Chimerix - Q2 2023

Transcript

Operator (participant)

Good morning, ladies and gentlemen, welcome to the Chimerix second quarter 2023 earnings conference call. I would now like to introduce you to your host for today's call, Michelle LaSpaluto, Vice President of Strategic Planning and Investor Relations at Chimerix. Please proceed.

Michelle LaSpaluto (VP of Strategic Planning and Investor Relations)

Thank you. Good morning, everyone, welcome to the Chimerix second quarter 2023 financial and operating results conference call. This morning, we issued a press release related to our second quarter operating update. You can access the press release in our Investors section of the website. With me on today's call are President and Chief Executive Officer, Mike Andriole, Chief Medical Officer, Allen Melemed, and Chief Technology Officer, Josh Allen. Before we begin, I'd like to remind you that the statements made on today's call include forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties and other factors. These risks and uncertainties and other factors could cause actual results to differ materially from those referred to in the forward-looking statements.

Please refer to our filings with the SEC for a more complete disclosure of these risks and uncertainties. At this time, I would now like to turn the call over to our President and Chief Executive Officer, Mike Andriole.

Mike Andriole (President and CEO)

Thanks, Michelle, and good morning, everyone, and thank you for joining us. I'm delighted to be hosting the call for the first time as CEO and to provide an update on our second quarter results, which were characterized by focused execution across both the ONC201 and ONC206 clinical programs. Starting first with ONC201 and the ACTION study, we've experienced strong engagement and enthusiasm across the neuro-oncology community globally for this study, driven in part by the scale of the unmet need in H3K27M glioma, where there are very few treatment options for these patients beyond radiation therapy. Additionally, high-grade glioma is a subset within the broader field of oncology, particularly in pediatrics, that sees relatively few randomized controlled phase III studies.

This reality further adds to the engagement we are seeing from investigators and sites, which have few competing studies in the field. Regulatory approvals to proceed in each of the 11 countries where we are now opening sites came quickly earlier in the year. The pace with which we are moving through IRBs and contracting reflects the pull we're seeing from investigators to participate in the study. In fact, our team opened sites at a pace of nearly one a day during the second quarter. We now have 77 sites open across 11 countries. We expect to have more than 100 sites open by the end of the third quarter. Importantly, patient enrollment continues on schedule. We expect to have our first interim overall survival assessment in early 2025.

Final progression-free survival data will likely follow next in mid-2025, and a second interim overall survival assessment is expected to occur later that year, if needed, followed by final overall survival data in 2026, also if needed. In parallel, we've started the process of preparing the organization, the program, and the market for the potential launch of ONC201, and have undertaken as many activities as possible prior to recruiting a chief commercial officer. While the ACTION study progressing on schedule, we have recently begun an external search for this commercial leader. I expect to have an update on that process later in the year. Turning briefly to ONC206, the open-label dose escalation and intensification studies are expected to complete in the first half of 2024. To date, dose escalation has included once-weekly dosing.

Looking forward, future dose levels include twice-a-day dosing for three consecutive days. This is where we expect to capture the range of continual exposures that should increase the likelihood of seeing consistent monotherapy activity with this agent. Allen will provide more color on that design, the safety profile we've observed to date, as well as provide an update on the previously reported GBM response on the once-weekly schedule. Finally, turning to finance. We've been deliberate and disciplined with tight expense control and capital allocation, even as we ramp investment in the ACTION study. Our burn in the first half of 2023 was $33 million, as the full effect of our previously announced reduction in force began to be realized in Q2.

We ended the second quarter with $233 million in cash and equivalents, right on plan to meet our previous guidance of approximately $200 million in cash at the end of the year. Under our current operational plan, we expect to have runway through each of the expected ACTION data points and into 2027. Our financial plan does not contemplate receipt of near-term, non-dilutive milestone payments from our TEMBEXA partnership with Emergent, but as we observed last week, BARDA remains active in the smallpox procurement space, and a TEMBEXA option exercise is possible, even if unlikely in the near term. As a reminder, each future full option exercise under the current BARDA contract equates to a $31 million milestone payment to Chimerix.

Chimerix also earns a 20% royalty on gross profits in the U.S. beyond 1.7 million treatment courses and a 15% royalty on all international gross profit. For more details on our second-quarter balance sheet and income statement, please refer to the press release, which we released earlier today. Lastly, we've begun a process to backfill the CFO, CBO role, and I expect to have an update on that process later in the year. In the meantime, we're fortunate to have a strong finance, accounting, and internal control capability that allows us a bit of time to finalize that search. With that, I'll turn the call over to Josh to provide additional color on the ACTION study and our recent engagements within the neuro-oncology community. Josh?

Josh Allen (CTO)

Thanks, Mike. As you all can tell from Mike's overview, our team has aggressively rolled out the ACTION trial with global coverage. For several geographies, the ACTION trial represents the first time that ONC201 will be made available through official channels to patients with H3K27M-mutant glioma who are in desperate need. We have worked closely with multiple stakeholders across the global neuro-oncology community to optimize the clinical trial design in a way that balances the need for scientific rigor with consideration of patient burden. Furthermore, we have identified creative solutions to support patients and their families when possible. This has had a direct impact on our ability to utilize referral networks as the ACTION study site availability widens over time, so that we maximize the capture of page-eligible patients who are in need today.

As a result of these efforts, our connection to the global neuro-oncology community has broadened in scope and has gained momentum. Over the last quarter, we have participated in multiple neuro-oncology forums aimed at identifying the most important issues facing the brain tumor community and how innovative solutions could be identified and expedited. These forums included participation in the White House Cancer Moonshot Forum on brain cancers and the National Brain Tumor Society Research Roundtable event. In addition, several team members have represented Chimerix and the ACTION trial at the annual British Neuro-Oncology Society, Pediatric SNO, and the Canadian Neuro-Oncology conferences, following study activation in their respective regions.

Our representation at these important events is another step forward towards building our global presence in the neuro-oncology community, and you can expect that trend to increase throughout the year by direct engagements of our team at regional conferences where ACTION is now open. Note that our regional event presence will be in addition to some of the larger conferences where we have engaged historically, such as the SNO Conference in November, that will be hosted this year in Vancouver, as well as the European Association for Neuro-Oncology, or EANO, conference in Rotterdam, where we hope to see you later this year in September. With that overview, I'll turn the call over now to Allen for a more detailed clinical update on the ONC206 program. Allen?

Allen Melemed (CMO)

Thank you, Josh. I'm excited to provide an update on the ONC206 program, which is progressing well in dose escalation studies that contemplate both escalating the dose and increasing the dose frequency, where we hope to achieve therapeutic exposures that may yield consistent monotherapy efficacy. We have two separate trials ongoing, one at the NIH in adult patients and one at the children at Pacific Pediatric Neuro-Oncology Consortium, or PNOC. Both trials have escalated safely under once-weekly Dose Level 5, and the NIH trial has safely completed Dose Level 6. There have been no related dose-limiting toxicities in either study, and we've observed similar safety profile between pediatrics and adult patients. Overall, the most common treatment-related adverse events were fatigue, leukopenia, and vomiting, which were all generally low grade, with no events greater than a Grade 3.

We are now moving to a dose and schedule that will allow for more frequent dosing. Our next dose level will include twice-daily dosing for three consecutive days to enable a pharmacokinetic profile exposure that has demonstrated optimal efficacy in multiple in vitro models and may increase clinical therapeutic response. As you may recall, in March, we reported an investigative set response in a patient with recurrent glioblastoma without the H3K27M mutation. This patient's response remains ongoing, and the patient has been on ONC206 for 15 months now. We are encouraged that the response to this patient is proving endurable on a once-weekly dose schedule so far. The patient is tolerating, so far, intrapatient dose escalation. With that overview, I'll turn over to Mike for closing remarks.

Mike Andriole (President and CEO)

Thanks, Allen. We've continued to execute our plan as expected in the second quarter, with a focus on bringing ONC201 to patients as soon as possible. We're beginning to prepare our organization to launch ONC201 and are excited about the promise to further broaden our pipeline in the future by advancing ONC206 or through business development. With that, Mark, we'll open the call to questions.

Operator (participant)

At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. It's star, then the number one on your telephone keypad. Your first question comes from the line of Maury Raycroft from Jefferies. Maury, your line is now open.

Speaker 10

Hi, this is Kevin on for Maury. First, just wanted to say, congrats, Mike. Just had a couple of questions for, you know, starting with the ACTION trial. You said you have 77 sites active. Could you say whether, you know, around 120 is still your goal or if you could, you know, potentially exceed that? Just any color you could provide on enrollment across different geographical regions so far or anything in the background characteristics so far that you can share and maybe how it differs from the phase II trials?

Mike Andriole (President and CEO)

Sure. Thanks, Kevin. I appreciate the question. On the number of sites, we'll certainly go over 100. We currently have sort of targeted 120, to your point. You know, the amount of engagement and enthusiasm, not just in the U.S., but internationally for the study, continues to be significant. I think there's a scenario where we go over 120. You know, we'll do validation of sites and qualification of sites, could certainly be somewhere between 120 and 140, depending on how that goes. We've, we've been very pleased with the amount of excitement and interest in participating.

With regard to enrollment, it's been really consistent across geographies, consistent with, sort of the, the pace of site activation in different countries. We actually just undertook this analysis. It's been very consistent across the U.S., Europe, separately in the U.K., where we're seeing enrollment at about the same rate. I don't know, Josh or Allen, if you have other comments on that?

Allen Melemed (CMO)

I have no other comments.

Speaker 10

Okay, great. That's helpful. Thanks. Just for 206, you started the more optimal dosing strategy. Could you just talk about how you're thinking about sharing data here? Are you gonna wait for the full escalation data next year, you know, or could you share some data prior? When you share the data, are you thinking about top-lining it or waiting for a medical meeting? Thanks.

Mike Andriole (President and CEO)

Yeah, good, good, good question, Kevin. Yeah, we've previously said, I think last quarter we mentioned that we'll provide quarterly updates on activity of this study. Certainly from an efficacy perspective, if we see other signals of activity, we'd expect to share that on our quarterly calls. As it relates to the conclusion of both of these studies, and certainly the primary purposes is, of course, safety, that would be something we would report out in the first half of 2024. Oh, Allen, Allen, if you have other, other thoughts or questions on, or comments on that timing.

Allen Melemed (CMO)

No, just no comments here, Mike.

Speaker 10

Okay, great. I'll hop back in the queue. Thank you.

Mike Andriole (President and CEO)

Thanks, Kevin.

Operator (participant)

Your next question comes from the line of Noreen Corbrea from Capital One. Noreen, your line is now open.

Speaker 9

Thank you. Hi, Mike. Congrats on everything. I guess my first question is kind of piggybacking on the ONC206. You know, in terms of when we will see some robust data, I'm guessing that'll be in 2024, first half. Do you have a sense of how many dosing cohorts or patient numbers we might be able to see at that point?

Mike Andriole (President and CEO)

We just added a slide to our corporate deck that's published this morning, Noreen, that details that, but I'll let Allen summarize the strategy.

Allen Melemed (CMO)

Sure. We've already gone through Dose Level 6 in the adult Dose Level 5 in pediatric patients. We are now gonna be switching both of them to the twice-daily, three days a week, and we hope to have these dose levels completed by next year. You can see in our slide deck that again, it depends on tolerability. We can go through other dose levels, but we hope we can, and we think it should be enrolled by second half. I think, what was, what's our guidance, Mike, 2024?

Mike Andriole (President and CEO)

Oh, we'll complete dose escalation in the first half of 2024.

Allen Melemed (CMO)

First half, yeah.

Mike Andriole (President and CEO)

Yeah. I'll just add to Allen's comments that we'll go through. You know, currently there's five additional dose levels contemplated, Noreen, so up to Dose Level 11, which is significantly higher exposures and concentrations than what we've seen to date through Dose Level 6. You can look at that slide. I'm happy, happy to-

Speaker 9

Yeah, I can see it now. Thank you.

Mike Andriole (President and CEO)

Sure.

Speaker 9

Just out of curiosity, does this mean, with regards to ONC206, you're not considering any more expansion opportunities outside H3K27M-mutant glioma? Are you just positioning to pivot to ONC206 completely?

Mike Andriole (President and CEO)

I'm sorry.

Allen Melemed (CMO)

This is Allen. Maybe I'll address your question. I think what you're saying is, is that the ONC206 trial is now going to be in patients that are not eligible for ACTION.

Speaker 9

Right.

Allen Melemed (CMO)

We're looking to see activity outside of the H3K27M disease currently.

Speaker 9

What I'm asking is, you know, with ONC201, though, will you consider anything, any other opportunities, I guess? Let's limit it to that.

Mike Andriole (President and CEO)

Yeah, I understand your question now, Noreen. ONC201 is, we're obviously we're focused H3K27M as the lead indication. It is, it is a fair observation. As we look at additional follow-on indications, for ONC201, certainly there's been activity in, in paraganglioma and, and pheochromocytoma, an adrenal tumor that, that looks interesting, from an IIT out of the Cleveland Clinic. That's certainly an opportunity for that program. Bigger opportunities are likely to be explored with ONC206, and in a more intense dosing schedule and regimen.

For, for several reasons, what we're seeing in the early biology with that program, to the extent that we extend beyond H3K27M within CNS tumors or outside of the CNS, it's more likely to be with ONC206, is our current thinking. Josh, you've done a lot of work on this topic. I don't know if you have other, other comments.

Josh Allen (CTO)

Yeah, I think that largely covers it, Noreen, but basically any of those other opportunities we were contemplating for 201 seem well positioned for 206B. We validated a lot of that in the lab, maybe even some other opportunities that weren't on the radar for 201. I think you've got it right. The priority for 201 will be in H3K27M, both see the head with ACTION and sort of supporting trials around the periphery to fill in the rest of that population, and then other opportunities will be prioritized for 206.

Speaker 9

Okay.

Allen Melemed (CMO)

Noreen, the only thing I would add, the only thing I would add for ONC201, assuming ACTION is positive, I assume there'll be a lot of additional studies, whether it's with radiation, with other combinations that will go on in this specific H3K27M patient population. I think there'll be a lot more research that will happen with ONC201, but a more focused towards this specific mutation.

Speaker 9

Okay, okay, that 1 more quick question then. Will we see anything. There was a combination study, a PNOC study with ONC201 and Paxil. Will we see anything from that study? Has anything come out of that?

Mike Andriole (President and CEO)

The PNOC hasn't published anything on that, and it's a, it's a, a study that they're running. I think we have modest expectations for, in, in that combination, but they, they haven't, published anything on that yet, Noreen.

Speaker 9

Okay, thank you so much. That's all for me.

Operator (participant)

Your next question comes from the line of Joel Beatty from Baird. Joel, your line is now open.

Joel Beatty (Biotechnology Equity Research Analyst)

Great. Thanks for taking the questions. The first one is on ONC206. With, with the new dosing schedule that you're moving to, could you describe how much different you, you'd expect things to be on, on, on measures such as the duration of therapeutic exposure?

Mike Andriole (President and CEO)

The level of concentration and the dosage, if you look over the course of a week, is multiples higher than what we've dosed in Dose Levels 1 to 6, Joel. We're going up to 200 mg BID, 3x a week. On a simple basis, you know, 1,200 mg per week at the highest dose level, if we were to graduate to Dose Level 11 versus where we've been to date, which is as high as we've been, about 350 once a day, once a week for Dose Level 6. Multiples higher exposure.

Joel Beatty (Biotechnology Equity Research Analyst)

Yeah.

Josh Allen (CTO)

Joel, what I'll add, if you, if you look at our slide deck, we do see some non-clinical data that shows the prolonged effect, you see with the prolonged infusion. We do see, at least in the non-clinical models, that a longer exposure does definitely help with cell count.

Joel Beatty (Biotechnology Equity Research Analyst)

Great. Did I catch in the prepared remarks that you expect to have an update on a commercial leader later in the year? You know, if, if so, could you tell us more about what that update would entail?

Mike Andriole (President and CEO)

We're actively re-recruiting that commercial leader, Joel. There are scenarios here where we're two, two and a half years out from launch. We're to a point in the organization where I think we've gone about as far as we can go without a commercial leader, in preparing for that. Certainly the enthusiasm we're seeing for the ACTION study gives us confidence to take that step in recruiting a chief commercial officer. We'll update that.

Joel Beatty (Biotechnology Equity Research Analyst)

Great, thank you.

Mike Andriole (President and CEO)

Between now and the end of the year. Thanks, Joel.

Operator (participant)

Your next question comes from the line of Ed White, from H.C. Wainwright. Ed White, your line is now open.

Edward White (Managing Director and Senior Biotechnology Analyst)

Good morning. Thanks for taking my questions. Congratulations, Mike. Perhaps the first question I have for you is a big picture question. What, if anything, is going to change under your leadership?

Mike Andriole (President and CEO)

Yeah

Edward White (Managing Director and Senior Biotechnology Analyst)

any changes to, strategy, or anything else?

Mike Andriole (President and CEO)

Yeah, thanks, Ed. Great question. As you can imagine, we've designed a transition plan with the intent of being, at least, as disruptive as possible to the strategy, and that's the strategy, you know, that's been in place, for a while. Don't expect a big new strategic initiative during this transition. Our priorities are gonna remain the same, which is to successfully execute the ACTION study, prepare to launch ONC201. We'll develop ONC206 to its rightful conclusion. We'll follow the data, we'll continue to evaluate external innovation to broaden the pipeline and leverage our capability to the greatest extent possible.

Those, those objectives won't change, in the, in the near term, and, you know, I think, I think we've been quite, quite thoughtful about making sure this is, a seamless transition.

Edward White (Managing Director and Senior Biotechnology Analyst)

Great. Thanks, Mike. Just stay on ONC206. As you mentioned, the data is gonna drive your decisions, but maybe we can just think about going down the road. What would be the next steps, do you think right now, if you have positive data and a safe drug in the first half of next year?

Mike Andriole (President and CEO)

Yeah. We're spending, spending a fair amount of time evaluating ways to accelerate efficacy studies in the scenario you just described, Ed. Of course, identifying a recommended phase II dose is step one in making sure that we've got a safe, a safe dose and schedule before we, before we take that step. I also think it's fair to say we need to see perhaps some other convincing signals of activity in the remainder of this phase I dose escalation as we get up into concentrations where we might expect to see additional, additional measures of activity.

So depending on where that is, we're working on a number of biomarker experiments now to determine where we would take this drug if we, if we in fact see that activity, both in the CNS and potentially outside of it. Josh has been leading the work on that initiative. Josh, do you have thoughts on perhaps where we might take this under different scenarios?

Josh Allen (CTO)

Yeah, I think that's a great setup, Mike. Ed, good morning. I, I think it'll depend on what we see, obviously. As Mike said, we need to charge into a recommended phase II dose, or at least two. I'd, I'd note we're, you know, exploring multiple levels and, and two different frequencies in both pediatrics and adults, which I think sets us well, up well, and, and as we're being mindful of Project Optimus towards dose optimization that may need to be tackled early, in development.

Assuming we see the signs we, we expect to see at this increased dose schedule, that, that just set us up for either follow-on opportunities within CNS tumors, where I would note that I think there's an opportunity in one or both of these programs for sort of a seamless transition into expansion cohorts, given the enthusiasm that we already have for these trials in that space. In parallel to that, you know, as Mike is alluding to, we're, we're, we're quite busy in the lab, basically prioritizing opportunities outside of CNS for once, once one or two doses are recommended to go forward into a follow-on phase II trial, that we have those indications prioritized for, for separate studies to launch.

I think opportunities for seamless expansion within CNS and maybe some separate studies outside of CNS, should be opportunities available once we, we, we firm up that dose coming out of these phase I trials.

Edward White (Managing Director and Senior Biotechnology Analyst)

Great. Thanks, Josh. Now I, I want to ask a question that I haven't asked in a while. On the subject of TEMBEXA, as you mentioned, SIGA won that U.S. procurement contract. I'm just wondering, do you have any insights into any potential new opportunities for TEMBEXA, either in the U.S. or outside the U.S.? As you mentioned, you get royalties on sales outside the U.S. as well.

Mike Andriole (President and CEO)

Yeah. No, it's good. It's a good question and a good reminder that, you know, we still have downstream economics to potentially earn in that partnership with Emergent. Ed, you know, on the one hand, it's promising that BARDA continues to be active in the smallpox antiviral space, as we saw last week. The other hand, you know, their procurement of TPOXX, you know, wasn't a complete surprise, and we know BARDA's budget is fixed, so it's sort of hard to handicap what that might mean for TEMBEXA in the near term. What I can say that, is that if anyone is well-positioned to maximize demand for TEMBEXA at this point, it will be Emergent, not just in the US, but internationally. Of course, we're rooting for them.

You know, one of the, one of the big, I think, variables in, in the international question is HERA, which is the European equivalent of BARDA. You know, they've stood up that organization to help identify and prepare for pandemics in Europe following the COVID-19 pandemic. That, that organization, as I understand it, has been capitalized, maybe not to the extent of, of the U.S. stockpile. It does have capital to deploy, and so what that strategy will be for smallpox preparedness and how TEMBEXA will fit into that is, is, of course, a question for Emergent. Certainly, that's probably the biggest near-term opportunity internationally. How near-term that is, you know, remains to be seen.

Edward White (Managing Director and Senior Biotechnology Analyst)

Okay, great. Thanks for taking my questions.

Mike Andriole (President and CEO)

Sure. Sure. Thanks, Ed.

Operator (participant)

Your next question comes from the line of Soumit Roy from Jones Trading. Soumit, your line is now open.

Soumit Roy (Biotech Research Analyst)

Good morning, everyone, congratulations on all the progress, and congrats, Mike, on the new role. One question.

Mike Andriole (President and CEO)

Thanks.

Soumit Roy (Biotech Research Analyst)

on ONC201, the phase III. Are you, is the focus gonna be RANO HGG and equally on the RANO LGG criteria to measure the progression? FDA recently approved the Novartis purely on RANO LGG, so curious about your thoughts, and if you can compare and contrast what you like and don't like, and if ONC206 will also be evaluated with the RANO LGG criteria.

Mike Andriole (President and CEO)

Yeah, we're evaluating a, a progression in that study, on RANO HGG. I'll let, Allen, comment further on sort of, how we're doing that in terms of, of, of timing and, and approach. Josh, I'm sure, will have a particular, opinion on how we think about HGG and LGG in this, in this particular tumor type. The important thing is whether it's contrast enhancing or not, that you've got a tumor volume shrinkage, on, on both of those measures. Let's, dig in each of those separately. Allen, do you want to, you know, comment on, on the PFS, determination?

Allen Melemed (CMO)

Yeah. Thanks, thanks for the question. The primary endpoint of the trial is overall survival, though we do have a alpha-controlled analysis for progression-free survival based on RANO HGG. That was in agreement with, with FDA regarding that endpoint. As for high-grade gliomas, FDA has focused their efforts towards RANO HGG. We will be doing an analysis in addition regarding RANO LGG, but it's not a alpha-controlled analysis, so there'll be less power for that. Regarding the low-grade trial, FDA has accepted RANO LGG for low-grade gliomas, but has not accepted the HGG at this point for that, and we will see from that. Josh, anything else to add?

Josh Allen (CTO)

Yeah, I'll add a little color on the difference, difference in utility of the different RANO criteria between response and progression endpoints. You'll recall the phase II data we previously reported on included both RANO HGG and LGG as a way to look at tumor shrinkage by enhancing or non-enhancing MRI sequences. There, we could utilize both. It was clear regulatory guidance to prioritize RANO HGG, given that these are, these are all WHO Grade 4, you know, high-grade gliomas. That, that's where the priority was given. As we transition to the TFS scenario, as Allen mentioned, that has alpha allocations in the ACTION trial, the scenario is a little simpler. When you measure progression by RANO criteria with high-grade glioma, progression counts either on enhancing or non-enhancing disease components for T1 and T2 clear.

Anyways, as, as Allen was getting at, RANO criteria for high-grade glioma will remain the primary criteria we use for evaluating progression on that study. The difference is, unlike a response endpoint where that only measures enhancing disease, progression could be triggered by enhancing or non-enhancing. It will still adequately capture all the patients going into that study with, with that one criteria.

Soumit Roy (Biotech Research Analyst)

Got it. Thank you for that color. The second question is, on the, any guidance on the cash runway, what you guys are thinking for, or are you thinking of any BD activity that could be, could be revealed this year or next year?

Mike Andriole (President and CEO)

Thanks, Soumit, for the question. In terms of our cash runway, as I mentioned at the outset of the call, we've been really disciplined on capital allocation to date, particularly as we ramp the ACTION study and through site activation and the stage of enrollment. Cash balance we have is right at the end of the second quarter, right on where we expected to be to have $200 million in cash at the end of the year. Our current forecast allows for a runway through all of the ACTION endpoints in 2025 and 2026, with just a little bit of cash left over to get us into 2027.

Clearly, an important objective for us as we as we complete execution of the ACTION study. Nevertheless, we are looking at external assets either to complement the pipeline with ONC201 or ONC206, and depending on how ONC206 unfolds, suppose there's a scenario where this development becomes more important in that calculation. We do have a little bit of dry powder in our in our cash forecast that could be available for other projects, and so we're actively looking at those. I will say the bar for business development and bringing in external projects is a bit higher given the activity we're seeing with ONC206.

Nevertheless, as I mentioned earlier, we still need to see other signs of convincing data, I think, to trigger a bigger investment in that program into phase II. We'll follow the data on that. We'll continue to look at assets externally as we have really for the last couple of years. If we find something where we think we can add value that meets our strategy in targeted oncology, I think we're prepared to act. Certainly, those criteria and making sure that it's complementary to our strategy are critical as we think about bringing on any additional projects right now.

Soumit Roy (Biotech Research Analyst)

Thank you for the color, and congratulations again.

Mike Andriole (President and CEO)

Yeah. Thanks, Soumit.

Operator (participant)

Your next question comes from the line of Joseph Thome from TD Cowen. Joseph, your line is now open.

Joseph Thome (Managing Director and Senior Biotechnology Equity Research Analyst)

Hi there, good morning, thank you for taking my questions. I have three. The first one is just a clarifying question. When you said commercial leader, I just want to make sure you mean an individual person at the company, like a CCO, to lead commercial development strategy and not a pharma partner to actually lead the commercialization of the therapy should the phase III trial be successful? Just want to make sure that. Is that correct?

Mike Andriole (President and CEO)

Yeah. No, good to point clarification. Yes, I was referring to a chief commercial officer at the company.

Joseph Thome (Managing Director and Senior Biotechnology Equity Research Analyst)

Okay, perfect. Thank you. Then second, you, you did mention you have to follow the data on the ONC206 program. You know, with ONC201, it kind of emerged that that 20% response rate was, you know, sort of the level that we wanted to see. I guess when we see the data in H1 2024, what you're looking for in the efficacy package as sort of a go, no-go decision on response rate or duration of response? Then second question is on ONC201, you know, with the over 70 sites and then hopefully growing to 120, given this is a rare disease, I guess how consistent is standard of care across these individual sites and diagnosis?

Is that a concern at all when you look between different sites and regions? Thank you.

Mike Andriole (President and CEO)

Yeah, good, good, good question. On the question for ONC206, in terms of what we're looking for, I'll just, I'll just reiterate, this is first and foremost a safety study. I think we've identified a dose and schedule as we think about escalation that should enable us to see some additional signals of activity. We certainly have seen one to date. What's interesting about that is it happened at such a low dose level, 100 mg, once a week, and has continued through, through intrapatient dose escalation.

Additional signals of activity like that as we get into Dose Levels 7, 8, 9, assuming that we get that far, from a safety perspective, I think will be important considerations for if or how we take that program forward. Certainly within the recurrent setting, you know, those patients are eligible for, for evaluation of a response. There's also an arm in the PNOC study that's in the frontline setting, where those patients really aren't eligible, just because it's, you know, in, in, in the upfront setting, and you've got confounding criteria such as, you know, other, other therapies, whether that is radiation therapy or otherwise, that might confound a response assessment.

So we've got, other ways that we're looking for, for signals of activity in, in that patient population as well. We'll look at the totality of the data when we have it, and make a decision, at that point. I don't know, Allen or Josh, do you have other, other thoughts on that question?

Josh Allen (CTO)

Just other, other, other context, keep in mind, you know, it's a pretty heterogeneous group, right? We're enrolling patients across the entire space of CNS tumors, and then as you can tell from the exposures that will come out of the study, there's, there's a wide range of that as well. You know, given all that heterogeneity, I think it's hard to peg a specific rate, but rather, what we will have is, is eye within that group towards patients up in therapeutic exposure ranges, looking for, you know, signs of, of, of monotherapy sort of shrinking tumors in a recurrent setting where monotherapy activity is a little more clear. If there's any signs of, you know, common denominators there that make mechanistic sense, so we could charge after a specific subgroup.

I feel like that's how we'll be looking at the data as opposed to a specific rate across the entire study.

Mike Andriole (President and CEO)

Allen, anything to add?

Allen Melemed (CMO)

Yeah, I think what I'll just say is that we, we need some confidence to move ONC206 forward, that we have a drug that will be as good, if not better, than ONC206 in certain populations. We will be very critical when looking at the data before making decisions to escalate to other areas.

Mike Andriole (President and CEO)

Yeah. On your, your, other question, Joe, you know, in terms of consistency of, of, standard of care in this population, you know, the, the big, the big consideration for us as we selected, countries is the radiation dose and making sure that patients were getting a consistent radiation dose in that market, at those institutions. So we're, we're comfortable, with that, consistency across all of the sites that have been activated. Then, for better or for worse, there really isn't, much in terms of standard of care, beyond that. To the extent that there is, we've, we've tried to make this as, homologous of a patient population as we can with the, inclusion-exclusion, criteria. Patients are allowed, temozolomide in combination with, with, radiation.

Some sites would may or may not continue that in this patient population. It's known to, to have less of an effect, or in fact, hasn't proven a survival benefit in, in unmethylated patients. The vast majority of patients with H3K27M mutation are, are unmethylated. Excluding that in, in the ACTION study, and making sure there's a adequate washout period, has not been a, a barrier, certainly in, in site enrollment and activation. We've, we've got good consistency across across sites, both within countries and, and across geographies globally on, on the standard of care.

Allen Melemed (CMO)

Yeah, Joe, this is Allen. Just to add, I think in the countries that we're going, getting a biopsy is standard of care, 'cause it's important for understanding prognosis as well as other markers. It's part of standard testing that's being done either through NGS or IHC. That is, there are some areas that we're not going to, that would not always biopsy. The ones we're going to always biopsy, typically always get this tissue. Then, as Mike said, standard is radiation, resection if possible, and really, there's no other options out there.

Josh Allen (CTO)

Great. Thank you very much.

Operator (participant)

There are no further question at this time. I would like to turn the call over to Mike Sherman. Mike, line is open.

Mike Andriole (President and CEO)

Yeah, it's Mike Andriole, but happy to finish. Thank you for everyone for taking the time this morning. We look forward to giving you updates in the coming months.

Operator (participant)

This concludes-

Mike Andriole (President and CEO)

Thank you.

Operator (participant)

Today's conference call. You may now disconnect.