Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. I will now hand the conference call over to Vincent Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.
Thanks, Lauren. Good afternoon, everyone. Thank you for joining us today to discuss Arrowhead's results for its fiscal 2019 first quarter ended December 31st, 2018. With us today for management are President and CEO, Dr. Christopher Anzalone, who will provide an overview of the quarter, Dr. Bruce Given, our Chief Operating Officer and Head of R&D, who will discuss our clinical programs, and Ken Myszkowski, our Chief Financial Officer, who will give a review of the financials. We will open up the call to your questions. Before we begin, I would like to remind you that comments made during today's call contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
All statements other than statements of historical fact, including, without limitation, those with respect to Arrowhead's goals, plans, and strategies, are forward-looking statements. These include statements regarding our expectations around the development, safety, and efficacy of our drug candidates, projected cash runway, and expected future development activities. These statements represent management's current expectations and are inherently uncertain. Thus, actual results may differ materially. Arrowhead disclaims any intent and undertakes no duty to update any of the forward-looking statements discussed on today's call. You should refer to the discussions under Risk Factors in Arrowhead's annual report on Form 10-K and the company's subsequent quarterly reports on Form 10-Q for additional matters to be considered in this regard, including risks and other considerations that could cause actual results to vary from the presently expected results expressed in today's call.
With that said, I'd like to turn the call over to Christopher Anzalone, President and CEO of the company. Chris?
Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. 2018 was a very productive year for us. A year ago, we were preparing to start first-in-human clinical studies for the first two candidates built on the TRiM platform, and today there are five candidates either in or approaching the clinic. ARO-HBV against chronic hepatitis B infection is in a Phase I/II study and is partnered with Janssen. ARO-HBV will now be referred to as J&J-3989. The second candidate is ARO-AAT against a rare genetic liver disease associated with alpha-1 antitrypsin, or AAT, deficiency, which has completed a Phase I study. We are actively working with the FDA to get feedback on potential endpoints and design of our next study. The third candidate is AMG 890 against cardiovascular disease and is partnered with Amgen.
Amgen is evaluating AMG 890 in a Phase I study to assess safety, tolerability, pharmacokinetics, and pharmacodynamic effects. The fourth candidate is ARO-ANG3 against dyslipidemia in a Phase I study in healthy adult volunteers and dyslipidemic patients. The fifth candidate is ARO-APOC3 against hypertriglyceridemia. I'm pleased to announce that we have received ethics approval and now await regulatory feedback on our planned first-in-human Phase I study of ARO-APOC3. We are prepared to begin the trial rapidly once all necessary approvals have been received. That is impressive progress to go from zero to five clinical programs, all built on the TRiM platform, in just 12 months. In fact, we have exceeded virtually all of the aggressive development goals that we set in 2018, and I believe that we are the fastest and most innovative company in the RNAi field.
As productive as 2018 was, 2019 has the potential to be even more so. Let's talk about some of our goals and expectations for calendar 2019. They are, one, complete dosing and report data from the Phase I study of ARO-ANG3. Two, complete dosing and report data from the Phase I study of ARO-APOC3. Three, present additional Phase I/II data from J&J-3989, formerly ARO-HBV. To that end, we already have accepted presentations at the Asian Pacific Association for the Study of the Liver meeting in February and the EASL International Liver Congress in April, and we expect additional abstracts to be submitted throughout the year. Note that the abstracts use the name of the compound J&J-3989 rather than the old name, ARO-HBV. Four, begin a Phase II study or studies of ARO-AAT, and we hope to provide clarity on a potential path to commercialization.
Five, file a CTA for our first inhaled pulmonary program, ARO-ENaC, against cystic fibrosis. Six, file a CTA for our first solid tumor program, ARO-HIF2, against renal cell carcinoma. Seven, discuss additional programs we are developing using the TRiM platform. Eight, we also anticipate that Amgen may share initial clinical data on AMG 890 later this year or in early 2020. This is a lot in a short amount of time, but Arrowhead has a proven track record of accomplishing what we set out to do. It also speaks to the growing maturity of the TRiM platform. To review, the TRiM platform is built around structurally simple conjugates that utilize ligand-mediated delivery and stringent bioinformatics. The TRiM platform also offers several potential competitive advantages, including a sophisticated RNAi trigger selection and screening process that identifies potent sequences rapidly in locations that RNAi competitors may miss.
Multiple routes of administration, including subcutaneous, intravenous, and inhaled. Potentially faster time to clinical candidates. Optimized pharmacologic activity and long duration of effect allowing infrequent dosing. Potentially wide safety margins. Simplified manufacturing at reduced cost, and the promise of taking RNAi to tissues beyond the liver, which would represent a big leap forward for the field and a substantial competitive advantage for Arrowhead. The data that we presented at the AASLD Liver Meeting in November 2018 for our first two TRiM-enabled candidates, ARO-AAT and ARO-HBV, have been very encouraging. They are both proving to be potent molecules with a long duration of effect. For example, 3 monthly doses of 300 milligrams of ARO-AAT led to reductions in serum alpha-1 antitrypsin to below the level of quantitation in 100% of subjects. Reductions were sustained for greater than 14 weeks, indicating that quarterly or less frequent dosing appears feasible.
ARO-HBV achieved a mean reduction in S antigen of 1.9 logs, or 98.7%, with a range of 1.3 logs, or 95%, to 3.8 logs, or 99.98%. In addition, ARO-AAT and ARO-HBV appear to be well-tolerated at all doses tested. This bodes well for these candidates and potentially for the rest of our TRiM-enabled pipeline. With that overview, I'd now like to turn the call over to Bruce Given. Bruce?
Thank you, Chris. Good afternoon, everyone. Since we are just starting the clinical programs for ARO-ANG3 and ARO-APOC3, I want to spend some time describing these candidates and the current clinical studies. Despite all of the progress with cardiovascular drugs over the past years and decades, atherosclerotic cardiovascular disease remains a major cause of death. While the current standard of care is effective at lowering LDL cholesterol in the vast majority of patients, large, well-run trials continue to show substantial unmet medical need for risk-modifying therapies with novel mechanisms of action. Hypertriglyceridemia and elevations in triglyceride-rich lipoproteins have been shown to be important causal risks for atherosclerosis independent of LDL cholesterol. Elevated triglycerides can lead to highly dangerous pancreatitis, may participate in hepatic steatosis, and are seen in metabolic syndrome. Metabolic syndrome is a complex of interrelated risk factors for cardiovascular disease and type 2 diabetes mellitus.
Let's start with ARO-ANG3. Arrowhead's subcutaneously administered RNAi therapeutic targeting angiopoietin-like protein 3, or ANGPTL3, being developed as a potential treatment for patients with dyslipidemias and metabolic diseases. ANGPTL3 has emerged as an important regulator of plasma lipoprotein levels, including triglycerides, LDL cholesterol, high-density lipoprotein cholesterol, and very low-density lipoprotein cholesterol by inhibition of enzymes including lipoprotein lipase and endothelial lipase. ANGPTL3 may also be involved in regulating apolipoprotein B particle containing synthesis and hepatocyte clearance of LDL cholesterol. This is important through mechanisms independent of the low-density lipoprotein receptor. This feature of LDL receptor independence is potentially very important and makes ANGPTL3 inhibition potentially novel and interesting as a therapeutic for LDL receptor-deficient hypercholesterolemic patients. Intrahepatic targeting of ANGPTL3 may also improve hepatic steatosis, which can progress to non-alcoholic steatohepatitis, or NASH.
Human genetic studies indicate that ANGPTL3-deficient homozygotes show lower serum insulin, lower serum glucose, and improved measures of insulin resistance compared to non-carriers. Given how often atherosclerotic cardiovascular disease and diabetes intersect, these effects as seen with ARO-ANG3 would be welcome. Our first-in-human study, AROANG1001, is a phase I single and multiple-dose study to evaluate the safety, tolerability, pharmacokinetic, and pharmacodynamic effects of ARO-ANG3 in up to 70 adult healthy volunteers with elevated triglycerides and various types of dyslipidemiac patients. The single ascending dose portion of the study is designed to include up to four cohorts of 10 adult healthy volunteers per cohort. Each SAD subject will receive a single dose administration of either placebo or ARO-ANG3 at doses of 35, 100, 200, or 300 milligrams.
The multiple dose portion is designed to include up to four patient cohorts, including patients with non-alcoholic fatty liver disease, or NAFLD; patients on a stable statin treatment regimen with elevated LDL cholesterol and triglycerides; patients with heterozygous or homozygous familial hypercholesterolemia; and patients with severe hypertriglyceridemia. The MAD cohorts will receive two monthly doses of ARO-ANG3. ARO-APOC3 is Arrowhead's subcutaneously administered RNAi therapeutic targeting apolipoprotein C3, better known as APOC3, being developed as a potential treatment for patients with hypertriglyceridemia. APOC3 has emerged as a therapeutic target for triglyceride reduction. APOC3 is a regulator of triglyceride-rich lipoproteins, or TRLs, and is present in TRLs. APOC3 is a known inhibitor of lipoprotein lipase, or LPL, and LDL-mediated lipolysis of these TRLs. APOC3 also delays clearance of lipoprotein remnants by the liver by inhibiting hepatocyte receptor-mediated uptake.
Insight gained from transgenic mice overexpressing APOC3 and APOC3 knockout mice has shown that APOC3 delays very low-density lipoprotein cholesterol hydrolysis in vivo and may delay the removal of TRL remnants. Human genetic studies indicate that APOC3-deficient heterozygotes show reductions in plasma triglycerides and LDL cholesterol levels. Risk for cardiovascular disease in these carriers was reduced as well. APOC3-deficient individuals, or homozygotes, do not demonstrate significant hepatic steatosis and appear to be phenotypically normal. Familial chylomicronemia syndrome, or FCS, is a severe rare genetic disease with a prevalence of one in a million. Often caused by various monogenic mutations leading to extremely high triglyceride levels, typically over 900 milligrams per deciliter, representing the top 0.1% of the population. Such severe elevations lead to various serious signs and symptoms, including acute pancreatitis, which can be fatal, chronic daily abdominal pain, type 2 diabetes mellitus, hepatic steatosis, and cognitive issues.
There is no currently available therapy that can be adequately used to treat FCS. Our first-in-human study of ARO-APOC3 is quite similar in design to that of ARO-ANG3. ARO-APOC3 1001 is a phase I single and multiple dose study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of ARO-APOC3 in up to 63 adult healthy volunteers with elevated triglycerides and patients with severe hypertriglyceridemia and FCS. The single ascending dose portion of the study is designed to include up to four cohorts of 10 adult healthy volunteers per cohort. Each SAD subject will receive a single dose administration of either placebo or ARO-APOC3 at doses of 25, 50, 100, or 200 milligrams. The multiple dose portion is designed to include up to three cohorts of patients with severe hypertriglyceridemia and one cohort of patients with FCS. The MAD cohorts will receive two monthly doses of ARO-APOC3.
Consistent with our first-in-human studies, we have designed AROANG1001 and AROAPOC31001 to give us a readout on safety and tolerability, as well as a robust look at the pharmacologic activity and duration of effect. We are planning to measure ANGPTL3 and APOC3 levels, as well as LDL cholesterol, total cholesterol, non-HDL cholesterol, HDL cholesterol, VLDL cholesterol, triglycerides, liver fat content using MRI PDFF in one ANG3 cohort, and other measures of drug activity. I also want to touch briefly on the status of ARO-AAT. Arrowhead's second generation subcutaneously administered RNAi therapeutic being developed as a treatment for a rare genetic liver disease associated with alpha-1 antitrypsin, or AAT, deficiency. We are currently interacting with the FDA on that program.
Keep in mind that to our knowledge, there has never been a drug to treat AAT-related liver disease in front of the FDA, so they have never had the opportunity to consider an approval pathway. We had a pre-IND meeting with them in October, and our discussions since then have been helpful and productive. We have discussed ideas on potential study designs and endpoints, which they are considering. We have completed the required long-term toxicology studies, and the study reports necessary for submission are now available as well. Our intention is to move forward with a phase II clinical study or studies as soon as we have clarity on the FDA's thinking around endpoints. Our hope is that the next study or studies may be able to become pivotal and provide a path to potential commercialization, but we do not have clarity on that yet.
With that brief review of our clinical programs, I'd like to turn the call over to Ken Myszkowski, Arrowhead's Chief Financial Officer. Ken?
Thank you, Bruce, and good afternoon, everyone. As we reported today, our net income for the quarter ended December 31, 2018, was $12 million, or $0.13 per share, based on 95.6 million fully diluted weighted average shares outstanding. This compares with a net loss of $13.2 million, or $0.18 per share, based on 74.8 million weighted average shares outstanding for the quarter ended December 31, 2017. Revenue for the quarter ended December 31, 2018, was $34.7 million, compared to $33.5 million for the quarter ended December 31, 2017. Revenue in the current period relates to the recognition of a portion of the upfront payments received from our license and collaboration agreements with Janssen, while revenue in the prior period related to the recognition of a portion of the upfront payments received from our license and collaboration agreements with Amgen.
Revenues from the Janssen agreement will be recognized based on our estimate of the proportion of effort expended toward fulfilling our performance obligations, primarily overseeing the completion of the current phase I/II HBV clinical trial. We expect the majority of the revenue to be recognized in this fiscal year, but we also expect revenue in fiscal 2020, as we will continue to perform certain follow-up activities through 2020. Total operating expenses for the quarter ended December 31st, 2018, were $23.7 million, compared to $17.3 million for the quarter ended December 31st, 2017. This increase is primarily due to increased drug manufacturing and clinical trial costs as our pipeline of clinical candidates has increased. Net cash provided by operating activities during the quarter ended December 31st, 2018, was $168.3 million, compared with net cash used in operating activities of $14.7 million during the quarter ended December 31st, 2017.
The key driver of this change was the $175 million upfront payment from Janssen during the quarter. Excluding cash inflow, our cash burn for the quarter was higher than in previous recent quarters, as we paid off a note payable in the amount of $2.3 million during the quarter. We estimate our near-term cash burn to average $20 million per quarter. Turning to our balance sheet. Our cash and investments totaled $303.3 million at December 31st, 2018, compared to $76.5 million at September 30th, 2018. The increase in our cash and investments was primarily due to the cash received from Janssen. Our common shares outstanding at December 31st, 2018 were 92.6 million. With that brief overview, I will now turn the call back to Chris.
Thanks, Ken. I mentioned at the beginning of the call that 2019 could be even more productive than 2018, and I view a few primary areas driving that. First, we expect ARO-ANG3 and ARO-APOC3 to create a lot of value this year. These are attractive targets that address a number of high-value unmet medical needs, and we are the first to use RNAi against them. Importantly, we expect to generate a substantial amount of data across several patient groups this year, and I believe that we will have a good idea if ARO-ANG3 and ARO-APOC3 can become drugs by the third or fourth quarter. I expect this year the current studies will generate the type of data that people are used to seeing from small molecule candidates at the end of phase IIb studies.
These will be important readouts. As we did with ARO-AAT and ARO-HBV last year, we will look to report data at appropriate conferences. ARO-AAT and ARO-HBV were big value drivers for us in 2018. I hope to see ARO-ANG3 and ARO-APOC3 producing similarly for us this year. Depending upon what patient populations we choose to focus on, we could have a rapid path to pivotal studies. Second, we are not finished generating and reporting data from the AROHBV1001 clinical study. Patients will continue to be monitored for one year post last dose. ARO-HBV was very active in all patient study. We look forward to seeing if even short-term dosing can have longer-term beneficial effects. I expect that we will continue to report data throughout 2019. Third, we expect to begin phase II studies in ARO-AAT this quarter, and are hopeful that these may become pivotal.
As we discussed, we are in active discussions with the regulators, beginning studies with agreed-upon design and endpoints could be a substantial value driver. Fourth, we expect to file CTAs for ARO-ENaC and ARO-HIF2 this year, representing what we believe to be the first commercially viable efforts to use RNAi outside the liver. This is a large leap forward for the field and an important strategic step for Arrowhead. Finally, you can never discount Arrowhead's breakthrough potential. We have consistently shown breakthrough speed and innovation that we believe is best in the field, I expect this to continue. We disclosed at our Analyst Day in the fall that we can now target muscle cells, I believe that unexpected breakthroughs will continue to be our hallmark and continue to build value for our shareholders. As I said, I expect 2019 to be a big year for us.
We are well on our way toward achieving our long-term goals to file two to three new CTAs every year, target a new cell type with the TRiM platform every 18 months, have 10 TRiM-enabled candidates in clinical studies by the end of 2020. Thanks again for joining us today, I would now like to open the call to your questions. Operator?
Thank you. Ladies and gentlemen, if you have a question at this time, please press the star then the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Again, that's star, then one to ask a question. To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question comes from Maury Raycroft with Jefferies. Your line is open.
Hi. Good afternoon, everyone, thanks for taking my questions. I'll start with ANG3 and APOC3. I may have missed this, are you saying how many patients you're going to include in both of those studies? Are you going to start dosing the patients simultaneously, or are you going to start with the healthies first and then move into the patients?
Hi, Maury. This is Bruce. As far as when we'll start, we'll run through the normal volunteers first, especially for ANGPTL3, where we want to figure out the dose range before we move into the patient groups. My recollection is that those cohorts are generally about eight to 10 in number. I think maybe eight per cohort. Or 10. I'm getting the 10 signal here, it's hard to keep all these trials clear. But yes, 10 per cohort.
Got it. Okay. You'll include about 10 patients in each one of the studies then.
In each of those separate cohorts that we described.
Got it. Okay. Then as far as the timing goes, you mentioned you'd know whether you had a drug by 3Q or 4Q, but presumably you're going to show some sort of an update before then on the dose escalation. Is it going to be similar to with AAT and HBV disclosures where that could come at a medical conference, or do you plan on top-lining that with the press release?
Yeah. We'll see, Maury. It is our hope that we can report data at American Heart Association meeting in November of this year. It is our hope that we can submit abstracts to that. As you point out with AAT and HBV, we found some other smaller conferences, before, in those cases, AASLD, where we could give a little bit of an update on what we're seeing. My hope is that we can find those as well. I don't know that we can. I don't know that the timing will work out, but it is my hope that we can do that similar to what we did with AAT and HBV.
Okay, great. For the AAT study, looking forward to seeing that design. I guess for the endpoint discussion, can you talk about what the considerations are or the options that are on the table that you're discussing with FDA?
I don't really think I can. We continue to believe, and I don't see any reason not to believe that this is an indication that is going to require biopsies. Outside of that, I think it's premature really to say much anything else.
Yeah, I think we are, relatively speaking, we're close to the point where we can talk about this in a more granular way. It is our hope that we will be filing an IND this quarter, so we're not asking you to wait too long, but I think we can have better clarity later this quarter.
Okay. Sounds good. Congrats again. I'll hop back in the queue.
Thanks a lot, Maury.
Our next question comes from Ted Tenthoff with Piper Jaffray. Your line is open.
Great. Thank you very much. Just get an idea for the AAT study. How large will that be, the phase II/III? How soon do you anticipate we could get data from that study? Thank you.
Yeah, Ted, it's Bruce.
Hey, Bruce.
Yeah, thanks. We don't know the size yet because it really depends quite a bit on the endpoints and some of the design parameters that we're discussing. It's one of those where the devil's in the details, if you will.
Sure.
It won't be a small study.
AAT, as orphans go, is a large enough orphan disease to have a reasonable size study. It'll be, I think, actually a landmark study in the field in all likelihood.
We'll have to see where things in the end up for me to be clear on that.
Is the goal still to start that in the first quarter? Thanks. Sorry, Chris, didn't mean to cut you off.
Sorry. Yes, the goal is to start that in the first quarter. I was going to say, your other question was about data timing.
Yeah.
As Bruce says, we're still a little bit in flux on endpoints and design and numbers and such. We're not ready to give guidance on data. I can tell you this, it is highly unlikely that we will have any data this year.
Yes. Yeah.
I don't think that's in the cards. Again, we can give you better guidance once we have a set design. I'll say one other thing on the size of the trial and on dosing or on enrollment. This is, as you know, this is our second generation drug against AAT liver disease. We have good relationships with PIs here and in Europe. I think that's going to bode well for us when we're looking to enroll the study. We also have a good relationship with the Alpha-1 Foundation, and they're going to be, I think.
Yeah
They're going to be a good help for us as we enroll the study.
Yep, makes sense. Then if I may, just a quick kind of housekeeping on the revenue side. I know you had from the balance sheet and the cash position, a lot of money that came in from the J&J partnership. Congrats on that. How do you anticipate recognizing revenues in the March and June quarter?
Right. We're recognizing $197.8 million in total from the initial upfront payment, which includes also the premium that we calculated on the stock as well as the drug supplies.
Yep.
We're estimating that the majority of this will be recognized over the rest of this fiscal year, but it definitely will go into next year as well. It'll depend on our efforts as we monitor them throughout the next couple of quarters compared to our budgeted efforts on that and exactly how we'll calculate the revenue.
That's separate from the $50 million milestone.
Yeah, exactly. That's separate from that.
Okay, cool. Awesome. Thanks, guys.
Thanks, Ted.
Thank you. Our next question comes from Katherine Zhu with William Blair. Your line is open.
Yeah. Hi, good afternoon. I'm just wondering for the MAD for both agents in cardiovascular, why are you doing just two monthly doses versus the three that you did before? Then with just the two months dosing with the kinetics, you can figure out your real dosing or proposed dosing for the future? I'm just curious about that. Then also, another general question is on the RNAi agents in the U.S. You guys, including other people, are doing the phase I's
Outside the U.S. Then come back and open INDs here. Is it a practice that we're going to continue to see, or do you think the FDA would be more receptive for early-stage RNAi studies?
Well, let me take the second one first. I wouldn't characterize the FDA as unreceptive. I can really only speak for ourselves, but we have found Australia and New Zealand to be an excellent place to do these studies. It's a very clear sort of regulatory path that has been pretty consistent and predictable. That has really worked well for us, and we have liked it. I know that others have, for instance, tended to go to the U.K., and I don't really know what their reasons are. You'd have to ask them. For us, it's just been a very straightforward path. There are also frankly incentives that are offered in Australia that have been useful for us as well, especially early in our life cycle when having significant rebates on clinical costs were meaningful for us. Did you want to add something, Chris?
Yeah. Katherine, let me add one thing to that. As you know, we have always followed the science in these clinical programs, and the flexibility that we've seen in New Zealand and Australia, and actually for HBV in Hong Kong, has enabled us to follow that science quite rapidly. We've had a number of protocol changes with our studies, just because we learn something new along the way, and we've been able to get those things through quite quickly, like on the order of one or two weeks. If we were in the U.S., it would take substantially longer than that. That just made a lot of sense for us.
It's been good for us then to generate all this data then to go to the FDA for these discussions around AAT because we go with an awful lot of data that we can talk about. I think that has facilitated really productive discussions because we have a substantial amount of data to talk about.
Yeah. Let me, Katherine, go ahead and answer your first question now. We had initially designed the programs to be three doses, just like we had done for AAT and HBV. As we really had a chance to collect all this data in the AAT program and live with that data, we recognized that we would actually be better off to do two doses and be able to follow that second dose out for a really good shot at understanding duration of effect and dosing frequency. It's becoming pretty apparent to us that it's likely that for most indications, we're going to be looking at quarterly dosing or maybe even less frequent than that. By giving three monthly doses, it was obscuring the picture of what's really happening.
With the single-dose data in normal volunteers, we'll get a good idea of what the depth and duration of knockdown with a single dose is. By doing the two monthly doses, if the first dose doesn't get you all the way to complete suppression of whatever is achievable, the second dose certainly does. We get to follow the kinetics of recovery all the way out. We actually surprised ourselves when we were sitting there one day talking about it. I said, "Gee, we shouldn't be doing three doses here. We should be doing two." Our tox was designed to let us do three. We could've done three. We did three with AAT and HBV. We actually looked in the mirror and said, "Gee, you know what? We ought to do two." That's why we did it.
That's why we submitted the protocols to do that. It feels to me like it's going to be really helpful for us in figuring out what we think that the right sort of dosing frequency will be moving forward from here. That make sense, Katherine? Maybe you're on mute.
Should we move to the next question, Lauren?
Yes. As a reminder, ladies and gentlemen, that's star, then one to ask a question. Our next question comes from Keay Nakae with Chardan. Your line is now open.
Hi. Thanks. Just back to AAT. If, for whatever reason, you couldn't get agreement with the FDA about the next study being a possible registration study, what would you look to prove in the next phase II study that you might then do?
Well, always hard to deal with hypotheticals, Keay. I think that one thing's for sure. If we don't come to an agreement on a sort of phase II, III design, we at least will have good clarity with the agency on sort of what the right next step is. I think one way or another, we come out of these discussions with a pretty good idea of sort of where the program is likely to be going. Whether we're able to do a seamless phase II, III or whether it winds up being a classical phase II leading to a phase III, I think we will have a good sense, today I couldn't play that scenario for you. We're really still talking to each other and thinking about this. We have to remember, it's a frontier. They've never been here before. No company's ever been here before.
Anytime you're on a frontier, it takes a little bit of thought and planning to figure out what the route is. This is quite normal, and it feels to me quite normal. We're just working our way through it in a collegial and, I think, positive way.
Would you characterize if there's generally strong consensus on what the appropriate endpoints should be?
I never like to characterize the agency until they speak for themselves. I think at this point, we're not done yet. I think we sort of said that. We're still talking, and we're still thinking and, I guess, bouncing ideas off of each other, you might almost say. I think at this point, I would never want to characterize what they may or may not be thinking or where we're going to wind up.
Yeah. I think the take home message here is that these are truly productive discussions. They are receptive. They appreciate the problem that we are looking to solve. I think we are working at this truly collaboratively.
Okay. Well, thanks for that. We'll look forward to further updates there. Thanks.
Thanks.
Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Chris Anzalone for any closing remarks.
Thanks, everyone, for tuning in today, and we'll talk to you soon.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone, have a wonderful day.