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Edited Transcript of PIRS earnings conference call or presentation 1-Aug-19 12:00pm GMT

Q2 2019 Pieris Pharmaceuticals Inc Earnings Call

BOSTON Aug 3, 2019 (Thomson StreetEvents) -- Edited Transcript of Pieris Pharmaceuticals Inc earnings conference call or presentation Thursday, August 1, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Allan Reine

Pieris Pharmaceuticals, Inc. - Senior VP, CFO & Treasurer

* Louis A. Matis

Pieris Pharmaceuticals, Inc. - Senior VP & Chief Development Officer

* Stephen S. Yoder

Pieris Pharmaceuticals, Inc. - CEO, President & Director

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Conference Call Participants

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* Biren N. Amin

Jefferies LLC, Research Division - MD and Senior Equity Research Analyst

* Jennifer Rose Teubl

Robert W. Baird & Co. Incorporated, Research Division - Research Associate

* Jonathan Miller

Evercore ISI Institutional Equities, Research Division - Associate

* Joseph Pantginis

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Matthew Christopher Phipps

William Blair & Company L.L.C., Research Division - Senior Research Analyst

* Pamela Ann Barendt

Cowen and Company, LLC, Research Division - Associate

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Presentation

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Operator [1]

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Good morning, and welcome to the Pieris Pharmaceuticals Second Quarter 2019 Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Allan Reine, CFO. Thank you, Mr. Reine, you may begin.

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Allan Reine, Pieris Pharmaceuticals, Inc. - Senior VP, CFO & Treasurer [2]

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Good morning, everyone, and thank you for joining us for our second quarter 2019 conference call and corporate update.

On the call today, we have Steve Yoder, our President and CEO; and Lou Matis, SVP and Chief Development Officer, who will be available for Q&A. You can access the press release this morning on the Investor Relations page of our website at www.pieris.com.

Before we begin, I'd like to caution that comments made during this conference call may contain forward-looking statements involving risks and uncertainties regarding the operations and future results of operations of Pieris, including statements relating to the timing and progress of our clinical trials and preclinical programs, our partnerships and our financial position. Actual results or events may differ materially from those expressed or implied by such forward-looking statements. Factors that might cause such differences are described in our filings with the SEC, including our annual, quarterly and current reports. The information being presented during this conference call is only accurate as of today, and Pieris undertakes no obligation to update any statements to reflect future events or circumstances.

Today, we are providing the company's cash position as of the end of the second quarter 2019, and an update regarding recent anticipated future corporate developments.

Cash, cash equivalents and investments totaled $99.7 million as of June 30, 2019, compared to cash and cash equivalents and investments of $128.1 million as of December 31, 2018. Our second quarter 2019 financials will be released with our quarterly report, which we expect to file by Friday, August 9, 2019.

With that, I will turn the call over to Steve.

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [3]

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Thank you, Allan, and thank you to everyone for joining us today for our 2019 second quarter corporate update call. I will begin with a brief overview of Pieris, and then move on to a summary of our progress last quarter and our plans for the remainder of the year.

As you know, at Pieris, we are leveraging our proprietary Anticalin platform technology to develop protein therapeutics. Anticalin proteins are engineered human lipocalins, which are proteins that are naturally abundant in the body and serve to bind and transport various molecules. Because lipocalins and bio extension Anticalin proteins are smaller and typically more stable and engineer-able than antibodies, they offer unique advantages to other treatment options, such as inhaled delivery to treat respiratory disorders locally, or the ability to create more complex bispecific formats to drive the desired biology, as we are doing in immuno-oncology. To take advantage of Anticalin's proteins capacity for delivery via inhalation, we are developing a broad respiratory franchise comprised of 3 fully proprietary programs and 4 currently active programs that we are developing as part of a five-program collaboration with AstraZeneca.

Our lead respiratory asset, PRS-060 is an inhaled IL-4 receptor alpha antagonist to treat moderate to severe asthma that we are developing as part of our collaboration with AstraZeneca. It is also 1 of the 3 programs in that collaboration for which we have retained co-development and co-commercialization rights.

We are pleased with the continuous progress of our respiratory pipeline. Last quarter, we presented data from the Phase I single ascending dose study of PRS-060 at the American Thoracic Society International Conference. PRS-060 was found to be safe and well-tolerated in 54 healthy volunteers in addition to demonstrating favorable pharmacokinetics and robust systemic target engagement. This is the first data set we have seen from an Anticalin protein delivered to human subjects via inhalation.

Looking ahead, we will be presenting detailed data from the ongoing Phase I multiple ascending dose study of PRS-060 at the 2019 European Respiratory Society International Congress, ERS. This study is evaluating the safety, tolerability and potential of PRS-060 to reduce fractional exhaled nitric oxide, or FeNO, versus placebo in patients with mild asthma and elevated levels of FeNO. FeNO is a validated biomarker for allergic asthma, as evidenced by the recent approval for dupilumab by the EMA for individuals with severe asthma and high levels of FeNO. The recognition of the utility of this biomarker by a regulatory body underscores our confidence in its importance and its potential to be a significant inflection point later this year.

The multi-ascending dose evaluation will help to provide important data on local lung target engagement and the ability of the drug to affect a validated biomarker of disease, as well as to help establish an appropriate dosing regimen for the drug's Phase IIa trial.

Beyond PRS-060, we initiated an additional discovery-stage program as part of our five-program respiratory collaboration with AstraZeneca last quarter, bringing the total number of active programs in this alliance to 4. We also initiated a proprietary discovery-stage respiratory program, bringing the total number of fully proprietary respiratory discovery stage programs in our pipeline to 3.

We have also made progress across our immuno-oncology pipeline. Our lead oncology asset, PRS-343, is a fully proprietary 4-1BB/HER2 bispecific designed to preferentially activate tumor-specific T-cells in the tumor microenvironment. We plan to report comprehensive data from PRS-343 Phase I monotherapy dose escalation study at a medical meeting later this year, including safety, tolerability, PK data, PD data, assessing tumor-localized drug effects such as TDA causative T-cell expansion and clinical response data. We also continue to enroll patients at our Phase I dose escalation trial of PRS-343 in combination with atezolizumab, an approved PD-L1 inhibitor, and we intend to report data from that study later this year as well.

Our partnered immuno-oncology programs also continue as planned. We are still on track to file an IND application later this year for PRS-344, which is a 4-1BB/PD-L1 antibody Anticalin bispecific molecule in the most advanced program in our five-program immuno-oncology collaboration with Servier. As a reminder, Pieris holds exclusive commercialization rights in the U.S. for PRS-344 and will receive royalties on ex-U. S. sales for this program.

Additionally, we have completed research activities for the first fleet candidate in our collaboration with Seattle Genetics, with further development activities being undertaken by Seattle Genetics.

Finally, a brief update on PRS-080, a half-life optimized hepcidin antagonist for anemia. We presented from the Phase IIa study of PRS-080 at the 24th European Hematology Association Congress in June. The data showed that PRS-080 was safe and well-tolerated at both 4 mg per kilogram and at 8 mg per kilogram treatment dose levels and at potently inhibited hepcidin and yielded robust iron mobilization with increases in both serum iron and transfer and saturation. At 8 milligrams per kilogram, there was a preliminary evidence of hemoglobin increase in patients treated with PRS-080 versus placebo.

As a reminder, ASKA Pharmaceutical currently has an exclusive option for PRS-080 for Japan and other Asian territories. Following delivery of a final study report, ASKA will decide whether to exercise its option to develop and commercialize PRS-080 in those territories.

Looking beyond our pipeline, we are pleased to welcome Dr. Maya Said to our Board of Directors. Dr. Said's deep scientific knowledge, understanding of large pharma's inner workings, and the appreciation of the need to bring high-value therapies to patients promise to be an asset to the company.

So in conclusion, we look forward to sharing the data from the multiple ascending dose study of PRS-060 at ERS this fall. We also look forward to sharing data from the monotherapy study of PRS-343 later this year, likely at a medical meeting in addition to sharing data from the PRS-343 combination study with atezolizumab, and to filing an IND for PRS-344.

Thank you for joining us on the call today. We would now like to open the call for your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Jonathan Miller with Evercore ISI.

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Jonathan Miller, Evercore ISI Institutional Equities, Research Division - Associate [2]

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I think we're all looking forward to seeing the 060 data at ERS later. I realize the last public call before that data is released, so perhaps it's a good opportunity to refresh people on what field observations were like in other trials in moderate -- in mild patients? And can you also maybe remind us again what sort of placebo arm improvements we ought to be expecting given the controlled environment?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [3]

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Jon, thanks for the question. I'll turn it over to Allan to run through those 2.

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Allan Reine, Pieris Pharmaceuticals, Inc. - Senior VP, CFO & Treasurer [4]

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Yes. So as this -- as you said, this is a controlled environment. So what that means is these patients are actually taken into a facility for 10 days so that they are no longer exposed to outside allergens, and therefore, can reduce the variability within those FeNO measurements. So in a similar trial that was done previously, Vectura UCB looked at an IL-13 fab fragment with a DPI inhaler over 10 days, so it's pretty similar trial design, and they saw a nice reduction, obviously, over placebo, there. I think, about a 33% relative reduction in the high dose on the primary endpoint versus the placebo. But you do see about, I think in that trial, somewhere around a 30% reduction in FeNO through that placebo group, because they're in that in indoor facility. Again, we're not commenting at all on our data or what our expectations are outside of that. But I thought it'd be helpful to just describe that prior study.

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Jonathan Miller, Evercore ISI Institutional Equities, Research Division - Associate [5]

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Can you maybe then, just as a follow-on, remind us how much FeNO reduction in mild patients we would have to see to expect a benefit in outcomes to translate to more severe patients?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [6]

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Yes. We can't comment on the specific data or on what that may mean.

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Operator [7]

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Our next question is from Biren Amin with Jefferies.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [8]

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On 060, it seems, on ClinicalTrials.gov, that trial continues to recruit patients. When do you hope to finish patient recruitment in time for data presentation at the ERS?

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Allan Reine, Pieris Pharmaceuticals, Inc. - Senior VP, CFO & Treasurer [9]

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Yes. So the -- we've already, as you know, submitted an abstract for ERS, and plan to present the data there. The trial, as you said, we haven't commented on enrollment past that. But obviously, it's -- we'll present the data that we have, but you can continue to enroll and test different doses as well, but we haven't given any kind of qualitative or quantitative measures on enrollment beyond that.

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [10]

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And Biren, Steve here. The only thing I would add to that is that we're not required to have fully completed the trial to disclose then existing data at the conference. So we do have flexibility there.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [11]

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Got it. AstraZeneca disclosed in their latest conference call, at least some -- in their slides, that they plan to start the Phase II study on this compound in the second half of this year. So can you just talk a little bit about what type of trial design that they plan to move forward with?

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Allan Reine, Pieris Pharmaceuticals, Inc. - Senior VP, CFO & Treasurer [12]

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Yes. We are not commenting on the Phase IIa trial. That's -- AstraZeneca's going to be running that. As you know, we ran the Phase I program. As the Phase I program is completed, we've handed over the development to AstraZeneca. I'm sure, as you know, we do have an option after the Phase IIa, to be able to co-develop the drug with AstraZeneca at different levels. But for now, for any questions on the Phase II, I'd have to defer you to AstraZeneca.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [13]

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Got it. And then maybe just one last question on moving to 343. How much data can we expect later this year? I'm going to assume that it's probably going to be a meeting like SITC that you're probably planning to present that data. So on each tumor cohort, how many patients can we expect? And are we going to get enough of a readthrough on whether you plan to move forward with this program, with this data set?

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Louis A. Matis, Pieris Pharmaceuticals, Inc. - Senior VP & Chief Development Officer [14]

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This is Lou. I'll take it. What we plan to present, I think, was really well-described in Steve's narrative. So we'll be showing data related to the drug's pharmacology, as well as data with respect to influence on the tumor microenvironment, biomarket data, as well as clinical responses. We can't, obviously, go to any details on what we've seen, but we're looking forward to presenting. And it'll be quite comprehensive in terms of the data we have from the single dose trial and as well as data that is emerging from the combination study. That -- the combination study, as you know, began significantly later in time relative to the monotherapy, so we're not quite as far advanced in the combination study as we are with the single-dose escalation study.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [15]

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Lou, have you made a determination on the appropriate dose to move forward with -- in the monotherapy cohort?

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Louis A. Matis, Pieris Pharmaceuticals, Inc. - Senior VP & Chief Development Officer [16]

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Again, we will describe that at the meeting. We certainly have doses where we believe there will be activity. And whether that's the final dose or not, we are going to be determining over the next months, several months into the end of the year. But we're very pleased to be presenting the data that we have so far, which we -- obviously, the clinical data that we show with respect to biomarkers in the tumor microenvironment with respect to response data, as Steve said, we'll obviously be showing the doses at which we saw data that we'll be -- going to present.

Sorry. It's a little bit complicated to express because you can't really go through the data now. But we're looking forward to presenting.

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Operator [17]

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Our next question is from Matt Phipps with William Blair.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Senior Research Analyst [18]

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So Allan, on the FeNO reduction, do you think the -- like the speed of the FeNO reduction relative to placebo is kind of important, especially given the controlled setting. Is that where you focus your separation earlier from treatment? And then when do you think we'll learn more about the 3 proprietary inhale programs?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [19]

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Matt, it's Steve here. I can take that, maybe I think the latter one first, and then we can talk -- Allan can take the first question. So the 3 proprietary programs, these are in discovery stage. As we mentioned, we're really committed to building a respiratory pipeline independent of AstraZeneca, and that's what this proprietary pipeline represents. We're not going to guide specifically, as you know, it's competitive. We want to make sure we have robust IP. But we know that the level of excitement that we have with our franchise is going to be only recognized probably once we provide more color. So without any promises, I would like to think that as 2020 unfolds, we will be able to provide updates on the pipeline beyond PRS-060, including potentially target names, but I would not expect a lot of detail on this across the remainder of this year. And then your second -- your first question was around the, I think, the kinetics of FeNO reduction.

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Allan Reine, Pieris Pharmaceuticals, Inc. - Senior VP, CFO & Treasurer [20]

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Yes. It's a good question, Matt. It's hard to know, I would say FeNO tends to be a biomarker that can go down pretty quickly. But what's important here is, as I say, in thinking about that biomarker and what it's effects are on, as you go into the moderate to severe population, both FEV1 and exacerbation reduction, whether over a 10-day period, if FeNO goes down quickly or not, but it gets to that same result at the end, is that going to affect FEV1 or exacerbation in a longer-term study? I don't know. But FeNO tends to go down, if we look at prior studies, pretty quickly after treatment.

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Operator [21]

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Our next question is from Joe Pantginis with H.C. Wainwright.

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Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [22]

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On 343, I know you can't discuss the numbers and the extent of the data at this point. But with -- I know, obviously, people are going to be looking for initial clinical responses, but I think it's also really important about the pharmacodynamic data and the biomarker data and tumor microenvironment aspects that you were discussing. So I guess, the way I would ask it, for the different levels of cohorts that you have in this study, are you pleased with the amount of, say, biopsy data and tumor microenvironment data with each cohort that you've been able to garner in the patients that agreed to it, and what are follow-ups or what have you to be able to put forth a good tumor microenvironment case?

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Louis A. Matis, Pieris Pharmaceuticals, Inc. - Senior VP & Chief Development Officer [23]

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This is Lou. Obviously, we can't comment specifically, but we are, and have been since the initiation of the trial, collecting data, both with respect to pre- and post-therapy biopsies as well as clinical data and PK and so forth in every single patient. So the sites have been extremely cooperative and enthusiastic about executing on every aspect of the study. And to be able to correlate anything we see clinically with supported data with respect to tumor microenvironment, for example.

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Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [24]

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Great. I appreciate that. And that is good. And just a quick a logistical question on 080, when do you anticipate giving the full data package to ASKA, and what is the time frame that they have to decide?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [25]

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Joe, it's Steve here. On that timing, we're wrapping up the formalities of the study. So a little bit later this year, we deliver the report. They have a fixed period of time. I'm not sure if that's public. It's not terribly long. So I think it's fair to say that sometime in the second half of this year, ASKA will have made and had communicated a decision to us.

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Operator [26]

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Our next question is from Chris Shibutani with Cowen.

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Pamela Ann Barendt, Cowen and Company, LLC, Research Division - Associate [27]

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This is Pam on for Chris Shibutani. We have a couple of questions on your respiratory programs. First, a clarification question. Do you know when the embargo lists the ERS abstract itself? Would it be October 1? I understand the actual presentation might include updated data, but clearly, people will be looking for the abstract. And then I have another one on your proprietary programs after that.

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Allan Reine, Pieris Pharmaceuticals, Inc. - Senior VP, CFO & Treasurer [28]

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Yes. You'll have to check the ERS website, and they'll have some dates on there, or you can reach out to them on exactly what and when it goes live, but we can't comment on that.

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Pamela Ann Barendt, Cowen and Company, LLC, Research Division - Associate [29]

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Got it. Okay. And then regarding your proprietary respiratory programs, can you comment on -- or confirm, if these are following a similar model, similar to 060, where you would have local delivery of inhibitor that's typically delivered systemically in an already approved format?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [30]

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Yes. So Pam, Steve here. In general, remember, our current R&D strategy is to address validated targets in new ways, typically validated with monoclonal antibodies, different levels of validation, whether they're clinical, even approved, like dupilumab, or maybe earlier stage, albeit clinical or preclinical validation. So everything we're focusing on right now in our respiratory pipeline is anticalin-based. It's inhalation-based where we believe a local intervention is relevant. And it is included, but not necessarily limited to asthma. So I think it's also a good complement to what we're doing with AstraZeneca. I think it's a nice balance. But it reflects our current strategy of pursuing more validated targets in novel ways.

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Operator [31]

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Our next question is from Madhu Kumar with R.W. Baird.

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Jennifer Rose Teubl, Robert W. Baird & Co. Incorporated, Research Division - Research Associate [32]

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This is Jennifer on for Madhu. I actually just have a quick clarification in addition to a question. Earlier in the question-and-answer, you mentioned a study that has a 33% relative reduction in FeNO. And I just want to know if that was in mild asthma patients or moderate to severe.

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Allan Reine, Pieris Pharmaceuticals, Inc. - Senior VP, CFO & Treasurer [33]

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Yes. That was a patient in a -- sorry, that was a population of patients that is pretty similar to what we're doing. It was a mild asthma population with FeNO levels above 35 parts per billion in that study. So a similar population that we're testing.

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Jennifer Rose Teubl, Robert W. Baird & Co. Incorporated, Research Division - Research Associate [34]

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Okay. Great. Perfect. And then just a quick follow-up to that. Do mild patients with elevated FeNOs have higher eosinophil counts?

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Allan Reine, Pieris Pharmaceuticals, Inc. - Senior VP, CFO & Treasurer [35]

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Again, it's -- when you're looking at mild patients, you obviously screen from a lot of them to find ones that have high FeNos. Some are also going to have high eos, but probably at a much lower percentage than you'll see with the moderate-to-severe population.

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Operator [36]

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There are no further questions registered at this time. I would like to turn the floor back over to Stephen Yoder for closing comments.

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [37]

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Okay. Well, thanks, everyone. I just want to thank you for your attention today, and for, of course, your continued support with Pieris. We look forward to keeping you updated on the progress. And thank you, again, for joining the call today. Have a great day.

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Operator [38]

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This concludes today's teleconference. You may disconnect your lines at this time. Thank you for participating, and have a pleasant day.