Participants

Yvonne Briggs; Investor Relations; LHA

Phillip Frost; Chairman of the Board, Chief Executive Officer; OPKO Health Inc

Elias Zerhouni; President, Vice Chairman of the Board; OPKO Health Inc

Adam Logal; Chief Financial Officer, Senior Vice President, Chief Accounting Officer, Treasurer; OPKO Health Inc

Maurice Raycroft; Analyst; Jefferies

Edward Tenthoff; Analyst; Piper Sandler

Yi Chen; Analyst; H.C. Wainright & Co

Mike Petusky; Analyst; Barrington Research

Presentation

Operator

Hello and welcome to the OPKO Health first-quarter 2024 financial results conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to your host today, Yvonne Briggs. Please go ahead.

Yvonne Briggs

Thank you, operator, and good afternoon. This is Yvonne Briggs with LHA. Thank you all for joining today's call to discuss OPKO Health's financial results for the first quarter of 2024. I'd like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward-looking and as such, will be subject to risks and uncertainties that could materially affect the company's expected results. Those forward-looking statements include, without limitation the various risks described in the Company's SEC filings, including the annual report on Form 10-K for the year ended December 31st, 2023, and in subsequently filed SEC reports. This conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, May seventh, 2024. Except as required by law, OpCos undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.
Before we begin, let me review the format for today's call. Dr. Phillip Frost, Chairman and Chief Executive Officer, will open the call, Dr. Elias Zerhouni, Vice Chairman and President will then provide an overview of Bio-Reference health, followed by OpCo's pharmaceutical business. And after that, Adam Mogul, OpCo CFO, will review the company's first quarter financial results. And then we'll open the call to questions. Now I'd like to turn the call over Dr. Frost.

Phillip Frost

Good afternoon, and thank you for joining us today. In March, we announced an agreement to sell certain assets of Bio-Reference health to LabCorp for 237.5 million. The assets included Bio-Reference is clinical diagnostics and women's health testing services outside of New York and New Jersey. The transaction was specifically structured in a manner so as to increase the likelihood of obtaining expedited clearance from antitrust regulators, but it also streamlines and remaining operations to advance the path to profitability for our Diagnostic segment. The transaction is expected to close in the second half of this year, pending FTC clearance. In general, our long-acting growth hormone therapy continues to gain traction as our global commercial partner, Pfizer expands its launch of the product in over 40 global markets. This once-weekly injection product to treat growth hormone deficiency is the first new chemical entity developed at OpCo biologics in Israel, where we now have other preclinical candidates under development. One is a long acting form of unlocks the oxyntomodulin analog, which I mentioned in our last quarterly call, the pegylated form of this active peptide has been shown to be effective and safe in treating diabetes and obesity in a Phase two study in over 450 patients. The new long acting form is expected to have the same pharmacology profile as the regulated form will permit administering larger doses we have and in development, a longer-acting ACTH antagonist for the treatment of acromegaly caused by the executive excessive secretion of growth hormone and IGF-1. We are progressing in our work with internal bio to develop oral forms of oxyntomodulin and a group to our analog for short bowel syndrome and other disorders involving nutrient malabsorption. We look forward to keep you apprised of progress with these promising programs. Boardex continues to advance its development work, and two programs are on track to enter the clinic this year. Our upstream bar vaccine license to Merck and our multi-specific oncology antibody which has received FDA clearance for a Phase one trial. Our cooperation with Varda is moving forward and provides nondilutive financing to develop multi-specific antibodies against COVID as work progresses on this first indication, we will begin to explore alternative targets to tackle other biodefense threats such as influenza.
With that brief overview, I'll turn it over to Elias.

Elias Zerhouni

Well, thank you, Phil. And good afternoon, everyone. Let me start by AquaLogic by apologizing. If you hear background noise, I'm in a noisy environment and the airport. But as Phil said, we were very pleased to announce our agreement with LabCorp to sell certain assets of Bio-Reference health for a cash purchase price totaling 37.5 million. These assets generate approximately $100 million in annual revenue and include patient service centers, certain customer contracts and operating assets associated with testing services, focus on clinical diagnostics and women's health across the US, but outside of New York and New Jersey. We will retain our national oncology and urology franchises and our diagnostic services in New York and New Jersey complements our efforts to improve efficiencies and enhance the productivity of operations. This transaction will streamline U.S. laboratory services business and support our work to reestablish profitability in the near future. As Phil mentioned, we expect the sale to close in the second half of 2024, subject to customary closing conditions and applicable regulatory approvals and ongoing initiatives, we continue to improve bioreactors performance and in turn value. Our focus remains on initiatives to reduce cost, improve efficiency and enhance productivity. In addition, we seek to bolster growth with the expansion of insurance coverage in our higher value specialty segments of oncology and neurology, with particular focus in our proprietary 4K Score test. As you know, the focus Cortez was first introduced in 2014 as a laboratory developed test. As you know, FDA published new rules to reform the regulation of lab developed test. This will have a minimal impact on Bio-Reference health as for our tests are approved by New York state regulators who are exempted from the announced FDA reform in December 2021. I would like to remind you, focus coal was approved by the FDA, supported by its analytical and clinical data FDA concluded that the focus charge was had the appropriate sensitivity at 96.9% and negative predictive value of 95.9% contributed to an overall beneficial clinical decision as to whether a prostate biopsy should be performed and accordingly, minimize unnecessary biopsies without excess risk of missing clinically significant prostate cancers in more than 100 independent publications by erosion since then to focus core has ranked us in best-performing biomarker test for the assessment of risk probability for aggressive prostate cancer, our urology team with a strong growth in 4K Score test volumes in the first quarter, and we expect these volumes to build as the cash is included now in various clinical die or guidelines for early detection. Our prostate cancer portfolio of us appears to screen for initial and repeat biopsies risk stratification. In regard to Rayaldee, the program continues to enjoy stable demand, which we hope will grow with new data routing may delay the onset of dialysis. According to our most recent analysis in oncology, we are pleased with GenPath performance due to its innovative testing platform with an expanded hematological malignancy panel and very competitive turnaround times. We continue to see strong growth in our oncology business with over 12% growth in volume Q1 2024 versus Q1 2023 much of this growth was through collaborations with large cancer centers and mid-level health systems. As health systems are challenged with costs and staffing in the oncology space, they are looking for a reference laboratory to work with for the especially for the testing opening up possibilities for Bio-Reference sites. Genpact has been able to meet their needs with our own hands, a comprehensive menu across all stages of care. This includes the internalization of our hereditary cancer business in late Q4 2023, which now offers clients an internal solution with fast turnaround times for timely decision-making that we continue to expand our testing portfolio and expect new tests in Q2 to complement our current OncoCyte advance and risk portfolio, which will enable GenPath oncology to evaluate guideline recommended genetic components of a patient's cancer and keep us at the forefront of precision oncology, similar to our New Jersey, New York, New Jersey, women's health and clinical businesses our national oncology testing segment will remain with Bio-Reference sales under our GenPath Oncology brand. Upon closing of the transaction with LabCorp, we believe that Bio-Reference health is well positioned for further expense reductions and revenue expansion with a focus on the retained businesses in the New York and New Jersey markets after the divestiture. Complementing these efforts to boost performance, we will continue to improve our diagnostic division to further enhance profitability for AACo health and best position us as an innovative biopharmaceutical company.
Moving to our pharmaceutical pharmaceutical segment, as you've heard and Jamba has been launched in all major global markets by Pfizer. We believe this drug is well positioned for significant growth as long-acting growth hormone products become the global standard in treating growth hormone deficiency for children. The launch is progressing as expected, with an increasing a significant percentage of patients shifting from daily to the long-acting once a week and gel product. In addition, we expect our partnership with Pfizer to expand with additional indications, including growth hormone deficiency for adults and other pediatric applications. And combined these approvals for these two indications will entitle OpCo to an additional $100 million in milestone payments.
Let me go to Mosaic's SurModics. We're proud of the progress to date. In March, we announced favorable results from the Phase one clinical study with our trispecific antibody against HIV. This clinical data are the first reported for a trispecific antibody in humans and strongly support further development of multispecific multivalent antibodies against HIV. The antibody was found to be safe and well tolerated at all dose levels through both intravenous and subcutaneous use with minimal anti-drug antibodies observed with dosing ranging from 0.3 milligram per kilogram to 30 milligram per kilogram with up to four administrations and a pharmacokinetic which remained consistent and similar to standard monoclonal antibodies. We therefore believe and our partners at the NIH believe that multi-specific antibodies will offer a differentiated approach to longer-lasting preventive and therapeutic options against most HIV one virus with the possibility of activating the immune system against the latent virus population to affect a functional cure. We are partnered with the NIH of this program through our collaboration with Merck to develop MDX-010 initial one, which is our Epstein-Barr virus. Multivalent nanoparticle nanoparticle vaccine is advancing on plan. We received a $50 million upfront payment upon licensing this vaccine with a potential 872.5 million in development and commercial milestones, plus royalties on global sales ranging from single digit to double digit percentages.
In terms of timing, we expect this program to enter the clinic in the later part of this year. Our collaboration with Barda is also proceeding on schedule and represents another source of non-dilutive funding for the Company. We secured an initial $59 million grant to fund R&D and clinical evaluation to a Phase one study of our multi-specific antibodies against known variants of SARS, CoV two for the treatment and prevention of COVID-19. Additional funding of up to $1.9 million may be available from Barda to develop multi-specific antibodies and delivery approaches to target other biodefense traits such as influenza. The ultimate goal of this research program is to develop a platform for gene-based delivery methods using mRNA or DNA vectors to supplement the body's natural protein production processes, which can then be used efficiently and effectively against future pandemics.
Rounding out the Model X pipeline is our immuno-oncology program, which is focused on hard to treat solid tumors as well as certain liquid tumors such as leukemias and lymphomas. We believe our multi-specific antibody candidates can simultaneously target several tumor antigens and enable better control of the immune system activation. And we expect our trispecific laser program for solid tumors to enter the clinic this quarter as our first IND application, as indicated by Phil, focused on solid tumors, was deemed acceptable to proceed by the FDA. Other immuno oncology products are advancing to IND enabling studies and are on target to enter clinical studies next year. So as you can see, it's an exciting time for OpCo as we execute our strategy to gain profitability for Bio-Reference health by rightsizing the half the diagnostic division to its most profitable areas of activities while addressing our bold biopharmaceutical segment with several programs set to enter the clinic this year.
I will now turn the call over to Adam go to discuss our first quarter financial results. Adam?

Adam Logal

Thank you, Ali, U.S. console and LEO. As I've discussed we had a busy start to the year, realizing significant value from some of our underlying assets and strengthening our balance sheet. The convertible debt offering in January reduced our cash interest expense. This refinancing provided us the flexibility to align our cash needs for our research and development investments to debt maturities over the next five years. In addition, we used a portion of the proceeds to buy back 55 million shares of our common stock, reducing our outstanding shares by over 7%. We also announced our agreement with LabCorp for the sale of select assets, which was a competitive process. And when completed, that will allow us to realign our business operations to focus on core markets and test offerings and to support our path to profitability at Bio-Reference. While while we are still within the review window with the Federal Trade Commission, we are diligent we're diligently working on the profit plan for Bio-Reference to ensure we get to breakeven and then profitability as quickly as possible. The LabCorp deal was the first large step in the multifaceted plan.
Moving to our financial results for our Diagnostics segment, we reported revenue for Q1 2024 of 126.9 million compared with 132.4 million for the 2023 period. Cost of expenses decreased to 161.3 million for the first quarter of 2024 from 172.4 million for the 2023 period.
Operating loss for our Diagnostics segment of 34.4 million included approximately 2.2 million of nonrecurring costs related to employee severance and programs associated with our efforts to return to profitability.
Depreciation and amortization expense were 7.9 million and 8.7 million for the 2024 and 2023 periods, respectively. Revenues included approximately 27.8 million related to the book of business that is subject to our sale agreement with LabCorp. The costs and expenses related to this business were approximately 34.8 million. As part of the transaction Lab Corp has agreed to offer employment to more than 700 of our impacted employees who support this business.
Moving to our pharmaceuticals segment, revenue decreased to $46.8 million for the first quarter of 2024 from 105.2 million for the comparable period of 23. Revenue from products, including our intellectual property and our international pharmaceutical businesses, decreased by 2.3 million, reflecting lower sales within our Israeli API business partially offset by higher sales of Rayaldee.
Revenue from the transfer of IP was 8.7 million in the first quarter of 2024 compared to $64.8 million for the 2023 quarter, which included an upfront payment of $50 million from Merck as a result of our EBV vaccine agreement as well as 9.5 million of milestone payments from our partners for Rayaldee during the first quarter of 2020 for Pfizer was able to substantially reduce the cost of manufacturing in general and by obtaining approval for a significant scale-up of their manufacturing process in order to support the global launch of And gentlemen, in turn, Pfizer has revalued its inventory on hand at December 31st and amortize that difference in manufacturing costs during the first four months of 2024, which is their standard accounting policy. As a result, our anticipated gross profit share for the first quarter was less than we anticipated, and we reported gross profit share from Pfizer of 5.8 million, which compares to 3.1 million for the 2023 period. Pfizer has obtained significant payer access in the U.S. in 2024 for Genvoya, and we look forward to the continued execution on their global commercialization plan. In addition, other revenue includes approximately $2.2 million from our underlying agreement with Varda, which offset R&D and of underlying support expenses for that program costs and expenses for our pharmaceutical segment were $74.5 million for the first quarter of 2024 compared to 86.3 million for the 2023 period. Research and development expenses for the first quarter of 2024 or $21.2 million compared to 31.9 million for the 2023 period. The 2023 quarter included the nonrecurring 12.5 million of expense related to our payment to Sanofi for their portion of our upfront payment from Merck. Partially offsetting this decrease were increased activities for MOX development programs. The resulting operating loss for the quarter ended March 31st, 2024 was 27.7 million compared to operating income of 19 million for the first quarter of 2023, which I previously mentioned, benefited from this 57.5 million of milestone payments received in the quarter. Amortization expense related to intangible assets were unchanged at $16.4 million for both periods.
Turning to our consolidated results, the first quarter of 2024 reported an operating loss of 71.5 million compared with an operating loss of 30.6 million for the 2023 quarter. Net loss for the 2024 period included approximately 26.2 million related to the fair value change on an embedded derivatives related to our convertible notes issued in January. For both periods, we recorded non-cash unrealized gains on our investment in GDX of 22.7 and $16.8 million, respectively, for the 2024 and 2023 period. As a result, net loss for the first quarter of 2024 was $81.8 million or $0.12 per share. And this compares with a net loss of $18.3 million or $0.02 per share for the 2023 quarter.
Looking ahead, we're providing the financial guidance with the following assumptions for our pharmaceutical segment. There are a number of factors that will continue to impact our gross profit share payments from Pfizer, including revenue from product sales from Gina troponin in general, global sales of Genotropin for the first quarter of 2024, as reported by Pfizer were 130 million, and Pfizer has not separately reported sales of Java. However, we have continued to observe consistent prescription growth globally for in general, as reported by IQVIA and Symphony. After adjusting for the expected accounting impact for the improved gross margins associated with the increased manufacturing scale of in general, we have revised our estimated gross profit share to be between 30 and 40 million versus our previous estimate of estimate of 40 to 50 million. We also assume a stable foreign exchange rate for our US ex U.S. pharmaceutical businesses, which will allow for continued profitable growth.
R&d expenses for the second quarter of 2024 will really reflect higher activities related to our modem programs, including CMC and efforts to related to the initiation of our first immuno-oncology clinical trial. A portion of these increased activities will continue to be funded through our Varda agreement for our Diagnostics segment. As the timing of our closing for our LabCorp transaction is not yet certain subject to FTC review. We have not adjusted our guidance to remove this business from our second quarter estimates as we've outlined, we're working to align the business to achieve cash flow breakeven run rate by the middle of 2024 and profitability run rate by the end of the year, which are both subject to the timing of closing of our LabCorp transaction. This work continues to include consolidating our geographic footprint and rationalizing our testing offerings. As we expect our client mix to improve as our cost structure and our cost structure to appropriately support our go-forward strategy.
During this transition phase, we expect consistent core testing volumes with a slight increase in the average price per patient collection amounts due to our revenue cycle management initiatives before considering any nonrecurring costs that may result from our restructuring activities and other nonrecurring expenses. We expect our costs and expense in Q2 to decline by approximately $5 million to approximately 154 to 157 million without giving effect to the approximately $35 million related to the assets as part of the LabCorp transaction. As a result, we expect the following for the second quarter of 2020 for total revenue between 180 to $187 million, revenue from services between 127 and $130 million, including 26 to $27 million from assets related to the LabCorp transaction. Revenue from product sales of 40 to $45 million and other revenue between 10 and 14 million including inclusive of the Pfizer gross profit share estimates, which are between seven and 10 million. We expect second quarter costs and expenses to be between 234 and 243 million. Again, excluding any nonrecurring expenses and expenses related to our restructuring of BioArray, it will also include approximately 20 to 26 million for R&D expense the range is based on the timing of certain CMC activities for our Mode X programs, as well as depreciation and amortization expense of 24 million.
That concludes our prepared remarks. Thank you for your attention. And now, operator, let's open the call for questions.

Question and Answer Session

Operator

(Operator Instructions) Maury Raycroft, Jefferies.

Maurice Raycroft

I am Thanks for taking my question. I was going to start with a question related to Bio-Reference. With the remaining Bio-Reference services business. It sounds like you plan to continue to streamline, optimize and grow that business with aim to get to profitability once the LabCorp deal closes, will you be able to provide more clarity into timing for getting to breakeven and profitability? And what's the longer-term strategy for maximizing value for both the services and pharma parts of the Company from a local EquiFirst question.

Adam Logal

Maury, thanks for the question. So the timing for us getting to breakeven is going to be tied to the LabCorp transaction. And we're not we're certainly not waiting for that as it relates to the rest of the business, and we're actively working down our fixed cost base, we're exiting and surface certain facilities and currently and which will help bring our fixed overhead. We're also continuing to really realign No. Our stated goal was to have no plans that would be executing to have us to run-rate cash cash flow breakeven midyear. I think we're still we're still working towards that. And obviously, if the FTC takes longer than expected them, then that could that could take longer. But otherwise and that's the path we're on.

Maurice Raycroft

Got it. Understood. And then for in general on, can you provide any more perspective or or clarity into the revised guidance there and the change in gross profit there?

Adam Logal

Sure. So overall, we've seen in general, the demand continue to be strong on a global basis where Pfizer has been in the market, the longest, obviously, it's continued to do to do the best. Really the change to guidance has to do with the accounting consequence of their of their revaluing some inventory they had on books and that flows through our gross profit share. And that has no reflection on the strength of the program just on the timing of when we're going to realize the benefits of of that improved gross gross margin that's coming from their scale-up data and understand and and maybe one question just on some of the Medex clinical assets. If there are specific catalysts this year that we should be focused on, in particular for two users or one moving into the clinic on. I don't know if there's anything more you can say about that study and when we could see initial data from.

Elias Zerhouni

I'll let Gary was underlined the CEO of Monex answer that specific question, Eric?

Yvonne Briggs

Yes, we you know, as analysts and Phil mentioned, we have the green light to go. So we're at the moment setting up sites and are really looking to bring patients into the trial. I think the as Elliot said in his comments, we're hopeful this should happen by the end of the quarter, and we're working to make it happen sooner if possible, in terms of any clinical results, you know, as you probably know with whenever you're taking a new immune therapy into the clinic, have you started a low dose and you dose escalate really for safety reasons. And that's a plan that we've come to Kraft with the FDA. So I wouldn't be expecting to see any data on CERTAINLY efficacy know, at least for you and probably next year is the time frame and which you might expect to see some type have results.

Elias Zerhouni

Okay, understood.

Adam Logal

Thanks for taking my questions.
Out back in the queue.
Thank you.

Operator

And the next question comes from Carl with Ladenburg Thalmann at this stage to take your questions and good afternoon, a few from our end on. I was wondering if you could talk about in general and to keep paying for the additional studies as far as the couple of expanded label?
So I mentioned is our closure or yourself.

Adam Logal

So the way our partnership works for those additional indications is we'll split the cost 50 50 with Pfizer, but we're not to the adult.

Elias Zerhouni

We're not necessarily expecting any additional studies, so just be their pediatric basket.

Phillip Frost

Okay, got it.

Elias Zerhouni

And for full year 24, what should we anticipate from Barda reimbursement?

Adam Logal

I know you called out 2.2 in the first quarter, should we extrapolate that and we would expect that to continue to ramp ramp up, Jeff. So that's part of the reason why the the R&D numbers going up, they're getting ready to do some some CMC activities, which will bump that number up. And just as a reminder, there's it was $2.2 million on the revenue line, the expense line is slightly less than that.

Phillip Frost

Okay.

Adam Logal

Got it.

Elias Zerhouni

That makes sense. And Adam, can you just clarify on the on the cash and debt, so it was 75.6 cash and to 30 plus 71 one on the debt side.
That's right, Rio on both Henry and the on anticipated LabCorp closure, you're expecting by end of year, it sounds like back half and that will be till we have the gross number rises to 37 days off.
Yes.

Adam Logal

I mean, the large unknown on the timing is just FTC. So once we clear the FTC, assuming we clear, the FTC will be working quickly with RailCorp the transaction.

Phillip Frost

Okay.

Yvonne Briggs

Got it.

Phillip Frost

You're feeling optimistic on the back half of the year.

Adam Logal

That's our expectation.

Phillip Frost

Okay.

Elias Zerhouni

And then on the fee, that those are also thanks for taking the questions.

Operator

Edward Tenthoff, Piper Sandler.

Edward Tenthoff

Okay.

Adam Logal

Thank you for taking my question to first, just a quick one on you had mentioned cost guidance for the second quarter of 2004 to 2 and I was writing furiously, but I didn't get the number to 43.7 to 43 or 34 to 34 to $0.43.
Okay, great. Super helpful. And then just kind of a higher-level question appreciating on what Gary analysts are saying about and the more multi-specific antibody giving moving from. I think a first one is for hematologic cancers. If I'm not, we've taken orders up for solid tumors and at a higher level, what do you ultimately expect to do with these different modality assets of the 700 partner. Could that be further partner? Should we expect more partnerships like from Merck EVV. deal on? Do you expect to keep the cancer stop and generate some clinical data next year.

Elias Zerhouni

Higher-level commentary on sort of what software and I think what I have been on we have is that forgive the background noise. I think it's a solid tumor molecule that we're planning on entering into the clinic this quarter space, we do have a liquid tumor, a molecule, which we're actually discussing with several parties who are interested. I think in the grand scheme of things, we are interested, but we have a platform to bring it to actually two platforms the vaccine once they have a multi-specific model and we are eliciting a lot of interest. We are interested in partnering and especially in research collaboration that will be funded by third parties where we could develop more targets to enter a larger portion of the market than what we could afford on our own. So we wanted to leverage the platform was the ability for us to through results through the results we've already had with the EBV with the Phase one trispecific data. And hopefully with this one I think is going to generate momentum, our collaborations with partners and licensing that I think will increase our bandwidth. And I'll stop here. And Gary, if you have a lot to say on that on.

Yvonne Briggs

Yes, I think you said it well, Elliot, say a tad bit tricky. We're open to whatever makes sense in terms of advancing these products to approval and getting them to patients. I think and the advantage of having a platform is that we can take individual products and partner them with third parties, and then we can reserve some that they have higher value and your path forward for commercialization. We can take some of those into play as well.

Adam Logal

So at the end of the day, I would I suspect it will probably partner more and we will develop internally, but we're very open to collaborate so I think that makes a lot of sense to when you think about all the different arm factors and agents that you can engineer into the multi-specific antibody, you know, a big oncology group who really is doing that. You know, multiplex combinatorial analysis makes a lot of sense, a lot for you guys doing around. So I think you'd really be able to empower some of the bigger players who are looking at ways to combine these different mechanisms. So I really appreciate what you're saying about the partnering potential for that platform.

Elias Zerhouni

Thank you, sorry.

Adam Logal

Thank you.
And the next question comes from Yale Jen with Laidlaw.
Good afternoon and thanks for taking the questions. I two questions. There are regard to the motor a product to enter the clinic soon. First one is for the EBV virus, a vaccine.

Yvonne Briggs

And my question is there's also a competitor of what they're now also developing on the vaccine against the same target. So my question is that at least on theoretical grounds, how do you compare yours to that?

Elias Zerhouni

But there are notes.
And I have a follow-up question to you for the answers to both of them then were better. But I'll let Gary give you the specifics.

Adam Logal

I'm just kidding.

Yvonne Briggs

The fun.
Well, you know, just to take a step back, my journey actually is delivering through mRNA almost the same gene products that we have managed to engineer onto the ferrets and nanoparticle, I'd say for the good of the patients it's actually a good thing to have more than one product out there being tested because one never knows how they will perform in the real world. I think what we like about our platform is the fact that it's a protein platform and we're using adjuvants that are well described with a safety profile that looks favorable in humans. The preclinical data in nonhuman primates and in our animal models is very strong. And so we're following a pretty well prescribed path with a nice set of ImmunoGen's where you know, I think we could and with great biomarkers when you're looking at and you of the viral loads and immune responses to the virus. So we feel pretty good about our products. I really don't want to get into the details of the alternative program. But what I will just say is the obvious, which is that they're using a different platform, they're using an mRNA platform that has some advantages in terms of going fast, but it has some unknowns, particularly with regard to side effects of the therapy and know as you begin to treat more and more patients with the vaccine, those issues become more and more important. And so there's no way to go on or gain or to have a crystal ball about which will work better I can. But we feel pretty good about the platform that we have and the partnership with Merck, where they have a real deep bench of the experts and knowledge for how to expand the trials and how to expand the reach of this vaccine to what we would ultimately like to address, which is the <unk>, is it the cause of cancer or the cancer on aspect of vaccine. So that I think that's the best I can do for you right now.
Okay.

Adam Logal

Great. That's very helpful. That's a lot of details here. It's one well, in terms of the two zero zero one is any could you give us some detail about the study design may be what are the targets P being pursued by design Flowcast type target?
Yes.

Yvonne Briggs

Yes, we we haven't formally disclosed the targets, but we will disclose them in the near future, probably within the next few weeks as we mine up to on enroll our first patient. But what I can tell you is that we've picked two on cell surface markers that are found on a number of solid tumors. There actually is a list of about 13 malignancies. They express these two antigens and they include lung, breast, prostate, pancreatic and the list goes on there. And there's of a fairly large number be tested. And we will in the initial stages, look at a variety of those tumor types, and we'll be looking for signs of some on tumor type where we might be seeing more efficacy. And then with time, if that bears out, we'll focus more on the tumor types where we're seeing efficacy and expand the trials in and those tumor types.
Okay. Great.

Adam Logal

That's very helpful and congrats to move this program of the Group.

Yvonne Briggs

Thank you. We're very excited to see it get to patients.
Yes.

Operator

And the next question comes from Yi Chen with H.C.

Yi Chen

Thank you for taking my questions.

Elias Zerhouni

Just to follow up on that and the X. 2001 of the solid Phase one solid tumor trial is a all-comer solid tumor trial, correct in how many patients do intend enroll grow for this trial?

Yvonne Briggs

On the IT, the trial is broken into two parts. So we have the Phase 1a and then a Phase Ib, I'd say in the Phase Ia will be the by the group where we will look at multiple different types. And then add after that point, we will begin to drill down on the ones where there's more activity, we expect to be able to make some decisions with approximately 40 or so patients in the first.
Then that includes some dose escalation because we have to go slowly and on and we will do that again and agnostic to the tumor type. And then when we reach what we think we'll be close to a therapeutic level, assuming we don't see any side effects that would preclude further expansion than we would.
I treat the large number.

Elias Zerhouni

And just to clarify, did you say that the results from the Phase one trial won't be available until 2026?

Yvonne Briggs

I didn't really say that look when they would be available because I said probably not before next year's when I said earlier, and I I would stand by that. It does take a while to, you know, get to the point where you think you're in a therapeutic dose and then you have to enroll sufficient patients and then you have to follow them for a period of time. So expecting to see even early efficacy data, we certainly will have safety data, I think before the end of this year, that tells us what what doses and how well tolerated it is and patients. But I don't expect that we'll begin to start seeing signals and until well into next year.

Adam Logal

Got it.

Elias Zerhouni

And could you give us some idea of that? How many oncology candidates you intend you bring into clinical stage of development before the end 2020.

Yvonne Briggs

And I would say that we have it will be in the range of two to four. I think very likely there will be two that will be into the clinic by next year, then depending on some partnerships on what we may have opportunities to advance another two.

Adam Logal

Okay.

Elias Zerhouni

And for partnerships, is it is it likely that you will need to generate Phase two level proof of concept data to materialize partnerships here?

Yvonne Briggs

You know, I think that's the earliest you'd like to respond.

Elias Zerhouni

No, no, I wanted to just clarify that is very different in oncology is another area in oncology is our litigation. And so you don't need Phase two data to generate a partnership you need to have a basket trial and some demonstrable results in the Phase 1a and 1b beginning of two, which you don't need to do what you need to do in other areas as well. And I'm clear because Phase two to retract a major and a partner, we'd like to be a strategic buyer has gone down from. I don't know if you agree with that one.

Yvonne Briggs

And then I very much agree. I think that often in oncology you can begin to see signals in Phase one. And then it's in instances where you don't really just depends on the appetite of the partner and of our internal teams in terms of the you know, at what point we really want to make those transitions So I'd say the safe answer is somewhere between Phase one and Phase two data.

Operator

Mike Petusky, Barrington Research.

Mike Petusky

It's what I just wanted to ask about the few months away. Yes, we think we've got some data. We've got some evidence. Yes, low CKD progression. And I'm just curious, are your sales folks able to share this data, this evidence with nephrologists? Are there any anecdotal reactions that, hey, this is really compelling this name really matter. I mean, can you just give a sense of if there if there's if there's any sense this could really unlock this product going forward?

Elias Zerhouni

Things haven't certainly I can expand on that. I mean, it's true that the data that we generated this year was very telling us from real-world evidence as well as from our own data. You could delay the onset of the dialysis by six months was not normal.
Now in terms of the reception of that, with publishing obviously presented to KOLs and nephrologists, it really makes a difference because no other therapy of secondary hyperparathyroidism has shown the ability to introduce. And it shows also we have the biomarkers that really indicate which patients are the ones that I really welcome the Rayaldee to delay the onset of dialysis would realistically for etc. So the ask the sales force is out there yet for asthma. It's really talking to the early for the holidays. You see a lot of those late-stage CKD that are not likely to go into dialysis, but we also think is valid for CKD three patients.
No, just for So great story and evolution. I think it reinforces the point that treating secondary hyperparathyroidism depression. And it does have an impact on the evolution of the disease, which was one of the questions we always had was a change outcomes and this is the answer that we announced so far and the data has been revenues and that's going to be.
My next question comes from Matt Duncan.

Adam Logal

I have a follow up to that in terms of, okay, you get the to get the data published and you start talking to docs about this. I mean, how long how long you don't think fixed subtypes seem to move much slower than they things logically seem like they should in terms of changing behavior of prescribing behavior. Is this the kind of thing that, hey, it's still a good one. It's really good missionary effort a matter of years rather than quarters or two to really change behavior or if they are currently in businesses that I would like to.

Elias Zerhouni

Thank you.
Absolutely. Are the right questions. I mean, if you know medicine medicine patterns among clinical guidelines take time to develop, I mean, you're talking about a year or two before they are going to make it to the guidelines. Like I mean, Rayaldee is in the guidelines now. So it's not a rapid process depending on the strength and the reception of the community of the files, you suggest that it may be faster or slower, but it's not a matter of a quarter or two. It will take time to develop All right.

Adam Logal

Very good. Thank you.

Operator

Thank you. And this concludes the question and answer session. And I would like to turn the floor back to Dr. Phillip Frost for any closing thoughts.

Phillip Frost

I just wanted to thank everybody for participating and for your very good questions and discussion. And we look forward to being together with you again at the end of next quarter.

Operator

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