Thank you very much for joining us today at our R&D meeting. It is time for us to start R&D meeting for 2024 for Ono Pharma. And today we use two platforms, face-to-face and also online for the participant. First, I'd like to introduce attendees from Ono, Mr. Sagara, Representative Director, President. Mr. Takino, Director, Senior Executive Officer, Executive Director, Discovery and Research. Mr. Okamoto, Executive Officer and Executive Director, and I'm facilitator. Today, I'd like to go through these items on the agenda. First, Mr. Sagara will say a few words for the opening, and we will invite Mr. Okamoto to talk about the development status of ONO-4578. And also, Mr. Takino will talk about the open innovation and ONO-8250, and we will have Q&A session after that. So please allow us to start now. I'd like to invite Mr. Sagara. Hello, everyone.
I'm Sagara. Thank you very much for your time participating in our R&D meeting, despite your busy schedules. So at the beginning, I'd like to give you some explanation about our new structure, which will start as of April 1st. As you may know very well, we have the patent cliff for Opdivo and the Glactiv for Forxiga, patent cliff for the diabetic diseases. These are the, actually the, risks we are facing, and, well, we are enhancing our pipeline, and we are working hard to grow further by overcoming these patent cliffs. And... So for the coming few years, we are going to deploy, the activities that we are planning to execute. And as we have been sharing with you, how we are going to overcome these challenges, the key point is international, such as U.S. and Europe.
We will get approval and marketing by ourselves in these international markets. That is our top priorities. Of course, we have had no experience in the approval getting by ourselves and also the SMCs and marketing and sales of our product in this international market, and we will know it is a big challenge for us. But it is what we have to take up on as a challenges and actually grow further, because in Japan, we have 5%, and we are doing our marketing and sales for this 5% in Japan, and 95% is from royalties. And this 95% may not be as high as in international companies and market, like 85% or 80% respectively in this potential market.
We would like to do ourselves, so that we will be able to achieve actually the goals of growing further. So we will make a concerted effort toward that. So talking about the United States first, Velexbru would be launched in 2022, 2026, in accordance with our current plan, and we are making progress with the plan. And two years away from now, 2026 is our target, and we are making a concerted effort toward that. And for that end, I was questioning myself if this current organization structure is appropriate for that goal. So I am the President, and I'm the Representative Director, only one solo person who is assuming that responsibility.
And we have been actually doing operations businesses with this organizational structure, but the, in order to further drive our activities toward 2026, we have decided to change it to this structure. So instead of one cylinder, we want to have two cylinders in order to propel the driving force, so that we'll be able to achieve higher and execute better. When we think about a potential accident, I understand, there wasn't an appropriate, well, the approach having only one representative director. So, we had this concern before, so we decided to expand the roles of the representative directors into three people. So, we have decided to change to this new, new structure. So this is the reason behind this decision. And what are the roles and responsibility of those three people?
The internal operations will be led by the president, which means Mr. Takino will lead internal operations and make judgment for decisions. And also, I myself will be engaged in major overall issues and policies. And Mr. Takino will be overseeing the overall operations according to his experience and the career, because he has a long experience and the track record of international business. And I became the president in 2008, and the long-listed product were going to be about 90% in two, three years away from that timing. And we didn't have as much as we wanted, and so we needed to enhance licensed products. That is how we were trying to overcome the challenges facing us back then. And we asked to exercise some extra effort for the BD teams, and actually they worked on very diligently. And together with Mr.
Takino, I found partners in Japan and outside Japan to identify new compounds for future drug discoveries, and on top of Opdivo and the Bristol's, we were able to obtain potential seeds, several thousands of compounds that is actually supporting us, were actually acquired during that time period, and we were able to make a good success with Opdivo, and we were able to get the approval for Myrbetriq and also the lung cancer afterwards, and we are steadily growing the business, but looking into the future now, we need to deal with situations similar, could be similar to 15 years ago. That is actually the things that we bear in mind, and we commit ourselves, and Mr. Takino will execute activities for expanding business into international market.
Actually, the SCM, sales and marketing, are the something that we are missing in his careers. However, but he has long experience in doing business outside of Japan, so we can expect a lot from him for the contribution. Therefore, we decided to go ahead with this new structure. Mr. Tochinaka, we will take care of the corporate strategies and planning. Also, Sagara, I myself, will be involved in external relations, including business and industry relationships. We announced this plan in November, and it's been a while since then, and we didn't have opportunity to talk about it to the analysts, so I decided to use this opportunity to explain our changes in the structure. We will get the approval for the marketing of the Velexbru in the United States, and this is our plan.
... So we are going into a period where we will struggle with revenue growth, and royalty revenue will decrease starting from this year, and unfortunately, Opdivo will be impacted by launches of other products. So therefore, for the coming years, we will experience some difficulties in the performance, which is opposite to the time period we enjoyed over the last few years, but we will execute activities and achieve the plans. And we will make commitment in investment, although we do not have any negative impact on the performance. Well, since we have experience in R&D investment a lot, although we were underperforming, and we were criticized by the market.
But, however, we were able to generate money and accumulate money internally, and it is good timing for us to use that for investment in R&D. We are planning to spend 600 billion JPY for R&D for the coming years until 2026, and strategic investment will be 250 billion JPY, and 2023 is 109 billion JPY. So we will make steady progress in investment and R&D activities. For the details, please refer to your handouts. In 2024, there is, on the blue box in the middle. If we make a successful progress, we'll be able to have the POC studies for ONO-1110 and ONO-2910. That is our current plan.
Thank you very much for your attention. Thank you very much, Mr. Sagara. Now, I'd like to invite Mr. Okamoto to talk about the ONO-4578 development situation.
Research and development. And I'd like to talk about the development status of ONO-4578. And recently, there was an announcement at the academic gatherings, including that report. I'd like to make an explanation. And this is the outline of the compound ONO-4578. This is the in-house small molecule compound, and that is a tablet for the oral taking, and the mechanism is a prostaglandin receptor antagonist. And there are four receptors of PGE2, and this is antagonist for EP4. And as for the status of development, let me elaborate it on later. And this is the mechanism of action of ONO-4578. As mentioned earlier, PGE2 is a biologically active substance, and this is an antagonist for EP4. And this biologically active substance, PGE2, has various functions.
Tumor cells use PGE2, which they produce, to guide the cells, such as MDSC, bone marrow-derived suppressor cell, and M2 macrophage, which negatively control tumor immunity and establish tumor microenvironment in order to avoid tumor immunity. As you see at the bottom, you can find Opdivo. Opdivo activates as a main player of offense side against the tumor, that is the CD8 positivity cell itself. Opdivo inhibit the activation of CD8 positivity cell itself, while ONO-4578 inhibits activation of other tumor immunosuppressive factors, such as MDSC and M2 macrophage, to activate tumor immunity. This is the non-clinical basic data. As I mentioned earlier, Opdivo and ONO-4578 have different operating mechanism. It is assumed that combination of these two will bring a stronger anti-tumor effect. The figure one shows the mouse-
... with both tumor-bearing mouse model and combination of PD-1 antibody and ONO-4578, which showed strong anti-tumor effect, as we expected. And it was also confirmed malignant cells, such as MDSC and M2 macrophages were decreased, and CD8 positive T-cell was increased, as we have expected, with the concept I explained to you a moment earlier. So the malignant cells can be decreased. So as you can find on the right side, the number of the CD8 positive T-cells could increase. And as a result of such non-clinical results, we think there is a high possibility for the combination therapy of Opdivo and ONO-4578, to show high efficacy with cancer types, for which efficacy of PD-1 antibody is well-established. And other types of cancers, such as pancreatic cancer or colorectal cancer, for which PD-1 antibody monotherapy or combination with chemotherapy did not show efficacy.
We are making progress with this clinical development. This slide shows the development status of ONO-4578. As is shown here, development of combination therapy with Opdivo is being carried out for multiple solid cancers. Today, I will introduce you the result of ONO-4578-01, Part 1 in gastric cancer, and Part D in colorectal cancer. In addition to these, as I mentioned earlier, for colorectal cancer, the combination therapy is expected to show the enhancement of efficacy. As the ONO-4578-02 trial, with the standard treatment of the chemotherapy and a combination with the 4578 , and ONO-4578-04 trial, with a combination of chemo, Opdivo and ONO-4578 in a first-line treatment, is done. Also as zero five trial, this is for the non-small cell lung cancer.
As you know, this trial, first-line treatment for the non-small cell NSCLC is for standard treatment is the regimen with the PD-L1 antibody. So this is the patient whose symptom progressed after administration of combination regimen, including PD-1 antibody as first-line treatment. So we're carrying out these trials, too. And as for the gastric cancer, you're gonna find in the blue arrow. As I will mention later, based on the result of the Part C, as was already announced in Japan, South Korea, and Taiwan, the phase 2 clinical trial in gastric cancer was commenced to add ONO-4578 to the combination therapy of Opdivo and chemotherapy, which is a standard treatment. Next, please. And from now, I will introduce you the results of the clinical trials of ONO-4578-01 trial, Part C. The result of this trial was reported at ESMO in the previous year.
This is the outline of study design. It's a bit harder to see, so let me elaborate on the next slide. This is different from what we used at the report in the ESMO, but wait, this is the study design. Part C of the ONO-4578-01 study, at the time of the commencement of the trial, being different from present, Opdivo was not approved for the first-line treatment of gastric cancer. In Japan, monotherapy of Opdivo for the first-line treatment of gastric cancer was approved, as is shown in the red circle, and that was the standard treatment for the trial at that time. In this trial of Part C, patients treated with Opdivo as standard treatment for the first-line, and showed certain clinical benefit, but assessed with progressive disease later.
In other words, the patients who are assumed to have acquired resistance against Opdivo are the target. So in this Part C, in combination with Ono four, five, seven, eight, Opdivo is administered again. And in Part C2, the standard therapy of monotherapy Opdivo as a combination dosing of Ono four, five, seven, eight. And this is the phase 1 trial, so we'll confirm the results and the efficacy and the safety. These are the primary endpoints. And today, I'll talk mainly about the efficacy. This is the result of the efficacy results. So in Part C1, you can find it on the left side, and the standard treatment Opdivo monotherapy plus four, five, seven, eight is on the right side. In C1, the response ratio was 10.0%, and disease control ratio was 73.3%.
With the PD-1 antibody, without a record of the PD-1, in evaluable patients in Part C-2, the response ratio was 16.7%, and disease control ratio was 40%. Just for your reference, in ONO-4578 phase 2 trial with gastric cancer patients after frontline treatment, without record of PD-1 antibody treatment, response ratio was 11.2%, and disease control ratio was 40.3%. Next page, please. This is a waterfall plot. The left side is C-1, and right side is the C-2. Please pay attention to the one on the C-1, on the left side. As I've been repeating, the target patients of C-1 were once treated, with a record of treatment with Opdivo, and experienced disease progression afterwards.
And in the Part C-1, more than half, or majority of the patients, the second administration of Opdivo was ONO-4578. More than half of them shown this tumor shrinkage. Next page, please. And in this clinical trial, tumor biopsy was conducted before and after administration to study the effect of combination therapy of ONO-4578 and Opdivo at molecular level. And this is the evaluation of the biomarkers. And I'm sorry, what we have measured as biomarkers cannot be disclosed. We are very sorry for that, but the results. So the clinical data of the safety and efficacy will be compared. So the efficacy predictors, so which item will work, will be more responsive with what type of patient, and efficacy and safety, this data will be extracted and studied. And this is the data we announced at the academic gathering of ESMO.
So this is a result of the biomarker analysis, which shows the change of the gene signature with tumor tissue before and after administration. And as I mentioned at the very beginning, with ONO-4578, what contained is the malignant cell, such as macrophage cells. And on the right side, you can find the malignant cell decreased, and the good cells increased, such as the CD8 positive T-cells. And it was found that the Opdivo can activate the CD8 positive T-cells. And it was observed that actually, the CD8 positive T-cell can be reproduced in clinical test. So the preclinical results are containing or suppressing malignant cell and activating CD8 positive T-cell, could be reproduced in clinical test. So our concept of combination administration of Opdivo and ONO-4578 is supported, at least by the result of the Part C-1.
This is a result of quantitative measuring of PGE2 metabolites in urine. The patient group was higher than SD anti-tumor effect compared to the group with PD, was found with higher amount of PGE2 metabolite in urine. It was found through the data. The respective observation is that with the patient with a higher level of PGE2, combination therapy of Opdivo and ONO-4578 will show the greater efficacy. Next page, please. This is the result of a safety study. With advanced recurrent gastric cancer patient, the combination therapy of Opdivo and ONO-4578 showed the controllable safety profile. So far, we have been talking about the result of Part C clinical trial itself. This is the data only to show you without any explanation.
But as you know, with Opdivo, we carried out the great number of clinical trials, and we have the accumulation of the data from these clinical trials. So we have the huge amount of data available at our hand, and we have to utilize such data for the development from now, and that is the strength we have. So let us show you one example of such utilization of big data. So the result of the clinical trial in gastric cancer and the result of the Part C-1 are compared. And sorry, the graph is very vague in here, but-
... The very big condition is that these are the comparison of the two different trials, so this is just for the internal study. So we have to be careful in interpreting the result. That's why I don't show you the actual graph here. So we chose the group of patients whose background almost same as that of the Part C2, and compare the data, and by comparing these results, and also not only the results of the Part C1, but also the biomarker analysis, we make the study and found that combination of Opdivo and ONO-4578 can be the promising, the treatment for the gastric cancer. That is the result, our conclusion, and that's why we started the phase 2 clinical trial for the first-line treatment of gastric cancer.
Next, this is what we published at ASCO GI in January this year for colorectal cancer. The result of the 4578-1 study, Part D, a phase one study for the Opdivo and 4578 combination therapy. We are sorry, it doesn't have any diagrams or the photos, and this is the study for the patient with colorectal cancer, who have the refractory or intolerant or in third line or beyond. Fifty-one patients have been enrolled, and this is the efficacy result. ORR was 3.9%, and DCR was 39.2%. Left-hand side, spider plot, and right-hand side, waterfall plot. At the cutoff point, two patient continued with the study treatment. About the Part D, the result and also other clinical studies published in literature are put together here. As I said earlier, Part D response rate is 3.9%.
When you come across this number, you may think that it's not working very well. You may have that impression according to this number. However, in the third-line treatment or beyond, especially for the colorectal cancer, it is very difficult to obtain response. So, Regorafenib, TAS-102, they are the current standard of care. Their response rate is in the range of 1%, so the tumor shrinkage is very difficult to observe in the third-line treatment and beyond. So this 3%, or a little bit above, is not bad. And this is about the result of the subgroup analysis. So the efficacy of PD-1 antibody need to be enhanced, and that is the, our design of the 4578. And in PD-1 or PD-L1 antibody, targeted the tumor cells. When the PD-L1 positive, or the cells are there, the efficacy is better.
So in this slide is showing the stratified analysis result of CPS, assessing PD-L1 expression in tumor cells and immune cells, and PD-L1 positive response rate was 4%, and the disease control rate was 48%. And PD-L1 negative response rate was 4.5%, and the DCR was 36.4%. By the number, PD-L1 positive group was better in terms of disease control rate. And this is the three-month plot, and it is showing the duration over time where the treatment is continued. So this co-administration of the two drugs is created in visibility. And as you can see, these are the longer time period, which are shown at the top part of the chart. This is about the PD-L1 expression status, and this is the KM curve of OS.
As you can see, this purple at the top, that is positive in PD-L1, and this PD-L1 positive group had a better survival than the negative group, and at twelve months, survival rate was 59.5% in PD-L1 positive, and 36.4% in the negative, and in PD-L1 positive group, OS didn't reach the median at cutoff point. Given that this is a small single-arm study, result should be interpreted with caution, but the OS result in the PD-L1 positive arm is better than other studies conducted with similar agents, so we are now working on our next development plan for colorectal cancer.... We would like to conduct a prospective study, same as gastric cancer. This is the safety result, the same as participant for gastric cancer. The combination of the Opdivo and ONO-4578, it has shown manageable safety profile.
This is the last slide for me. The result were presented here that Opdivo and ONO-4578, and part C, part D, we have actually extracted the data that have been published at the conferences. The result of the efficacy and the BM analysis obtained in part C suggested the certainty of the ONO-4578 and nivolumab combination concept. PD-L1 and PD-1 monotherapy is not effective for the colorectal cancers, but ONO-4578 may contribute to the efficacy of PD-1 antibody. It is contributing to the efficacy of PD-L1, PD-1 antibody. The three global phase 2 study in first-line gastric cancer, ONO-4578 monotherapy, has been initiated based on the result of part C and other clinical studies. Thank you very much for your attention.
Thank you very much, Mr. Okamoto. Mr. Okamoto talked mainly about this drug, ONO-4578. Now I'd like to invite Mr. Takino to talk about the open innovation activities and also ONO-4578. Please go ahead.
Now, I would like to talk about the research activities. I'd like to give you updates. Next slide, please. I'd like to start with the update on open innovation in the first half of my presentation to outline our research activities. In the second half, I would like to talk about our result, especially the ONO-4578, which is delivered as a result of our open innovation activities. Before that, I would like to slightly show you some drug discovery strategy and priority areas, so our strength in drug discovery is supported by open innovation.
We use open innovation to leverage on cutting-edge technologies, and by selecting our most optimal modality, we aim at breakthrough new drug discovery, which will have a medical impact, so there are four key priority therapeutic areas: oncology, immunology, neurology, and specialty. As you may know very well, these are the areas where the unmet needs are still high, and there are many patients who are waiting for new drugs, and specialty means that if there are diseases with high unmet needs and high medical impact, we will work on them, other than those above three areas. This is about open innovation update, so this is the chart of the history. I used the same format used for the last year R&D meeting, and the new means, the new open innovation project, which was started since last year. Next, please.
As you can see, lighter blue, biologics projects. We are working very hard on those projects. And also orange, AI. This is about AI and digital technology usage. We are doing through trials and errors, but we are making good progress. And this is the similar information from a different perspective. The slide shows therapeutic area in vertical, and at the top, from Cs to modality, from left to the right. And in blue square box, that's our activities progress last one year, and protein antibodies are the focus of our activity this year, and this is our commitment. And about AI, of course, it sees search for discovering drug potentials, especially small molecule designs. We are trying to improve efficiency. In the middle is ... And also the bottom as well, you can see AI marks.
... and also, among bio activities, we are going to utilize AI to full extent. I think it's obvious from this slide for you. Also, solid white text in blue box, that is, ONO-7018, ONO-4685, and ONO-8250. These are actually the drug candidate from open innovation activities, and it's been enhancing our pipeline. Next page, please. I'd like to give you some summary of the biologic collaboration. As you can see on this slide, antibody creation is what we have been doing from the PG and also the small molecules. Looking at the current industry trend, well, we need to enhance the portfolio balance and also the chances of success. We are currently working on these activities.
So first, we need to enhance by utilizing the library, and also utilizing AI and digital technologies, and also the multispecific antibodies to help things evolve. And so these number one, two, three, are, we are focusing, and not only from bottom up, but also we need to actually introduce some research themes that have been developed to some extent. So, and also, the modality has been diversifying, this, and Fate and modified cytokines are the what we are also working on. So I would like to give you some more detailed explanation, each of them. So first, about the research theme interaction in oncology, and Macomics in U.K. is a biotech company. As it was mentioned earlier, it is about the technology for TAM, Tumor-Associated Macrophages.
The late Professor Pollard of the University of Edinburgh, who is the pioneer in this field, established this company. TAM is very important in this microenvironment of tumor, and we are not able to ignore it. Their drug discovery platform technology is being utilized, and we discover the macrophage target for drug discovery, and the PD-1 antibodies are less effective in low T-cell infiltration. Macrophages may be able to be utilized better. This is what we announced in the previous week. This is a collaboration, is a Switzerland company, Numab, and that is the company with advanced technology for the antibody engineering. Since 2017, we have been collaborating with them for drug discovery. This is for the macrophage engager, which will attach macrophage to tumor cell. They have the newly found NM49.
And we introduced it as our research theme, so that we can make it a part of our pipeline in the future. Next page, please. And in addition to these introduced themes, we have more basic target. So with the companies with high technologies, we have been doing a collaboration, a partnership. One of them is the Twist. They have the in silico library, so together with Twist, we can create the antibodies, which we cannot create by ourselves alone. And the next is Adimab. And this is the this company has the rich format and experience of the multispecific antibody. So together with Adimab, we'd like to increase the pipeline about the multispecific antibody. And another collaboration I want to mention is the one we announced the other day.
That is a Japanese venture company, EME. And this is about the VHH antibody, whose molecule is very small. So difficult target for antibody. If it is VHH, the target can be reached. This is the feature of VHH antibody. So we'd like to maximize the feature of VHH as much as possible. That's the purpose of the collaboration with EME.
... Next page, please. However, in addition to the antibodies, we are also carrying out various collaborations, such as with Shattuck. And also, last week, we had a collaboration with company called Q, but about the modified cytokine we are interested in. So we are trying to introduce the latest development of technology. So the two molecule with two functions, the creation of such a protein is now possible with this company's technology. So in the field of the treatment of autoimmune disease, we are trying to work on a project using this technology. So these are the updates on the bio-related open platforms. Now, let me talk about our collaboration in the field of AI and digital technology utilization. First, the application of AI and digital technology for biology.
This is a collaboration with Evozyne for the drug discovery. And this is... They have the model of the protein language, and utilizing the natural language processing, they have their original platform. So from antigen, they can create the sequence of the antibody from scratch. So this is the latest technology. And we tried to work with them so that we can accelerate the speed of the antibody designing. Next page, please. And this is the collaboration with MolCure. This is a Japanese venture company. And using AI for the biopharmaceutical products, the various features are mechanically learned to produce the big data. And from the big data, the antibodies, which were difficult to produce, will be easily produced from now. So other than bio, there are some cases we utilize AI. This is the collaboration with U.K. company, Turbine.
The tumor cell on computer allow us to have the simulation. Specific biology of cancer cell is collected to find the new treatment target through calculation. If, when it is realized, that will be a kind of a breakthrough or epoch-making treatment. We are looking forward to seeing a kind of fruit from this collaboration. Next page, please. This is the one we made a press release this week. It's a so-called use of the generative AI and latest technology. The unique or original natural language, the so-called AI drug discovery platform, will be utilized. We'll have the interactive collaboration so that we can come up with the data-driven drug discovery. Last case, I want to report about digitalization.
This is not a case of the venture collaboration, but the use of the supercomputer of NVIDIA for drug discovery. The Tokyo-1 project, using this drug discovery supercomputer, we are involved in the use of this. And with this supercomputer, at the unprecedented high speed and big scale processing of data is possible. So the value decision or prediction of the designs, we expect that there'll be a transformation of drug discovery process from now with the direction of the supercomputer. I'm not directly attaching the machine. That's all about the updates on open innovation. But let me touch upon some other cases of the open innovation using two to three pages from now. One is the OVI.
2020, three years ago, in this Bay Area, we have opened our footprint, and we started $100 million, and now the scale has increased to twice, so that we can gain information in a strategic manner about the innovation. This is a strategic investment we're making. I will not go into the details of these, but as you see here, and this is available on our homepage, in the future, these are the players which are expected to make a contribution to our pipeline. We would make investment into these. We will expand the scale of investment. On the other hand, not only are making investment, we are making the return for the academia through our research grant we provide in and out of Japan.
To the researchers in academia, we provide the research grants through our foundation. They are the independent entity, and so we are not involved with them in many occasions, but we have the Ono Medical Foundation, which is specialized in lipid metabolism abnormality. Also from 2022, we established another foundation specialized in the immunology, oncology, and neurology. These are the three fields of the key importance for us, and we would like to support the researchers who are trying to meet the unmet needs. On the right side, you're gonna find the Ono Pharma Foundation. We are in North America, especially in West Coast, Cambridge, and Boston, so that we can be exposed to the cutting-edge researches.
So we would want to have the anchor or exposure to the latest researches going on in the United States. And next, I want to introduce you the introduction of. I'm going to introduce you the ONO-8250. As you know, with FATE, we have the contract for the drug discovery. And Fate Therapeutics has the iPS cell-derived cell to create CAR T, and they have the very excellent gene editing technology. So utilizing that editing of iPS cell will be differentiated into immune cells. That is our technology. And on this page, you can find the CAR Ts through this collaboration. There are seven ways of gene editing. So the CAR T is highly armed, our iPS-derived HER2-positive 8250. So this is called ONO-8250 clinical trial. And needless to say, iPS cell is used for this trial.
So from the blood sample of the patient is not used. We can make the formulation in a large volume in a homogeneous way. And this can be off-the-shelf. Well, freezing is needed, but this can be a kind of product which is available from off-the-shelf. This is how we place expectation on this clinical trial. So when the blood has to be taken from the patient, it takes much time and cost on the patient, also on the medical institutions. But with this iPS-derived one, we can expect a great advantage. And at present, this 8250 is going on with the phase one, with the phase one clinical trial in HER2-positive solid cancer patients in United States. And I would like to talk about one of the seven editing.
Antibody used for CAR is an anti-HER2 antibody, H2Mab-2. Professor Kato of Tohoku University developed the anti-HER2 antibody against cancer, which is called H2Mab-2, with excellent selective targeting of cancer cells. This is the original HER2 antibody by Professor Kato, which was excellent targeting, selective targeting. The data shows the selectivity of the target. As you see with the red line, trastuzumab, which is often used HER2 antibody, and blue line shows that of the H2Mab-2 used as CAR. That is the 8250. The left side is expression of the HER2-expressing tumor cell. With either CAR, you're gonna find a cytotoxicity.
But with the normal cells, with expression of HER2, Trastuzumab, red line, has the cytotoxicity, but with 8250, because of the high selectivity of target, normal cells are not damaged. So this basic data shows that tendency. Of course, the magnitude of this has to be confirmed through the clinical trial, but we can place big expectation on this signal.
I would like to talk about other characteristics of this investigational drug, especially with the cancers we are targeting. We are targeting solid tumor, so we are working very hard to develop it to this level, and there are many barriers for us to overcome. Also, there are tumor migration issues, and this is about CXCR2 gene, and gene editing is utilized for it, and IL-8 production increases in tumor cells. Because of IL-8, actually, AD250, it can be migrated into tumor tissues. That is the big concept. In the middle, so the microenvironment of tumor is actually a negative environment where the immune function cannot work as expected.
Fusion gene of TGF-β receptor is considered to have been controlling the immunology, and the red part in the chart is where the tumor immunity level is repressed by TGF-β. We actually did the gene editing to create a fusion gene of TGF-β receptor and IL-2RA receptor. That is on the right-hand side, and we are able to see the improvement in this tumor immunity. This is actually a potential key to overcome solid tumor issue, and we further working on another concept that is on the right-hand side. HER2 expression is going to be lost because the tumor does escape, and heterogeneity can occur for that. In order to deal with it, this modified CD16 gene is implanted to address by using trastuzumab or other antibody drugs in combination.
HER2 expression is lost in some cancer cells, but this ONO-8250 can work as intended with the cytotoxic activity. And the other one is about the high selectivity of CAR. We believe it is due to its high selectivity, and ONO-8250 has shown some cytotoxic activity to HER2 low expression cells. And as you can see by comparing two charts, left-hand side and right-hand side, and HER2 low expression, we have confirmed some efficacy. This is the signals in the basic status, so we need to further confirm with clinical trials in the future, though. And this is the last data of ONO-8250. This is about HER2-positive tumor cells, and this is the HER2-positive bearing model. And left-hand side is trastuzumab itself and antibody tumor suppression effect, as I use trastuzumab for the example.
AD250 can be utilized with other antibody drugs. Through CD16, AD250 binding power can be enhanced in order to improve on the tumor effect, and this is the data suggesting it. Previously, we have our drug development methods, but this actually beyond the conventional drug development concept with a lot of learnings, and we believe we have reached the stage we are able to expect a lot from this substance, and we are looking forward to further progress in the clinical trials. In our focus areas, from target search to the small molecules and the biologics, we will enhance our themes. Also, we will leverage on AI and digital technologies in various projects, and we will accelerate the speed of drug discovery and enhance success rate.
Let me use the last slide. This is the current development pipeline. We would like to make progress of these investigational drugs from the development pipeline to the clinical stages, and also we want to enhance them to become growth drivers. We understand these are the challenges that we have to work on and achieve result. Thank you very much for your attention.
Thank you very much, Mr. Takino. From research, open innovation progress and ONO- and ONO-8250 situation were shared. Now, we would like to open the floor for questions. We need some time to organize the layout, so could you please wait for a while? We are ready to accept your questions.
So if you have a question, we would like to get questions from people in this venue, and we'd like to get questions from the people participating online. So first, Mr. Yamaguchi from Citi. Please go ahead.
Yamaguchi from Citi. I have two questions for 4578, and you have some broad slides. I couldn't see it very well, and, the combo is in green. When we compare them, well, I think you wanted to suggest that the OS can be, could be better or could be improved. Left-hand side, I can see some green part in this blue slide. Yes, as I said earlier in my explanation, the red one is Part C1 itself. No, no, no. Blue one is Part C1, and red one is matching data. So in Opdivo study, beyond PD is what, we actually experienced with, the pseudo progression.
It is working, but patients show PD. So after PD, we allow the continuation of administration after PD, but this is the hypothetical understanding. But after PD or beyond the PD, we continue administration of Opdivo, and we understand we are able to make comparison using this population, so we did it. And green one is where it is going to start from the top part. So you are targeting using this data as the basis to go ahead to the phase two? Well, actually, there is a range, so it's up to people how they interpret. But confidence level are not overlapping, so we feel some certainty. And about CRC, you have shown some slides, and PFS is relatively low, OS is a little bit longer.
It's not bad, I understand that, but it have to be very good. Otherwise, I understand you are not able to achieve the target afterwards. So are there any other solutions you are able to increase the success rate? If you continue as it is, well, it will be difficult for you. Thank you.
Thank you for your question. And could you show us the part, the CRC data slide? If you can give it on the screen. Thank you. Yes, as you pointed out, Part C1 for gastric cancer and Part B for the colorectal cancer, we are not planning to continue the study at the certain result. Well, actually, these are studies we wanted to check the efficacy in the molecular levels.
The combination therapy cannot be converted into the drug immediately, but this is the list of the comparison with the studies. And first-line treatment is in line with the chemotherapy as the for the treatment, and we are actually trying to look into the data from different perspectives. And Opdivo is made work for some cancers, and if you add, especially for the colorectal cancer, tumor shrinkage is very difficult. So if well, the response rate is actually increased if we see the tumor responses, and we are not able to disclose the detailed information. I understand you use a lot of technologies, and there are so many technologies you introduced to us.
And do you have any expert internally who are able to use those technologies? How you are taking care of human resources for that? I understand that these technologies are very new to all the researchers or people working for many years in this industry. So even if you use the technologies, you have to have good people who are able to use it appropriately.
Yes, I understand your suggestion. Yes, people who are using these technologies, or who are actually very well versatile with this technology, are giving us suggestions, and we do not force them to use. But we get the suggestions and the opinions from those technology users, and we identified there is a need to use these technologies. So they are well used, and I understand there are young generations who prefer digital. Yes, and I understand it's difficult. Not only the dry, but if they stick only to the dry, it doesn't help them. So half wet, half dry is actually balance. We need to keep in our mind in designing the technology usage. And so we are actually keeping a good balance where we are able to use the technologies.
Next is Sakai from UBS Securities.
I'm sorry, UBS. Let me talk about the table on page 12. So ORR, you mentioned about colorectal cancer, and I think the one on page 12 is about gastric cancer. Am I understanding correct? My question is that C1, C2, so the patient group is about 30, so it's not a well-established statistics. But I think... So C1 is the PD-L1, and C2 is naive patient. And with this result, I think which one has efficacy, the Opdivo or ONO-4578, is not clear with this test. So did you make that study?
We haven't disclosed it, but we acquired the biomarkers, and as was questioned a moment ago, in order to in addition to the comparison, that was the past data from the past, we have the comparison of the change of the biomarker when the combination with the combination therapy and monotherapy. So the certain level of contribution by four, five, seven, eight was seen, so we have to wait until the phase 3 to confirm it.
So what you're doing is now in the phase two?
Yes.
With phase two, the POC is being confirmed. And next, about ONO-8250, so what is the way of delivery? It's a intravenous injection, so the number of dosages. Maybe you don't know about the dosage at this moment, but I want to know more about the delivery method.
Thank you. So it's an intravenous injection, and the number of administration and dosage. So now the first-in-human test started in the United Kingdom. So like the molecular low molecular or the type the dosage is not finalized yet, but the CAR T treatment with blood cancer, which was already approved, I think the pattern of the delivery with dosage will be same as the already approved CAR T. And the efficacy on solid cancer is because the feature of the antibody itself. Thank you for your question. So as you pointed out, against the solid cancer, the CAR T or cell treatment do not have efficacy because it cannot penetrate into the cells. So as was mentioned by Takino-san cell itself guide the cytokine . So theoretically, I think it's possible to penetrate into cells, but whether it actually penetrate into cells, have to be confirmed.
Thank you very much.
And next is Mr. Hashiguchi from Daiwa Securities.
I'm Hashiguchi from Daiwa Securities. I have a question both on 8250 and 4578 . About 4578 , when the phase two is a first-line treatment. So C1 cohort is actually the fourth line, and C2 is actually the third line. And the background of the patients are different. And given that, I think that, the, with C2, the efficacy is higher. So the, patient who are treated with Opdivo, and I think, that enables four, five to seven, eight, more effective. That's what I read from the, data. How should we interpret this phase two?
Now P2 is carried out. It's a randomized test, and target patients are the combination therapy of Opdivo and chemo. That is a standard treatment in the world. So the possibility of the carrying out of the trial, and with this, I think, we can have the test design to clarify the efficacy of the ONO-4578. So we include the standard treatment for this first-line treatment. And with combination of the chemotherapy, for example, for the colorectal cancer or pancreatic cancer, we have the test with the first line. And the chemotherapy with the first-line treatment of gastric cancer have the kind of affinity with the immunotherapy, especially because of the oxaliplatin.
So the currently available results show if we select the patient group who have developed this resistance, maybe they can expect a higher efficacy. But when we see then how much improvement, enhancement of the anti-tumor efficacy we're gonna have, I think the first-line treatment is enough. And we also have to think about the marketability, so that's why we want to challenge the first-line treatment of gastric cancer.
Thank you very much. Next is about ONO-8250. So the secondary use is a kind of hot topic with CAR-T, and there are various ways to talk about it. So the autograft rather than allograft. So the risk is higher than the autograft. So what do you think of this?
So it's just a speculation. But actually, the unnecessary gene editing is a cause of the risk. So in that case, iPS gene editing can secure the quality of, or uniform the quality. So in that sense, we can have a different level of risk, or we, with which we can expect a lower risk. That means the mistake of the gene addition is identified so that you can make the check of the gene addition before the marketing. Yes. So the strain is derived from the edited gene, and that is where we expect a great role to be played by the iPS cell. But I think it's too early to decide anything.
Thank you very much. I understand.
So Mr. Muraoka from Morgan Stanley, please.
This is Muraoka from Morgan Stanley speaking. I have a question on the ONO-4578. You successfully testing the first-line treatment of the gastric cancer, and if you can have the good result, that'd be great. I think you can do with it in Japan, but how about the approval in the world?
What do you mean?
Can you use the data available from this trial for the approval in United States?
This is the phase two trial, so when we have the result of this trial, including United States, we will start the international phase three clinical trial, which will also cover United States. We are not going to apply for the approval with the data from this phase two trial. Gastric cancer, there's a big difference in the environment in Japan when... Or easier in United States. But if you go without any problem, you can go on to the phase three trial after this phase two trial. Yes, as you mentioned now, mainly between Western countries and Asian countries, there's a kind of ethnic difference. But as one of the first-line treatment for gastric cancer, the combination of Opdivo and chemotherapy is a standard, so we don't see any big difficulty in continuing the trials.
Thank you very much. And next question is about the growth strategy on page four. And you mentioned that they are, you are going to launch the Velexbru in United States in 2026, and the result of the clinical trial is being available from the latter half of this year. So I think you can apply for approval a year ahead of the currently explained timetable for United States. Do you think it's difficult to accelerate the timetable?
Thank you very much for your question. So as for the ongoing clinical trial, we are refraining from making any specific answers about the progress. But as was explained by Mr. Sagara at the beginning, the clinical trial itself is progressing very steadily, and we are going to follow the timeline which we have announced so far. So there is a, the follow-up for the application of approval in United States is quite long.
So when do you think you can actually make the application for approval?
I'm sorry, I cannot answer your question now. But in the near future, about Velexbru, I know that you are very much interested in Velexbru, so the progress of the clinical trial, especially, based on the kind of press releases, we will deliver you the updates on the progress of Velexbru in the near future. So please wait for that.
Thank you very much. I understand.
Next, Mr. Nakahashi from the Tokai Tokyo Research Center.
I am Nakahashi from Tokai Tokyo, and I understood well about ONO-8250 and ONO-4578. And about ONO-4578, it's a prostaglandin receptor, and it's for the colorectal cancer and gastric cancer. And when I first started to cover you, you are more oriented for the compounds such as prostaglandin, and we couldn't understand what you're talking about. Now, you have the research team, as you see on the final page, and specialized in the oncology and immunology. So the teams are focusing on efficacy, and four five seven eight is for the solid tumor. But as for the prostaglandin, are there any other ways to develop it to, as a treatment for the cancers? Are there any other seeds available?
So about your first part of the question, so the research team working on the indication. So the progress with research and development was a good understanding of the biology of each indication. So immunology, oncology, and neurology do not have any big boundary. So yes, including the pocket of research activities, but in order to maximize the value we now have at hand, we still have some way of doing the research from the past. And based on that, PG or PG-related projects, application for the oncology other than 4578. Yes, I think your question is about the possibility of that application. And at this moment, we do not have any specific sign of such application yet.
Thank you very much.
And this is Sawada. And please, Mr. Sawada from JP Morgan, please.
About ONO-8250, I have four questions. First question is, gene editing. If you use CRISPR-Cas9, you have to pay a cost. Who will pay for the cost? Are there any problem of paying for the cost? And about the GVHD, TCR is lost. Is it possible to avoid it with that, and CD52 should be lost together with it? I understand other people are using that approach, so TCR, is it good enough? And number three, iPS cell, the quality of it. And Fate iPS quality control is not at a high level in the industry. So how do you ensure the quality of iPS cell? I understand the quality impacts a lot in your research activities, and what is the quality you are minding now?
Also, in combination with chemotherapy, you are developing regimen, and why you want to include chemo in your course? What is the efficacy of itself? If you want to check the efficacy of this investigational drug, I think you need to exclude chemo so that you are able to be more clear about the efficacy of it.
Thank you very much for a lot of questions, and about the gene editing cost, well, we do not disclose the information or the comment from Ono or Fate, and but in overall, so we currently have calculation where we are able to enjoy the financial benefit out of this and about GVHD, TCR all lacking or eliminating only that one, we don't have the answer to that yet, but we do not edit for everything.
We do not edit for 10 or 20 or something. We need to actually see a good balance in reality. According to that understanding, we have these you know the specifications, and we understand we have a good profile to go into clinical studies. About the quality of iPS cells, I of course when we move into the clinical studies, when there are some issues, we will actually improve the quality by paying extra efforts and attention with Fate. For Fate, this is first human iPS. It's not their first human iPS-derived study, so this is not the specific concept. These are actually the answers to the first three questions, and the last one should be answered by Okamoto-san.
The combination therapy with chemo is not what we are focusing on. In general, all the cell treatment, where, well, actually, we need to isolate the right lympho cells. We have to get rid of them, and that is for the general treatment. We need to actually confirm the reliability of this investigational development. We are not using the chemo as the backbone. Sorry, we have some people waiting online to ask questions, so I'd like to get the last question from the venue and Mr. Wada from SMBC Nikko, please.
Can you hear me? Wada from SMBC Nikko. Thank you very much. I have one question for ONO-4578 and ONO-8250.
First one is about ONO-4578, and after operable, we don't see any emergence of the immunotherapy. Biomarker is what you are good at to select the population, and biomarker, pages 9-16, is what I'd like to use for this question. Is this predictable? Before the administration, you actually check the PGE2 in urine to get good population. Actually, this is retrospective and SD beyond and PD population. PGE2, well, the metabolite was high in urine. We believe it is contribution by the ONO-4578. But conversely speaking, we do not develop using that data for further progress in the development activities. EP4 compound development is being pursued by other manufacturers, and also, some report was made for this urine metabolite.
It may be working for the efficacy, that is their report. And another question is about ONO-8250. CAR-T is not used for the solid tumors because of the tumor migration, and you use the CD16 to deal with it. And the second one is heterogeneous. Other than HER2 expression tumors, heterogeneous is the bottleneck, and because of that, the drug cannot be effective. And I think it was page 61. HER2 antibody is utilized together. What does it mean?
Thank you for your question. This one. I understand there are different interpretations. HER2 antibody, we use CAR, and our HER2 and also epitope is different in recognition, so it is a possibility. In that case, there may be an increased ability for binding. That is one possibility in our assumption.
Synergistic effect. Well, actually, how it is occurring or working, actually, we do not have enough insight to make comment on that. I see. And Fate CAR-T only, and tumor cells without HER2 expression, have you added any functionality using the T cells? You mean cancer cells without HER2 expression. Well, we happen to embrace that scenario yet, so are you going to use other compound to target it? Yes. I hope I'm answering to your question.
Yes, I understood. Thank you.
We know there are people who are still raising, showing hands, but it has passed our scheduled time, so we'd like to conclude our R&D meeting. So when you close or exit from the Zoom, you will see the questionnaire survey on the screen. So if your questions were not taken today, please enter your question in the questionnaire survey so that we are able to answer to your question later. And we would appreciate your kind comment input in the questionnaire survey so that we'd like to use your opinions for future activities as well. Thank you very much for your time.
Thank you very much for your participation. We'd like to finish our R&D meeting now.