Plus Therapeutics - Earnings Call - Q4 2024

Executive Summary

• Q4 revenue of $1.412M beat consensus by ~40% (estimate $1.007M); EPS of $(0.49) was slightly better than consensus $(0.497) as non-cash warrant mark-to-market and grant revenue recognition supported results in a low-revenue, clinical-stage profile.
• Secured $15M equity financing and a $2M CPRIT grant advance, restoring Nasdaq equity compliance and extending cash runway into mid-2026; management guided 2025 grant revenue to $6–$8M.
• LM program: Phase 1 single-dose completed; recommended Phase 2 dose at 44 mCi, plan for end-of-Phase 1 FDA meeting and initiation of multiple-dose trial; GBM Phase 2 completion targeted for 2025; CNSide full commercial launch on track for 2025.
• Near-term catalysts: CNSide commercialization milestones, LM regulatory interactions, LM multi-dose enrollment, GBM Phase 2 enrollment completion, and pediatric IND submission—each potentially re-rating prospects for de-risking and future revenue.

What Went Well and What Went Wrong

What Went Well

• Completed LM Phase 1 single-dose trial with RP2D at 44 mCi; management expects an expedited path via single-dose expansion and future registrational design discussions: “We think … a single dose of 44 millicuries warrants further evaluation for FDA approval…”.
• Strengthened liquidity and runway: $15M financing; regained Nasdaq equity compliance; CPRIT $2M advance; guided 2025 grant revenue to $6–$8M.
• Built supply chain redundancy with SpectronRx and extended Telix IsoTherapeutics agreement to secure cGMP Re-186 for late-stage trials and commercialization.

What Went Wrong

• Operating loss widened YoY to $14.7M (2024) amid increased ReSPECT-LM spend; net loss was $13.0M, reflecting financing expense ($3.545M) partially offset by positive warrant FV change ($5.654M).
• Cash and investments fell to $3.6M at year-end 2024 vs. $8.6M prior year, highlighting dependence on equity/grants until commercial revenue ramps.
• Accounts payable and accrued expenses rose to $11.3M from $6.6M YoY, and stockholders’ equity remained negative, underscoring near-term balance sheet pressure absent continued non-dilutive funding and disciplined OpEx.

Transcript

Operator (participant)

Welcome to Plus Therapeutics Fourth Quarter and Full Year 2024 Results Conference Call. Before we begin, we want to advise you that over the course of the call, including any question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects, and financial performance, which may affect Plus Therapeutics' future operating results and financial position. All such statements are subject to risk and uncertainties, including the risk and uncertainties described under the risk factors section included in Plus Therapeutics' annual report on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission from time to time. Plus Therapeutics advises you to review these risk factors in considering such statements. Plus Therapeutics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends, or circumstances after the date they are made.

It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Plus Therapeutics' President and Chief Executive Officer. Sir, you may begin.

Marc Hedrick (President and CEO)

Thank you, Sherry. Good afternoon, everyone. Thank you once again for taking the time to join us today as we provide an overview of recent business highlights and discuss our fourth quarter and full year 2024 financial results and go forward guidance. Joining me for the call today is Mr. Andrew Sims, our Chief Financial Officer. I'll begin the call by providing more detail on four important recent corporate announcements. Then I'll discuss progress in our most advanced clinical programs and then discuss progress and plans for CNSide and its commercialization. After that, I'll turn the call over to Andrew to review our financials. First of all, in early March, we closed on an underwritten equity financing of $15 million in gross proceeds with new stockholders. This was preceded by a smaller financing from existing stockholders.

We also received about that time $2 million in its accelerated grant proceeds from CPRIT. This capital, in combination with further anticipated grant funds, strengthens our balance sheet and provides funding through key milestones into mid 2026. Additionally, the financings enabled Plus to regain compliance with Nasdaq's minimum stockholders' equity listing requirement.

Andrew will, in fact, provide additional details on the transactions, future grant availability, and cash runway. On a personal note, and on behalf of our board of directors and our dedicated management team, I would like to express our collective gratitude to our current and new stockholders for their support of and confidence in Plus and our mission. We are also grateful to those organizations with which we have substantial financial and grant support, specifically the U.S. NIH, and that's the NCI, National Cancer Institute, the U.S. Department of Defense, and the state of Texas, specifically CPRIT.

Also, moving on, we recently taken to strengthen our senior leadership team. Specifically for Plus Therapeutics, Dr. Mike Rosol joined us as Chief Development Officer, responsible for leading our preclinical and clinical development activities, including clinical operations. Mike has extensive experience in oncology, radiotherapeutics, and biomarker development, all highly germane to Plus's pipeline. Specifically for CNSide Diagnostics, our wholly owned subsidiary, Mr. Russ Bradley joined us as President and General Manager of CNSide. Russ is a seasoned and successful operator in the field, previously holding top management positions at both major and smaller diagnostic companies, as well as related board positions. Russ has a deep knowledge of diagnostic operations, fast-growing commercial diagnostics, market access activities, and business development. Additionally, I'm pleased to welcome Dr. Jonathan Stein to the team at CNSide as its Medical Director.

Jonathan has extensive experience in all aspects of diagnostic operations, compliance, and regulatory affairs. Now, I'm excited to introduce you to Rheobic. We now have an FDA-accepted proprietary name, which is Rheobic, and that goes alongside the USAN-adopted and INN-recommended non-proprietary name or generic name, Rhenium (186Re) obisbemeda. All of these are required for our future marketing application with the FDA. Working with the leader in pharmaceutical brand name creation and development, we are striving to develop a powerful brand identity for Rheobic, and that all begins with its global name. In parallel, we will be rolling out comprehensive branding materials that will strengthen and shape the Rheobic brand identity, and going forward, we'll use Rheobic to refer to our lead drug, now in mid-stage clinical trials, for use in patients with glioblastoma, leptomeningeal cancer, and soon in children with pediatric brain cancer.

Finally, we recently received approval by the U.S. FDA on our application for orphan designation for the use of Rheobic in patients with LM due to lung cancer. This adds to our previously received orphan designation for LM due to breast cancer and our fast-track designation for Rheobic. This is reflective of our strategy to focus on the top two causes of LM, specifically breast and lung cancer, which represents two-thirds of the LM market. Now, I'd like to switch gears and focus on our leptomeningeal metastases clinical development program, in which we are investigating our lead radiotherapeutic Rheobic and the ReSPECT-LM trials, which are substantially funded by the state of Texas. We recently announced the completion of the ReSPECT-LM phase I single administration dose escalation trial.

In that trial, we have determined a recommended phase II dose of 44 mCi as well as the maximum feasible dose of 75 mCi. Based on these determinations and promising clinical safety and efficacy data, which I'll highlight in a moment, we have expanded our integrated clinical development plan for Rheobic as follows.

First, because a single dose of Rheobic at the recommended phase II dose was deemed safe, well-tolerated, and exhibited a promising efficacy signal in terms of clinical response and overall survival, we intend to move forward on a dose expansion trial at 44 mCi to gather additional safety and efficacy data for Rheobic. In terms of next steps, once the final clinical study report is complete, we plan to conduct an end-of-phase I meeting with the FDA to align on an optimal path to approval for Rheobic and tailor the next clinical development steps.

As there are no approved drugs for LM and a substantial clinical need, we intend to leverage promising clinical data for Rheobic, our orphan drug designations as mentioned, fast-track designation to identify the most expedited path to market for patients that are in desperate need for options. We think given the promising phase I data, a single dose of 44 mCi warrants further evaluation for FDA approval for LM related to breast cancer. In parallel, the ReSPECT-LM multiple dose escalation trial of Rheobic will begin enrollment soon for the purpose of dose optimization. Key details for the trial are as follows. The single dose at the recommended phase II dose of 44 mCi will be fractionated into three doses of approximately 13 mCi.

Based on the PK and PD data derived from the phase I single dose trial, three doses will be given at diminishing intervals, or first every two months, then every month, and then every 15 days. There are options to expand the size of the treatment cohorts and extend the number of treatments beyond three to six doses total. Besides the pharmacokinetic and pharmacodynamic data and dose optimization, the trial will assess safety and efficacy. The trial will be a basket trial initially and has been approved previously by the FDA, and site startup is ongoing.

The plan to pursue both single and multiple doses in an accelerated clinical development approach is based on the positive clinical data specifically presented at the end of last year at the Society for Neuro-Oncology annual meeting and the San Antonio Breast Cancer Symposium in December, as well as data that has been obtained subsequently. Those conference presentations included important new data on PK/PD safety, clinical response, and survival. Key highlights of the conference presentations and some of the more recent data that we will present in detail at upcoming conferences include 29 patients with LM who received a single intraventricular dose of Rheobic between 6.6-75 mCi. In terms of safety data, there was one DLT, which is a grade 4 platelet count reduction that was observed at the cohort 5 dose of 66.14 mCi.

Two DLTs were observed in one patient in cohort 6 that was a grade 4 platelet and neutrophil count reductions, indicating at least some bone marrow exposure consistent with the PK analysis data. Notably, there were no SAEs that occurred in cohort 4 patients at what has been determined to be the RP2D. PK and PD analysis showed target to off-target radiation-absorbed dose ratios of greater than 100:1. To put that in perspective, such ratios are impressive because they mean the dose is much more effectively delivered to the area of interest, the tumor in this case, than to the other areas of the body where one desires to keep the doses as low as possible. In other words, our drug design and formulation strategy works.

Clinical response to a single dose of Rheobic was assessed through four months or 112 days post-treatment to deliberately exclude the effect on patients receiving under a compassionate use protocol who survived well beyond the published median overall survival. Specifically, in these patients, we assessed change in CSF tumor cells via our CNSide tumor cell enumeration assay, which is the best measure of tumor cell bulk or prevalence. Also, we looked at radiographic response, and survival benefit was also assessed. Through cohort 5 and at the time of data cutoff for the conference presentations, data was available for 16 patients. Five or 31% of those patients showed a radiographic response based on investigator assessment. We also used clinical benefit rate or CBR as an outcome measure in this very fragile patient population as it encompasses complete response, partial response, and stable disease outcomes.

An additional seven of the sixteen patients I just mentioned showed stable disease through four months for a radiographically determined clinical benefit rate when combining the five I just mentioned before of 75%. A 75% CBR related to imaging analysis. Additionally, in terms of clinical responses, a decrease in disease symptoms was noticed in two of fourteen evaluable patients or 14%, with ten showing stable symptoms through four months for a clinical benefit rate of 86%.

Lastly, when looking at the cerebrospinal fluid or the CSF tumor cell enumeration assay, again, our CNSide assay, which is the most sensitive measure we have for assessing tumor volume, which has also been shown to correlate with survival, this decreased up to 100% by day 28 following Rheobic treatment, with four of the fifteen evaluable patients showing a response translating to a clinical benefit rate of 93%.

In terms of survival, median overall survival was 9 months, which compares favorably to the historically reported consensus in the literature of about 4 months, supporting the potential efficacy of Rheobic for LM. The full presentations from SNO and San Antonio Breast Cancer meetings are available on our website for further review. In terms of guidance for our integrated development plan for LM, we anticipate an FDA meeting, likely a type B end-of-phase I meeting, as soon as possible to align on the following.

First, a path to a registrational trial for a single dose of Rheobic in patients with LM resulting from breast cancer primaries. That includes a single dose expansion trial that would provide an expeditious path to registration. Key issues to resolve in this meeting, if possible, are things like endpoints, comparators, tumor subtypes that we'll study, and so forth.

Second, we seek to align on the integration of a future multiple dose strategy given the promising data we have seen with compassionate use treatment in a single dose phase I and anticipated data expected later this year in the formal multiple dose escalation trial. In the second half of 2025, we anticipate completion of the first and longest duration of the multiple dose expansion cohorts.

By then, we anticipate having FDA alignment, a definitive clinical plan for a single dose expansion trial, and site onboarding should be ongoing. Furthermore, on May 9, 2025, Plus Therapeutics will be presenting response data from the RESPECT single dose LM trial, essentially the full phase I data set as it exists at that time at the Nuclear Medicine and Neuro-Oncology Symposium in Vienna, Austria. Other data presentations are anticipated throughout the remainder of 2025, and we'll update on acceptance and agreement to participate.

Now, switching gears a bit to glioblastoma. In terms of ReSPECT-GBM and those trials, the phase I trial results were recently published in Nature Communications, a prestigious high-impact journal. We have made that publication open access and it is now available on Plus Therapeutics' website or directly through Nature. The results show a strong safety and efficacy signal that has been further confirmed through the first half of the phase II trial, as previously reported. For the program as a whole, a total of 52 patients have been enrolled through both phase I and II, and we anticipate phase II completion in 2025, and the RESPECT trial continues to benefit from a grant from the NCI. An offshoot of the adult glioblastoma trial is our pediatric brain cancer program. We previously announced that we have received a U.S.

Department of Defense award of a $3 million grant to substantially support a phase I trial for children with pediatric high-grade glioma and ependymoma. Approximately a $900,000 payment was received in September 2024 as part of this award, and we anticipate an additional $1.1 million payment in 2025. Interactions with the FDA are ongoing towards final IND approval. We anticipate obtaining that approval in 2025 with Lurie Children's Hospital associated with Northwestern and Chicago serving as the initial clinical trial site. Now, regarding Rheobic radiotherapeutic drug production and supply chain management, this remains an important and active focus ongoing behind the scenes. Recently, we announced partnerships with SpectronRx, IsoTherapeutics, RadioMedix, and ABX, the details of which can be found in previous press releases and earnings calls.

Furthermore, to ensure our ability to meet the demands of expedited or accelerated late-stage clinical trials, as I mentioned before, and future commercial production requirements for Rheobic, we continue to expand key partnerships in 2025 as we have in previous years, but now with the focus geared more towards supply chain redundancy and backup supply. Now, fundamentally switching gears, I'd like to update you on our CNSide business, but I think it's important to give a brief background on CNSide for those of you that may not be as familiar with it, and frankly, we haven't talked much about it over the last few years. CNSide is a CNS cancer testing platform we have been utilizing in our ReSPECT-LM clinical development programs as a biomarker and exploratory endpoint since 2022.

Since then, and over that time, extremely high conviction of the value of CNSide for Rheobic's future commercial success, and specifically, I mean increasing the total addressable market by two to four times for Rheobic. The immense value also for hundreds of thousands of cancer patients at risk for LM but are in a diagnostic quandary. Finally, the substantial value in CNSide as a commercial diagnostic platform in and of itself. Given this, we seized on the opportunity last year to acquire it outright. Since then, we have been investing thoughtfully in the people, the means, and the materials to bring CNSide back to market in a manner that can unlock its full value for patients, providers, and stockholders. What is CNSide? What does it do?

CNSide, you know, in a brief way, brief description, is it's a cerebrospinal fluid or CSF assay platform that accomplishes three core things. First, diagnosis. Specifically, it can confirm or, importantly, reject the clinical suspicion doctors may have that a patient with almost any type of solid tissue cancer may have LM. It does so at a much higher sensitivity, or said differently, a true positive or true negative rate that's much better than can be done with existing technology, which is essentially cytology. It also accomplishes treatment monitoring.

In patients with LM, monitoring of CSF tumor cells has been shown to correlate with survival and is now recommended in the NCCN clinical guidelines, i.e., one can address whether a patient is responding to treatment, do they need a different therapy or therapeutic choice, or perhaps can therapy be paused potentially, perhaps they may have safety issues related to their current course of therapy.

Finally, as a treatment selection tool, LM cancers often exhibit a drift in biomolecular signal that may influence treatment approaches and drug selection decisions in the future once drugs are approved by the FDA. Clinical data has shown that CNSide can be important in this clinical decision-making process. Users of CNSide are neuro-oncologists, neuroimmunologists, and medical oncologists or other practitioners caring for patients with common cancers such as breast and lung cancers, as well as melanoma and others.

It's not strictly limited to patients that have LM or highly suspected of having LM. Now, let me talk about the status of the business in brief. As mentioned, we have hired a seasoned core team to both launch and manage the business day-to-day, specifically Mr. Bradley and Dr. Stein, who I mentioned previously. Other key hires have been made and onboarded in the past 12 months. We have also established a CLIA-registered centralized laboratory for test operations in Houston, Texas, that is actively testing patient samples from our clinical trial and ongoing pre-commercial pilot testing. Key market access activities have been ongoing for nine months in the areas of medical affairs and reimbursement. This includes negotiations with commercial payers as well as seeking expanded coding approvals and NCCN CNS cancer change requests for LM diagnosis.

Furthermore, key marketing, corporate and product branding, and sales planning activities have been completed. In terms of guidance, first of all, the company will be exhibiting CNSide at key medical conferences in 2025 and plan to submit abstracts and publications as we move forward this year. Commercially, the CNSide tumor cell enumeration test is on track to launch fully this year, beginning in a geographically limited manner, expanding over the course of the year as market access activities such as state licensures, key payer agreements, and medical system contracts are expanded.

Specific financial guidance will be forthcoming later this year as visibility improves. CNSide product offerings will also evolve in 2025, and more on that over the next few quarters. With that, I'll now turn the call over to our Chief Financial Officer, Andrew Sims. Andrew.

Andrew Sims (VP and CFO)

Thank you, Marc. Good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the fourth quarter and full year ended December 2024. The cash and investments balance was $3.6 million at December 31, 2024, compared to $8.6 million at December 31, 2023. The company recognized $5.8 million in grant revenue in 2024, compared to $4.9 million in 2023. This represents CPRIT's share of the costs incurred for our Rheobic development for the treatment of patients with LM. We expect 2025 grant revenue to be in the range of $6-$8 million, of which we have already received $2 million. The total operating loss in 2024 was $14.7 million compared to $13.3 million for the full year 2023. The increase is primarily due to increased spend relating to the RESPECT-LM trial.

Net loss in 2024 was $13 million, or $1.95 per share, compared to a net loss of $13.3 million, or $4.24 per share for a full year in 2023. I would also like to provide an update on our runway based on the previously announced private placement and provide guidance on our grant funding for 2025. There are two additional sources of cash to which Plus Therapeutics has access beyond the balance disclosed in cash on hand and liquid investments on our Q4 2024 balance sheet. The first source is the cash from the recently announced private placement closed on March 4 with gross proceeds of $15 million. The second source of cash remains our continued funding through three grants. Firstly, the CPRIT grant to support the ReSPECT-LM trial.

Coming into 2025, we have $7.2 million remaining to be received on the grants, of which we received $2 million in Q1 2025 and are on track to receive $1.6 million in Q2, with the balance to be received in late Q3 or early Q4 2025. Plus also has just over $2 million remaining of grant proceeds from an award from the United States Department of Defense for $3 million in total to support the upcoming RESPECT pediatric brain cancer trial. The first advance was received in 2024 for just under $900,000. Plus also continues to benefit from the NIH grant to support the ReSPECT-GBM phase I-II trial. Although expected to be completed in 2025, it currently covers approximately 90% of the overall trial costs. We also continue to source other non-dilutive sources of capital. We will continue to only report on individual grants when they are awarded.

In addition, in Q1 2025, we consolidated our operations into our CNSide facility in Houston, streamlining operations and reducing costs. Taken in total, the cash runway is well in terms of Marc's laid out being fully funded. Now I'll turn it back to you, Marc.

Marc Hedrick (President and CEO)

Thank you, Andrew. Before we move on to Q&A, I'll take a moment to provide a summary of guidance on anticipated key events and milestones for the remainder of the year. First of all, in terms of data and related presentations, specifically at the Nuclear Medicine and Neuro-Oncology Symposium in May, we'll provide a comprehensive RESPECT-LM data review of the single-dose phase I trial, including new key safety and efficacy data.

In terms of other targeted meetings for the remainder of the year, we plan to contribute abstracts and presentations along the way at a minimum to our core constituencies in oncology, specifically at the Society for Neuro-Oncology, American Society of Clinical Oncology joint meeting in August, and the Society for Neuro-Oncology annual conference in November. In addition, besides the submitted abstracts, the company plans to host an educational seminar at SNO-ASCO featuring KOL presentations on both Rheobic and CNSide, and potentially at the SNO annual meeting. More on that to come later. In terms of clinical and regulatory milestones this year, we are on track to initiate the ReSPECT-LM phase I multiple-dose escalation trial and complete the first cohort of multiple doses at the two-month intervals.

We're also on track to meet with the FDA this year following completion of the RESPECT phase I clinical study report, which is in process, to seek agreement with the FDA on a few things. First, the broad issues around the clinical development of Rheobic through approval, first for breast cancer, then other cancers. Also, we intend for these meetings to provide us with substantial agreement on key issues such that we can optimally design a phase II-III registrational trial for both a single dose of Rheobic for breast cancer and later to integrate dosing optimization thereafter as additional multiple dose data becomes available. Finally, as a result of these meetings, we will be better able to design a single-dose expansion trial in agreement with the FDA and be in startup mode in the second half of 2025.

Also, we intend to complete enrollment of the final patients in ReSPECT-GBM phase II trial by the end of the year. We also plan to obtain IND approval for the RESPECT-PBC phase I trial of Rheobic for pediatric brain cancer. We'll also push to get enrollment started there as well this year at Lurie Children's Hospital. Regarding CNSide, this will be a very important year for Plus with many commercially oriented milestones planned. Specifically, CNSide is on track to launch fully this year. This is beginning with a geographically limited introduction now, but with building steam over the course of the year as CNSide is an assay platform, initial commercial on tumor cell enumeration or tumor cell number counting to be followed with additional testing capabilities thereafter. Market access activities are ongoing, and state licensed hospital and Bellwether medical system contracts will be announced as completed.

Geographically, since lab testing is centralized, market expansion will be driven as market access objectives are met. Most important commercially related financial guidance is planned to begin later in this year as key milestones are achieved and visibility improved. Additionally, the company will be exhibiting CNSide at key medical conferences and plan to submit a variety of abstracts and publications as we move forward this year. Sherry, I'll turn it back over to you for Q&A.

Operator (participant)

Thank you. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. One moment while we compile the Q&A roster. Our first question will come from Edward Woo with Ascendiant Capital. Your line is open.

Edward Woo (Director of Research and Senior Analyst)

Yeah, congratulations on all the progress that you're making. On the CNSide, do you anticipate building up a major sales force, or will you look for partners to commercialize this?

Marc Hedrick (President and CEO)

Hi, thanks for the question. Appreciate it. Not a major sales force. Let me clarify that. This is a niche opportunity. In one sense, we're beginning the sales process with academic neuro-oncologists at major oncology centers, call it the 30 NCI-designated cancer centers. That's a relatively small group. There are only about 300 neuro-oncologists in the country. There are a lot more medical oncologists, and there are a lot more emergency room doctors even that could use it, but that will come later.

The key thing is to launch us into this narrow group of thought leaders at major institutions that probably gets you 80% of the market, and then over time expand it out to the broader medical oncology market, and perhaps even, as mentioned, the docs. That's well within our capability to execute and finance, and I don't think it makes sense at this point to partner, although at some point partnering in the U.S. and/or outside the U.S. will be something that we're going to look at very closely and be predisposed to do.

Edward Woo (Director of Research and Senior Analyst)

Great. Thanks for answering my questions, and I wish you guys good luck.

Marc Hedrick (President and CEO)

Thank you.

Operator (participant)

Thank you. One moment for our next question. That will come from the line of Jason Kolbert with De Boral Capital. Your line is open.

Lindsey Edh (Equity Research Associate)

Hi, Dr. Hedrick. This is Lindsey Edh for Jason. First off, I just want to say congratulations on the financing. We just have a few questions for you. The first question is, the recurrent GBM trial is the most advanced. Are you able to lay out what must happen to meet the goal of data this year?

Marc Hedrick (President and CEO)

Hi, Lindsey. Yeah, in a way, it's most advanced, although if you truly look at the integrated development plans for both, it's very likely that LM could get approved before. Superficially, yes, GBM is in sort of late stage phase II. As I mentioned, we've enrolled over 50 patients, including completing a phase I, completing a dose escalation, over halfway through a phase II. The key thing has been adding new sites. We've got a flood of new sites that are interested on the heels of the Nature Communications publication. We really don't need more new sites.

We now have five sites that are enrolling, now a New York site and now an Upper Midwest site. We have sort of Chicago area and Upper Midwest covered as well as the Northeast. We are really talking about 11 patients to complete that. That will be a focus over the next year, and I think that is going to be achievable.

Lindsey Edh (Equity Research Associate)

Thank you. Just a follow-up question. Can you remind me of the powering assumptions behind the trial? 80% powered for what delta? What would be exciting data for that?

Marc Hedrick (President and CEO)

The powering on the phase II, its comparator is essentially a standard of care. We have actually conducted two real-world control arms that we have funded through our partner Medidata, and we have looked at two different comparator arms.

One is patients that have been treated with monotherapy with the only approved drug for recurrent GBM. That's Bevacizumab. And those patients live under eight months. And that's a relatively large trial. That also compares with publications as well in terms of meta-analysis on recurrent GBM. At the behest of the FDA, who wanted to control for the effects of convection-enhanced delivery. We also looked at patients that have received CED, but were also demographically mapped to our trial. Again, median overall survival is about eight months. So kind of any way you cut it, recurrent GBM patients, no matter what you do, live on average about eight months. So that's our clinical hurdle rate. In terms of powering assumptions, if you look at I'll kind of cut to the chase here.

If you kind of look at 80% powering, and you look at that as the comparator, and really, I don't think it matters as your comparator, as all roads lead to eight months, it seems, that you're really talking about a trial of somewhere in the neighborhood of 100-150 patients. We've had discussions with the FDA about using real-world control data. Actually, a real-world control phase III design has been approved by the FDA. If we're able to do that, that'll mean the active patients are going to be much closer to maybe 100 patients to get that same level of powering, such that we would have a randomization scheme that sort of looks like this. You would treat three active patients would be compared to three control patients.

Of those three control patients, two would be demographically matched real-world control patients, and one would be a true comparator prospectively taken, and that would likely be either a comparator to Bevacizumab or a radiation or standard of care, which is essentially physician's choice. Does that answer your question?

Lindsey Edh (Equity Research Associate)

Yes, it does. Thank you so much for answering my questions. I just want to say congratulations on the progress in the quarter.

Marc Hedrick (President and CEO)

Thank you. Thanks, Lindsey.

Operator (participant)

Thank you. One moment for our next question. That will come from the line of Sean Lee with HC Wainwright. Your line is open.

Sean Lee (VP of Equity Research)

Hi, good afternoon, guys, and thanks for taking my questions. My first one is on the LM study. You proposed a dose expansion at the 44 millicurie dose. I was just wondering, is that going to be another additional cohort to the phase I study, or are you mentioning that as part of the phase II study that you were planning?

Marc Hedrick (President and CEO)

Hey, Sean, thanks for the question. Yeah, let me tell you what my aspiration with that is, and it's subject to discussion with FDA, and it's subjected to their desire to move this program quickly. I think the ideal path here would be for the FDA to sign off on a phase II trial focused on breast cancer, likely HER2 positive or HER2 negative patients, so n equals 15 of each, at the 44 millicurie. The phase I dose is a basket trial that includes lung patients and breast patients, gastrointestinal cancer patients, and so forth.

The key in segmenting the patients by molecular subtype is to the degree that overall survival is in the endpoint mix. There likely will be a differential survival depending on what kinds of patients one selects based on survival data that's been reported in patients with LM. I think we want to sort that out. From a statistical evaluation, this discussion with FDA, I think, will elicit the proper endpoints.

Our belief is that while overall survival is important and the ultimate goal, because these patients have essentially two cancers, a primary cancer in the breast and a metastatic cancer, that confounds the interpretation of overall survival data. Our view is that actually CNSide is the best measure of response and correlates with survival. That could be an important primary endpoint, co-primary endpoint, or secondary endpoint. That would change the trial design dramatically.

My anticipation is if that's the way we go with a phase II with 30 patients, 15 of each hormonal subtype, we could analyze those individually and also collectively. That could provide enough patients, ideally, and we could build this in upfront to roll directly into an approval trial. That would be ideal. That will take a little bit more negotiation with the FDA and likely a bit more time to get up and running. We could also do a phase I-B, which is essentially a direct dose expansion. That would be quicker, but it likely would not expedite the regulatory approval process as much as going directly into kind of a phase II or a phase II/III pivotal design.

Sean Lee (VP of Equity Research)

Just thanks for that. With regards to the multi-dose study then, would you wait for the first data to come out from that study before you initiate a phase II, or would you try to build that into a phase II, or would that, for example, need a second study afterwards?

Marc Hedrick (President and CEO)

Yeah. No, I think we're going to move forward directly into this phase II or phase I-B. That data will be important no matter what we do in terms of increasing the performance data, the proper endpoints in the trial, powering assumptions, and expanding the PK/PD data. No matter what we do with multiple doses, that's going to be important data to drive the overall program. I think the phase I data is very promising. We've had multiple multi-year survivors, which is essentially unheard of.

If you look at the survival Kaplan-Meier curve for median overall survival, you see a lot of long-tail survival, which is unheard of in the disease, which is a very positive thing. I do believe, based on the data, that proceeding with a single dose approval is very promising and possible, and I think we should pursue it as quickly as we can. Either way, we win with that data set. The multiple dose data, I think we already know that multiple doses work. We've treated patients in the phase I, as you know, Sean, with multiple doses under compassionate use. We know on a small number of patients that we could do that safely at very high doses, and patients seem to live longer.

Dose optimization can take a while, so we think it's very important to get this into the market to patients, to doctors, as quickly as we can. We think that pathway really goes through a single dose first, and then we'll layer on dose optimization as the data comes back, and then play, read, and react to the data in consultation with the FDA.

Sean Lee (VP of Equity Research)

Okay. Great. Understood. Now my final question is on the CNSide. I was wondering if you could provide a bit of color on the market opportunity and how much, where do you think you'll be in the next 12 months or so?

Marc Hedrick (President and CEO)

Yeah. It's a great question. In my view, the market opportunity in kind of a best reasonable case is 500,000 tests a year in the US. That leverages ruling in the diagnosis, ruling out the diagnosis in patients who might have breast cancer and suspicious neurological symptoms but indeed do not have LM. The treatment monitoring data increasingly looks to be very promising.

You add up all those markets, and you look at the publications that are increasingly coming out showing there is an epidemic in LM that really drives that market number. It is a very sizable market opportunity in our view. The prior company's commercial data over two and a half years really support the physician acceptance of that. About half the major cancer centers in the U.S. were using the test during that time frame. I think it is a very sizable market opportunity. Where do I think we will be a year from now? I think that the tumor cell enumeration test will be commercial.

It'll be rolled out on a geographic scale as we get state licenses and we get major payers on board, as well as Medicare. We've actually made great progress in the last nine months on those. We'll be able to talk about that more, but we want to talk about those on a success basis, not on a forward-looking basis. I think we will have the ability to scale up operationally in Houston, really to infinite tests. The number I mentioned before, 500,000 tests, we can do that in our Houston facility. Scale up is really a matter of extra headcount and extra capital equipment. The devices involved in the test we actually make in Houston, so we control our destiny there. I think a year from now, the TCE test will be expanding throughout the U.S.

We'll be adding in situ hybridization, immunocytochemistry, and NGS along with that. We'll be rolling out later in the year. We'll be building out a sales team that will be focused, as I addressed Ed's question before, on those major cancer centers and those physicians that are key opinion leading doctors. I failed to mention Russ Bradley. Russ has been there, done this multiple times throughout a 25, 30-year career in diagnostics, including a long stint at Abbott. Knows how to scale diagnostics and has key relationships in the market and can do this operationally and commercially. We'll really be integrating him more and more in that business over that same time frame.

Sean Lee (VP of Equity Research)

Thank you for the additional details. That was very helpful. Thanks again for taking my questions.

Marc Hedrick (President and CEO)

Thanks, Sean.

Operator (participant)

Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Dr. Marc Hedrick for any closing remarks.

Marc Hedrick (President and CEO)

Thank you, Sherry. Thank you to everybody that joined us on the call, listening on the call in the recorded version. I would just like to say on behalf of the board, I would like to thank our employees, our team members, the physicians that we work with, the key opinion leading doctors that are in this area. I really appreciate their input. Most of all, the patients that trust us, a number of which I've talked to and interfaced with as they've been involved in our trial. Thank you very much for your participation on the call, and have a good evening. Goodbye.

Operator (participant)

This concludes today's program. Thank you all for participating. You may now disconnect.