Good day, ladies and gentlemen, welcome to Syndax third quarter 2018 conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. If anyone should require assistance during the conference, you may press star then zero on your touchtone phone. As a reminder, this conference may be recorded. I would now like to introduce your host for today's conference, Melissa Forst of Argot Partners. Please begin.
Thank you, operator. Welcome, thank you for everyone who's joining us on the line and the webcast this afternoon for a review of Syndax's third quarter financial and operating results. I'm Melissa Force with Argot Partners, and with me this afternoon is Dr. Briggs Morrison, Chief Executive Officer, and Rick Shea, Chief Financial Officer. Joining during the question-and-answer session will be Michael Metzger, President and Chief Operating Officer, as well as Peter Ordentlich, Chief Scientific Officer. This call is being accompanied by a slide deck that has been posted on the company's website. I'd please ask that you turn to the company's forward-looking statements on slide two. Before we begin, I would like to remind you that any statements made during this call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section in the company's most recent quarterly report on Form 10-Q, as well as other reports filed with the SEC. Any forward-looking statements represent the company's views as of today, November fifth, 2018 only. A replay of the call will be available on the company's website at syndax.com. With that, please turn to slide three, I'll turn the call over to Briggs.
Thank you very much, Melissa. Thank you to everyone joining us on today's call and webcast. This afternoon, I will share the progress we've made during the third quarter as we continue to execute on our corporate strategy in support of our primary mission, to realize a future in which people with cancer live longer and better than ever before. Slide three provides a high-level summary of our corporate strategy, I will touch on each of these strategic pillars during today's call. We just held a call on October 25th to discuss some of our programs, my prepared remarks will be brief. Slide four is a summary of the near-term investment thesis for Syndax. We'd like to remind investors that 2019 is shaping up to be a very significant year for Syndax, with multiple opportunities to unlock tremendous value for shareholders.
There are two overall survival interim analyses for E2112, our phase III trial in hormone receptor-positive, HER2-negative breast cancer. I want to again emphasize that a positive OS trial in hormone receptor-positive, HER2-negative breast cancer would be a landmark result and could be transformative for Syndax and its shareholders. We also have readouts from our randomized phase II trials, ENCORE 602 and 603, exploring the combination of entinostat and a PD-1 pathway antagonist in triple-negative breast and ovarian cancer. Both ENCORE 602 and 603 are randomized placebo-controlled trials, which allow very straightforward interpretation of trial results. If either is positive, that would represent one of the first randomized trials to validate a novel mechanism that adds to the efficacy of a PD-1 pathway antagonist. We anticipate having early clinical data from our chronic graft-versus-host disease trial with SNDX-6352.
Finally, we're on track to file the IND and start clinical trials for our Menin inhibitor, which we have now named SNDX-5613. As we continue to learn more about the potential of SNDX-5613 in acute leukemia, we see this molecule becoming an additional and important value driver for our company. Again, 2019 is shaping up to be a very significant year for Syndax. Let me now turn to slide five and give you an update on our phase III trial of entinostat in hormone receptor-positive, HER2-negative breast cancer. Slide five again summarizes the trial design. The trial has now randomized 608 patients to exemestane plus placebo versus exemestane plus entinostat, the focus of this trial is now clearly and unequivocally on overall survival.
As we've noted before, overall survival interim analyses are done approximately every six months, the next interim OS analyses will be around May and November of 2019. Positive outcome at any of the OS interim analyses or upon achieving the final number of events needed to conclude the study would allow us to file for regulatory approval based upon the terms of our special protocol assessment with the FDA. We remain very confident in the possibility that E2112 will achieve a survival benefit. Recall that it was the phase II overall survival results that led to the granting of the breakthrough therapy designation by FDA.
As I summarized on our call on October 25th, based upon the results of the phase II trial, combined with the statistical design of E2112, we've always believed that the OS endpoint was more likely to be positive than the PFS endpoint in 2112. The fact that PFS did not achieve the very high statistical hurdle of a P value of .002 does not in any way diminish our confidence in the possibility of achieving a survival benefit in E2112. We also know that overall survival is the most valued endpoint for patients, for physicians, for regulators, and for payers, a positive OS trial would enable both rapid regulatory review in the U.S. and in Europe, and potentially rapid payer access. Slide six again emphasizes potential for the entinostat/exemestane regimen to be the preferred agent after a CDK4/6 therapy for HR-positive breast cancer.
We know that CDK4/6 therapies, most notably IBRANCE, are being used increasingly as first-line agents. There's a clear desire to understand what therapies will be effective in a patient who has stopped responding to a CDK4/6 inhibitor. Our current estimate is that between 30%-50% of patients in E2112 will have received a CDK4/6 inhibitor prior to entering the trial, and thus we will have a highly relevant data set in this population. This population of patients is relatively large, with an estimated 34,000 patients each year who go on to receive hormone therapy after failing first-line therapy and could therefore potentially be eligible to receive entinostat. Slide seven summarizes our ENCORE clinical trial program, which we are testing entinostat in combination with PD-1 pathway antagonists, either PD-1 antibodies or PD-L1 antibodies.
We've now communicated our plan for non-small cell lung cancer. We are continuing to follow patients in the melanoma cohort of ENCORE 601. Our randomized placebo-controlled trials in triple-negative and ovarian cancer are fully enrolled, as is our single-arm colorectal cancer trial, with readouts anticipated in the first half of next year for all three indications. We've previously communicated as we complete our initial clinical trials in each tumor type, we will prioritize which indications to advance to registration trials based upon a combination of unmet medical need, the competitive landscape, and our ability to generate an attractive return on our investment. Taking those factors into account, we announced that we are moving forward with a biomarker-based registration trial in non-small cell lung cancer patients whose disease has progressed after both platinum-based combination chemotherapy and a PD-1 antagonist.
Slide eight summarizes the emerging area of clear unmet medical need for patients with non-small cell lung cancer whose tumors have progressed after both a platinum-based combination chemo and a PD-1 antagonist. Slide eight also points out that the use of biomarkers for selecting patients for appropriate therapy is common practice today in non-small cell lung cancer. Assuming a positive outcome from our focused biomarker-driven trial, which we are now calling ENCORE 607, we believe the novel biomarker we are evaluating could transition easily into this treatment landscape. Turning to slide nine, I'd like to briefly again review ENCORE 607, the registration trial we designed for entinostat/KEYTRUDA combination based on discussions with non-small cell lung cancer experts, as well as input from the FDA. To enroll in this study, patients must have received a platinum-doublet-based chemotherapy and pembrolizumab. The pembrolizumab must be their immediate last therapy before entering the trial.
We anticipate that the majority of patients will have received the triplet of pembrolizumab, pemetrexed, and cisplatin, the regimen used in KEYNOTE-189, and will have progressed while on maintenance pembrolizumab. Patients will also be allowed to enter if they have received platinum-based chemotherapy as first-line treatment, followed by pembrolizumab second-line. We will first assess the level of classical monocytes in the peripheral blood using a validated assay. Patients with low monocytes will be treated with entinostat plus KEYTRUDA. Those with high monocytes will be randomized to be treated with standard of care chemotherapy of the investigator's choice versus the entinostat/KEYTRUDA combination. Following discussions with FDA, the primary endpoint of the trial is PFS based upon the PFS data we saw in phase II. Let me again call out two key points about this focused biomarker-driven trial.
The trial is designed both to validate the classical monocyte biomarker and to demonstrate that the combination therapy of entinostat plus KEYTRUDA is superior to standard of care chemotherapy in the high monocyte population. The trial will enroll approximately 180 patients with data potentially available within two years, second half of 2020. This could position us to be the first novel therapy with regulatory approval both in the U.S. and EU in this sizable population of lung cancer patients. Slide 10 summarizes the study designs for ENCORE 602 and 603. ENCORE 602 is our phase II trial exploring the combination of entinostat with atezolizumab in triple-negative breast cancer in patients who have received at least one but no more than two prior lines of therapy.
ENCORE 603 is our phase II trial exploring the combination of entinostat with avelumab in ovarian cancer for patients who have received at least three but no more than six lines of prior therapy including at least one course of platinum-based therapy. Both ENCORE 602 and 603 are randomized placebo-controlled trials, which allows very straightforward interpretation of trial results, and we anticipate results from ENCORE 603 in the first quarter of 2019, results from ENCORE 602 in the second quarter. In summary, as shown on slide 11, we expect multiple exciting value inflection points across our ENCORE IO combination trials over the next months. Again, as we complete our initial clinical trials in each tumor type, we will prioritize which indications to advance to registration trials based upon unmet need, the competitive landscape, and our ability to generate an attractive return on our investment.
We've already announced that we will go forward with a registration trial in non-small cell lung cancer patients whose disease has progressed after both platinum-based combination chemotherapy and a PD-1 antagonist. We will consider further investments as data matures in our other proof of concept trial. Let me now turn to slide 12 and SNDX-6352, our potential best-in-class monoclonal antibody therapy targeting the CSF1 receptor. We presented the Phase I healthy volunteer data at 50 in November of 2017, and the multiple ascending dose study in cancer patients is ongoing, as is the combination trial of SNDX-6352 with IMFINZI, a PD-L1 inhibitor. We anticipate selecting a recommended Phase II dose sometime in the second quarter of 2019. Our chronic graft versus host disease trial is now underway, and we anticipate data from that trial about a year from now.
Last, but certainly not least, on slide 13, I summarize our Menin-MLL program. As mentioned earlier, we've now selected a development candidate, which we call SNDX-5613, and remain on track to file an IND in the first half of 2019. To date, we've generated a significant amount of preclinical evidence suggesting that these molecules can target two genetically defined leukemias, the MLL rearranged leukemias and the NPM1 mutant leukemias, which together represent a fairly sizable patient population. We presented exciting positive data at this year's AACR, demonstrating efficacy in PDX models of both of these leukemic subsets, and those presentations can be found on our website. There will also be two presentations highlighting our Menin-MLL program at the ASH annual meeting next month, including an overview of the field by Dr. Scott Armstrong from the Dana-Farber, and additional data on the role of the Menin-MLL interaction in NPM1 mutant leukemia.
We plan to continue exploring indications where these agents could make an impact, especially focused on settings where Menin has been implicated as a driver of disease. I want to emphasize that we see a rapid and straightforward clinical development path for SNDX-5613, like the path that was taken for patients with TRK fusions or IDH1 mutation. We expect that the molecule should have a single agent activity. We will, of course, target patients who have either an MLL rearrangement or NPM1 mutation. These patients are readily identifiable in clinical practice today and present an area of high unmet medical need. It's quite possible that we could observe clinical activity early in the clinical development path, again, unlocking significant value for Syndax shareholders.
As we continue to learn more about the potential of SNDX-5613 in acute leukemia, we see this molecule becoming an additional and important value driver for our company. With that, I'll turn it over to Rick for the financial update.
Thank you, Briggs. Turning to slide 14, for the three months ended September 30, 2018, Syndax reported a net loss of $17.3 million or $0.68 per share, compared to $15.1 million or $0.68 per share for the comparable prior year period. Third quarter 2018 research and development expenses increased to $14.1 million from $12.2 million for the prior year, an increase of $1.9 million or 16%, due to an increase in development activities of $0.8 million and increased employee compensation expense of $1.2 million. The increase in development activities was primarily related to the development of the Menin program and increased activities in the ENCORE 602 trial, partly offset by the completion of clinical pharmacology trials and a decrease in E2112 costs. The increase in employee compensation costs is primarily due to increased headcount.
G&A expenses increased to $4.1 million during the third quarter of 2018, compared to $3.6 million for the prior year, an increase of $0.6 million or 16%. The increase was primarily due to an increase in employee-related expenses of $0.3 million and in professional and legal fees of $0.2 million. At September 30, 2018, there were 26.1 million common shares issued and outstanding, which includes the 2 million warrants held by BVF. Syndax ended the third quarter of 2018 with a cash balance of just under $90 million. As we mentioned on our last earnings call, in the third quarter, we commenced sales of our stock off our ATM at-the-market facility with Cowen. This was done to solidify our balance sheet, anticipating our decision to initiate the focused biomarker-driven non-small cell lung cancer registration study.
In the third quarter, we recorded $9.4 million in net proceeds from the ATM, which offset our cash burn for the third quarter. We ended the prior quarter with a cash balance of $98.4 million. The net change in cash for Q3 was a net decrease of $8.8 million. The operating cash burn was $16.1 million, plus there was a decrease in accounts payable of $2.1 million, that was offset by the $9.4 million of ATM proceeds. To date, in the fourth quarter, we've recorded an additional $6.1 million of net proceeds from the ATM, which will offset our Q4 cash burn. Additional financial details will be available in our annual report or our quarterly report, excuse me, on Form 10-Q, which we intend to file today. Looking ahead, I'd like to provide financial guidance for both Q4 2018 and for the full year 2019.
For the fourth quarter of 2018, we expect R&D expenses to be $13 million-$15 million and total operating expenses to be $17 million-$19 million. This includes approximately $1.5 million of non-cash stock compensation expense. With cash at the end of Q3, just under $90 million, and reflecting our Q4 guidance for operating expenses and our actual Q4-to-date ATM proceeds and our projected interest income, we expect year-end cash to be approximately $80 million. For the full year 2019, we expect R&D expenses of $54 million-$58 million and total operating expenses of $68 million-$73 million. Operating expenses for 2019 are expected to include non-cash stock compensation expense of $6 million. With the clinical programs we're presently conducting and have committed to, we're projecting that our operating expenses for 2019 will be lower than our 2018 operating expenses.
As Briggs mentioned, we believe that we have multiple significant value-enhancing development milestones over the next six to 12 months. With a projected year-end cash balance of approximately $80 million, we will have a solid cash position entering 2019. I'd like to now turn the call back over to Briggs.
Thanks very much, Rick. I started today's call highlighting what an important year 2019 is shaping up to be for Syndax, I will close the call by re-emphasizing that same point. We have many data readouts over the course of 2019, any of which could unlock significant shareholder value. Upcoming milestones are summarized on slide 15. We take pride in being somewhat uniquely positioned within our industry as a small company with so much clinical data coming out over such a short time frame, including data from a phase III trial and multiple phase II trials over a matter of months. It will again be an extremely busy next few months for us here at Syndax. As always, I'd like to thank the team here at Syndax, our collaborators, and most importantly, the patients, trial sites, and the investigators involved with our clinical programs.
With that, I'd like to open the call for questions.
Thank you. Ladies and gentlemen, at this time, if you have a question, please press star then one on your touchtone phone. If your question has been answered or you would like to remove yourself from the queue, you may press the pound key. To prevent any background noise, we ask that you place your line on mute once your question has been stated. Our first question comes from Bert Hazlett of BTIG. Your line is open.
Thank you, and thank you, Briggs, and everybody, for the update. Mike, a couple of questions. First of all, with regard to the peripheral classical monocyte biomarker, you clearly have given us an update on your enthusiasm for non-small cell lung cancer. Could you give us a sense of where that biomarker stands in melanoma? Then I have a question on the MLL program after that.
Right. Thanks for the question, Bert. I think as we indicated previously, we are letting the melanoma data mature. We have presented 34 patients at ASCO. We have a larger sample size, so we're letting that data mature and looking at monocyte biomarker for various aspects of clinical benefit. You'll remember for lung cancer, we saw both on response rate and PFS. We hope that by the end of this year, we'll have that data further matured and further analyzed in terms of whether the classical monocyte also helps us in melanoma.
Okay, thank you. With the MLL program, again, as you mentioned, an exciting program, and it is good to see it move into the clinic. SNDX-5613 seems to be one of the portfolio. Could you discuss in brief characteristics that lifted SNDX-5613 to the top? Should we think about other second-gen compounds that might be active in maybe potential resistant species that arise?
Right. SNDX-5613 came to the top for the general pharmaceutical properties and other characteristics of the molecule relative to the other molecules that were in the portfolio that we acquired from Allergan. At this point, actually, Bert, it has been very hard to generate resistance to these molecules. At this point, we are not working on a resistance program simply because it has been difficult, I should say, thus far, we have not been able to generate cell lines that are resistant to this first class of molecules. We do not have a mechanism yet to understand resistance and how we would go after it. That is a reassuring thing to us because the molecule, it seems to be hard for a cell to escape.
Okay, thank you. Just one question with regard to guidance. Does R&D spend, Rick, include any spend on advancement in melanoma? Thanks.
At this time, it does not.
Okay, thank you for your time.
Thanks, Bert.
Thank you. Our next question comes from Chris Shibutani of Cowen. Your line is open.
Thanks very much. Just to confirm in terms of how you communicate some of the updated data points that we have coming over the next few quarters, particularly for 601, 602, and 3. Obviously, you have several different partners. Can you confirm under what circumstance you'll be sharing that information? Is that going to be a corporate release? Are you waiting to provide that at a medical meeting? Is that communication that you're fully in control of as opposed to one of your partners?
Short answer is yes, we are fully in control of that as opposed to our partners, Chris.
Are you thinking about medical meeting presentations or corporate release top-line results?
Right. I would say both, and obviously it depends on the timing of one. For 602 and 603 randomized placebo-controlled trials, once we got that data and we had it in hand, we would, I think, be required to release that information and then present it at a medical meeting.
Okay. Curious to know, the slide that you present, the ENCORE program still includes two mutational burden, TMB, which went through somewhat of an update at ESMO with Bristol study let out, and it was unclear sort of what path that biomarker was going to continue to move forward. Can you share your own points of views about that particular biomarker and the role that you believe it may play across any of these indications or combination studies that you're pursuing?
Sure. Peter, do you want to take that question?
Sure. Yes, happy to. We've included it partly as a way to understand the likelihood of the patient's ability to respond or not to the single agent immune checkpoint, particularly in the lung and melanoma setting, even though we know that our patients have been pre-treated. We've included those biomarkers that have been shown in other studies to be either predictive or prognostic of response to the immune checkpoint. For us, it's really a way to help us understand what the combination may be doing relative to the single agent, in our more advanced setting. We don't know the necessary relevance of any of these in particular to these prior pre-treated patients. As a result, we're collecting that information.
I have to say, because the whole exome sequencing a little harder to get off the samples, that data will end up being just by definition, a bit more limited than the gene expression data we've collected through RNA-Seq or NanoString. Not too much more to add to that other than we're following the literature and just to see how it evolves with some other ongoing clinical programs.
2019. It's helpful to have that, it's notable-
Pardon me, Chris, you're breaking up. Can you start again?
Ask a little bit further about the operating expense guidance and what we can believe is included in the range, particularly, for instance, for SG&A at the lowest possible revenue, $10 million for 2019, that you spent the max on the R&D and the lowest on the two operating. That's not necessarily realistic, but I'm trying to reconcile that with the potential to expand so many clinical programs. I can understand the emphasis on R&D, but can you give us a sense for how you came about with these operating expense ranges? I know that resources need to be very carefully thought about, but just help us with that, the scale of spending is low.
Chris, I'll take that. What we have happening in 2019, obviously, the accrual is completed in E2112, expenses will be drifting down in that clinical study. In the 601 ENCORE studies, all fully accrued, expenses will be winding down in the first half of the year. 602 and 603 will be completed largely in the first half of the year. All of those programs, the costs are trending down. Those will be offset by the lung study trending up in the year. That's somewhat of a push. In the 6352 program, we actually had some significant manufacturing tech transfer costs that occurred in 2018 that won't be recurring in 2019. Presently at least, we just have the GVHD study, which is relatively modest in cost. The cost overall for that program are actually going to be down year-over-year.
Cost in the Menin program obviously will be trending up. Overall, we'll be slightly down year-over-year. As I mentioned to Bert, that at present, we don't have a melanoma registration study in the guidance. If we decide to go forward with that study, I'll update the guidance for you.
Thank you for the additional color.
Thank you. Our next question comes from Christopher Marai of Nomura. Your line is open.
Hey, good afternoon. Thanks for taking the question. Thanks for the color on the Menin therapeutic. I appreciate that you're looking to bring that through the clinic rather rapidly. I was wondering, given those plans, when might we see first data? Obviously, we saw early data here at ASH was preclinical, and you're going to start a trial in, what, second quarter of 2019. Should we expect any data at ASH 2019 on that? Secondarily, how do you look at the competitive landscape there in terms of both enrolling trials and perhaps IP? There's an IND expected for another similar compound first quarter of 2019 by a competitor, and just wondering what your thoughts are around both the IP and potentially competitive trial enrollment. Thank you.
Yeah. Chris, I think it's a little early for us to say whether it would be data at ASH next year. Obviously, getting the trial up and running, opening sites, getting patients enrolled, I don't think we have quite that all worked out at this point, so it's a little hard to say whether we would have data at ASH. The competitor molecule I think you're referring to is the molecule from Kura, which I think is roughly on the same timeline as ours.
In our conversations with sites in getting our trial up and running, we're quite confident that we can find sites that can enroll our trial. I think you also asked about IP?
Yeah.
Yes, that's correct. Any concerns about freedom to operate or any potential concerns around IP with this compound? Maybe remind us, do you have composition of matter around them? Thank you.
Chris, it's Michael. I don't think there's any concerns about IP. This is separate IP from our competitor, distinct both genus and species. I think we're in a very good competitive position. Looking at late 2030s because it's brand new IP in terms of expiration, we're in quite a good spot.
Great. Thank you. Then one quick follow-up just on entinostat. Obviously, at ESMO, we saw some data for another HDAC inhibitor in the metastatic breast cancer setting, showed a PFS benefit and some emerging OS data. I was wondering if that's helped inform your view of when we may potentially see the OS read here from your entinostat trial, the ongoing phase III. If you had any other thoughts having reflected on that data, with respect to entinostat's chance for success. Thank you.
Obviously, the chidamide compound, it's not entinostat. It's a different molecule. It is a class 1 selective HDAC inhibitor and does have some both structural and pharmacologic similarities to entinostat. I think our best predictor of how our trial will read out comes primarily from our own phase II data. I think the fact that the chidamide team was able to show a PFS benefit that looked very similar to what we saw in our phase II trial with entinostat is reassuring, I think our predictions on when the trial will read out are more based upon our phase II trial than on anything they presented.
Understood. Thank you very much. Congrats on the quarter.
Thank you. Our next question comes from Konstantinos Aprilakis. Your line is open of JMP Securities.
Thanks very much for taking my questions, guys. Apologies if any were already addressed on the call. Just your latest thoughts on whether the monocyte biomarker might be useful for patient selection outside of non-small cell lung and status of any retrospective analyses performed on past clinical trials. Entinostat has an extensive clinical experience. Anything you've gleaned there and an update there? Then a quick follow-up.
Right. Konstantinos, we did mention that, as I said, the other place where we're looking at this most actively is in the melanoma population, that cohort is continuing to mature so that we can have enough information from the cohort on both PFS and response rate that we can then ask whether the classical monocytes is also useful in that population, as it so far has been in lung cancer. We don't have an answer to that yet. Hopefully by the end of this year on that trial. What was your other question?
I just had a quick follow-up. In the pivotal trial for non-small cell lung, was it discussed or have you considered including a KEYTRUDA monotherapy cohort in that trial, or do you not think it's necessary given wanting to validate the biomarker and compare to standard of care chemo? What are your thoughts there?
Yeah. What I would say is we had that conversation with a number of lung cancer experts at World Lung, when we presented our data back in September, did discuss with them the option of having a KEYTRUDA monotherapy arm. I would say they were uniformly opposed to that arm of the trial. In fact, weren't sure they would be able to actually get it through an IRB to have a patient who had just progressed on a PD-1 then go on to a trial in which they get the exact same agent or an agent in the same class that they had just progressed on, they felt was a difficult thing to undertake.
They also said to us that in their experience, that their response rate to that retreatment, if you will, was really quite low, they thought it was not really something they would be interested in taking part in, to be honest.
Okay.
They were much more interested in the randomization against standard of care chemotherapy.
All right, thanks very much, guys, and congrats on the quarter.
Thanks, Konstantinos.
Thank you. Again, ladies and gentlemen, to ask a question, please press star and then the number one. Our next question comes from David Lebowitz of Morgan Stanley. Your line is open.
Thank you very much for taking the question. In the upcoming non-small cell lung cancer trial, I guess you have two different primary endpoints. Does the trial need to succeed in both primary endpoints in order to be considered successful?
Yeah. I'll let Michael Metzger, our Chief Medical Officer, answer that question.
David, in a word, yes, we would want to see positive results in both endpoints in order to declare the trial successful for the following reason. Remember, the first analysis will be an analysis between high and low monocytes, and therefore that analysis would need to be positive in order to demonstrate that monocytes could be used to segregate and select patients. Secondly, we would want to see that in the high monocyte patients that we have selected based on the marker, that we would in fact be able to show benefit compared to standard of care chemotherapy, which would be required to get the drug approved.
The first analysis is required to get the marker validated. The second analysis is required to show that the drug provides benefit in that patient population.
Thank you for that. With respect to the patient, the size of each of the cohorts, was the phase II data the basis for determining the powering in the upcoming trial?
Roughly, yes. Exactly. We were looking to see if we could replicate in a rigorously defined phase II, III trial the results that we had observed in the phase II trial.
Thanks for that. With respect to the 602 and the 603 data, could you just run us back through the historic rationale on why KEYTRUDA was utilized in 601 with those particular tumors, and why these other PD-1, PD-L1s were chosen for 602 and 603?
Yeah, sure. I think, David, if you look at our program, we tried to set up a relatively broad proof of concept program that essentially tested different tumors that have different immunologic states, if you will. If you think about lung cancer and melanoma, at least a subset of both of those are considered to be inflamed tumors. Triple negative breast cancer tends to be excluded where you have T cells, but they sort of sit outside the tumor. Ovarian is sometimes referred to as sort of the immunologic desert, where you actually don't see a lot of T cells either around the tumor or in the tumor. There was a plan to look at different tumor types based upon their immunology. Then in conversations with different companies, different companies were interested in different tumor types.
At the time, Merck was obviously quite interested in lung cancer and melanoma. Those were the two tumor types that they initially were studying. Roche Genentech was interested in triple-negative breast cancer. Pfizer, as you know, has been doing work in ovarian cancer. We added in colorectal cancer with Merck later in the program. Again, given some of the stuff that we had seen in melanoma and the interest in colorectal cancer as a tumor type that was really non-IO responsive. The demarcation amongst the different companies was really just the tumors that they were interested in. I would say others were interested in lung cancer, but we'd already given that to Merck, so we didn't want to do the same thing again with another company. That's how we ended up with the various partners.
They've been wonderful partnerships, great scientific collaborations, that's how we ended up where we are.
Thank you very much. I guess one last question. Could you remind us the threshold for colorectal cancer in the Simon two-stage stage?
Yeah. In the Simon two-stage stage, the hypothetical response rate is 15%. We're trying to exclude a lower bound of 5% in the Simon two-stage stage design with a 90% power and a type 1 error rate of 0.05. That's one-sided. We would require three of 37 responses in the first stage in order to go to a final overall study size of 84 patients.
Thank you very much.
Thank you.
Thanks, David.
Our next question comes from Ed White of H.C. Wainwright. Your line is open.
Hi, thank you. Just a quick question for Rick. You said that the ATM, you raised $9.4 million in the third quarter and $6.1 million so far in the fourth quarter. I was just wondering if you can give us the share count associated with that monetary value. Thank you.
Yeah, let me see if I have that handy here. Let's see. I have an overall share count, I believe, of 2.1 million shares for the $15.5 million in total. I don't know if we split it out separately by quarters. It's probably going to be in our 10-Q that's going to be filed actually momentarily, so you can probably find it in there.
Okay, thanks, Rick.
Thank you. At this time, I'd like to turn the call back over to Dr. Morrison for closing remarks.
Great. Thanks very much, operator, and thanks for everybody for joining us on today's call. We look forward to seeing you at various upcoming meetings, and if you have any other questions, feel free to contact us.
Ladies and gentlemen, thank you for your participation in today's conference. You may disconnect.