Q1 2024 Kymera Therapeutics Inc Earnings Call

Participants

Justine Koenigsberg; Vice President, Investor Relations; Kymera Therapeutics Inc

Nello Mainolfi; President, Chief Executive Officer, Co-Founder, Director; Kymera Therapeutics LLC

Jared Gollob; Chief Medical Officer; Kymera Therapeutics LLC

Bruce Jacobs; Chief Financial Officer; Kymera Therapeutics LLC

Brad Canino; Analyst; Stifel Nicolaus & Company, Incorporated

Eric Joseph; Analyst; J.P. Morgan

Andy Chen; Analyst; Wolfe Research

Divya Rao; Analyst; TD Cowen

Vikram Purohit; Analyst; Morgan Stanley & Co. LLC

Geoff Meacham; Analyst; BofA Global Research

Kelly Shi; Analyst; Jefferies LLC

Jeff Jones; Analyst; Oppenheimer & Co. Inc.

Presentation

Operator

Good day and welcome to the Kymera Therapeutics first quarter 2024 results conference call. (Operator Instructions) Please note that this event is being recorded. I would now like to I turn the conference over to Justine Koenigsberg Please go ahead.

Justine Koenigsberg

Thank you. Good morning and welcome to Kemira's quarterly update call. Joining me this morning are Nello Mainolfi, President and CEO; Jared Gollob, our Chief Medical Officer; and Bruce Jacobs, our Chief Financial Officer. Following our prepared remarks, we will open the call to questions to have enough time to address everyone's questions. We ask that you please limit your questions to one and a relevant follow-up.
Before we begin, I would like to remind you that today's discussion will include forward-looking statements about our future expectations, plans and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A description of these risks can be found in our most recent 10-Q filed with the SEC. Any forward-looking statements speak only as of today's date, and we assume no obligation to update any forward-looking statements made on today's call. With that, I'll now turn the call over to Nello.

Nello Mainolfi

Thank you, Justine. Good morning, everybody. It's been a very productive beginning of 2024 starting in January with an extensive update at our immunology R&D Day. And a subsequent financing to provide capital that we will invest in our expanding clinical development efforts and growing pipeline. Q1 has been focused on execution on both our preclinical and clinical pipeline as well as external engagement across a variety of business at medical conferences.
Today, our plan is to share a brief update on our programs as well as timelines for news and coverage. We're expecting through the rest of this year and early 2025. As we shared earlier this year, we believe we have a significant opportunity to address and expand the existing treatment paradigms within immunology by developing compelling oral small molecule degrader medicines with biologics like activity.
As had been the case all the way back to the financing of the company, we have taken a differentiated approach to target selection and focused on critical molecular pathways that are well validated through human genetics, clinical evidence and or the success of approved drugs.
Many of these pathways play a key role in immune-mediated disease pathology. And while injectable biologics dominate these markets often due to the strong clinical activity, they're not without limitations, which in many instances can limit penetration.
As a result, we believe developing convenient oral options with biologics like activity and a good safety profile represents an enormous opportunity to expand patient access in many of these markets and are currently dominated by injectable agents environment for program, which was our first program to enter clinical development, exemplifies a target in a pathway that has the potential for a broad patient.
And we have talked in the past about our reasons for enthusiasm around Eric for as a target. And our rationale for pursuing at high-risk for is an obligate node in the oh one TLR signaling, and we believe its degradation is the only approach to fully block the pathway, creating multiple development opportunities in large, high unmet need indications indicated for seven for higher for Phase 1 trial.
We observed deep and well-tolerated degradation, early signs of clinical efficacy and high fidelity or translation from preclinical models to patients. We provide key insights for our growing immunology pipeline and physician Fusion programs, such as our sub-6 and seek to develop programs for success.
In March, we had the opportunity to showcase our proprietary immunology, Blockbuster programs, KT. 61 stat six degrees and KC. two nine for our Phase IIb data at the American Academy of Dermatology annual meeting posted presentations, which marked the first data from a specific targeted agents.
And I think to a degree that could be shared at a major medical meeting, highlighted our robust preclinical packages and support the significant potential of our oral degraders in this pathway in our KT-621 the poster, we highlight the preclinical efficacy studies comparing to the six to one to pick them up in a preclinical atopic dermatitis model.
Importantly, cases six to one showed robust activity in vivo in this model equal or superior to the cinema cases, six to one degradation of that six was well tolerated in multiple preclinical safety studies. It does have a concentration up to 44 about the projected human efficacious concentration, if we can indeed deliver biologics like activity, a good safety profile and oral once-daily dosing.
We believe KT-621 could change the treatment paradigm for millions of patients suffering from Th two, Th two driven inflammation in terms of timing, P 61 is currently in IND-enabling studies and is on track to enter Phase one testing in the second half of 2024.
It's our intent to conduct the Phase one healthy volunteer study for to affect single and multiple ascending doses of T. two OPT. six one and move quickly from various locations. We have finalized our clinical development plans and strategy, and we look forward to sharing more details as we move closer into that development.
What would it take to be shared a poster at AACR demonstrated people more degradation, potency, low nanomolar inhibition of the 23 IL-12 and type one interferon pathways showing Casey to reinforce potential to recapitulate the biology of human stick to loss of function mutation. Biological differentiation of KC. two nine four from our stake to small molecule inhibitors was demonstrating through IL-10 sparing compared to Supra, which is important in inflammatory bowel syndrome as well as was shown through superior inhibition of type one interferon pathway compared to 2.79, which is relevant for the treatment of several diseases, including interferon driven diseases.
Additionally, kidney two, nine four demonstrated deep and sustained peak to knockdown in the liver with low daily doses. We believe that these data demonstrate that at peak to degrade that it has the potential to deliver best-in-class seek to partner with Brocade. We productivity across multiple IL-12 23 and type one interferon driven immune inflammatory diseases. We intend to continue to share updates across our pipeline and medical meetings in 2024. In fact, later this month, we presented a poster highlighting KP. 61 and its potential to treat Th two allergic diseases at both the American Thoracic Society International Conference in San Diego as well as at the Digestive Disease Week in DC.
These presentations, which build on what was previously shared at R&D Day will include new, exciting additional preclinical data to send out my intro here since our founding eight years ago, a milestone which we will commemorate just in a few days, we have demonstrated consistent scalable innovation, including strong preclinical to clinical translation of degradation, safety and activity across our whole pipeline. We have also achieved early proof of concept in both immunology and oncology, which we believe is a significant accomplishment for the new modality.
As we are transitioning from early to mid late development across our pipeline, we remain committed to building on our early success in expanding our team and capabilities to deliver on the substantial clinical and commercial opportunities that our programs offer to ultimately become a global commercial-stage medicine company. In the meantime, we look forward to important near-term data readouts in the US in this year in oncology and multiple readouts from our immunology pipeline in '25. I'd now hand over to Jared to provide an update on our clinical program. Jared?

Jared Gollob

Thanks, Nello, and I'll round out the immunology discussion this morning. The direct for and then give an update on our two clinical oncology program. Our first-in-class oral IRAK4 degrader 84 seven four, is progressing into Phase two trials in hidradenitis suppurativa and atopic dermatitis.
These trials are being conducted by Sanofi under our collaboration, and we expect to be in a position to share top line data in the first half of 2025 for gold at Sidoti move this program into Phase 2 studies based on the early clinical data we generated in HS and AD patients in Phase 1 trials in that study.
Not only did we achieve our study objectives in terms of PK/PD and safety, but we also delivered encouraging signs of clinical activity that we will also evaluate over a longer dosing period in the Phase 2 trials these randomized placebo-controlled trials represent an opportunity to demonstrate the potential for IRAK4 degradation generally and Kinki four seven for specifically to transform the treatment of complex inflammatory diseases and to offer HS and AD patients, a well-tolerated effective and convenient oral medicine.
So switching gears now to oncology, I'll start by noting that we recently presented scientific data on our oncology pipeline in both the late-breaking poster session and during the major symposium at the ACR Annual Meeting.
As we shared in the past, our preclinical and early clinical findings highlighted last month at the meeting support the advantages of degraders over other existing technologies and agents and further validate our differentiated molecular design, target selection and translational strategies to advance the new generation of medicines for patients. Thank you to five three are highly potent degrader of MDM2 E3 ligase that modulates most common tumor suppressor.
P53 is currently in development for the treatment of liquid and solid tumors. Preliminary data from the Phase one clinical trial showed evidence of target engagement and P53 pathway activation, along with initial signs of antitumor activity without dose-limiting toxicities, including typical hematological toxicities.
These findings support our therapeutic hypothesis for MDM2 degraders and the potential to improve the therapeutic index compared to MDM to small molecule inhibitors as we finish dose escalation in the Phase one trial this year. We hope to see antitumor activity in a variety of tumor types and coupled with our biomarker selection strategy, we plan to assess these data collectively to inform next steps.
Finally, on MDM2, we are announcing today that we've had an abstract accepted for a poster presentation at ASCO in June, where we will provide a clinical data update. Once the trial is completed, we expect to present the full data set at a medical meeting later in the year.
Thinking three three three are highly selective degrader of Stat three have traditionally undrawn transcription factor recognized as a key component of objects that signaling pathway with both tumor cell intrinsic and tumor cell extrinsic effects on the tumor microenvironment. It's currently in development for the treatment of multiple stacked rate dependent pathologies, including hematological malignancies and solid tumors.
Preliminary data from the Phase one trial demonstrated early signs of anti-tumor activity at doses that were generally well tolerated and associated with substantial StatSpin knockdown in blood and tumor. Our preclinical to clinical translation showed some early but encouraging responses in both CTCL and Hodgkin's lymphoma. We also demonstrated simulation of an interferon gamma response in tumor and blood, which is encouraging given the correlation between interferon gamma and how tumors respond to anti-PD-1 drugs. Since escalation of IKT. three three three Phase one study is ongoing with the goal to further assess safety and anti-tumor activity in both liquid and solid tumors. We expect to complete the study this year and deliver additional proof-of-concept data to define KT. three G. threes path to late-stage development.
We are also announcing that we've had an abstract accepted for presentation at the European Hematology Association or EHA meeting in June, where we will present a clinical update. We plan to present the full data set at a medical meeting later in the year. Now I will hand the call over to Bruce to share financials for the quarter. Bruce?

Bruce Jacobs

Thanks, Jared. I'll quickly review our first quarter 2024 financial highlights and you can certainly reference tables found in today's press release. Revenue for the first quarter of 2024 is $10.3 million. All of that was attributable to our Sanofi collaboration. And just as a quick reminder, we had received or have received $55 million in total milestones as a result of the start into two Phase 2 studies in the fourth quarter of last year.
With respect to operating expenses, R&D for the quarter was $48.8 million, about $6.1 million of that represented non-cash stock based comp, resulting in an adjusted cash R&D spend of $42.7 million, a 10% decrease from the comparable amount in the fourth quarter of 2023.
On the G&A side, our spending for the quarter was $14.4 million, of which $5.9 million was stock non-cash stock-based comp. The adjusted cash G&A spend of $8.5 million, again, excluding the stock-based comp, reflects a 1% decrease from the comparable quarter sequential quarter. Our cash balance at the end of the first quarter was $745 million.
In January, as we mentioned, we realized approximately $300 million in net proceeds from our equity offering, and our cash balance is expected to provide a runway into the first quarter of 2027, and that will enable us to execute on multiple, I should say, the first half of '27 that will enable us to execute on multiple data readouts, including oncology proof-of-concept results in 2024 KT-474 Phase 2 data expected in the first half of 2025 and several clinical inflection points for our STAT6 and TYK2 programs also in 2025. So this concludes our prepared remarks. We'd be happy to take your questions. Operator, if you can open the line for questions. Thank you.

Question and Answer Session

Operator

(Operator Instructions) Brad Canino, Stifel.

Brad Canino

Great. Thanks so much for the question, and it looks like we're going to get two bites of the apple for MDM2 this year. And generally, I would assume that the completed IA and the biomarker data later this year would be most material.
So just to not overlook what's coming at ASCO, can I have you talk about the decision to present here? What should be the focus and how should investors view within the broader trial and strategy for the asset? Thank you.

Nello Mainolfi

So thanks, Brad. So just taking a step back, this is a program that we started clinical development in the second half, roughly the middle of last year. And our first stage would have our quarterly call in November. If you recall last year and we present a really limited data as we since then recruited many more patients in the solid tumor and lymphoma arm as well as open the ML arm.
We thought it was important to connect with the medical community and obviously the investor community to give an update on the progress we've made in both arms of the trial that I believe will shine more light on the potential, though MDM2 across the subset of patients and also create more enthusiasm hope we can to continue to recruit the right type of patients to our study.
So obviously, when we share data, there are multiple audiences and the investor community being one of them, the goal is to complete, as we said in the press release, is this Phase one dose escalation study by the end of the year and then yet provide a full update as well as plans for further development later in the year. But given the substantial data of patients recruited between November. And now we thought this would be it's a good update to showcase the progress of the program.

Brad Canino

Okay, thanks for that. And I know I know you took part in AM targeted protein degradation symposium at ACR. I'd just love to hear what your general insights were. Thoughts were exiting that about the evolution of this therapeutic area. Thank you.

Nello Mainolfi

Yes, that's a great question, Brad. So firstly, with a great meeting, I believe I told you there he was very well attended with school symposium with many companies presenting, I actually hadn't been in the CPC focus symposium in probably too long. And so it was great to see a huge amount of interest from many stakeholders in this Phase I so many physicians or so of your smaller large company. So I think the level of interest it is increasing with that. The data, especially clinical data that different companies are our own.
Hi, Sherry. I also came home with the great feeling that companies like Chimera are really leading the field here in terms of capability, target selection, sophistication of approach and so I think generally there is still a lot of work to do for the field, but I'm glad that we and others are leading and providing hopefully good examples for others to follow.

Operator

Elie Merle, UBS.

Hey, it's Sam on for Elie. I guess just in line with the previous question. And from the MDM2ASCO update at Asco, can you provide any color on, I guess, like the extent of data that we could be expecting from this study? And I guess what kind of efficacy measures we should anticipate to look for on? And what are you guys looking for from the data as you think about the development worldwide?

Jared Gollob

Hey, thanks for the question. I mean, this is really planned to be a clinical update for the Phase Ia dose escalation. So really to show the progress that we've made since last November. So know that the goal here is to share additional information on the types of patients who enrolled both solid tumor patients as well as patients with hematologic malignancies to share the safety that we've been seeing as we've been dose escalating to share more data on the pharmacodynamic effect of the drug.
Recall that back in November, we did show an impact on IGD as a team, which is a key biomarker. Just downstream of them you have to or aim is to show more data that provides that sort of information on pharmacologic engagement and of course, to provide whatever response data we have clinical response data we have for patients with solid tumors in patients with hematologic cancers.

Okay, great. Thank you so much. And I guess just a quick follow-up. Just any color on the updates for the biomarker patient selection strategy you guys are pursuing and how is the progress kind of going there?

Jared Gollob

Yeah, I think that that's an important question. And I think Nello mentioned that earlier, which has been an important part of the program for MDM2, in addition to being able to demonstrate that the therapeutic index with our degrader is superior to that seen with MDM2 inhibitors to be eventually to be able to evolve a sort of patient selection strategy or cyclical sort of biomarker strategy for selecting patients who we think would be most sensitive to this treatment?
We don't plan on providing at that particular update at ASH. So but our anticipation is that later in the year, preferably at a medical meeting, we'll provide more of those data showing our progress preclinically and even perhaps some of our clinical data that have been informing our ability to develop a patient selection, biomarker strategy, focusing on those patients who we think and we'll be able to predict would be most sensitive to MDM2 degradation.

Operator

Michael Schmidt, Guggenheim Securities.

Hey, good morning. This is Gayle for Michael. We wanted to get your thoughts on the recent Reebok data that showed superiority over Dupixent. As you think about the opportunity for your direct foreign staff as such degraders, do the level of results shift the bar for an oral agent in a D and potential other indications? And as a related question, what's your strategy on future head to head studies against biologics for your overall II portfolio. Thank you.

Nello Mainolfi

Yes, that's a great question. So I don't think we've learned today that inhibiting Jack kind is, is the extremely powerful anti-inflammatory mechanism. In fact, I think if you look across several indications, not only in HIV, you see Jackie leaders being extremely, extremely active so I don't believe we learn anything new. I think what we are what we are proposing here at Chimera is to use protein degradation to go after targets that provide the best efficacy to safety profile.
So the opportunity here is to have an oral drug that is well-tolerated that does not require, you know, block block, either mining or broadcasting or monitoring of patients for severe cardiovascular events. So I don't think the bar has moved at all. I think we the field is still looking for oral agents that are active and have a very well-tolerated profile. And that's really what we're trying to do for both direct floor. And that's the 32 in different way. Obviously, we have discussed of each program individually.

Operator

Eric Joseph, JPMorgan.

Eric Joseph

Hi, good morning. Just wanted to get a little bit of a better sense of what your internal bar is for moving to Phase three and to forecast that later-stage development? I wonder whether key opportunities in HE malignancies will be strategically attractive enough or do you want to think broader than encompasses solid tumors as well? And additionally, Titan is the focus more on moving forward with a monotherapy strategy that would you be amenable to combination approaches? Thanks.

Nello Mainolfi

Yeah, maybe I'll start and then pass it to Jared. So first, I would say the reason why we got involved with MDM to which, as we all know, is a target that is being pursued by the whole industry in the past 15 years or so is the reason for us to do so. It's really our Marquee. It was their idea of tumor types that we have seen are extremely sensitive to removal of MDM2, which is quite different in our view, from inhibition of Ambien to PET/CT interaction that small molecule inhibitors to look into, as Joe was saying, we have develop the same steep demand, let's say, across tumor types.
They point to the subset of tumors in which we've seen preclinically renewal. We'll start sharing some clinical data, but we've seen preclinically second say so far to be extremely sensitive to these mechanisms when does go across both team as well as solid tumors. I think we've shown already preclinically that AML, especially both the single agent as well as combo or we've seen some really maybe almost best-in-class activity.
And this is an area that we would pursue independently of the opportunity in solid tumors given the high unmet need still be relevant commercial opportunity for both first line but also for refractory now. So I think I would say that the AML opportunity is in a way independent and solid tumor. But I also would want to say that the impetus to work on MD and two was to go also beyond him, oncology. So we have a hopefully, exciting plan that we can share with you based on a biomarker strategy this year is expanding in solid as well.

Eric Joseph

Great. Appreciate it. Thanks for taking the call.

Operator

Kalpit Patel, B. Riley.

Hi, this is Jay for Kalpit. Thanks for taking my question. Just one on the tax the program. The question is if you have the opportunity to discuss a divestment on the audience that's fixed degrader with Sanofi if so could you share any insights into why perhaps than off the opportunity to collaborate with a number of statistics degrade accompanying that?

Nello Mainolfi

Yes. So as we've said repeatedly in the past series again today, we started this program a few years ago. We have built a conviction around our ability to use oral degraders in immunology, starting from the early days in our four. And we have decided that we have no interest in partnering our immunology pipeline in order to think that at least in the foreseeable future in order to fulfill our vision to building a global integrated company. I'm not going to publish the share discussions that we've had with Sanofi.
But I would say generally, this is a program that has been pursued on the fixed front from other parties quite heavily in terms of potential partnership. But our communication has been very clear and that we believe this is a program that we want to develop as a stand-alone independent company for the pursuit for the foreseeable future.
I will also remind everybody that we are the first company to take is that the six degrader. Actually, I would say that is aged overall in the clinic with the first company to demonstrate the preclinical activity of such an agent. And you know, everybody else is obviously years behind us.

Okay. Thank you. That's very helpful.

Operator

Andy Chen, Wolfe Research.

Andy Chen

Hi, good morning. Thank you for taking the question two related questions also on staff savings. Just curious if you can talk about tissue distribution. And so I see deep degradation in the skin in non-human primates. I'm just curious how well this tissue distribution translates to humans. I'm curious if you can cite several precedents were were this nonhuman primary distribution is highly correlated to humans and also in the in the first half of 25, are we going to gain any insight on this exact topic? What kind of metrics will we have when determining whether STAT6 is indeed acting on the skin in humans? Thank you.

Nello Mainolfi

No, it's a great question. So first, for people that have followed us over the past few years, know that we don discussed preclinical data of PK. and distribution besides the degradation there that we show in our presentations. And that's only because we believe those are highly and confidential and important data that we want to keep for ourselves at this point. But I will say that if you look at the data we presented, we've shown that KT-621 degree STAT6 equally effectively in several issues in skin and lung in blood.
And it, I believe in Spain to I'm not sure we've shown them or not, but we've said we've shown that our distribution of the drug allows for that the I would say, generally equivalent degradation across all Th two relevant tissues. And so we our expectation is to see in the cleaning the same level at this time. And we've seen good translation of preclinical into clinical in terms of distribution across different species. I would say that, yes, in the first half of 25. Our goal is to share a Phase one data as it's been publicly disclosed, and the Phase 1 data will evolve both blood and skin biomarkers.

Andy Chen

Thank you.

Operator

Derek Archila, Wells Fargo.

Hey, guys, good morning. This is (ianudible) on for Derek. Thanks for taking our question. So quick one from us kind of like following up on the last question on the stat sig Phase one study, will you be including a cohort of patients to achieve this proof-of-concept kind of like you did with like four seven four? Or will this only be including like healthy volunteers? Thanks.

Nello Mainolfi

Well, at this point, I think what we said today was that the initial evaluation been healthy. Volunteers will share more at a later date.

Okay, thanks.

Operator

Divya Rao, TD Cowen & Company.

Divya Rao

Hi, guys. This is Divya on for Mark. Thanks for taking our questions and go to the earlier question on what is the scope of kind of the disclosure that we should get from KT-333 at the heart. And then as a follow-up, I guess, what do you need to see in this Phase one trial, which I guess you're planning on completing at the end of the year and liquid tumors to continuing development in both liquid and solid tumors.

Nello Mainolfi

I'll take the second and I'll let Jared answer the first part of your question. So the second part was around where we need to see, as I said in the past, also on our power for continuing investment is having meaningful opportunity with a clear path to a sizable patient population with big clinical and commercial impact. And so the those that obviously the more obvious answer to your question is that solid tumor opportunities, we'll be able to make a much easier case for further investment.
As I have said in the past, we don't expect to see single agent activity in solid tumor as we haven't seen pre-clinically, but we're evaluating the biomarker, the tumor biomarker effect to that tie with preclinical data that we have and that we've already demonstrated in the in this potential solid tumor combo opportunities. So that is one.
And then obviously having strong antitumor activity as a single agent in liquid tumor is important for two reasons. One, because there are potentials liquid tumor opportunities that are sizable enough it to be interesting, but also to confirm that the drug is active and it's worthwhile further investment in expanding the opportunity. Jared, you want to comment a bit on the expectations for either.

Jared Gollob

Sure. And recall that at ASH this past December, we presented data on 29 patients that we had enrolled so far and we show very encouraging safety data, which was allowing us to continue to dose escalate. We showed very strong pharmacodynamic data, including strong statutory knockdown in blood and tumor as well as strong immunomodulatory effects in blood and tumor, such as that interferon gamma response that was predictive of potential combination with anti-PD-1.
And we also showed promising clinical responses in CTCL as well as in Hodgkin's lymphoma. So the aim for and the presentation is really to build on that as you continue to dose escalate to provide further data around safety, as we've been dose escalating to provide additional pharmacologic data on target knockdown and immunomodulation in blood and whatever we may add a tumor and to provide additional clinical response data. And again, as you said that this is meant to be a clinical update. And then the plan will be then later in the year of what we anticipate completing dose escalation to provide final data set at a medical meeting later in 2024.

Divya Rao

Thank you.

Operator

Thomas Smith, Leerink Partners.

Good morning, this is (inaudible) in line for Thomas Smith. Thanks for taking the question. We have to both in I&I. The first one is like what's the gating factor to initiate a Phase one trial for KT-621? And what data can we expect from the readout, what you spent in first half '25? So we have a hard time indications for the subsequent development in identification indication.

Nello Mainolfi

Okay, great. So we said on the call today and in the press release to work in IND-enabling studies and we're going to leave it at that we don't usually provide a specific update on where exactly we are on the process. So you've obviously completed FH filing an IND and initiating Phase 1.
It was between us and that in terms of indication prioritization for static, I think the only thing I would say is, as we've said in the past, also, we are focused on getting this drug to as many patients as possible, starting with, large indications where we've seen injectables can really, really have low penetration for many, many reasons. So I would say we're prioritizing the larger indications. So but that doesn't mean we will not pursue others. I think that will happen. But just in a it's probably different stages amendment.

Got it. And for the actual program with data expected in first half as well of next year from this mill feed will make the decision of going forward or not. But you also have an opt-in decision by how are you approaching the UP and what do you need to see to make a decision?

Nello Mainolfi

Yes, to a after Phase 2 that before Phase 3. So it Phase three needs to be in the planning stage when we will have the opportunity to decide to opt-in or not. And this are the decision will be based on new obvious reasons. The excitement we have around the opportunity with the drug, the investment that we have across our pipeline, the cash needs that will be needed across the investments across our pipeline.
I would say, maybe they believe that the base case is if the drug is active as we expected, it will be it will be value accretive for us to obtain. And so it would be probably an easy decision to make. But as you know, it's hard to make decisions in a vacuum. So one word there. We will make the decisions based on all the other parameters I mentioned.

Operator

Vikram Purohit, Morgan Stanley.

Vikram Purohit

Hi, good morning. Thanks for taking our questions. So we also had a couple of questions on 474, and apologies if you mentioned this in your tenure our prior Q&A and we missed it, but we were just curious on how you incentivize your currently thinking about indication expansion for seven for BEYOND HS. and AD. and when some of those decisions could be made and how you're thinking about them for the time being ahead of you just in 80 datasets coming in the first half of next year? And then secondly, on a more logistical point, and should we hold the expectation that the HS and AD data sets would come together? Or is that not necessarily the case?
And if you have any visibility at this point on which which venues or which forms might be appropriate to showcase those data sets. That would be helpful color to get from your perspective. Thanks.

Nello Mainolfi

If you got three questions, well done. So the fact we did with the last one, it's a unique time for us to know, actually both the timing and where instead the program time lines have been presented in clinicaltrials.gov with disclosures from both Sanofi and us. We're seeing that both studies should be able to read out in the first half of 25. I still feel we're too early to know whether they'll be disclosed together or separately until you give us more time?
I think when we're closer, we might be able to answer that question in terms of the indication expansion. And I also said in the past, we've signed the anchor. We have worked diligently on evaluating many other opportunities. In many of these are obvious other indications that the biology has been validated, again, are known to be relevant.
And I think there is sensitivity about disclosing what they are just because I think the team right now is focused on executing on these studies. I believe Sanofi will be the one maybe disclosing other indications first, and then we'll be happy to provide more color in terms of timing. Again, I can't speak for them. But let's say for now, we're focused on executing on these studies. And I believe this is a personal opinion as we get through some of these inflection points, we'll be able to share more.

Vikram Purohit

Got it. Thank you.

Operator

Geoff Meacham, Bank of America.

Geoff Meacham

Hey, thank you. So I guess I have a quick question on given capital constraints. Do you think that there's a scenario where you guys might partner out some of your oncology assets, like what factors would you take into consideration when evaluating the potential for a partnership?

Nello Mainolfi

Yes. So thanks for the question. So generally, as we've said earlier on, we believe we are partnering it to be an option to continue to grow the Company needs to serve a purpose. Rarely rarely not always miraDry. I would say that that financial drives partnerships, but it has to be really with financials only raises, there will have to be a win-win opportunity, I think is the end of the partnering in oncology is something that we know we've discussed in the past, we might be something that we'd be open to do for some of our oncology programs.
I just can't speak to specifics given that we're still in the midst of generating important data that will it will, first of all, tell us the level of commitment they can err on its own once we invest in the program. Everything after that, we'll be able to have a clear view of what the best path for value creation for our oncology pipeline, look at what they do, it is there's always partnership is a tool that any company should use to think about long-term value creation as we can reinvent the wheel in every single program.

Geoff Meacham

Got it. Okay. Great. And then what are your key priorities for this year?

Nello Mainolfi

Say that again.

Geoff Meacham

Yes, business development between.

Nello Mainolfi

Yes. I mean, I have I think I've answered the question already.

Operator

Kelly Shi, Jefferies.

Kelly Shi

Thank you for taking my questions. Also have no concern at both of them. Obviously, the clinical development is expanding in this space and the oral agents like Jack inhibitor and BTK inhibitor, especially interesting, because even now curious, how should I look for the greater the provision to other oils as it accommodates, what would be the differentiated clinical features to be anticipated based on targeting strategy and also the anomaly have a great idea.

Nello Mainolfi

So it was -- the sound was not great, but maybe if I understood correctly, you were talking about how the derrick for compare to like other small molecule at Jive with BTK inhibitors in our journey. Jared you want to take some of that?

Jared Gollob

Yeah, I mean, I think certainly the differentiation, you know, is there potentially, you know, both for efficacy based on the mechanism as well as on safety. And we know that for seven for ARX-04 to greater because it's impacting and the IR. one receptor pathway as well as the toll-like receptor pathway has the ability to impact multiple different pro-inflammatory cytokine essentially with a single compound, whereas many other agents in the I&I space, targeted agents in particular have a more restricted effect on all of these pro-inflammatory cytokine.
And so the broader effect, our multiple different cytokine, we think can give us a broader development opportunities within autoimmune and other inflammatory diseases. I think that is one important differentiating factor. I think there are safety factors, I think which also know can't be overlooked with data presented before are summarized before the fact that there are adult human direct for genetic knockouts who in adults we do not have any and phenotype already susceptibility to infections. And so I think being able to potentially maximize knock down the virus for chronically and to essentially optimize efficacy without compromising safety, I think is a real central game changer in differentiating factor from other drugs like JAK inhibitors.
For example, the check inhibitors do have broad anti-inflammatory effect with a significant safety liabilities in terms of risk of infection, risk of cytopenias, risk of malignancies. That is not something that has been seen in either human direct or knockout individuals are even in preclinical studies. And so I think this ability to potentially really strongly degrade and non-direct were chronically to maximize efficacy while not having any safety issues could really allow this drug to be broadly developed across multiple different indications, also not just in moderate to severe patients belong to a milder patients.
I mean, I think this really provides optionality that you don't really you can't be seen or challenged by other modalities. And so we think that this is what are the real value propositions of 47 for both the differentiation of potentially efficacy standpoint as well as on the safety standpoint, phantom interest expense here that I hear.

Kelly Shi

Terrific. Thank you.

Operator

Next question is from the line of Jeff Jones from Oppenheimer. Please go ahead.

Jeff Jones

Good morning, guys. And thanks for taking the question. Just two quick ones from us on there's some evidence of improved efficacy and targeting IL17 A. and apps versus just IL. 17 ALOV. me versus second. Can you, Matt, and could you comment on whether targeting RAC. four would be expected to impact the pathway for both forms? Just a technical question. And then on the financial side on how should we be thinking about the Sanofi collaboration revenues going forward versus milestone payments? Thanks.

Nello Mainolfi

So Jared will take the first and then --

Jared Gollob

Yes, I had a question around the activity of IL-17 AF. targeting versus a especially in diseases like HIV, where there may be an advantage. I think sort of more broadly speaking further, I think speaks to the advantage of having a broader anti-inflammatory effect versus a more restricted one. I mean, here is still restricted to IL-17, but the being able to hit the eight F. isoforms rather than just a is already showing you that as you broaden out the impact, we potentially can increase efficacy.
Now even though I forwarded that specifically target the IL-17 pathway. We know that by impacting the IL-1 family cytokine pathways as well as the toll-like receptor pathway as we do impact IL-17 production and while we haven't looked specifically at a versus F isoform, we would assume that that in fact, is probably broad across multiple different IL-17 isoforms data come back to the point I was making earlier, which is that having a drug, we have a broader anti-inflammatory effect within these autoimmune diseases that have very clear Trophic inflammation that includes both HS. and AD. and many others is an advantage. And the 17 A. effort today is just another way to sort of highlight the advantage of going broader and having more efficacy versus being more restricted and narrow.

Bruce Jacobs

And Jeff, just to answer your question on revenues, while we don't obviously guide to collaboration revenues, you can see in our balance sheet, the deferred revenue number it's just over $46 million. That's that amount of revenue we expect to recognize over the near term as we fulfill our performance obligation via the inclusion, though of additional milestones there's no, there's no additional milestones are included in that number. So anything that is achieved with respect to future milestones, those would be largely recognized at that point in time. So that's what I can tell you on that.

Jeff Jones

Great. Appreciate it, guys. Thank you.

Operator

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Justine Koenigsberg for closing remarks.

Justine Koenigsberg

Thank you. We'd like to thank everyone for joining us this morning and look forward to keeping you updated on our progress. Later this month, we'll be participating at the BofA Conference and hope to see many of you there. In the meantime, please don't hesitate to reach out if there are additional questions following today's call. Thank you. That concludes today's call.

Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.