Q4 2023 Crinetics Pharmaceuticals Inc Earnings Call

Participants

Scott Struthers; Founder & CEO; Crinetics Pharmaceuticals Inc

Alan Krasner; Chief Endocrinologist; Crinetics Pharmaceuticals Inc

Marc Wilson; Chief Financial Officer; Crinetics Pharmaceuticals Inc

Jim Hassard; Chief Commercial Officer; Crinetics Pharmaceuticals Inc

Joseph Schwartz; Analyst; Leerink Partners

Yasmeen Rahimi; Analyst; Piper Sandler

Jessica Fye; Analyst; J.P. Morgan

Jeff Hung; Analyst; Morgan Stanley

Brian Skorney; Analyst; Robert W. Baird

Douglas Tsao; Analyst; H.C. Wainwright

Jonathan Wolleben; Analyst; JMP Securities LLC

Dave Windley; Analyst; Jefferies LLC

Leland Gershell; Analyst; Oppenheimer

Presentation

Operator

Welcome to the Chronix Pharmaceuticals Fourth Quarter and Full Year 2023 financial results conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a question and answer session. I will now turn the call over to Corey Davis of LifeSci Advisors. Please go.

Thank you, Sergio, and hello, everyone. Joining me on the call today are Scott Struthers, Founder and Chief Executive Officer, Alan Krasner, chief endocrinologist, and Mark Wilson, Chief Financial Officer. Also joining us for the Q&A portion of the call are Dana pursued a Chief Medical and Development Officer, and Jim has Chief Commercial Officer. A press release announcing the fourth quarter and full year 2023 financial results was issued today and is also available on the kinetics website.
As a reminder, we'll be making forward-looking statements, and I invite you to learn more about the risks and uncertainties associated with these statements.
As disclosed in our SEC filings. Such forward-looking statements are not a guarantee of performance, and the Company's actual results could differ materially from those stated or implied in such statements due to risks and uncertainties associated with the Company's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's news release. The Company's other news releases and kinetics SEC filings, including its annual report on Form 10 K.
I'd also like to specify that the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, February 28th, 2024 for critics takes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. I'll now hand the call over to Scott Struthers. Scott, go ahead.

Scott Struthers

Thanks, Corey, and good afternoon, everyone, and thank you for joining us for our quarterly results call. As the company progresses towards commercialization. It's our intent to expand our investor outreach and provide greater opportunities for interactive dialogue. We appreciate your attendance and look forward to our discussion today and on future quarterly calls.
To begin, I'll spend a few moments summarizing our recent accomplishments, but 14 before turning the call over to Alan Krasner, our Chief endocrinologist, to discuss our clinical programs and recently reported data in some more detail before we get started with the review of 2023, I wanted to say how pleased we are to have announced a private placement equity financing of approximately $350 million. Earlier today, we're very appreciative of the continued support that we've received from new and existing shareholders who share our long-term vision for building the premier endocrine company to help patients suffering from a wide range of different endocrine related diseases. This financing is simply one more step forward in that strategy.
2023 was a tremendously successful year for kinetics on many fronts. I'll begin with our lead development candidate. Paltusotine toxicity team continues to deliver impressive results in the two indications for which it is being developed acromegaly and carcinoid syndrome.
In September, we reported clinical results in acromegaly that exceeded expectations. Our Phase three PATHFINDER one trial achieved its primary endpoint of maintaining IGF control and met all secondary endpoints with high statistical significance. As a reminder, PATHFINDER one was designed to evaluate oral paltusotine in patients with acromegaly for already controlled on standard of care, which are injected somatostatin receptor ligand depots or SRL. therapy. Our intention for this trial is to support an indication for the maintenance of acromegaly treatment. In other words, to maintain biochemical control in patients switching from standard of care injectables to once-daily oral paltusotine.
In contrast, our second Phase three trial, Pathfinder two is evaluating paltusotine in patients with acromegaly who have elevated IGF-I levels above via the normal range. These are patients who are either naive to therapy untreated for at least four months for patients who agreed to wash out of the standard of care. As part of entering the study, we completed enrollment in PATHFINDER to last year, and we are on track to unblind and report top-line results in March If successful, we intend to submit an NDA supporting supported by these results from both studies to the U.S. FDA in the second half of 2024.
Overall, our PATHFINDER program is intended to provide a broad label for the treatment of acromegaly.
Moving now to carcinoid syndrome, our second intended indication for participating in December, we reported initial results from our ongoing open-label Phase two trial in patients with carcinoid syndrome. From a safety point of view, paltusotine continues to be well tolerated in this patient population, consistent with what we've seen from our other clinical studies to date.
With regard to efficacy to date, we are seeing clear reductions in the two key symptoms of carcinoid syndrome, which are excess bile movement, frequencies and flushing episodes results from December were from a subset of patients, and the study is now fully complete with a total of 36 patients. And the proof in the profile we reported the initial results in that unit we reported in the initial results is confirmed in the top-line results that we are expected in this first half of this year. We're excited to move forward into Phase three studies in carcinoid syndrome, pending alignment with the FDA on the study design we've been following in the footsteps of Tuscaloosa team. We built a remarkably deep pipeline. Our second molecule for eight nine four is currently being evaluated in an open-label Phase two trial in patients with congenital adrenal hyperplasia or CAH and a second trial in patients with ACTH. dependent Cushing's disease people or CH. are unable to make cortisol and instead make excess adrenal androgens. And 494 is an oral ACTH antagonist designed to normalized levels of adrenal androgens. Alan will elaborate on this program, and we anticipate reporting initial results from a subset of patients in the second quarter of the year beyond 49 core. We're also advancing multiple preclinical programs, including a parathyroid hormone or PTH receptor antagonist for the treatment of hyperparathyroidism TSH antagonist for the treatment of Grace disease and thyroid eye disease and candidates for metabolic disease diseases, including diabetes and obesity. These are just a few of the many early stage programs in our pipeline, and we plan to provide you with regular updates on these and other development candidates when appropriate in anticipation of a potential 2025 launch of paltusotine, we also remain focused on building out our commercial organization acromegaly and carcinoid syndrome together present a multi-billion dollar market opportunity for actively developing commercial capabilities for these markets, identifying key prescribers and tailoring our launch strategy. We know that Pathfinder one data is resonating well, creating excitement among the acromegaly and carcinoid syndrome prescribers and the patients understanding payer perspectives is also crucial. And Jim hazard and our Chief Commercial is our Chief Commercial Officer is building a market access team to build relationships with these important stakeholders. We're preparing logistics, finalizing specialty pharmacy agreements and generally preparing the company for commercial readiness on all fronts.
Looking forward to the rest of 2024 and 25, we anticipate multiple transformative milestones ahead, completing Pathfinder two, completing Phase two, followed by initiation of a Phase three study in carcinoid syndrome, completing a Phase two and initiating a Phase three in CAH, submitting our first NDA and launching how to for acromegaly, if approved for over continuing to advance our pipeline of promising candidates in high prevalence indications that are beginning to emerge from discovery. We are also continuing to invest in our world-class discovery capabilities that are the roots of our long-term success.
With that, let me hand it over to Dr. Alan Krasner, our Chief endocrinologist, to talk about our clinical program and the results we're seeing today now.

Alan Krasner

Thank you, Scott. Today I will provide a summary of the results we recently reported from our clinical programs and what this means for the continued development, starting with paltusotine. As Scott already mentioned our Phase three PATHFINDER one study of oral paltusotine in patients with acromegaly achieved all the goals set out for the study. In September, we reported highly statistically significant results in our primary endpoint and all secondary endpoints.
Before I dive into the data, I'd like to reiterate that this trial was designed to evaluate patients participating in patients who are already biochemically controlled on injectable SRL therapy and switch to participate in acromegaly excess growth hormone axis at the liver to secrete excess insulin-like growth factor one or IGF-1 participants in the Pathfinder one trial were previously treated with injectable SRL therapy and had IGF-1 levels at baseline of less than or equal to one times the upper limit of normal. The goal for participating in this trial was to maintain this level of biochemical control. Therefore, the primary endpoint was the proportion of participants who maintained IGF-1 levels of less than or equal to one times the upper limit of normal on paltusotine compared to placebo. We also prespecified clinically important metrics as secondary endpoints. The change from baseline in IGF one, the change in acromegaly symptoms using a fit for purpose, acromegaly symptom diary and the proportion of patients participants able to maintain growth hormone levels of less than one nanogram per milliliter.
In the study, we saw a remarkable 83% or 25 of 30 patients who received paltusotine meet the primary endpoint. This is compared to only 4% or one out of 28 patients receiving placebo. The magnitude of this difference is highly statistically significant with a p-value of less than 0.0001 in all secondary endpoints. We also achieved statistical statistical significance participants in the participating Group maintained control of IGF-1 levels, while those on placebo rose markedly. And this difference was statistically significant with a p-value of 0.0001 in addition, overall symptom control was measured using the acromegaly symptom diary or ASD. score participants receiving paltusotine maintain control of their symptoms as measured by the total ASD. score as compared to an overall increase from baseline as reported by the placebo group. This difference was statistically significant with a P value of 0.02.
Finally, 87% of participants receiving paltusotine maintained growth hormone levels less than one nanogram per milliliter compared to 28% in placebo. This difference was also highly statistically significant with a p-value of 0.0003. And we are very excited about these results that demonstrate durable symptom and biochemical control, driven through a convenient, once-daily oral option for patients who are currently burdened by depot injections. These data are very clear that paltusotine effectively maintains IGF-1 levels in the normal range in the draft guidance on the development of drugs for the treatment of acromegaly issued in January 2023, the FDA identified to acromegaly population pick up to a acromegaly patient populations of interest. Firstly, the maintenance population who are evaluated in the Pathfinder one trial. And secondly, the treatment population that we are currently evaluating in our Pathfinder to study the treatment population includes those with active acromegaly who are not who are not currently on medical therapy and therefore have an IGF-1 level that is greater than the upper limit of normal. The goal here is to show that a new agent can treat active disease as measured by lowering elevated IGF-1 level. Srls are currently used in practice as first-line medical therapy for acromegaly. Because published studies have demonstrated that most untreated patients when treated with SRL monotherapy have meaningful lowering of IGF-1, although only the minority of patients, particularly among those who are naive to medical therapy normalized IGF-1, it is not possible to predict which untreated patients who start out with a potentially wide range of baseline IGF-1 elevations will actually normalize. But it is known that the majority of patients treated with an SRL in previous studies benefited from therapy for regulatory purposes. The primary objective of Pathfinder two is to demonstrate a statistically greater proportion of subjects on paltusotine with normal IGF-1 at end of treatment compared to that achieved with placebo treatment. This was the same primary objective of Pathfinder one. However, it is important to note that the absolute IGF-1 normalization rates and Pathfinder two is expected to be lower than that observed in the Pathfinder one population. Remember, the Pathfinder one population were all known to have normal IGF-1 on SRL monotherapy at baseline test one or two patients would be expected to have a wide range of IGF one belt elevations at baseline based on published data, our best estimate of the overall percentage of patients who achieved normalized IGF-1 on drug at the end of treatment in PATHFINDER two should be approximately 30%. And this study is powered to show that this is different than that expected in the placebo group. This normalization rate would indicate that paltusotine is similarly effective to injected SRLs in this patient population and should be able to compete with the injections as a first line therapy, although IGF-1 normalization is of interest, perhaps even more relevant to clinical practice is the reduction from elevated baseline that can be achieved with publicity. And this is a prespecified key secondary endpoint in Pathfinder two pending results. We hope that Pathfinder two will complement Pathfinder one and allow us to seek a broad indication for paltusotine in the treatment of acromegaly, PATHFINDER two completed enrollment with 111 enrolled participants. We look forward to sharing top-line results from PATHFINDER two with you in the next month, paltusotine second target indication. Carcinoid syndrome is also showing promising results to date. In December, we reported initial results from the ongoing open-label Phase two trial. As a brief reminder, SRLs are the first-line medical therapy for carcinoid syndrome. And we would expect that oral paltusotine would compete with the injections in this patient population as well.
Carcinoid syndrome arises from neuro endocrine tumors that most commonly originate in the small intestine. The syndrome is caused by tumor production of serotonin and other factors. The two key symptoms that patients experience in this disease are diarrhea and flushing. Our goal in treating carcinoid syndrome patients with paltusotine is to reduce their total symptom burden. The ongoing Phase two study is an open-label parallel group study that enrolled patients who are either naive to SRL treatment or or are currently treated untreated and actively symptomatic or who are controlled on SRL therapy and willing to wash out prior to entry. The initial results we presented in December included 27 participants. The trial is fully enrolled with a total of 36 participants and top line results from the full study are anticipated in the first half of this year. From a safety point of view, paltusotine was well-tolerated with no new safety findings consistent with what we've seen in our previous studies. In addition, pharmacokinetics in this patient population remains consistent with what we expected to see from prior experience and healthy volunteers. We are also very pleased to have already observed meaningful reductions in the two key symptoms of carcinoid syndrome, it says bowel movements and flushing episodes. Even in the initial look at the data so far, paltusotine is associated with a 65% reduction in excess of movement frequency in patients who entered the study with greater than three bowel movements per day in patients who experienced one or more fleshing out events per day at baseline paltusotine and also associated with a 65% reduction. And these EpiCept as part of this study, design participants had the opportunity to up titrate their dose of paltusotine based on prespecified symptom criteria. However, few patients in the study at the time of the initial analysis required an increase in dose. So we believe we're on the correct range to observe a response results of biomarker and other supplemental exploratory endpoints will be analyzed and reported with final results. We are excited about this initial data and look forward to reviewing the full top line results which are anticipated in the first half of this year. Based on the results thus far, we believe paltusotine is acting like an SRL in terms of its ability to provide symptom relief, and we think the full dataset will confirm this. We will submit the final data to the FDA to discuss at an end of Phase two meeting. We look forward to updating you on the Phase three trial design details, including dose registrational endpoint and timing. Once we've had these discussions, our second candidate following paltusotine is 0.04894 4894 is an ACTH receptor antagonist in development for the treatment of congenital adrenal hyperplasia or CH. classic CH. is a genetic disorder that affects approximately 27,000 patients in the US. These patients have impaired quarters of production, which causes high levels of ACTH. This excess ACTH causes over stimulation of the adrenal cortex, resulting an overproduction of androgen as an ACTH antagonist, 4894 is designed to act directly at the adrenal gland to normalize adrenal androgen production. 4894 is currently being studied in a Phase two open label sequential dose study in participants with CH. At this stage of development, we are primarily interested in evaluating safety and pharmacokinetics of 49 for, however, we are also interested in looking at pharmacodynamics and NCAH. This is measured primarily using the biomarker interesting diagram or a four similar to how we presented the carcinoid syndrome data in December, we plan to report initial data from the open label Phase two study in the second quarter of 2024. This will not be full data, but initial data from a small number of enrolled participants. We hope that will give us an early picture of how 4894 is acting in CAH. patients.
With that, I will now hand it over to Mark for a review of the financials.

Marc Wilson

Thank you, Alan. We ended 2023 on strong financial footing with $558.6 million in cash and investments. In addition, earlier today, we announced a $350 million private placement equity financing. This private placement further strengthened our financial position with approximately $900 million on a pro forma basis. We have a solid financial foundation as we prepare for multiple upcoming data readouts and regulatory milestones. And as we continue investing in the expansion of our deep pipeline.
Research and development expenses were $45.6 million and $168.5 million for the quarter and full year ended December 31st, 2023, compared to $37 million and $130.2 million for the same periods in 2022. The increases were primarily attributable to higher personnel costs and increased outside services, both of which were driven by the advancement and expansion of our portfolio of programs. General and administrative expenses were $17.1 million and $58.1 million for the quarter and full year ended December 31st, 2023, compared to $11.3 million and $42.4 million for the same periods in 2022. These increases were primarily attributable to higher personnel costs. Our net loss for the quarter ended December 31st, 2023 was $60.1 million compared to a net loss of $45 million for the same period in 2022. For the year ended December 31st, 2023, the Company's net loss was $214.5 million compared to a net loss of $163.9 million for the same period in 2022. Revenues were $4 million for the full year ended December 31st, 2023, compared to $4.7 million for the same period in 2022. There were no revenues for the quarter ended 2023 compared to $0.7 million for the same period in 2022. Revenues in both periods were primarily derived from licensing arrangements associated with our path to CRN01941 product candidates. Net cash used for operating activities during the quarter ended December 31st, 2023 was $38.5 million and was $166.3 million for the year ended December 31st, 2023. In 2024, we anticipate our cash burn to be approximately $50 million to $60 million per quarter, and we expect that following the $350 million private placement announced earlier today that our pro forma cash, cash equivalents and short-term investments of approximately $900 million will be sufficient to fund our current operating plan into 2028.
I will now hand it back to Scott for closing remarks before we begin the Q&A.

Scott Struthers

Thank you, Mark for extremely proud of the progress we made throughout 2023 and so far in 2024 and 2024 is poised to be a transformative year for kinetics. We look forward to providing continued updates throughout the year as we progress paltusotine to regulatory submissions and commercialization, make continued advancements in our pipeline and continue to create exciting new drug candidates with our discovery efforts. Thank you all for your attention. Operator, we're ready to take questions.

Question and Answer Session

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by number one on your touchtone phone. Should you wish to the grant from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. First question comes from Joseph Schwartz from Leerink Partners. Please go ahead.

Joseph Schwartz

Thanks very much and congrats on all the progress on one. So first question on Pathfinder two, um, for the patients who are enrolled in this trial that are not currently receiving medical therapy, do you have a sense of how many of them had previously responded to SRLs versus those that didn't?

Scott Struthers

Well, Joe, and thanks.
I let Alan answer that question for you.

Alan Krasner

So in the group where patients haven't been recently treated private screening for this study. Basically, patients who are known not to have responded to route in the past or medical therapy in the past are not eligible for this study now that is largely left to the discretion of the principal investigator of the doctor at the research site. But those patients in periods where they're known not to be responsive to medical therapy, they should not really be in a trial in which medical therapy is being evaluated.

Joseph Schwartz

Right. Okay. That's helpful. Thanks. And then actually another question on Pathfinder two do you have a sense for how the assay you're using to measure IGF-1 in the patients in PATHFINDER?
Two compares to the assay that was used for the studies that were done many years ago for octreotide and lanreotide in the same population? And could any differences in the assays rigor influenced the results? And if so, do you have any estimate for how much that could come from translate into.

Alan Krasner

But yes, so we are using what is currently the gold standard assay for IGF-1 measured in a central laboratory in immunoassay. That is very rigorously validated and probably more important than the assay itself is the uptick up to date reference ranges by age for IGF-1. That's been a major area of research over the last 50 years. And so we are using the state of the art measurement technique. And you're right, the older studies used our previous assays and also previous reference ranges that were available at the time. However, we have worked with the world world's experts on assay potential assay differences, and we have taken that into account for our sample size calculations for this study, there could be minor differences. But in the more recent, I mean, there could be more significant differences with older versions of the assay. But we think we have a good handle on comparing to more recently done research, particularly in naive patients with acromegaly.

Scott Struthers

So majority. But I think also, Scott, to add that, that does get more and more difficult. The further back in time, you go to compare our data with those earlier studies and largely because of the assay and perhaps more importantly, the reference ranges for the assay.

Joseph Schwartz

Thanks for your questions.

Operator

And thank you.
Your next question comes from Yasmeen Rahimi from Piper Sandler.

Yasmeen Rahimi

Please, we'll have some good afternoon team, and congrats on all the progress on maybe the first question that has been submitted to us all throughout the whole morning has been investors. Wondering if the PIPE investors were previewed, any data related to Pathfinder two or and carcinoid or CAH would love to hear your color. And then my second question is for Alan. If you could maybe share what could be a reasonable sample size for the interim readout for OCA and also maybe a little bit of a reminder or what is considered a clinically meaningful difference and a four level and maybe other key endpoints that we should be looking forward to from from the unmet need that exists in these patients?
Thank you.

Scott Struthers

As you know, I can't answer discuss the inner workings of that deal process and Pathfinder two remains blinded to you me and everyone will know the outcome of that trial next month, but it should be obvious to everybody from the list of great funds that we disclosed in our press release, they were willing to be named and were included in the deal. But this isn't a deal or wasn't a deal about handicapping some single short term. Rita. This is a high-quality list of new and existing investors with a long-term view that understand and want to support long-term growth and vision of our company.

Yasmeen Rahimi

And Justin, I think that was very helpful.

Scott Struthers

On the FTTH side.

Alan Krasner

Yes. So yes, those are all great questions about the CH. study. What is an appropriate sample size for us to reach some conclusions about safety, pharmacokinetics and efficacy. So I would say right off the bat that this is not a pre-specified up a statistical exercise. This is more of a qualitative look at directional data which is exactly what we did recently with carcinoid syndrome. This is a rare disease. But in general, we are look, you asked what's the most? What's the clinically meaningful change in the pharmacodynamic biomarker of most interest. And that's interesting, Diane has mentioned, and I think you know, what we'll be looking for, of course, is easily our chain are easily visualized changes from baseline in a four level on the pharmacodynamic front. And in fact, most importantly, can we achieve normalization of a score, I think is probably what's most clinically meaningful based on what we know now from elevated baseline. And as you mentioned, there are many other potential endpoints. Besides a four on the pharmacodynamic front, we can look at and that we are exploring a lot of these in this, even this small study in Phase two for CH. I mean some examples of things that are also important. There are other biomarkers that are of relevance to like 17 hydroxy progesterone, which is another biomarker used by clinicians to assess dose and response to therapy as well as the diagnosis of the disease. But also things like how are the patients doing clinically. A lot of these patients, for example, of a female patients with this disorder have irregular menses and can be in personal. And we would, of course, we monitor menstrual cycling in women very closely, and there are many other clinically important things like that, that we will follow carefully. And I hope we have a good directional signal from our interim analysis that we'll be doing and reporting on by the end of the first half.

Scott Struthers

Thank you, Alan, Ryan.

Operator

Thank you. Your next question comes from Jessica Fye from JPMorgan Chase.

Jessica Fye

Please go ahead. Hey, guys, this is Noss on on for Jess. So we are very close to on full data for carcinoid. Can you help us set some expectations there. Maybe like what would represent a win for that update? And then can you provide any updated thoughts on your office three plans for carcinoid syndrome? Thank you.

Jim Hassard

Yes. So I mean, I was pretty impressed with our interim data reported in December. I thought that was a pretty winning stuff already. And some of these very important endpoints kind of reached a statistical significance even in this small in this small our study. So I would say a win for the final dataset is really confirming kind of what we saw in our interim data. And also we hope to have more information and expanded information on other exploratory endpoints like key biomarkers and other sort of supplemental data points. For example, you may recall from our interim data report, we I was very excited to see not only have the numbers of excess bowel movements and flushing episodes reduced on paltusotine, but also the urgency of the dose associated bowel movements and also the severity of those flushing episodes were also it's very meaningfully reduced. That goes beyond just number as it goes to the what the patient is actually experiencing and what's most important to patients. So I'm hoping we'll have additional kind of patient centric information as well.

Scott Struthers

And maybe comment on Phase three for our Phase three?

Jim Hassard

Thank you.
Yes, we are actively designing Phase three obviously, and we're using our Phase two database to help with that a great deal. In fact, the Phase two database is really essential for this process. I do anticipate, based on our regulatory history that we will be designing a likely a placebo-controlled parallel-group Phase three trial where exploring a variety of important potential primary endpoints that we will discuss with the FDA as well as the key secondary endpoints for the Phase three trial on we based on historical precedent, we know that the general sample size for Phase three trials in this area are roughly say, between 80 and 150 patients. And I think that's the kind of study we will end up proposing to the FDA. And again, we'll report back once we've had those discussions with them full.

Scott Struthers

Thanks. Just Frank.

Operator

Your next question comes from Jeff Hung from Morgan Stanley.
Please go ahead.

Jeff Hung

Thanks for taking my questions. Can you talk about the importance of the acromegaly symptoms, diary and the strategy for having that included in the label? And then I have a follow-up.

Scott Struthers

Actually, I think it's important to point out that that's fairly unique amongst the SRLs, and we're very excited about it. And maybe Jim, our Chief Commercial Officer, can answer a little more in-depth.

Jim Hassard

So thanks, Scott. So as Scott mentioned, I symptom diary or quality of life is not been a component of the competitive label. So is something that we do look forward to and whether it's in the label or whether it's in publication, it's certainly something that will be communicated to key opinion leaders within the United States and globally symptom control among patients with acromegaly is a big deal of there. Certainly biochemical control is the regulatory endpoint, but as we speak to patients, it is all about symptoms and how they feel. And so it will be a big part of the conversation from a commercial standpoint. And it certainly would be an important component of helping to sustain performance for both patients and physicians.

Jeff Hung

Great. Thanks. And then what is your latest thinking on the commercial strategy for pulse in and what has been the payer feedback been so far?

Jim Hassard

And so our commercial strategy is I think as element Scott have mentioned, Pathfinder one and Pathfinder two will provide us with. We hope that the broadest possible label that will allow us to treat and market to both naive patients and patients that are currently going under under therapy.
In terms of we've had a number of advisory boards with physicians and also market research with payers. And I will tell you that based on the PATHFINDER one data, the response has been very, very enthusiastic on in terms of a value proposition. We also have been speaking with payers just about the relative pricing within the marketplace, both for the standard of care injectables and depending on channel as well. And within the hospital segment, there is a markup system that that occurs where the average markup for payers and and for patients in terms of their co-pay within injectable somatostatin analogs that are delivered within the hospital outpatient setting the markup can be as high as or on average, about 300% as high as in some cases, 700%. So this is certainly a savings that an oral pill to the team delivered through specialty pharmacy can offer to the payer community and something that we're having continued discussions with payers on that on that level.

Jeff Hung

Thank you.

Operator

Thank you.
Your next question comes from George Hill from analyst.
Please go ahead.

Thanks for taking our questions and congrats on all the progress you've made last year on question quick question on acromegaly. So taking a look across all the historical data processing, i.e., acromegaly, for the strong correlation between treatment response in certain baseline characteristics such as age or whether a patient has entered the study with a macro versus micro at Inova. Can you give us a better understanding or insight more broadly to how these patient demographics for path there too aligned across the spectrum of previous studies that are in this group.

Scott Struthers

I think the simple answer is we haven't done that analysis yet, and some of those sensitivity and subsets will be part of the Phase three workup. But broadly, this is a global study with acromegaly patients that we think are representative of the general population.

Alan Krasner

I think in the literature from previous studies done over the years. It is not easy to identify a clear predictor of response to treatment in acromegaly. Probably if one thing is most useful, it's just looking at the baseline IGF-1 level. If it's if it's very high, it's C&O, this are going to take more lowering to get to normal. And that's why we reiterate that in this kind of study where patients in PATHFINDER two are patients can start out sometimes with very high IGF-1 levels. And we should expect a lower rate of IGF-1 normalization compared to what we saw in PATHFINDER one where we knew everybody there was controlled at baseline on medication.

Scott Struthers

And we've been trying for years, you've been telling other folks to be sure and remind people that this is not the same population that we studied in PATHFINDER one.
And that overall, our blended estimate for this study is a response rate in the low 30s ballpark in the end.

You've previously, you know, building off of that. You previously mentioned that you've used the head to head passively a diverse octreotide study in your assumptions for at least the Stratum one group. Can you walk us through that rationale behind looking at that study to inform potential patent matter to outcomes? And especially given when you look across these studies historically, that's probably one of the more conservative response rates we've seen well.

Scott Struthers

It's also one of the most modern and comprehensive studies in the naive population and using the same assay with a close to modern reference range. So I think it's actually a pretty good analogue, and we did use that in our powering assumptions. And in that study, the control arm was octreotide and it was a large number of naive patients and octreotide reduced IGF levels and the vast majority of patients, but only 24% achieved IGF levels within the normal range and so that's where we had the powering for that group.
Our Stratum one of the Pathfinder two study.

Yes.Thank you.

Operator

Your next question comes from Brian Skorney from Baird. Please go ahead.

Brian Skorney

Hey, good afternoon, everyone. Thanks for taking my questions.
I guess just following on on that last question, can you say anything about the baseline for respects in terms of what the baseline IGF-I level, what does wall target Pathfinder two study? And I mean, it sounds like it was reasonable. Is it fair to say that there's sort of a trade-off between the primary and secondary endpoint, where a lower baseline IGF-1 would mean better response rate, but lower IGF production and higher baseline in the reverse?

Scott Struthers

Yes, I think we'll just have to wait another month for every brand to come. And I know everybody wants to see it, but nobody worse than me so soon is the answer was there part of that, that I could really answer, and I kind of lost it at the at all.

Brian Skorney

Just if you could say anything about sort of the baseline IGF-1 level?

Scott Struthers

Yes, not at not at this time.

Brian Skorney

And then maybe as a follow-up, ask something more in the pipeline today, it seems like your thyroid stimulating hormone antagonist was moving along nicely. I guess do you think you have the capability to get an oral agent here?
And and I was just wondering about the specific target, is it the TITSH. receptor is that IG at one receptor? I'm just trying to think about how to get a handle on on how comparable this could be the opportunity, any differences between where it's finding to think about?

Scott Struthers

Oh, yes, no, great. Yes. Just bumped into one of the chemists in the hall who is really excited about the latest batch of molecules, and we already have good molecules that are orally available and polishing the last few, I think we're getting pretty close in this program. The target is the TSH receptor and just remind people because this isn't something we've talked a ton about in our pipeline. Graves disease is caused by antibodies that people develop that activate this TSH receptor. And so the notion is to block that in grave eye disease or thyroid eye disease is it's been branded. The more formal name is Grace off them apathy, but it's such a mouthful that people call it thyroid eye disease that's caused by the binding of these antibodies to TSH receptors and the cells at the back the back of the eye, those receptors then act on those cells.
And on the IGF receptors on those cells to cause the hypertrophy that results in the protruding and other problems in the back of the eye. So we're going to the root of the problem that there hasn't been a new drug for GRACE disease itself since the 1940s and the TSH receptor is the root problem. If you block that and you have an effective drug for Grace itself. We think you won't be getting great side disease. And if you block that receptor for patients who already have Graves eye disease, we think we can treat it. That's the hypothesis. And this is yet another peptide hormone receptor that we're trying to replace or trying to block with a small molecule. And maybe I'm too in our horn a little bit. But I think the guys in the next labs down the hall here, some of the best in the world guys and gals. So for some of the best in the world at making drugs like that. So yes, we're going to get it.

Operator

Thank you.
Your next question comes from Douglas Tsao from H.C. Wainwright.
Please go ahead, ma'am.

Douglas Tsao

Good afternoon and thanks for taking the questions. And maybe as a starting point, I'm just curious on with the CAH. readout on the interim, look that we'll get, I'm just curious sort of is there on an operational decision you make from getting that versus the full readout and Unisom, but it's similar to carcinoid syndrome where it sort of really helps you jump start thinking about the Phase three study? Or are there potential changes that you would make to the fit the CH. study itself that on new sort of mid-course adjustments on on that would help you sort of better understand and how the molecules behave?

Alan Krasner

Yes, Doug, it's like all the core endocrinology studies, including the Phase one we did with paltusotine, where in the earliest cohorts of our SAD study, we knew the drug was working and we knew the pharmacology that was coming out by these changes in hormonal biomarkers and as this ICH. study progresses and we begin to get that type of information, it's you know, it's an open-label study. So we're looking at it all the time and we're getting all this information to guide our Phase three design. But until we start to instill it until we disclose that, we can't be talking about it publicly either with our investors or with a broader group of physicians outside of our investigators and our advisory boards. So we want to be able to talk to a broader community about how we advance this program forward. And that's and it's been moving well. So that's why we decided that our current estimate is we'll be able to start talking about it next quarter.

Douglas Tsao

Okay. Great. And then just a quick follow-up on the TSH antagonist. I'm just curious, what are you looking at on, I guess, in a preclinical setting to determine or select your molecule I'm just curious what sort of you're most focused on in terms of lead candidate selection ahead of obviously going into the clinic and seeing the sort of the impact on power levels on, et cetera?

Scott Struthers

Yes. So it's very much like our other programs in finding the right molecule. You're trying to optimize 2030 different characteristics. And we've had molecules for a long time that were potent at the receptor and able to normalize hormone levels in a mouse model. But we're really working on all those other little polishing to make a good molecule to make sure it's highly orally absorb, doesn't have drug interactions has good toxicology profile. But if you're interested in efficacy, I'll point you towards our corporate deck where there's a slide towards the back where we give mice and antibody, just like the humans have that cause activation of the TSH receptor, their thyroid hormone levels go up remarkably and then we start treating them with one of our oral candidates and those hormone levels go back to normal. So we'll do that same type of study in patients with greatest disease. So I think it's quite relevant as an efficacy model. But like I said, in many of our programs, it's not about the efficacy. It's about finding a great drug that also has the great efficacy.

Operator

Thank you.
Your next question comes from Jon Wolleben from Citizens GMP.
Please go ahead.

Jonathan Wolleben

Say thanks for taking the question.
Two for me. Just wondering if you could give some context about how you think the opportunity to propel to strategic changes in acromegaly, if you just have a maintenance label versus a maintenance and treatment label?
And then it seems like a lot of excitement for United for in CAH and Cushing's has been a difficult and indication and the dynamics are changing there. You know, are you still thinking about moving forward. The question was as well as eight nine four. We're going to be focused on. Cah will report. Thanks.

Scott Struthers

Well, let me address 49 for and then I'll hand it over to Jim to think about the commercial opportunity, talk about personal opportunity, but four eight nine four addresses the ACTH receptor, which is the heart of the body at the center of the body's endocrine response to stressors and when things go wrong in that pathway, bad things happen. So in Cushing's disease with excess glucocorticoids or in CAH patients with that first glucocorticoid you're adding you're adding too much capacity or increasing blood pressure on your damaging bone. It's a problem. So we if we were out front in CAH, we have an exciting ongoing study with the NIH in Cushing's disease, and we're continuing to work on that. And we're thinking about what else we might do down the road with an ACTH antagonist. This is something nobody else in the world has ever evaluated in humans, and we're going to learn a lot about the pathway in these studies. So Jim, maybe you want to comment on indications and expectations for how to succeed in acromegaly?

Jim Hassard

Sure. Thanks, Scott. And I think the question was specifically kind of maintenance versus naive. I mean, from a from a an addressable patient population standpoint, the majority of the patients are currently on treatment. So in any given year, we estimate maybe 500 new patients are naive patients enter enter the marketplace so that gives you approximately 10,000 patients that are maintenance arm patients. And that's the importance of the Pathfinder one data already in hand is that group of approximately 10,000 patients, however, don't want to minimize the value of a pathfinder two because again, Pathfinder two gives us the broadest possible label to really address patients across the continuum. It's differentiated from several products that are in the marketplace. So it will be an important readout for us as we move forward. And I think we hope to glean more than just an indication from PATHFINDER two. We hope that there's some important data that will differentiate paltusotine from the injectable somatostatin receptor ligands additionally.

Scott Struthers

And if I can just add to that a little bit as amazing as the data was from PATHFINDER one, it was all about maintaining a level of control in patients who were control in Pathfinder two, we're starting with patients who are sick and demonstrating to Pogo's well that's helped us attain can help them lower their IGF levels, lower their symptoms, make them feel better. And there's something visceral about being able to communicate an improvement in a disease condition rather than just a maintenance in the disease condition. And so we're very excited to see how this plays out next month.

Operator

Thank you.
Your next question comes from Dave Windley from Jefferies.
Please go ahead.

Dave Windley

I can afternoon. Thanks for taking our question. Some we have to for CA to own, if I may. So number one just around A4 reductions at week 12 and others actually surprising not surprisingly not a lot of data out at week 12 and most are for weeks two to four. So I'm curious to hear what level of percentage a four reduction do you think will be competitive at least two given we already have from the data out there from others, but those are from earlier time points.
And then question two is around based Europe, one competitor who will obviously have some Phase IIb data in March. How do you frame that update given you will report data soon after in Q2? And maybe if I can be a little bit more specific, can you comment on how we should think about percentage a four change versus the absolute magnitude of a board change and which should people focus on paying so much yet?

Scott Struthers

Thanks, Dennis. Um, let's see how the best way to answer that is first up in our study, we're measuring time courses of A4 and other adrenal markers throughout the treatment period. So the comparator time points at different places for the other, really innovative things that Allen is doing in that study. And we'd like to make our studies as informative as possible because we have an option for patients to enroll in what we call the circadian are where we measure A4 and other markers throughout the day because as you know, those fluctuate. And so understanding the timing of measurements in the day, not just in the weeks is also important, and I think you know, but I've been around the center consistently since the earliest days of my career. And CRF is a very exciting molecule that has some wonderfully interesting biologies, but at the pituitary, it is only a portion of the signal that goes into the cortex trough cells that make ACTH. And we now have an estimate from the recent data on crinecerfont that by blocking that signal, you can reduce 45% of the A4 output by the adrenal. So that says there's another 65% of signal going into the pituitary from probably bears a person or some other things. However, mechanistically at the adrenal, there's only one way that ACTH can act and that's through its receptor, which is called MC. two and Landqart receptor two, and that's what we're blocking. So I would expect an ACTH antagonist to have a much more if you can fully block the receptor to have a much larger effect on adrenal, et cetera. But and we'll know what that effect is in the coming months. So super excited to see that and I think the community has as well. We've known about ACTH in Cushing's disease since Cushing's disease since 1910, but nobody has ever had an antagonist in that receptor before so it's a very exciting advancement in the field.

Operator

And thank you.
Your next question comes from Leland Gershell from Oppenheimer.
Please go ahead.

Leland Gershell

Thanks and congratulations on all the accomplishments that have been made and thank you for the updates across the board. Just curious, Scott, as we look forward to the annual meeting of the Endocrine Society, not too long from now, I want to know if you might be able to give us indication of any updates perhaps on some of the earlier pipeline programs that you're moving forward? I look forward to that. Yes, thanks.

Scott Struthers

That's a annual pilgrimage of endocrinologists from around the world to get together and talk about the latest in endocrinology. And I've been going since the 1980s, I love that meeting. We will be sending, as usual, a large contingent of we're submitting many abstracts. I frankly don't know the final list of abstracts, but that will be coming out as we see the acceptances. And I think you can look for a strong presence from there from us there in Boston this June.

Leland Gershell

Great. And then just a question just to clarify and on freight going forward between Cushing and CHQ. and your press release had mentioned the CHM. three, that would be next quarter. I think you had indicated previously that we may see switching data in Q2, but that wasn't mentioned. So what is the cushions reveals going to be perhaps from two Q3? Or I'm just wondering if you might have any indication.

Scott Struthers

You know, I think we just didn't do a deal between the two discussions and maybe didn't spend enough time talking about Cushing. So let's let's see how it plays out. I think there's a chance we'll hear about both but 49 for us, certainly something of great interest on many fronts, but don't interpret any subtlety in the way we face things as any loss of interest in Cushing's disease.

Operator

Thank you. That's all the time we have for questions today. So I will turn it back to Scott for closing remarks.

Scott Struthers

Thank you, everybody, for joining us today. We appreciate your attention and your support and look forward to talking to more to you more in the future.
Thank you.

Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.