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Edited Transcript of PIRS earnings conference call or presentation 7-Nov-18 1:00pm GMT

Q3 2018 Pieris Pharmaceuticals Inc Earnings Call

BOSTON Nov 15, 2018 (Thomson StreetEvents) -- Edited Transcript of Pieris Pharmaceuticals Inc earnings conference call or presentation Wednesday, November 7, 2018 at 1:00:00pm 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

* Jonathan Miller

Evercore ISI Institutional Equities, Research Division - Associate

* Matthew Christopher Phipps

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

* Pamela Ann Barendt

Cowen and Company, LLC, Research Division - Associate

* Umer Raffat

Evercore ISI Institutional Equities, Research Division - Senior MD & Senior Analyst of Equity Research

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Presentation

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Operator [1]

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Greetings, and welcome to the Pieris Pharmaceuticals Third Quarter 2018 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Allan Reine, Chief Financial Officer for Pieris Pharmaceuticals. Thank you. 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 third quarter 2018 earnings conference call. 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. We announced financial results this morning. You can access the press release 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 related to the timing and progress of our clinical trials and preclinical programs, our partnerships and our financial position, and 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 is only accurate as of today, and Pieris undertakes no obligation to update any statements to reflect future events or circumstances.

With that, I will hand 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 this 2018 third quarter earnings call. I'll begin by giving a brief introduction to Pieris followed by an update on our clinical and preclinical pipeline. I will then go over some corporate highlights from this past quarter and discuss our plans for next year.

As a reminder, we are a clinical stage biotechnology company, developing novel, Anticalin-based therapeutics across multiple indications and are particularly focused on respiratory diseases and oncology. Anticalin proteins, which are propriety to Pieris, are engineered lipocalins. Lipocalins are proteins that are naturally abundant in the body whose function is to bind and transport different molecules. These proteins are small and monovalent, and their distinct size and structure allow us to pursue a variety of treatment options.

They also have good drug-like properties, which continue to be demonstrated through clinical data, including data we will be discussing on today's earnings call. We believe that having good drug-like property is one of the 2 essential components of developing successful drugs. The other is having biology that is differentiated from other drugs, such as traditional monoclonal antibodies. To that point, we are engineering Anticalin proteins to be administrated through inhalation, an advantage over injectable monoclonal antibodies that informs our entire respiratory pipeline.

We are also engineering Anticalin proteins to drive distinct agonistic activity, a foundation of our bispecific immuno-oncology platform, which focuses on T-cell costim agonist.

Turning to our core value drivers. Our lead respiratory asset PRS-060 is an inhalable IL-4 receptor alpha antagonist, addressing the same target as the FDA-approved dupilumab for the treatment of uncontrolled asthma. This molecule was designed to target a validated pathway in a localized way via inhalation. In addition to being a high-value commercial opportunity, it also serves as a proof of concept for the novel delivery potential of our drug class.

We are developing PRS-060 in collaboration with AstraZeneca with retained co-development and co-commercialization rights in the United States.

Our lead oncology asset, PRS-343, is a fully proprietary immuno-oncology bispecific drug candidate composed of 2 Anticalin proteins targeted 4-1BB that are genetically fused to its antibody targeting HER2. This tetravalent molecule was designed to preferentially activate tumor-specific T-cells in the tumor microenvironment through a unique agonistic mode of action with the objective of providing a larger therapeutic window than that of traditional monoclonal antibodies engaging 4-1BB.

I will now give an update on our overall pipeline, beginning with respiratory diseases and followed by immuno-oncology and other programs.

Turning to respiratory. We're pleased to announce that PRS-060 was safe and well tolerated in a single-ascending dose Phase I study in 48 healthy volunteers. The drug candidate was tested at nebulized doses ranging from 0.25 milligrams to 400 milligrams. We're very encouraged by the data from the study as it's the first time an Anticalin protein has been administered to human subjects via inhaled delivery.

We continue to enroll subjects with mild controlled asthma to an elevated levels of fractional exhaled nitric oxide, or FeNO, in a placebo-controlled multiple ascending dose Phase I study, where we are evaluating the safety, tolerability and PK profile of our drug candidate, along with its capacity to reduce FeNO, which is an established marker of lung inflammation in subjects dosed with PRS-060.

We and our partner, AstraZeneca, expect to report full data from these Phase I studies at an upcoming medical meeting. After the completion of the Phase I studies, AstraZeneca will sponsor the Phase IIa study, which will focus on moderate-to-severe asthmatics. Once the Phase II study is complete, we may exercise our options to co-develop and separately to co-commercialize this program in the United States.

PRS-060 is one of 5 programs we are developing with AstraZeneca as part of the collaboration we signed with the company in 2017 in which we have co-development and co-commercialization options for PRS-060 and 2 additional programs. Beyond PRS-060, we have initiated discovery efforts for 1 additional AstraZeneca program earlier this year.

We are also actively developing our own proprietary respiratory pipeline outside of the AstraZeneca alliance, and we initiated discovery efforts on 2 programs earlier this year.

I would now like to provide an update on our immuno-oncology pipeline. We continue to enroll patients in our dose escalation study for PRS-343. We had previously guided initial data release by year end, and I would like to provide an update on the timing today.

We now intend to record initial data for this study in the first half of 2019. Although this represents a shift from our previous timeline, we believe that disclosing data after completing the dose escalation phase, while prioritizing the enrollment of patients across a range of immunotherapy responsive tumor types, will provide a more complete data set from which to evaluate the drug candidates [perpetual] . As a reminder, the protocol allows for the flexibility to enroll up to 10 patients per cohort, and in the company has recently begun screening for the 11th cohort in this study.

In August, we initiated a dose escalation trial of PRS-343 in combination with the PD-L1 inhibitor atezolizumab and we intend to report initial data from this trial also in 2019.

Beyond PRS-343, we recently announced another 4-1BB Anticalin-based bispecific addition to our pipeline, PRS-344. PRS-344 is a PD-L1 4-1BB antibody-Anticalin fusion protein that we are developing as part of our immuno-oncology collaboration with Servier.

Published preclinical models of anti-PD1 in combination with anti-4-1BB therapy have demonstrated robust antitumor activity, and we are enthusiastic about the prospect of investigating the potential synergistic effects of a bispecific directed to this pair of targets. We will present preclinical data from this program for the first time at the Society for the Immunotherapy of Cancer, SITC, in 2018 Annual Meeting at the end of this week.

We continue to expand our immuno-oncology pipeline beyond this, both proprietary and partnered, within our 2 IO focused alliances, Servier and Seattle Genetics. As previously mentioned, we intend to file 2 INDs next year, one of which will be for a wholly owned program and the other one for one of the partnered programs we are developing within our Servier collaboration.

Finally, I would like to discuss PRS-080, which is a potent hepcidin antagonist, known as the master negative regulator of iron metabolism. This program is nearing the end of an ongoing Phase IIa study in dialysis-dependent patients suffering from functional iron deficient anemia.

Due to some technical issues unrelated to the drug product near the end of the trial, we fell behind our intended schedule of enrollment completion by this stage. We plan to enroll 1 additional patient soon, and wanting to use the occasion of this quarterly earnings call to disclose highlights of data generated to-date from the trial.

The study is evaluating 5 weekly doses of PRS-080 versus placebo at 2 different dose levels: 4 milligrams per kilogram and 8 milligrams per kilogram. To date, the drug appears to be safe and well tolerated at both dose levels tested. Another example of an Anticalin therapy demonstrating a favorable safety profile in the clinic.

The drug also was shown to potently inhibit hepcidin, and at both dose levels demonstrated substantial iron mobilization and increased transferrin saturation, similar to what was seen in the Phase 1b single-dose study.

To date, there has been no conclusive change in hemoglobin at either dose versus placebo. We believe that weekly doses of a hepcidin antagonist may not consistently suppress hepcidin levels to drive a hemoglobin effect due to hepcidin rebound, which may reduce the window of opportunity for the mobilized iron to drive increased hemoglobin levels. We believe more frequent dosing could lead to more consistent hepcidin suppression that could lead to more significant hemoglobin changes versus placebo. We plan to enroll the final patient this year and present the full data set from this trial in 2019. We also plan to share the data set with ASKA Pharmaceuticals, at which point ASKA will decide whether to exercise its right to develop and commercialize PRS-080 in Japan and other Asian territories. Additionally, we plan to share the data set with potential partners outside of ASKA's [often] territories.

Moving beyond the pipeline. We are excited to welcome 2 new members to our Board of Directors, Dr. Peter Kiener and Dr. Matthew Sherman. Dr. Kiener has served in multiple executive roles, most recently as the Chief Scientific Officer of Sucampo; and Dr. Sherman, who most recently served as Executive Vice President and the Chief Medical Officer of Acceleron Pharma.

This concludes my prepared remarks, and I would now like to hand back over to Allan to guide you through our financial results for the third quarter of 2018.

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

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Thank you, Steve. We recognized a revenue of $8.3 million for the quarter ended September 30, 2018, as compared to $3.9 million revenue in the quarter ended September 30, 2017. This increase in revenue primarily relates to the increased level of activities with respect to our collaborations with both AstraZeneca, which commenced in June 2017, and Seattle Genetics, which commenced in February of 2018.

Research and Development expenses were $11.4 million for the quarter ended September 30 2018 as compared to $6.3 million for the year early quarter a year earlier. This increase in R&D expenses reflects advancement across the pipeline of programs as well as preparation for and advancement of clinical studies.

General administration -- general and administrative expenses were $4.7 million for the quarter as compared to $2.9 million for the quarter ended September 30 of last year. This increase in G&A expenses reflects higher personnel costs and professional services costs audit and legal, as well as an increase in G&A costs to support the growing business of the Company.

The net loss for the quarter was $6.2 million or $0.11 per share compared to $7.1 million or $0.16 per share for the quarter ended September 30, 2017.

Turning to the balance sheet. Total cash, cash equivalents and investments as of the quarter ended September 30, 2018, totaled $137.3 million as compared to $82.6 million as of December 31, 2017. This increase was driven primarily by the $47.2 million in net proceeds from the February 2018 equity offering, the $30 million upfront payment received as part of the Seattle Genetics immuno-oncology collaboration and the $12.5 million milestone payment from AstraZeneca achieved in the fourth quarter of '17 that was paid in the first quarter of this year. This was offset by $35.7 million of operating cash expenditures during the year.

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

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [5]

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Thanks, Allan. In summary, we are focused on developing our clinical assets, both proprietary and collaborative, while continuing to leverage the benefits of having a novel [pathway]. We are pleased with the clinical data from PRS-060. We believe that the PRS-080 clinical data are another example of the drug-like properties of the Anticalin drug class, and we look forward to sharing PRS-343 data next year once we have a more comprehensive data set to better inform on continued development of that program.

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 the line of Umer Raffat with Evercore ISI.

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

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Actually, Jon Miller on. I have a couple of questions. Let's start with the PRS-060 data that you say at an upcoming medical meeting. This is still a 2018 readout? Are we still expecting this data this year? Or are we just going to wait until next?

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

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Jon, Steve here. So we haven't guided specifically on which upcoming medical conference that will be, given the fact that we like the ability to talk about both the single ascending dose and the multiple ascending dose trials together. We like that opportunity. I think we should be thinking about this as something beyond 2018. And as a general reminder -- yes, I'd say typically, there are 2 prominent respiratory conferences that people use: You have the American Thoracic Society in the spring and you have the European Respiratory Society in the fall.

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Jonathan Miller, Evercore ISI Institutional Equities, Research Division - Associate [4]

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For PRS-343, seeing the pushout on data there, I'm trying to figure out how to interpret that. It seems like you're now going in this 11th cohort to the actual approved Herceptin dose. So have you seen any responses at all at lower doses? And do we have a way to differentiate responses from your molecule relative to the responses that you might expect at the Herceptin dose?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [5]

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Yes, look, it's a fair question. I think and as we mentioned or what we're seeing here is we're not going to comment on any trial data thus far. What we have done, I think it's a good practice, is when we set a goal for where we want our drug to deliver, we set qualitative and quantitative PD thresholds to release data prior to completing enrollment in trial. And we're simply not there yet. I think there are a number of factors that can influence the right dose level. And as you noted, we are screening the 11th cohort, which is a dose in line with your trastuzumab as indicated at the metastatic setting. And we will be able to probe that cohort as well as we will be enrolling in that even prior cohorts.

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Operator [6]

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Our next question comes from the line of Chris Shibutani with Cowen & Company.

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Pamela Ann Barendt, Cowen and Company, LLC, Research Division - Associate [7]

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This is Pam on for Chris. Can you provide some rationale around your mention in the press release of now focusing on immunotherapy responsive tumor types in the 343 monotherapy study?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [8]

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Sure. I think maybe I'll let Lou maybe talk to the clinical trial enrollment strategy.

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Louis A. Matis, Pieris Pharmaceuticals, Inc. - Senior VP & Chief Development Officer [9]

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Yes. So, yes we, as part of the dose-escalation stage, have allowed patients with any (inaudible) mentioned tumor type to be enrolled and that we of course (inaudible) go forward at the outset. And we will continue to do that. But what we're seeking to do is now that we're able to enroll a larger number of patients in each cohort as we go forward to complete the dose escalation, we can focus on a number of different HER2 positive tumor types that we've been wanting to really explore detail from the outset, such as in particular gastroesophageal cancer and bladder cancer. And to look at the number of patients with those kinds of tumors in the context that PD-1 pathway inhibitors have shown some activity in those tumors, and we would like to explore in more depth as we go forward the activity of the drug on patients with HER2 positive subset -- the HER2-positive subset of those tumor types.

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Pamela Ann Barendt, Cowen and Company, LLC, Research Division - Associate [10]

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That's very helpful. And just another quick follow-up for me. Can you comment on how the ultimate distribution of tumor types will look generally? How many patients can we expect in the most prevalent tumor type, for example?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [11]

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Sorry, yes. I missed the first, you said the what something distribution?

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Pamela Ann Barendt, Cowen and Company, LLC, Research Division - Associate [12]

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Sorry, the ultimate distribution of tumor type in the 343 monotherapy study, given that now you're focusing a little bit more on the immunotherapy-responsive tumor types.

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [13]

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So we're not going to comment on the full distributions at this time. I think if we go back to when we disclosed data in June, where we had enrolled approximately 15 to 17 patients, that was the broadly distributed across several different HER2-positive tumor types. As we go forward, we will continue to [biased] , as we said, towards specific tumor types. We're not going to disclose specifically what those are at the present time.

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Operator [14]

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Our next question comes from the line of Biren Amin with Jefferies.

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

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Just maybe to start on 343. How many additional cohorts do you plan on dosing beyond this 11th cohort?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [16]

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Yes, let me pass that question over to Lou.

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Louis A. Matis, Pieris Pharmaceuticals, Inc. - Senior VP & Chief Development Officer [17]

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Okay. So as written in the protocol, we initially designed the trial to go up through cohort 11, which is when we add screening patients for that cohort, which will the highest dose cohort. And we determined that at the outset, if the drug was safe and well tolerated through cohort 11, and factors such as the tolerability, the tumor size, receptor occupancy noted at higher doses, we will be prepared to explore it. So I think that -- that's an optionality that we have given the behavior of the drug to date. But we would make that decision once we've seen some of the initial activity of the drug in cohort from 11th.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [18]

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Got it. And then just on the current trial. You've amended it to include or to enroll patients with immunotherapy responsive tumor types. Are we talking about patients that have PD-L1 high? Or are we talking about patients who were PD-1 inhibitors that are more effective? Can you define what this population is?

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

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Yes. We didn't -- we're describing our strategy moving forward, we didn't actually amend the trial, so to speak, in a formal way. So we're not necessarily looking for certain biomarkers as inclusion criteria. Clearly, those are biomarkers that we are measuring as we go forward as most immunotherapy development drug management, look at the other PD-L1 positive tumors (inaudible) advantage in terms of responsiveness. But -- so we're measuring those, but we're not including any biomarkers as inclusion criteria at this time.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [20]

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Got it. And then are you looking at all at HER2 mutation tumor types in the 343 study?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [21]

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No, we are only looking at HER2 positive tumors that actually had elevated expression, either by immunohistochemistry or FISH plus Immunohistochemistry. And I think that the nature of the drug's mechanism of action actually requires there to be elevated levels of HER2 on this surface, that's how the drug works to cluster the anti-4-1BB Anticalins and activate the T cells (inaudible). The other thing we are doing of course is for validation is we're collecting all tumor biopsies where possible, so we can retrospectively compare them (inaudible). And we are -- we have shown and presented at meetings data that shows that the drug from the immunologic standpoint can actively (inaudible) T cells for tumors that express HER2 less than 3 plus level to 2 plus levels. But as far as the criteria for enrollment in this trial of concern, we restricted the patients to be enrolled to those who have had the equivalent of a 3-plus positive HER2 -- 3 plus HER2 positive tumor. Retrospectively, with the longitude of biopsies we'll be able to see exactly what the HER2 status was are determined at the time the drug was initially administered to the patient.

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Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [22]

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Got it. And maybe just one last question on 060 in the mild asthmatic study that's currently ongoing, what type of result will be considered -- would be defined as clinically relevant in terms of reduction in FeNO?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [23]

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Yes. The amount of FeNO reduction that we required to move forward and consider a positive outcome is actually decided in consultation with AZ, of course. And we used some data from previous studies and benchmarks. The closest study to what we're doing in terms of patient population who are looking at FeNO reduction in mild asthmatics came from the (inaudible) single chain variable fragment study and they were presented at the American Thoracic Society meeting in May of 2017. So that was one poor benchmark. But we also of course looked at FeNO reductions in some of the -- that were achieved in some of the trials in patients with moderate-to-severe asthma as well. And have -- from that overall analysis of the data and the correlation of FeNO reduction with drug efficacy, we have what we believe is a statistically significant reduction versus placebo as a benchmark whether we move forward. And so as part of the current multi-dose -- multi-ascending dose trial in the mild asthmatics, we're looking at FeNO reduction at multiple dose levels. And from there, we'll be able to determine the appropriate dose for the Phase IIa study in the severe asthmatics.

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Operator [24]

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(Operator Instructions) Our next question comes from the line of Matt Phipps with William Blair.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Analyst [25]

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Just first on 060. I'm not sure how much you can say at this point, but can you mention anything about the serum bioavailability between the nebulized and IV formulations? And maybe half-life? And then anything from preclinical studies? Is this just that dry powder inhalation might kind of even improve PK bioavailability above the nebulized formulation?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [26]

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Matt, Steve here. We're not disclosing any data at present time on the either the single ascending dose or the ongoing multiple ascending dose study. I think what we can say for the nebulized to drug powder formulation (inaudible) is that a lot of this is driven by particle size. And so I think we have a really good understanding of what particle size that we need to result with to have the drug be positive in the right part of the areas. And so I think with AstraZeneca's world-class formulation capabilities and based on data that we generated, which we're not at liberty to disclose today, we're extremely confident that we have right particle size in the nebulized formulation, and we're very confident that we'll be there for the dry powder, which will be the formulation as we go into our Phase IIa study.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Analyst [27]

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And then Steve, I'm not sure if I heard you correctly. Did you say that you have a pharmacodynamic kind of boundaries or benchmarks set in the 343 trial and you haven't met those yet? Can you clarify what you said there?

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [28]

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Sure. I'm happy to do so. I was saying that what we've done, as we do for all of our programs, we set what is good enough look like in order to declare success and as well as when we want to disclose initial data for a program. And for PRS-343, we set a qualitative criteria in how many different types of maybe biomarker readouts we would like to see activity and we also set quantitative thresholds and we wanted to achieve prior to disclosing data, whether that was -- whether that would be in the context of our interim data before completing enrollment. And yes, we are not -- we're not there yet. We're not going to comment on the data at this time, as we think a more fulsome data set would be the right way to disclose in terms of all these IO programs that are ongoing right now. And we wanted to try to respect the benefits of having a more fulsome data set. And so, correct, we're not there yet on the PD quantitative thresholds to justify coming out with data set. But we are continuing to enroll. As you saw, we are continuing to escalate, and we continue to generate data from the more recent cohorts, and we continue to over enroll with the entire cohorts.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Analyst [29]

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And then last thing, I guess, not sure exactly how to ask. But it seems like obviously, you've seen something encouraging to support the IND-enabling studies of additional 4-1BB style bispecifics with this platform or maybe some of the other proprietary ones that were not disclosed when you're working on maybe have different mechanisms.

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

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Sure. I think -- yes, Matt. So we have not seen any showstoppers for PRS-343. A lot of things need to be considered, as I said, to have a good drug, drug like properties in the biology. And on the latter part, the biology that will be at stake for PRS-343 is different from the biology at stake for 344, which is the PD-L1 4-1BB bispecific where you have the benefit of the double IO engager on the PD-L1, PD-1 access disruption, and they're still that localized benefit given the PD-L1 is expressed. So there is -- there is significantly nuanced Biology between those programs that I think certainly merits a continuation of IND-enabling activities for a number of programs, including PRS-344. But again, I go back to reiterate the fact that we're not there yet on a PRS-343, doesn't mean we won't get there. We got to just continue to work through escalation and over enrollment and look at the data as a totality.

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Operator [31]

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Our next question is a follow-up from the line of Umer Raffat with Evercore ISI.

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Umer Raffat, Evercore ISI Institutional Equities, Research Division - Senior MD & Senior Analyst of Equity Research [32]

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I had a quick follow-up, if I may. I wanted to maybe spend a minute on the Novartis inhaled asthma program. And my questions were twofold. First, so Novartis management claims they've cleared all preclinical tox on their inhaled TSLP program. Is it fair to say that you also completed a comprehensive preclinical tox on your inhaled IL-4 as well? And secondly, how significant is that competition? It sounds like they're fast tracking at the Phase II. So I just wanted to understand the timelines because this appears to be getting competitive relatively early stage.

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [33]

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So maybe I'll take this, it's Steve. And I'll take a cut at that. I think there's 2 different aspects to your question. The first considers the tox, I guess, on the specific drug in hand. And then the second one is the overall biology, may be TSLP biology versus IL-4 receptor alpha. Maybe I can take the first one. May be, I'll let Lou take the second one. We have currently -- we've completed 4 weeks tox for our drug PRS-060 that allows us to move through the 1a, the 1b, and then the Phase IIa study. Beyond that, we will then parallel process along with the Phase IIa development, the longer tox study that will enable later-stage development. I mean, if you look at the tox data that we have which we're very encouraged by. When you look at the safety and tolerability data from the Phase 1a study, where we say we are safe and well tolerated and in fact that we continue to escalate in the multiple ascending dose study, and we look at the overall biology of IL-4 receptor alpha antagonism with a significant safety database for dupilumab, we're very encouraged by the tox data we have generated today considering the overall biology and the specific drug-like properties of PRS-060. So whether or not I will call it a comprehensive tox that we'd say we've done absolutely what is needed to be able to take this program to Phase IIa and we will be there on preclinical global tox beyond that is necessary to carry it to further development beyond that. And then with respect to TSLP versus IL-4 receptor alpha, I'll let Lou handle that one.

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Louis A. Matis, Pieris Pharmaceuticals, Inc. - Senior VP & Chief Development Officer [34]

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Obviously, the TSLP is another quite interesting target for moderate-to-severe asthma, and we're quite aware of the data and the Phase II data that was published, and potentially show a benefit that is more broadly active irrespective of (inaudible) phenotype but that was from a Phase II study, and DUPIXENT was very similar to that Phase II study. So we'll see how we systemically administered TSLP plays out in Phase III. But it doesn't mean that it's going to be more effective in the target patient population that we're addressing with 060. I think that for example you'll be surprised to see that at the anti-TSLP antibody was not active in atopic dermatitis where DUPIXENT is quite active in atopic dermatitis. And of course it's on the market now (inaudible) because the inflammatory mechanisms did work in dermatitis and [indiscernible] to a significant extent. so we're aware of the data and we feel very bullish (inaudible) out there as a target for inhaled delivery.

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Operator [35]

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Mr. Yoder, there are no further questions at this time. I'll turn the floor back to you for any final comments.

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Stephen S. Yoder, Pieris Pharmaceuticals, Inc. - CEO, President & Director [36]

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No, no further comments. I just want to thank everyone again for your attention today and for your continued support of Pieris. We look forward to keeping you updated on our progress. And thank you, again for joining the call. Have a good day.

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Operator [37]

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Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.