic syndrome. We intend to move these efforts forward aggressively pending the determination of an optimal dose. We look forward to providing an update, including additional Phase I data from KOMET-001 later in the year. Given the excitement around our menin program, it's easy to understand why it's captured Wall Street's attention over the past year. However, we remain just as excited about the opportunity for farnesyl transferase inhibitor in oncology; an evolving story best told to treaters. For those newer to our story, as a preload, we in-licensed transferase, our first-generation farnesyl transferase inhibitor from Janssen in December 2014. Previously, it had been studied in more than 5,000 patients and demonstrated compelling and durable anticancer activity in certain unselected patients. Using advancements in cancer genetics and tools such as next-generation sequencing, we identified genetically defined subsets of patients most likely to respond to tipifarnib. The most advanced of these initiatives is focused on patients with head and neck squamous cell carcinoma, or HNSCC, that carry mutations in HRAS. We estimate that 4% to 8% of HNSCC patients have HRAS mutations. Earlier this year, tipifarnib was granted breakthrough designation from the FDA for the treatment of patients with recurrent or metastatic HRAS mutant HNSCC. The breakthrough therapy designation was based on data from our Phase II RUNHN trial, which was recently published in the journal Clinical Oncology. Development of targeted therapies in HNSCC has lagged behind other cancer indications. Thus, we were very gratified by the FDA's award of breakthrough therapy designation, which acknowledges both the dire unmet need for patients with recurrent or metastatic HRAS mutant HNSCC and the promise of tipifarnib to provide clinical benefit to patients. We're motivated by our data and the potential that tipifarnib could represent the first approved small molecule targeted therapy in HNSCC. We remain focused on conducting our AIM-HN registration-directed trial and bringing tipifarnib to market as quickly and efficiently as possible, providing a beachhead to the development of rational combinations and expansions to larger genetic subsets. Among these potential combinations, we've prioritized the combination of tipifarnib and PI3 kinase alpha inhibitor. Our preclinical data suggests that HRAS and PI3 kinase alpha are codependent oncogenes in HNSCC, and that combining tipifarnib with a PI3 kinase alpha inhibitor has the potential to provide meaningfully better antitumor activity than inhibiting either target alone. We believe this has the potential to increase the total addressable population for tipifarnib to as high as 50% of HNSCC. Building on the promise of tipifarnib as a monotherapy, this combination represents chapter two of our story. We're currently preparing a Phase I/II proof-of-concept study of tipifarnib in combination with a PI3 kinase alpha inhibitor in patients who have HRAS overexpressing and/or PIK3CA dependent HNSCC. We expect to initiate this study in the second half of 2021. Meanwhile, through internal efforts and our network of academic collaborations, we've uncovered some compelling opportunities for farnesyl transferase inhibitors in combination with other targeted therapies. This biology is totally novel, and we believe it warrants a greater investment in the therapeutic class. From this investment, we are advancing a discovery stage program to develop a next-generation farnesyl transferase inhibitor designed to target innovative biology and address large oncology indications of high unmet need through rational combinations. This represents chapter three of our story and potentially the largest opportunity. Our goal for this program is to deliver a drug candidate that has comparable potency and selectivity and improved pharmacokinetic and physical chemical properties relative to tipifarnib. We've already identified a number of advanced lead compounds, and we anticipate nomination of a development candidate for IND-enabling studies later this year. None of this would have been possible without the pioneering work our team has done over the last five years. While we continue to focus on the opportunity with HRAS mutant HNSCC, we view farnesyl transferase inhibition in oncology as a potentially broader and more valuable therapeutic commercial franchise and one that has the potential to deliver multiple opportunities for additional indications. We look forward to sharing an update with you as the story continues to evolve. With that, I'll now turn the call over to Marc Grasso for a discussion of our financial results for the first quarter 2021.

Marc Grasso, CFO

Thank you, Troy, and good afternoon, everyone. I'll provide a brief overview of our financial results here on the call and invite you to review our 10-Q filed today for a more detailed discussion. Research and development expenses for the first quarter of 2021 were $20.3 million compared to $12.6 million for the first quarter of 2020. The increase in R&D expenses was primarily due to increases in companion diagnostic development activities and clinical trial costs related to our registration-directed tipifarnib trial, clinical development and manufacturing activities related to our KO-539 program, personnel costs, and other expenses. General and administrative expenses for the first quarter of 2021 were $10.6 million compared to $7.6 million for the first quarter of 2020. The increase in G&A expenses was primarily due to increases in personnel costs and non-cash share-based compensation. Net loss for the first quarter of 2021 was $30.7 million or $0.46 per share compared to a net loss of $19.2 million or $0.42 per share for the first quarter of 2020. As of March 31, 2021, we had cash, cash equivalents, and short-term investments of $603.9 million compared with $633.3 million as of December 31, 2020. Based on our current plans, we continue to believe that our cash, cash equivalents, and short-term investments will be sufficient to fund our operations into 2024. With that, I will now turn the call back over to Troy.

Troy Wilson, CEO

Thank you, Marc. Before we jump into the question-and-answer session, let me lay out our anticipated milestones for the remainder of this year. For KO-539, initiation of genetically enriched Phase Ib expansion in mid-2021 and additional Phase I data from KOMET-001 in the second half of 2021. For tipifarnib, initiation of a Phase I/II proof-of-concept study in combination with the PI3 kinase alpha inhibitor in the second half of 2021. And for our next-generation farnesyl transferase inhibitor program, nomination of a development candidate in mid-2021. With that, operator, we're now ready for questions.

Operator, Operator

[Operator Instructions] And our first question comes from Jonathan Chang from SVB Leerink.

WeiChang, Analyst

Hi, guys. Thanks for taking my question. First question, I'd love to get your thoughts on the recent Amgen disclosures on their KRAS G12C inhibitor and their efforts to evaluate whether a lower dose is also safe and efficacious. That seems to have parallels to your own efforts to determine a minimum safe and biologically effective dose. How should investors be thinking about this?

Troy Wilson, CEO

Jonathan, thanks for the question. When we communicated the feedback that we received from FDA just about eight weeks ago, at our last quarterly call, we put that feedback in the context that it was our understanding this is an initiative at FDA to ask sponsors to really do the work to define the optimum Phase II dose. And there was a fair amount of discussion around that. What we've seen - and let's take the FLT3 inhibitor gilteritinib, as an example, is with these targeted therapies, one has the potential because of the wide therapeutic window to saturate the target and then continue dose escalating. So FDA, it's our understanding, and part of the discussion we had around our trial. FDA is really asking sponsors to define the lowest dose with maximum pharmacologic and clinical activity. In Amgen's case, they have essentially a completed registrational study. They're going to go back and do some work to bridge potentially to a lower dose. In our situation, it was actually not a request from FDA. It was a recommendation that we made to FDA that given we have multiple doses potentially at which we could move forward, we made a proposal to FDA that we do the gold standard into a Phase Ib expansion with a lower dose and a higher dose and ask the question between those two doses is there a difference in PK and exposure? Is there a difference in PD, safety, and tolerability and, of course, efficacy? FDA, I think it was a little bit coincidental. FDA was very much in agreement with our approach. So we're earlier in the development paradigm, Jonathan, if you want to sort of make a direct comparison between our efforts and those of Amgen. But the right analyst is that with these targeted therapies, particularly as one is thinking about polypharmacy and combinations, you really want to do the work needed to zero in on the lowest dose with maximum pharmacologic and clinical activity. And that's particularly important in AML because as you go to earlier lines, you have patients on seven plus three, ASOs, venetoclax, as well as potentially PPIs, antidepressants. So I think we'll - it's our view that this is going to be an increasing trend for companies doing work early on to really nail down the right dose. In our case, it's exactly the right thing to do. We've got two good doses. We think we'll come out of this Phase Ib expansion with really the best answer moving forward into the registrational study and beyond. Sorry for the long answer, but I think it's important to provide that context.

WeiChang, Analyst

Great. That's helpful. And second question, with the recent data disclosure from the competitors' menin and MLL inhibitor program. What are the reasons for confidence that KO-539 could do better?

Troy Wilson, CEO

Yes. Yes, that's a really good question. So let's break it down because there are sort of several elements here. I think, first and foremost, the competitor data underscores the importance of the menin and MLL pathway as a therapeutic target. While we are a competing program, we play to win, but you have to impress by the level of clinical benefit in terms of both response rate and the number of patients that were converted to MRD negative, right, zero measurable residual disease. The challenge that the competing program has is they're trying to navigate the straights between two cliffs. On the one hand, their compound is very sensitive to CYP3A4, which makes it difficult potentially if they're in an environment where they have inhibitors of CYP3A4. They also have dose-limiting toxicity in the form of QTc prolongation. The CYP sensitivity is an issue in that the exposure of their compound can vary depending on the other agents that the patient is taking. Those can be things like antifungals, azoles, as well as grapefruit juice, and St. John's Wort, right? All of these are well-known inhibitors of 3A4. This doesn't bear a path forward; it just means it's complicated, both as a monotherapy and in combination. In contrast, the Kura program shows no dependence on CYP3A4. We've said that repeatedly. Our compound has a very wide therapeutic window, good safety and tolerability. There is an increase in exposure with increasing dose. We need to do the rest of the work deciding which dose is the right one to move forward as a recommended Phase II dose, but we don't require the addition of exogenous agents to address that CYP3A4 liability, as you see with the competing program. I think we don't have the QTc prolongation. We've seen no evidence of cardiac toxicity. It's early days for both programs. We believe that 539 has the potential to be both best-in-class. And given we're now just about ready to transition into the Phase Ib portion, we think we can also be first and we're really going to work hard towards achieving both of those goals.

Operator, Operator

Our next question comes from Peter Lawson from Barclays.

Peter Lawson, Analyst

Hey, Troy, thanks so much for taking our questions. Just on the data readouts this year. So just wondering if you could talk to the data we could see in the second half of the year, and I assume that that's mostly on an escalation basis?

Troy Wilson, CEO

Yes, Peter. So it's a good question. We've guided toward providing a data update in the second half of the year. Our focus is to get into those Phase Ib expansions as quickly as possible because we know we have good safety and tolerability. We know we have compelling evidence of activity. We need a recommended Phase II dose, and that's really what we're looking to achieve and then looking to share as quickly as we can. We'd like to provide an update later in the year. I don't know yet exactly what that's going to look like. But in terms of will it include any of the Phase Ib data; I think we'll continue to give kind of qualitative updates on how the program's going in terms of what we're seeing. But we are looking for an update later this year. And then, of course, we haven't even dosed the first patient yet in the Phase Ib. I would expect that when that data is ready, and we've determined the recommended Phase II dose and are then moving into the registration-enabling portion, we'll then provide another update to you, the other analysts, and of course, to the street, to help understand what was the output of the Phase Ib. We just - at this point, we don't have any clarity yet on it. We have goals. But until we're really enrolling steadily in those Phase Ib cohorts, it's a little bit hard to be more concrete.

Peter Lawson, Analyst

And then just from the press release, you talked about expansion opportunities and inhibitors into other genetic subtypes? And what are those? And you also mentioned MDS patients. So I'm just curious what percentage of MDS patients could benefit from it?

Troy Wilson, CEO

Yes. So let's take those two separately. So as far as the other genetic subtypes, people on the call will recall that at ASH in December, we showed that 539 was able to drive complete remission in a patient with SETD2 RUNX1 co-mutant MLL. We were pleasantly surprised by that. We weren't completely thunderstruck, but we were surprised. We've continued to see evidence of biologic and clinical activity outside of the genetic NPM1 in MLLr. The challenge we have, Peter, just to be candid, is I don't think we fully understand the selection rules. We know that the menin MLL pathway is important. We know that it interacts with other targets; we're still trying to define those selection rules that would help us enroll a third potential cohort. The Phase Ib, really the goal there is to select a recommended Phase II dose, and in doing that, we're going to enrich in KMT2A and NPM1. By doing that, we're trying to enroll in a population where we have the highest likelihood of seeing clinical benefit with as few variables as possible so that we can really stay between these two dose cohorts. When we're on the other side and we've determined a recommended Phase II dose, using that recommended Phase II dose, then we can look toward expanding the application of KO-539 to other genetic subtypes. When you're trying to both understand the biology and the dose at the same time, it's complicated. But if you do them serially, it makes much more sense. And this is consistent with what's been done with other targeted therapies. As for your question around MDS. Yes, there are a percentage of patients with MDS, their pre-AML who have NPM1 mutations. There's some very interesting work going on in academic labs, looking at the sequencing of mutations in these myeloproliferative and myelodysplastic diseases. We're intrigued that there might be a possibility there to intervene before a patient ever develops full-blown AML. There's both preclinical work going on and, of course, then looking at the work we're doing in AML. But if one could prevent the onset of AML, that would, of course, be the ideal situation. Don't know whether that's possible, but certainly something that when the time is right and we have a Phase II dose; it will be an opportunity to explore.

Operator, Operator

And our next question comes from Reni Benjamin from security.

Reni Benjamin, Analyst

Good afternoon, guys. Thanks for taking the questions. Troy, I'd love to just maybe just expand a little bit more on these - on the Phase Ib. You mentioned the lower dose cohort, a higher dose cohort. Have you guys picked what those doses will be? And why pick between one and the other? Why not explore some granular doses as well, maybe something between 50 and 100, right? Or maybe even change the dosing schedule?

Troy Wilson, CEO

Yes. So it's a good question, Reni. It's a really good question. Again, you're looking at a number of variables, right? Number one is safety and tolerability. It's our belief that both doses will have passed the safety threshold for the escalation. But that's the first thing you need to look at. Then the question is exposure. We've said although we are seeing increases in exposure at increasing doses, eventually, you'll reach a plateau. That's part of the answer to the question from Jonathan. FDA is saying, why go beyond that? If you think of the dose exposure curve looking like a knee, you want to be up on top of it but not all the way up on the side. You want to give as much drug as you need to give and not a lot more. The final and probably most important is clinical efficacy. To date, we haven't had enough data to be able to say whether one is different than another. It's our belief that with two doses, we can define whether there's an advantage to the higher dose. The lower dose, the two milligrams, you'll recall, we saw two responses - or I should say, an MRD-negative complete remission in one NPM1 mutation and a morphologic state in the other. The question is; are you getting any incremental benefit as you go higher? One can be as granular as you want, to your question. There's nothing that says you couldn't explore more doses, but we're trying to balance - we want to get to the right answer without necessarily the perfect answer. We do recognize a competitive space, both with existing competition and new entrants in the field. So we're trying to really strike that balance between getting the right recommended Phase II dose and moving as quickly as we can to register. The Phase Ib is nicely set up for that. As with every study for data-driven decisions, if there's a reason to explore something a little different, we'll do that, but we're trying to keep it fairly simple.

Reni Benjamin, Analyst

Okay. And then just as a follow-up, you're mentioning the registrational study and the fact that you might be able to utilize patients from either dose that you want choosing for the registrational study. Can you talk a little bit about what you think a registrational study could look like? And then also, just in terms of timing. And not to pin you guys to anything, but I would think that maybe those 12 patients could get enrolled, even if you start the study by the middle of this year that it could be done this year just given the fact - I think you've mentioned in the past that you hope to be at about 20 sites or so total once this is up and running. Can you maybe help fine-tune those assumptions?

Troy Wilson, CEO

Sure. So there's a few things packed into that question. Let's start with the number of sites because that's our current focus, right? Getting the protocol through IRBs, getting new sites booted up and getting the existing sites able to enroll under the Phase Ib portion of the protocol. We're at seven or eight sites now. I want to say we're anticipating tripling that over the next several months as we bring new sites online alongside the sites currently enrolling. We don't have projections based on different data sources yet, as until you're really there, actually at sort of at steady state. No one really knows what the rate of bringing patients on study will be. If anything, we're trying to power it appropriately, with enough sites to help drive enrollment, both in the Phase Ib and ultimately into the pivotal. But right now, Reni, our goals are to determine a recommended Phase II dose this year. It's hard to be a lot more granular than that. Until you both get the sites open and you get some experience with how many patients they're seeing, not every patient that we identify, for example, is eligible to come on a study. There are a fair number of screen failures that you have to account for and so forth. But I think we're in good shape. As for the alignment with the registrational study and how to think about it, one of the advantages of doing it this way is we've now aligned the endpoints of the Phase Ib with those that will be used in the registrational portion. So we're looking at complete remission, complete remission with transfusion independence as a key secondary endpoint. That will be important. That was actually a recommendation from FDA to allow us to count patients toward the totals. In terms of what we think is needed - sorry, there's a little bit of background noise. In terms of what we think is needed, what we're hearing from investigators and KOLs is that a 20% to 30% response rate, i.e., CR rate in this population is likely registrational. These are populations with very high unmet need. These patients do not do well on any available therapy. If you're looking at a 20% to 30% response rate, you're talking about a registrational study of around 50 to 100 patients per cohort, just depending on the grade. Our study will - we haven't really talked about the registrational study. We will, as we get into that next phase. But it's going to look like the design of other therapies. With an important distinction, the Phase Ib is enrolling both NPM1 and KMT2A in each dosing cohort. The goal is just to select a dose. So you're going for patients most likely to respond. Once the recommended Phase II dose is selected, we believe we can take the patients from the selected cohort, the Phase Ib selected, and then we will separate the patients by genetic subtype. So we'll have a KMT2A arm, we'll have an NPM1 arm, and we're anticipating having a third arm, which was the question I was addressing from Peter earlier in the call. Those will look fairly typical with what you've seen with other small molecule targeted therapies, given that you want to meet or exceed that 20% to 30% response rate. I hope that gives you sufficient color on your question.

Operator, Operator

Our next question comes from Joe Pantginis from H.C. Wainwright.

Joseph Pantginis, Analyst

Hey, guys. Good afternoon. My first question might be for Mark. I know you guys don't usually give financial guidance. But when you look at OpEx for the rest of the year, I guess, from an R&D standpoint, I'll ask specifically though, can we look at this as a bit of a baseline? Are there sort of one-offs with regard to, say, manufacturing that took place to have drug supply for clinical studies? I just wanted to get some sort of read.

Francis Burrows, Financial Officer

Yes. Thanks, Joe. To answer the question, there are some one-offs in the first quarter that could make the first quarter more outsized. In particular, there was some spend on the companion diagnostic front. That said, we do anticipate spending to continue increasing over the course of the year. While we haven't given specific OpEx guidance for the year, that may be something that we're going to do in the short term. I think you should continue to see an increase in R&D spend over the course of the year.

Joseph Pantginis, Analyst

No, that's helpful. And then switching to some of the back end prepared comments. Troy, you gave a lot of different kinds of properties with regard to the next-generation farnesyl transferase inhibitor. I was just curious with some of your lead candidates, any of those properties that are rising to the top that you really wanted to see as part of your rational design?

Troy Wilson, CEO

Yes, Joe, thanks. It's a good question. Tipifarnib is a really - it's a very good drug. However, as we've seen with a number of other drugs, EGFR inhibitors are the most notable; you can generally improve upon first-generation technology. One of the things we'd love to be able to do is very simple; is to lower the dose and to have the drug given once a day as opposed to twice a day. For the head and neck patients, we're dosing patients at 600 milligrams daily. That's a lot of drug for head and neck patients. Based on what we know, we think there's potential to come in with a development candidate that's potent, potentially has less interpatient variability and better bioavailability such that you could basically have a smaller pill but give all the therapeutic punch you see with tipifarnib. So those are - we want to make sure we maintain the good safety profile of tipifarnib, but we do think both in terms of the physicochemical and pharmacokinetic property we might be able to improve on it. The early compounds suggest that's possible.

Joseph Pantginis, Analyst

Got it. And then my last question, I guess, is sort of my mandatory have to ask regarding the status of the AIM study. And it's more like not like do you have any timelines to provide, but maybe some sort of anecdotes as to - are you seeing some sites getting ready to open again post COVID. Where are you seeing some activities in particular regions, something maybe more benign along those lines?

Troy Wilson, CEO

Yes. It's a good question, Joe. And it's an important study. It's potentially the first targeted therapy approval in head & neck. You do see country-specific effects. And it's not entirely clear whether they're due to COVID, to be honest. The country is sort of wax and wane. Europe has largely been locked down. What we have found with head and neck patients generally is that they're reluctant to travel. If you don't get very close to them in terms of their ability to get therapy, they're just going to try to pursue other options. That's partly because by the time we're getting them, they're far down the disease path, and it's tough for them, right? It's usually a trial like this or hospice. So COVID definitely makes that worse. The other thing is we're seeing - where we seem to get the best traction is where patients are newly identified. If you go into databases, for example, you can find interesting mutant patients, but often those patients have passed on. That's why we have such an active screening campaign to find these patients. As we've indicated in the past, we've made changes to the protocol to allow - make it easier for patients to come on study. Those changes do appear to be yielding some benefit. We're also looking - we can't move fast enough to have our next study, the PI3 kinase alpha combo study, on because you really need physicians, study teams, sites, patients thinking about genetic screening. Genetic screening is key to this puzzle. If they're screening for PI3 kinase mutations or amplifications in addition to HRAS, we think that ultimately will be beneficial. We're really looking at HRAS mutant head and neck as a beachhead to potentially a much larger opportunity with the combo, and that's borne out with preclinical data as well as just the - what we're hearing from investigators and study teams as we're preparing for the current study, which will be the combination study of tipifarnib plus the PI3 kinase alpha inhibitor due to start in the second half of the year.

Operator, Operator

Our next question comes from Phil Nadeau from Cohen & Company.

Philip Nadeau, Analyst

Good afternoon. Thanks for taking my questions. A couple on the Phase Ib expansion cohorts. You mentioned, in particular, that one of the goals is PK, PD in those cohorts. I'm curious if you'd be willing to share with us what maybe some of the pharmacokinetic or pharmacodynamic goals are; in particular, is there like an AUC that you're going for, a time above IC 90, or other markers?

Troy Wilson, CEO

Thanks, Phil, for the question. No, not really, no. In contrast to our competitors' program, it's not that we're looking for a particular plasma concentration or time above IC 90. Rather, and this was suggested, we showed kind of an early cut of the cycle one, day one data at ASH. You do see intrapatient variability and exposure. Now that variability in exposure doesn't appear to be associated with toxicity. It's not clear that it's associated with efficacy. It's not like the outliers are the patients seeing the responses, but we'd like to understand that better. It's easier when you're in an enriched population of being able to say, okay, what's the basis for the interpatient variability? Is it, for example, the PKA of the compound? Is there a food effect, the sort of standard stuff you do in drug development? And then how do you optimize that to drive the greatest efficacy? So it will be an element of the data set that we look at from the Phase Ib. Ultimately, what we think will be the greatest determinant between the two doses is going to be pharmacological activity. The biomarkers are - and again, our competitor shows some nice data. In these genetically selected populations, you would expect to see knockdown of the target gene; are the arrows lining up with the clinical activity and exposure? It's part of the overall package. But we firmly believe we've got two good doses, both the higher and the lower. We want to do what I think is increasingly going to be the gold standard, and that is which of those two is the optimum Phase II dose forward. We'll go as fast as we can to get that answer, and I think that will put us in a very good position as we're then segueing into the registrational portion.

Philip Nadeau, Analyst

One question on the biomarkers. Your competitors showed really good knockdown in MEIS1. HOXA9 was knocked down, although not completely suppressed. And I guess investors have been debating whether that's a function of HOXA9 or that specific compound. Do you have an opinion on whether it's possible to totally suppress HOXA9?

Troy Wilson, CEO

It's - so MEIS1 is one. Our preclinical data suggests that MEIS1 is the better biomarker relative to HOXA9. You can knock down MEIS1 nearly completely and consistently; HOXA9 appears to be more variable. We would use MEIS1 as a marker of activity. You just get a - in our view, you get better signal to noise. So for the investors that are wondering, I think we think it's probably more the biology of HOXA9 relative to MEIS1, and they should really focus on MEIS1.

Philip Nadeau, Analyst

Great. And then last question for me, another question we get all the time is comparing and contrasting covalent versus non-covalent inhibitors. Do you have a perspective on the pluses and minuses of the two approaches in men?

Troy Wilson, CEO

Yes. As I think we've mentioned in the past, when we were developing KO-539 as part of the collaboration with the University of Michigan, we actually pursued both covalent and non-covalent approaches. We had hits that we were evaluating using both approaches. Menin turnover in cells is about six hours. We made a very data-driven decision that was we could knock down - we could disassociate menin from MLL and chromatin completely. We could induce differentiation with a reversible inhibitor; an irreversible inhibitor didn't really seem to get us anything as far as being able to drive dissociation of menin from MLL. The flip side, of course, is covalent inhibitors are not without cost. Just as a reminder, those who are new to the Kura story, the chemistry team that developed our menin inhibitor did all of the pioneering work on the KRAS 12AC inhibitors. You can follow the publications and the patents. You can get idiosyncratic off-target toxicity due to the fact that the electrophile in the covalent inhibitor is binding to cysteines other than your target system and your target protein. That toxicity often doesn't manifest until you're in patients because preclinical models are not predictive of it. So Phil, both from a - not really needing it to drive activity. I mean you've got CRs at the first or second dose. It's not clear what a covalent inhibitor is going to do better than that. You want to avoid any - you want to have a squeaky cleaner compound as you can. So we made a data-driven go with the reversible inhibitor with 539, and ultimately, I think that was the right decision.

Operator, Operator

And our next question comes from Tiago Fauth from Credit Suisse.

Tiago Fauth, Analyst

Thanks for taking my question. So just a quick one on NPM1. So we satiation on the relative merits of targeting either MLLr versus NPM1 population, given that the front-line outlook is fairly different across the population. To the extent that you've seen some data, but not as much as the MLLr, but we've seen some data in NPM1 from you guys and from competitors, how consistent is the data you'd seen to date with perhaps a worse prognosis once you reach that relapsed/refractory stage? What's the actual attractiveness of the class within the population, and what's sort of the bar for that? And again, that 20 to 30 seem about right, but I'm curious if you could break down for subsets that may have a different answer necessarily.

Troy Wilson, CEO

Sure. Tiago, it's a good question. In the relapsed/refractory setting, NPM1 commonly appears with other comutations, DNMT3A, IDH, and FLT3, and it's a very negative prognosis. Those patients do not do well on existing therapies. I think both we and our competitors have shown encouraging early signals of activity in that population. What is meaningful there is the ability to drive to MRD negativity, right? That will increasingly be the gold standard in AML. I think we've shown one anecdotal example as of the ASH update. Syndax had, I think, a second one in NPM1 and then some MRD-negative patients in the MLLr patient population. That's all encouraging. As you transition to frontline, particularly in patients who cannot tolerate intensive chemo, if you look at the response rate and the rate of MRD negativity venetoclax and azacitidine, there's a landmark Phase III study. The response rate is about, I think, 60%, with a 20% MRD negativity rate over 12 to 15 months of overall survival. There's clear literature available if people want, and they can ask for citations. There's clear literature that says if patients with MRD-negative responses have better survival. That's why FDA gave the green light to Kronos for their trial with the SYK inhibitor. The potential of a menin inhibitor to drive an MRD-negative response in that frontline setting with a durable response, that's really what you're going for. This mechanism of action is like it's the perfect tool for that problem because the NPM1 is directly related to the menin MLL pathway. By virtue of the mechanism, you're inducing differentiation and driving these MRD-negative responses. We're keen to get to that front setting. Although you may increase the response rate, the hope is that you'll make those responses deeper, more durable, and that will benefit patients both in the non-intense and intense chemo populations.

WeiChang, Analyst

Hi, guys. Thanks for taking the follow-up. What is cobicistat? And what impact could this have in combination with a menin MLLr inhibitor on future development strategy?

Troy Wilson, CEO

Jonathan, kudos for you for getting back in the queue. Sure. Cobicistat is a strong CYP3A4 inhibitor. For those who may not be aware, I think Jonathan is referring to an update on trials.gov from one of our competitors. As far as we know, cobicistat is used to increase the drug levels of sensitive CYP3A4 substrates. The thought is that the competitor is dosing their compound with cobicistat as a way of trying to increase the exposure of their menin inhibitor and reduce the sensitivity to azoles. If you can do that, then all you could remove the requirement of having two doses, one for the azole and one for the non-azole; the complication, of course, is it makes it much more difficult to then use that in combination with other drugs. You can just go into the package insert for cobicistat and look at the contraindicated drugs, and you'll see it includes azoles, right? Because of the CYP3A4 interactions. So it may ultimately help in the near-term with increasing plasma exposures at lower doses. In the long term, it's going to make combinations, we think, much more complicated. In contrast, of course, for 539, none of that, right? Our exposures are independent of whether patients are on azoles, moderate azole, or strong azole. We don't have to dose with cobicistat or another compound that's commonly used as ritonavir. So it's just a much better setup both for the monotherapy and the combination.

Operator, Operator

We have no further questions at this time.

Troy Wilson, CEO

Great. Thank you, operator. And thank you all once again for participating in the call today. We'll be at the JMP Securities Life Science conference next month. We look forward to speaking with many of you then. In the meantime, if you have any questions, please feel free to ask Pete, Marc, or myself. Thank you again, and have a good evening, everyone.

Operator, Operator

This concludes today's conference. Thank you for participating. You may now disconnect.