Earnings Call Transcript - PSTV Q4 2022

Operator, Operator

Good afternoon, ladies and gentlemen. Welcome to the Plus Therapeutics Fourth Quarter and Full Year 2022 Results Conference Call. Before we begin, we want to advise you that over the course of the call and question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Plus Therapeutics' future operating results and financial position. All such statements are subject to risks and uncertainties, including the risks and uncertainties described under the Risk Factors section included in Plus Therapeutics' annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission from time-to-time. Plus Therapeutics advises you to review these risk factors in considering such statements. Plus Therapeutics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made. It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Plus Therapeutics' President and Chief Executive Officer. Sir, you may begin.

Marc Hedrick, President and CEO

Thank you, Andrea. Good afternoon everyone, and thank you once again for taking the time to join us today as we provide an overview of recent business highlights and discuss our 2022 fourth quarter financial results. Joining me for the call today is Dr. Norman LaFrance, our Chief Medical Officer and Mr. Andrew Sims, our Chief Financial Officer. I'll begin the call by reviewing 2022 and then Andrew will review our financials and Dr. LaFrance will be joining us for Q&A. At a high level, I was extremely pleased with our accomplishments in 2022. Going into the year, we set for ourselves some significant development goals and we achieved or exceeded almost all of them. At the same time, we continued a very conservative approach to managing our balance sheet, ending the year with a similar cash level to the prior year, but we materially expanded our availability of cash as Andrew will discuss. Let me begin by focusing on drug development, clinical regulatory activities and related milestones. First, I ask that you wind the clock back over a year and recall that we ended 2021 with a single drug, which was 186RNL active in only a single phase one clinical development program for recurrent glioblastoma funded in large part by the NIH. That was in essence the whole of our active clinical development program at that time. That was a year ago. Fast forward to the end of 2022, we ended the year with two investigational drug candidates, Rhenium (186Re) obisbemeda, formerly called 186RNL and Rhenium 188 Bioabsorbable Alginate Microsphere or 188RNL-BAM as we call it. Regarding our investigational drug, Rhenium (186Re) obisbemeda, we have two active clinical programs now ongoing, one for recurrent GBM and the other for Leptomeningeal. In terms of glioblastoma in 2022, we substantially expanded this program. Specifically, we advanced from phase one to phase two. We are continuing the dose escalation for larger tumors and higher dose volumes. We manufactured GMP drug allowing us to move into phase two. We enrolled the first patient in the phase two trial and we negotiated with the FDA to continue the phase one dose expansion for larger tumors and now have an active re-treatment protocol with FDA to explore retreating patients that happen to occur after a first treatment. For Leptomeningeal disease, we moved this program to essentially a co-lead program with GBM and specifically we advanced that program successfully from the preclinical stage to an enrolling phase one trial. We obtained $17.6 million in funding for this program. That, in combination with our one-third match as required by the grant order, should be sufficient to fund this program through phase two in the enrollment of approximately 150 patients. For pediatric brain cancer, while we did not initiate this trial in the calendar year because of the discussions with the FDA that were required for this first in pediatric patient radiopharmaceutical trial, we did make significant progress. Specifically, after three rounds of FDA interactions on the nature of the IND for pediatric brain cancers, the FDA reviewers have accepted our clinical protocol design, but still require and request some additional adult data, which we plan to submit relatively soon. Our second drug, 188RNL-BAM was licensed in early 2022 from academia, and during 2022, we successfully transferred that technology to Plus and then successfully manufactured that drug internally last year. We then used that drug to successfully in human organ XVIVO perfusion model, confirming the preclinical feasibility and the manufacturing of that drug. We submitted pre-IND information packaged to the FDA. So big picture in terms of milestones achieved in 2022 was a transformative year in the company's development. Additionally, in 2022, we presented important data readouts in our two lead clinical programs, GBM and Leptomeningeal Cancer. In November 2022, results from the company's phase one ReSPECT GBM trial for recurrent glioblastoma were presented at SNO - The Society for Neuro-Oncology meeting in Florida by the trial PI. In the phase one dose escalation trial, at that time, 24 patients with recurrent GBM across seven cohorts received a single dose of Rhenium obisbemeda administered in the dose escalation phase, achieving up to 740 of the tumor. That's compared on average to about 35 gray total absorb radiation dose delivered to tumors using external beam radiation. The data in our trial showed that Rhenium obisbemeda can be safely administered and there's a statistically significant correlation between overall survival and both absorbed radiation dose to the tumor and percent tumor volume in the treated volume. The strength of the signal is unusually positive for a phase one trial. We found that specifically for every 100 gray increase in the absorbed dose correlated with about a 36% decrease in the risk of death. The more radiation to the tumor, the lower the risk of death. Additionally, in every 1% increase in the tumor volume treated up to a max of a hundred percent, that is associated with a 4.5% decrease in the risk of death, and that was highly statistically significant. There were no dose limiting toxicities reported, and the overall safety profile was very favorable. The study concluded that single administration of Rhenium obisbemeda by convection-enhanced delivery in recurrent glioma patients with poor prognosis is feasible, safe, and potentially effective in increasing overall survival when a therapeutic dose of radiation is delivered to the tumor. In the latter cohorts, we delivered a therapeutic dose in over 80% of the patients treated. Based on the data from the phase one trial and Q4 2022, we initiated a phase two dose expansion trial, evaluating Rhenium obisbemeda for the treatment of patients with recurrent GBM using our cohort six dose, which is 22.3 millicuries in 8.8 milliliters of injection for small and medium sized tumors, essentially tumors that are about 20 cc or less. This phase two will enroll up to an additional 31 patients with small to medium sized tumors in approximately 24 months or less. That trial continues to be supported by an award from the National Cancer Institute. While we have five sites authorized under the NIH with the PI and the NIH, we plan to expand the number of trial sites beyond the authorized five to facilitate faster enrollment. The primary endpoint, as a reminder, is overall survival following single administration, which is an endpoint we agreed to with the FDA. Secondary endpoints will assess safety tolerability, objective response rate, partial response, serious adverse events, event-free survival, and progression-free survival at six months. Key focus areas of ongoing clinical investigation in the GBM development program will be further dose exploration by increasing the dose and also increasing the number of doses to patients who happen to occur after a single administration to inform the design of future registrational trials. As discussed previously, the company and FDA agreed to hold future meetings, facilitated by our orphan and fast track designations on the registrational trial design, including the use of external data to augment the control arm and speed enrollment in the potential pivotal trial. Now let me move on to our Leptomeningeal Metastases or LM development program. The LM trial is a multi-center phase one two dose escalation study rated dose safety and efficacy of Rhenium obisbemeda. LM, as you may know, is a complication associated with advanced cancers that infiltrate the fluid line structures of the central nervous system, also called the leptomeninges. It just so happens that the incidence of LM is growing with local and improved cancer care, and there are no approved FDA therapies. Approximately 120,000 patients per year are affected with LM, and it's substantially underdiagnosed. Standard treatment includes external beam radiation therapy to the affected sites, potentially with chemotherapy given either orally, intravenously, or often administered twice a week directly into the CSF space. Systemically administered therapies almost never work because of the blood-brain barrier preventing access to the leptomeningeal injuries. So going back again to the SNO meeting in November, we also presented the early phase one data from the ReSPECT LM trial at that meeting. It demonstrated that a single administration of Rhenium obisbemeda was feasible, safe, and well tolerated across the two dosages studied at that time in cohorts one and two. Patients in that trial after treatment showed a decreased CSF tumor cell count by 48 hours following treatment, which was between 46% to 90% in terms of reduction of the tumor cell count that was measured in the CSF. The $17.6 million product development research funding award we received from the Cancer Prevention and Research Institute of Texas began funding in the fourth quarter of 2022. As mentioned, this award will cover the majority of the development cost, including funding for up to 150 enrolled patients for the LM program over three years, and that's an important source of non-dilutive funding. That material strengthens the company's balance sheet. In early 2023, we completed enrollment in cohort two of the LM trial, and now six patients have been treated regarding next steps with that trial. Following the Data Safety Monitoring Board review, which is anticipated to be in March, we expect that we'll complete enrollment in part A of the phase one portion soon, perhaps in the next quarter. Thereafter, we plan a meeting with the FDA to determine the exact dose expansion plans for the phase one part B trial, and then we expect to initiate that part B trial in the second half of 2023. We also expect initial data from the phase one part A to be presented in the second half of 2023. As I mentioned on our third quarter 2022 call in November, we are making significant progress in building a more resilient and robust GMP supply chain through our strategic partnerships that enable the development, manufacture, and future potential commercialization of our products. Our current supply chain and key partners are positioned to supply GMP Rhenium obisbemeda for any ongoing and planned phase two or three clinical trials in patients with GBM, LM, or pediatric brain cancer, and that's now fully in place as of the end of last year. Based on extensive previous work, we expect to submit an updated investigational new drug application for what will be called the ReSPECT PBC phase one safety dose finding and efficacy study of Rhenium obisbemeda for pediatric brain tumors. It will be submitted in conjunction with our lead academic institution, Lurie Children's Hospital at Northwestern University in Chicago. Finally, regarding our novel recently licensed radioembolization microparticle technology 188RNL-BAM, we successfully met two objectives. Furthermore, based on the FDA feedback regarding the most appropriate regulatory designation for the investigational product, specifically whether it should be a drug or device in terms of its regulatory path, we are pursuing the request for designation process to define this in parallel to performing required developmental activities. Regardless of whatever the ultimate regulatory designation ultimately is, it's our view that despite the fact that competing legacy products on the market have been permanently indwelling for in some cases over two decades, the bio-resorbable nature of our technology supports its ultimate designation as a drug. Nonetheless, we'll collaborate with the FDA to seek their ultimate guidance on this determination and proceed in parallel with those development activities that we can reasonably do irrespective of the ultimate regulatory determination. The company plans, as mentioned previously on other calls, to initially focus on developing the BAM technology as a next generation bio-resorbable, radioembolization therapy for liver cancer. So with that summary, I'll turn the floor over to our Chief Financial Officer, Andrew Sims, who will review the financials. Andrew?

Andrew Sims, Chief Financial Officer

Thank you, Marc. Good afternoon everyone. Please refer to our press release issued earlier today for a summary of our financial results for the 2022 fourth quarter and full year ended December 31st, 2022. As of December 31st, 2022, cash and cash equivalents were $18.1 million compared to $18.4 million as of December 31st, 2021. The company believes the combination of current cash committed grant funding in conjunction with existing discretionary capital sources secures our cash runway through 2025. Cash used in operations for full year 2022 was $13 million compared to $10.3 million for full year 2021. During the fourth quarter of 2022, the company received its first grant funds of approximately $1.9 million as planned. The main year-over-year changes between full year 2022 and full year 2021 are as follows: Grant revenue of $224,000 was reported related entirely to the CPRIT grant. Total operating expenses for full year 2022 were $19.9 million compared to $12.5 million for the prior year. The 2022 total included two main areas of spend that were one-off in nature. The first area of increase was CMC spend related to the development of GMP quality drug and key regulatory consulting activities necessary to advance the phase two GBM clinical trial. These expenses were over $4 million in 2022. 2023 spend related to these activities is forecast to be less than $500,000. In addition, to a lesser extent, the company had a forecasted increase in litigation and legal spend related to a legal settlement disclosed in Form 10-K. The net result is that we expect an overall decrease in total burn in 2023 based on our currently disclosed milestones. Interest expense decreased from $932,000 for full year 2021 to $711,000 for full year 2022. This decrease reflects the continued principal paydown that commenced in November 2021 on the company's Oxford debt. The net loss for full year 2022 was $20.3 million or $0.77 per share compared to a net loss of $13.4 million or $1.11 per share for full year 2021. Now I'll turn it back to Marc.

Marc Hedrick, President and CEO

Thank you, Andrew. Before we move on to Q&A, allow me to provide a very detailed guidance on anticipated milestones for 2023. First of all, we intend to expand the glioblastoma clinical trial sites and make meaningful enrollment progress of the ReSPECT GBM phase two trial to support a target completion of enrollment date by the end of the year 2024. We also plan to publish the ReSPECT phase one data in a high impact factor peer-reviewed journal. We also intend to present clinical safety and efficacy data of the phase one and phase two ReSPECT GBM trials in the second half of 2023. In terms of LM, the Leptomeningeal metastases, our plan is to complete enrollment in the phase one part A of the ReSPECT LM trial and begin enrollment in the phase one part B. We also intend to expand the number of clinical trial sites to support that expansion into part B of that phase one. In the second half of 2023, we'll present clinical safety and efficacy data based on the phase one, part A of the ReSPECT LM trial. As per the CPRIT grant, we will explore potentially synergistic drug combination studies of locally delivered Rhenium obisbemeda coupled with promising systemic therapies in relevant preclinical models of leptomeningeal disease. We will also initiate the IND to treat pediatric patients with ependymoma and high-grade glioma and begin enrollment. The first clinical trial site should be Northwestern in the Lurie Children's Hospital in conjunction with the FDA. We intend to finalize the regulatory designation for the 188RNL-BAM technology and complete key developmental activities this year. Furthermore, we believe there are opportunities to execute corporate partnerships to expand the business opportunities for Plus Therapeutics' unique CNS oncology platform. Finally, building on our success with the CPRIT grant, we intend to submit multiple grants to raise non-dilutive capital to support the expansion of the company's drug development pipeline. With that behind us, let me turn this back over to Andrea for the Q&A session. Andrea?

Operator, Operator

At this time, we will conduct the question and answer session. Our first question comes from Justin Walsh with Jones Trading. Please go ahead.

Justin Walsh, Analyst

Hi, congrats on the progress. Thanks for taking the questions. To start, I was wondering if you could maybe provide some more color on what we can expect in the upcoming data you just mentioned. So for ReSPECT, GBM, I'm curious about any patient data we haven't seen from the phase one, two A portion as well as what we might see from the phase two B portion. And likewise for ReSPECT?

Marc Hedrick, President and CEO

Hey, Justin, it's Marc. Obviously, we'll present what data we can to you, but I'll let Norman take that question because he's up to his shoulders in evaluating that data. Norman?

Norman LaFrance, Chief Medical Officer

Yeah, thanks, Marc. Great question, Justin. As you've seen over the past couple of years, we've developed progressive statistical evaluation models starting with the Kaplan-Meier curve for less than 100 gray, which was based on the preclinical data where there's clear efficacy from that absorbed dose. We know that radiation works and more radiation is better. Those two cohorts and by comparison, it was roughly a two-year overall survival versus a five-month overall survival for our specific data that we added to those evaluations. These were presented at medical meetings and peer-accepted presentations. One on the Cox proportional hazard ratio model, which is a survival model in the statistics that uses all the data. Instead of the cutoff of 100 gray, which as I said was supported both by what is known with radiation absorbed dose in general and our specific preclinical data, we presented the totality of our data with that Cox model and showed an improved survival percentage. We used the increment of 100 gray and reported close to a 45% improvement in survival for each additional 100 gray of absorbed dose and a comparable survival that was about 3% to 4% for each 1% increase in covered tumor treatment. We expanded that model because of its ability to correct for covariate parametric types of bias you might get with what's called the accelerated failure time model that showed consistent and actually better statistically significant outcomes. The Cox model had a p-value of 0.003, whereas the AFT model showed a p-value of 0.00. These analyses were all on our data without any differentiation of cutoff as we did in the initial Kaplan-Meier 100 gray cutoff. We'll continue to analyze these. The phase two trial that we started will build on this data. We have analyses that we will likely present in our publication that is currently in draft and for a major publication on phase one, on what this means in terms of the predictability of phase two. We will probably present that at a future ASCO or SNO meeting in the summer, and certainly for the SNO meeting in the fourth quarter. I'm very happy to discuss in a separate call. We can't get into the statistics in great detail, but if there's any interest in really digging into that just let us know and I'll be happy to spend some time with you.

Justin Walsh, Analyst

Got it. Maybe one, you mentioned the presentations you guys have been going to at different scientific meetings. I'm curious about some of the reception to the data that you've presented so far. Obviously, the PI is quite enthusiastic about this, but how's the community received it?

Norman LaFrance, Chief Medical Officer

Yeah, I'm glad you asked that because for me to bring it up maybe is not as humble as we should be and not to be a wise guy, I think you should ask some of the Key Opinion Leaders out there what they think. What they tell us unprompted is that this is surprising data for such an early program, and they've not seen it in typical therapeutic programs. Part of my answer to them, and some of them know me, is this is a radiopharmaceutical, and it's not uncommon early in a program to get a very good sense on how it's going to work, because the mechanism of action, first of all, is well known. It's well accepted that energy transfer to the tumor is efficacious, and more is better. We have the delivery problem solved for both the GBM and LM, so that's very effective as has been presented. As you're well aware, we've shown that the increasing doses we've done during the dose escalation remain very well tolerated and quite predictable because we're not using exhaustive doses or extremely high doses. They've all been well tolerated without any observed dose-limiting toxicities or identified maximum tolerated doses. So we're on very solid ground for a very good therapeutic index. The safety margin is very comforting and robust, and people have recognized this. Many times, they will get unsolicited requests for interest in our programs because they've seen our presentations at one of the several meetings we've participated in.

Justin Walsh, Analyst

Got it. Maybe this next one for Marc and kind of builds on what you were saying about some of the interest you guys have been getting. I'm sure you can't speak to specific potential partners, but I'm wondering if you can shed any light on the types of conversations you're having or would like to be having. Are they primarily related to potential combination therapies or other types of opportunities?

Marc Hedrick, President and CEO

Hey, Justin, I would like to say that we've done three transactions over the last, say, one transaction at years. We've worked to expand the pipeline and build it out. They are kind of across the board, quite honestly. We're very open in terms of discussing and evaluating ways we can build value for shareholders, whether that's out-licensing or in-licensing. We just continue to expand those discussions. As the data gets out there, the things that Norman presented will gain more notoriety, which increases the number of discussions. It can be really hard to say much about that at this point, except that the conversations are increasing, not decreasing.

Justin Walsh, Analyst

Got it. And one more from me. Just sort of speaking to some of the general tones here, it seems to me like we're at another inflection point in the radio therapeutic field with the significant increase in the use of targeted radio pharmaceuticals and prostate cancer. So I'm wondering if you guys have seen any change in the tone or content of discussion you've been having as the commercial potential of some of these radiotherapeutics has become even more apparent?

Marc Hedrick, President and CEO

Got it. And one more from me, just sort of speaking to some of the general tones here. It seems to me like we're at another inflection point in the radio therapeutic field with the significant increase in the use of targeted radio pharmaceuticals in prostate cancer. I'm wondering if you guys have seen any change in the tone or content of discussion you've been having as the commercial potential of some of these radiotherapeutics has come even more into focus? Yeah, I may let the doctor comment scientifically. He's been doing this for a while and knows a lot about the space and has seen it evolve, probably has more drugs approved under his watch than anyone in the country in terms of the radio therapeutic space. Starting maybe in early 2021, we're seeing banks increasingly add analysts that are dedicated to radiotherapeutics. This is an important milestone. There's bank coverage, analyst coverage, capital flows into the space. There's manufacturing infrastructure being funded and built out in anticipation of the market coming, and then you see major players making deals in the space. We see a lot of promising movements in the capital markets pointing to years ahead of us of growing value in this space. We cannot be more excited to be here at the ground floor. One of the things that's different about us, I think, Justin, is we have real data. We have a lot of companies building infrastructure, but we're building a data profile that I think is very exciting in a group of diseases that have few good options. So yeah, we're very optimistic and bullish. Doc, do you want to elaborate?

Norman LaFrance, Chief Medical Officer

I think what you're asking, you're mentioning the PSMA space, which is very crowded and has seen successful recent approvals. There are several out there, and as you well know, before that was the serotonin receptor, the DOTATATE approval, which has been successful. Quite frankly, in the literature and at meetings, that's been what's talked about, understandably, and they've earned that with good data and results. In all due humility, I'd like to add that when we presented at the European Association of Nuclear Medicine, they have a highlights presentation at the beginning of the meeting to present what the reviewers and leadership of that society feel are the up-and-comers or the new data to pay attention to, and our GBM data presentation was chosen for the highlights lecture as the first presentation. Admittedly, there was a PSMA paper and a DOTATATE paper and so forth consistent with what they've been doing over the last years, but it was very rewarding and appreciated by us. The folks came up to me afterward and got a picture for posterity, in the sense of noting that this is quite an advance that they've recognized a definitive radiopharmaceutical that rather than the classic systemically administered using some elegant biochemistry or targeting mechanism is instead very straightforward and had incredible data. So we've made the highlight lectures, and I think this is recognition by the field that there are other candidates out there that are going to make a difference.

Operator, Operator

Our next question comes from Ed Woo with Ascendiant Capital. Please go ahead.

Edward Woo, Analyst

Congratulations on the progress in 2022 and definitely congratulations on the CPRIT grant. Is there any possibility or visibility that you'll be able to apply for grants for any other indication?

Norman LaFrance, Chief Medical Officer

Hey, Ed, thank you for the question. I think you mean the LM CPRIT grant? Are we going to be able to apply that to other indications?

Edward Woo, Analyst

No, in terms of getting grants for other indications, completely new grants.

Norman LaFrance, Chief Medical Officer

Oh, got it, got it. Yeah, no, thanks for the question. We've been successful, knock on wood, in getting third-party grant support in terms of the NCI grant and the CPRIT grant. One of the reasons we moved to Texas was that we thought that with $6 billion of capital for cancer funding, we might be able to get some of that to fund our programs—and behold, we were fortunate to be able to do that. We know of companies that have up to three CPRIT grants. We do think that some of our programs that aren't funded or aspirational programs that we would like to bring onboard, but because of our kind of internal frugality about capital deployment, we don't want to spend it until we raise it; there might be some opportunities there. Our plan, and that was a milestone this year, is to submit more than one grant, including the CPRIT, but also other grants that some opportunities that we have available to us to fund additional programs to build out the pipeline. That's a goal—those can be hard to get, but we're going to submit them, and we think we've sort of cracked the code to a degree on CPRIT, and we think there might be some greater opportunities ahead of us there.

Edward Woo, Analyst

What was the timing in terms of when you submitted your application to when you got awarded the grant?

Norman LaFrance, Chief Medical Officer

Actually, yeah, it was about 18 months. We submitted a couple of iterations. We got close a couple of times. Like with the NIH feedback, we worked in the background to continue to advance the program while we were continuing those dialogues. Treating a patient in LM really helped convince them, and the data really helped convince them that this is worth funding. It's like all grants; it's typically iterative. The key is being persistent.

Edward Woo, Analyst

And having data.

Norman LaFrance, Chief Medical Officer

Yeah, data helps. That's right.

Edward Woo, Analyst

Definitely. Congratulations, and definitely looking forward to more good news from you guys this year. Thank you.

Operator, Operator

Our next question comes from Sean Lee with HC Wainwright. Please go ahead.

Sean Lee, Analyst

Good afternoon, guys, and thanks for taking my questions. My first question on the Phase 1 GBM study, can we expect the data readouts from that prior to full patient enrollment expected by the end of '24?

Norman LaFrance, Chief Medical Officer

It's an open-label non-blinded study. So the short answer would be yes. To give you more details, it'll be as I think I was answering Justin's questions on the types of statistical analyses. I would expect us to have some reviews of the different types of analyses, just because there are lots of ways to utilize those to form the design of a registrational trial. I'd like to give you more detail, but the short answer is yes, and it'll depend on how the data develops. If we can certainly accelerate the accrual faster, we'll be in a position to move on that more quickly. Part of that will be in our preparation to go to the FDA, so we plan to share that. I can't give you exact timing, however.

Sean Lee, Analyst

Okay, no issues. Thanks for the additional color. My second question is on the upcoming pediatric study. What are some of the key learnings and takeaways from the GBM trial that you feel could help you apply to the pediatric study and make it more successful?

Norman LaFrance, Chief Medical Officer

Yeah, great question. Very applicable. We actually leveraged the pediatric questions and presentations to the FDA. We leveraged our adult data significantly. The first interactions with the FDA were to include all comers in pediatric brain tumors, which is a broad spectrum. The FDA is careful and conservative regarding any first-in-pediatric patients for any drug, particularly radiopharmaceuticals. We got feedback, for example, that we were limiting the tumors to sub-tentorial types with high unmet medical need and poor prognosis, which encompass high-grade gliomas. We recently had FDA agreement on that, and just owe them some last clarifications they have on some of the adult data, which is straightforward. We have done a re-analysis showing their interest in the adult data, which we'll be able to leverage for future adult considerations. Marc, do you have anything else to add on this?

Marc Hedrick, President and CEO

One thing I would add to that, Sean, is we've mentioned before that in the adult trial, delivery is key—if we can cover the tumor with enough radiation, we're going to kill the tumor, period. We translated that data directly into the pediatric population. This gives us a high degree of confidence going into this trial that we can deliver the drug. Another point is it's very common to put electrodes into the brain in these cases. We have a high degree of confidence that the convection delivery process will be well tolerated. We're able to leverage both that epilepsy treatment data as well as our adult delivery data to feel confident going into this trial. We're able to convey that successfully, I think, to the FDA given the final clinical protocol.

Sean Lee, Analyst

Thank you for that. That was very helpful. My last question is on the BAM product. I know it might be a little early, but are there specific indications where you feel the product will be particularly suited for?

Norman LaFrance, Chief Medical Officer

Yes. Our initial target is going to be for hepatoma. There are two drugs on the market that are kind of long in the tooth. They're non-bioresorbable and used to treat hepatoma, representing about a $1.2 billion opportunity. Those are permanent, but we're providing a drug with different radio therapeutic characteristics related to rhenium that make it more attractive. It's bioresorbable, which means that you can tune the bio-resorption timing so that by the time the radiation is fully decayed or nearly fully decayed, the embolic has been bio-resorbed, allowing vascular patency to be resumed, and you can treat the patient multiple times. That's the idea—a very differentiated, unique novel product. So liver is our initial target, but we believe this could apply to any tumor that you can target via radioembolization or angiographic catheters. It might also lend itself to difficult-to-treat tumors like pancreatic cancer and other sarcomas where it's challenging to reach.

Operator, Operator

Marc Hedrick: Andrea, we have one written question. The other three written questions have been mostly addressed. This question focuses on our LM trial and the innovative cell testing method used to evaluate biological response. How significant is this for your trial moving forward and your development strategies?

Marc Hedrick, President and CEO

The test we're utilizing is called CNSide, manufactured by a California company. Thus far, I would say we're incredibly pleased with that test. It fills a crucial gap in the diagnostic and therapeutic approach to these patients. The current existing way that LM is diagnosed is by a mix of imaging—imaging's not great—clinical findings, which are often vague and non-specific, and CSF lumbar puncture results, which look at glucose protein and cell count. This is very nonspecific and very non-sensitive. We've seen significant reduction in tumor cell counts measured by that assay in the first four patients where we have data. We're pleased with what we've seen thus far, but it's still early. Another relevant piece of information is that LM is significantly underdiagnosed, with about 25% of patients with LM diagnosed based on autopsy data. This means there is an opportunity to significantly increase the total addressable market for our therapeutic by up to four times. That leads to a substantial increase in the application for the test. Additionally, beyond just the quantification of tumor cells, we can potentially use that test to tailor therapy. Although we don't use it for our trial, you can actually group antibodies, look at specific epitope expression, and genomic analysis as part of that test to tailor therapy, and we're beginning to explore that under our CPRIT grant. So, that's a good question and we believe it will be very important in the long term to pair the therapeutic with an innovative diagnostic like this—think of it almost like a companion diagnostic.

Operator, Operator

I'm not showing any further questions right now. Marc, if you'd like to close it out?

Marc Hedrick, President and CEO

Yeah, so thanks everyone for participating in the call today. We appreciate your interest in the company. Once again, thanks to our employees and the collaborating physicians and scientists that we work with on a daily basis. We're also very appreciative for the patients who enroll in this trial, who need this help and trust us to deliver for them and their families. So we look forward to continuing the updating process as we move forward, and thanks also to our stockholders for their continuous support and confidence. Thank you.

Operator, Operator

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.