Q3 2026 Coherus Oncology, Inc. Earnings Conference Call - COHERUS ONCOLOGY INC

Good day and thank you for standing by. Welcome to the Q3 2026 Coherence Oncology Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1, 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1, 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kerry Graham. Please go ahead. Thank you, Heidi. Thank you. Third quarter earnings conference call. Dr. Denny Lanphier, Chief Executive Officer of CoHARIS, Dr. Rosh Diaz, Chief Medical Officer, Dr. Teresa Lavallee, Chief Scientific and Development Officer, Samira Ghori-Gokhar, Chief Commercial Officer, and Brian McMichael, Chief Financial Officer. Before we get started, I would like to remind you that today's call includes forward-looking statements regarding CoHARA's current expectations about future events. Actual results may vary significantly, and we undertake no duty to update or revise any forward-looking statements. Please see the press release that we issued today and our quarterly form on Form 10-Q for more information on risks and uncertainties. And now I'll turn the call over to Denny. Denny Ramos Thank you, Carrie, and good afternoon, everyone. Thank you for joining us on our third quarter of 2026 earnings call. As you know, we have spent the last few years transforming Coheris from a biosimilars company into an innovative oncology company focused on overcoming immune resistance from cancer. We've made substantial progress in reducing our debt, lowering our operating expenses, establishing Lactorsi in the market, and advancing our clinical pipeline. We've conducted key clinical trials and developed sufficient data to set future development direction for our Tegmo Ketoc program and select the go-forward dose. Today, I will discuss three strategic alternatives designed to make Coherus a financially self-sustaining, innovative oncology company with best-in-class and first-in class products by the end of 2027. First, the strategic prioritization of esophageal cancer is our focus for best in disease with Tegno Ketox. Second, and the structural and financial benefits that flow directly from this prioritization. And then finally, our emphasis on driving Lactorsi revenues over the next four or five quarters to the level where they can fully support the company's core cash burn. When we launched TagMod T to a clinical program, it was with the clear expectation that we would select the most promising area for continued development. This is exactly what we have done. As we reported on October 28th, over the last two years, we have explored a wide range of mucosal system cancers from head and neck through esophageal, gastric, colorectal, across various lines of therapy to understand where Treg depletion might best be advanced as combination therapy. The emerging data from this very systematic clinical investigation demonstrated that esophagial cancer comprises a best-in-disease opportunity across first and second lines of therapy. Accordingly, going forward, we will be sharply focusing our tagmo-ketoic development efforts there as this provides a substantial number of benefits. First, providing a treatment alternative to patients confronting a particularly difficult cancer with poor prognosis. Second, our integrated approach across first- and second-line therapy will seek FTA support for rapid, efficient, and affordable development paths, leading to accelerated approval. Third, this enables ex-U.S. partnering. Our encouraging interim data in combination with Toro Palmem and our development efforts focus now enables partnering discussions for ex-US rights. Toro Palmem is approved in Europe and other regions for the treatment of ESCC, irrespective of PD-L1 status, and is being widely adopted in those markets. Esophageal cancer is the sixth in terms of annual cancer deaths globally, where over 400,000 patients are impacted annually, particularly in Asian countries. Our objectives for XUS partnering include, one, use of these upfront payments to offset clinical trial expenses and support the accelerated approval process. Secondly, partner funding for X-US registration trials in their territories, significantly lowering the portion of overall cost that COHERIS would need to incur. Third, leveraging the global regulatory constructs, such as FDA's Project Orbis, for harmonizing approvals across regions to the benefit of all parties. With data and clinical direction in hand, we are now engaging a financial advisor to conduct the TAGMO-K-2G partnering process, particularly with companies and countries with a high incidence of pathogen cancer. We'll keep you informed on our progress. Now let me address the structural and financial benefits derived from our strategic prioritization of the topic of cancer. Over the last two or three years, we have pursued a broad development program across several cohorts, indications from more than 120 patients to identify the most promising indication of interest in the go-forward dose. But these objectives have now been both met, with the dose and indication both identified for FDA discussions over 2027. At the same time, and somewhat fortuitously, two other concurrent events provide right-sizing and cost-reduction opportunities for us. First, our process transfer of toropalamin from China to the U.S. is now complete, as of Q3-26, and the action date for the FDA for the drug product portion of the application is November 30th. You may recall the drug substance has already been approved earlier this year. This allows us to reduce the ongoing cost associated with this transfer and approval, which increased the burn over the last two years. Second, our transition services agreement with the acquirer of Udenica in South La Corde is now pretty much wound down, allowing us to further reduce our footprint across the company. These TSA efforts were very labor-intensive for us and artificially inflated our cash burn and were confusing for investors. The confluence of these three events, strategic prioritization, wind down the TSA, and the imminent manufacturing transfer approval allows us an ideal opportunity to align and right-size our organization, consistent with the reduced scope of our efforts. Accordingly, we are announcing today that we are implementing projected 30% headcount reduction in intended expense reductions. Our CFO, Brian McMichael, will elaborate more on this in just a moment, but let me give you just one key metric so you can understand the benefits in context. These right-sizing and prioritizing reductions amount to $6 to $7 million a quarter, which reduces the quarterly lactosey revenues required to support the core burden from a previously guided $30 to $35 million a order down to $25 to $30 million a board. This positions us to more readily establish a sustainable operating model, allowing us to continue investing in our high-value clinical opportunities with greater financial independence. Next, let me address commercial and revenues, and Samir will provide more data directly, but I'll just summarize here a few of the key growth drivers. While we continue to make steady progress in penetrating the MPC market, our current share is approximately only 20% to 22%. This means that too many patients are still receiving inferior therapy, and this represents a key growth opportunity for us. Also, the relatively low market share results in quarter-to-quarter volatility and lumpiness when one of the regions gets a disproportionate number of patient fluctuations, such as discontinuation. This has to be addressed by increasing market share and penetration at damp offices. There is substantial opportunity remaining with about 30% of the patients continuing to receive chemotherapy alone and not benefiting from the Lactorsi six-year survival of 64.8 months. versus 33.7 months with chemotherapy alone over the next year we'll need to dramatically reduce that 30 share by focusing on identifying these patients and reaching their providers who can then prescribe lactorgy in combination with chemo per our label given the compelling survival data this objective appears reasonably within reach over the Next 12 months we also plan to address the 40% of the patients who are being treated with off-label immunotherapies that lack clinical evidence of efficacy. This share is steadily going down, but faster progress is needed here also. Physician reach and education are key here, so HCPs know that we have superior data versus chemotherapy alone in our standard of care. Progress has been made here over the last three quarters, and Samir is going to tell you about that in our strategies to reach these physicians. Finally, our payer strategy is starting to bear fruit as the step-ups in place have proven very effective in modifying old prescribing behaviors. They make physicians pay attention, so this is a successful strategy we are extending in 2027. With that, I'll now turn the call over to Raj Dias, MD, our Chief Medical Officer. Raj? Thank you, Danny. Today, I'm going to talk to you about why we have selected autopsied cancer for future development as a best-in-disease approach. We intend to pursue a second-line esophageal cancer study with both histologies, esophagal squamous cells and esophgeal adenocarcinoma, as reported from our TREGCHECK 102 program due to, firstly, the strength of the signal, secondly, the high unmet medical needs, particularly in the second- line setting where chemo alone is the current standard of care, and thirdly, the opportunity for a fast path-to-market strategy, leveraging FDA designations and development constructs. Let me start by addressing the second-line esophageal data and our plans. In this setting, we demonstrated activity in both squamous and adenohistologies at the go-forward dose of 700 mg Tagma-Ketog with toripalamab. This includes nine evaluable second- line esophagial cancer patients, three adenocarcinomas, and six squamous cell carcinomas. The overall response rate data were very promising, as we saw three confirmed PRs plus one unconfirmed PR, that is, a 33.3% confirmed ORR and a 44.4% unconfirm plus confirmed OR. This activity exceeded the chemo-only benchmark of around 10% ORR in this area of high unmet medical need. Additionally, the clinical benefit rate was 55.6%, with two patients remaining on treatment for over five months, and two additional patients on treatment that had not as yet had their first tumor scan assessment. Importantly, this was a randomized study across the two doses, with 22 patients treated to date. For the 300mg TAGMA dose in combination with TORI, there were no responses, and all patients progressed by four months. This demonstrates two key findings. One, these dates show that toripalamide in the second-line setting has limited activity, thereby establishing contribution of effect. Second, it gives confidence in the TAGMO go-forward dose of 700 milligrams as it exhibits clear dose-dependent activity. Very importantly, both in terms of response and duration, activity was observed both in patients who have PD-1 refractory and also patients and tumors that are PD-L1 low or negative, meaning that TAGMA, Tauri, doublet both rescued PD-1 resistance and also demonstrated activity in cold or PD-L1 low or negative tumors. These data, irrespective of histology, inform next steps and provide the opportunity to progress our next study in second line ESCC and second line EACC, a similar approach that taken in the Pembrolizumab Phase III QNOP 181 study. studies will investigate the tagmatory doublet for chemotherapy. Our immediate next step is to meet with the FDA to align on two topics. First, the recommended phase 2 dose to ensure we have satisfied the requirements of Project Optimus and second, the second line of esophageal cancer study design and any potential for this data from this next study to support expedited development including accelerated approval. Let me now review for you again the first line setting interim data. In our first-line ESCC study, a safety cohort with target enrollment of 12 patients with 700 milligrams of TAGMO in combination with TORI and cisplatin 5-SU, we demonstrated an overall response rate of 89% and 100% ORR in PD-L1 positive patients, including one complete response, that is, 8 out of 9 of the efficacy-evaluable patient population, importantly, with activity irrespective of PD-L1 status. The duration is also notable, with two patients demonstrating activity for close to eight months. The safety profile was manageable and acceptable, whilst four of the 10 safety-evaluable patients discontinued due to AEs. This rate was not dissimilar to that seen in the Checkmate 648 study, and 50% of the discontinuation was due to cisplatin-related renal toxicity, which we plan to mitigate by stocking up cisplatin, oxaliplatin for the future study. In terms of the unmet medical need in first-line ESDC, there are three FDA-approved PD-1 chemo combinations for first-time disease, all with a limitation to PD-L1 positive patients only, with ORRs ranging from 44% to 59% in PD-R1 positive populations. Of course, with the usual caveats of cross-trial comparisons, the fact that activity with the TAGMO-TORI chemo combination was seen irrespective of PD-L1 stages and equates to 100% in PD-1 positive evaluable patients, speaks to the potential to improve on the current standard of care. The current SOC in PDL1 positive disease typically provides a median PFS of around seven months, and whilst durability is not as yet mature in this cohort, we look forward to continued follow-up for PFS. These impressive first-line data provides us additional confidence in the Treg mechanism across the subgeal cancers. We intend to address the first-signed ESDC opportunity after we progress the second line as part of our integrating development strategy and commitment to the disease. In summary, these data confirming TAGMA clinical activity, in addition to the established strong pharmacology previously communicated, support continued advancement and its focus on second-line disease in the subject of histology represents an area of clear unmet medical needs where a chemo free option would be well appreciated for patients. With that I'll hand over to the mayor. Thank You Rosh. Third quarter net sales for 14 million dollars representing 3% quarter over quarter growth and 25% year over year growth. While sequential growth falls short of our 10 to 15% target due due to slower new patient starts in a few territories, underlying drivers of long-term growth remain stable. Nationally, growth in accounts purchasing Loftrosy for the first time was in line with the second quarter. Patient discontinuation rates were also consistent with prior quarters, and duration of treatment continued to increase gradually. Based on a detailed assessment, we believe demand fundamentals remain strong, and that localized patient flows in select territories tempered growth this quarter. Our long-term goal is to achieve a dominant market share in the NPC space by displacing suboptimal chemotherapy only and off-label IOs. We have made significant investments to achieve these objectives. Due to the rare nature of NPC and patient flow dynamics, these efforts will take time. That being said, recent market research revealed positive leading indicators of demand and strong physician sentiment. We surveyed both academic and community oncologists to assess their perceptions of locterosis and to help inform our view of future demand. The results were encouraging. 75% of surveyed oncologists now view locterosy as the standard of care in NTC compared with fewer than 35% who hold a similar view for off-labeled IOs. This represents a significant favorable shift in opinion towards Lofthorzy since the last survey in early 2026. We believe this shift is driven by our focused promotional efforts on the Lofdorzy superiority story. In addition, 57% of oncologists are now aware of a six-year overall survival data. Recall that this data demonstrated a near doubling of survival with Lofthorzy plus chemotherapy versus chemotherapy alone. We are pleased to have achieved this level of awareness within three quarters of the data being available. To convert these favorable physician perceptions into accelerating demand, we're focused on three priorities. First, our field team remains focused on using claims-based alerts to identify physicians who use chemotherapy alone. About a third of eligible patients still receive chemotherapy alone, and our educational efforts are geared towards minimizing the use of this suboptimal treatment. Second, we're now collaborating with large clinical organizations to identify patients who are not receiving Loftorzi per the label and per the NCCN guidelines. We are then working to educate physicians within these partnered organizations on the superior survival benefits of Loftorsi. And third, we are partnering with major national and regional payers to establish a preference for Loftrosi in eligible NCC patients. Where these payer partnerships are already in place, our share of addressable patients is approximately double the national average. We are now expanding these payer partnerships with the goal of covering a majority of U.S. covered lives. We previously guided that we would achieve a $15 million quarter in 2026, and we expect to achieve that guidance in Q4. Longer term, we remain on track to reach peak market share by 2028, consistent with the prior projections. I'll now pass the call to Brian McMichael, our Chief Financial Officer. Thanks, Amir. I will start off today by discussing Coherence's liquidity, plans for managing cash burn, and the advantages of the organizational right sizing we announced today, including cost reductions and expected savings. At the end of Q3 2026, we had $83.6 million in cash, cash equivalents, and investments, which is down $21.7 million from $105.3 million at the end of Q2. This change reflects an expected reduction in cash firms. The use of cash in operations for Q3 was $34 million, which is a 43% decline from the quarterly average in the first half of 2026. As we signaled on the last earnings call, the slowdown in cash burn was primarily due to a significant reduction in cash being used to pay down TSA payables and accrued liabilities associated with the divested biosimilar business. As announced previously, during Q3, we paid off our $38.7 million term loan using the proceeds of a new $55 million term loans that closed during the quarter. This refinancing contributed a net $11.5 million in cash to the balance sheet. As Denny outlined, the strategic prioritization will yield significant benefits to further reduce burn. Once implemented, we expect a sustainable reduction in recurring costs of $6 to $7 million per quarter on average and expect to achieve most of this rate of savings within two quarters. These savings will come primarily from an approximately 30% reduction in headcount from about 140 to 100 FTEs, which will take place this month. While these reductions will come from across the organization, we are preserving substantially all the commercial organizations as we prioritize driving the growth of Loctorsi sales. Consistent with our strategic prioritization, we plan to achieve savings by deprioritizing certain TACMO key tag indications. Once successfully executed, these actions would help to extend cash runway and reduce ongoing core costs, which comprise all the non-cash costs of the business other than development costs. This lowers the quarterly lactorsy revenues required to cover these core costs from $30 to $35 million, as we previously guided, to $25 to $30 million per quarter. O'Hare recently received the revenue report in connection with the Udenica divestiture. Only a modest audit adjustment would be required to reach the earn-out threshold for the first $37.5 million milestone, as the reported net sales came very close to meeting the threshold in the first earn-up period. As permitted under the purchase agreement, we are exercising our audit rights and other contractual rights, and we will thoroughly review the reported results. As a reminder, we will get the report on the second $37.5 million milestone after Q1 2027. Without considering the potential benefit of the cost reductions, the payment of the milestone, or proceeds from ex-U.S. deals, our cash runway is less than 12 months from the date of the 10-Q we filed today. As such, that quarterly report included going concern disclosures to reflect this. On the expense side, we had another strong quarter reducing costs versus the same quarter in the previous year. As covered by Samir, Loctorzi revenues were $14 million, up 3% from the prior quarter. While we remain optimistic about the future growth trajectory of LoctorzI, the lumpiness experienced this quarter was greater than we anticipated, so we're revising the range of our revenue outlook for the year to $54 to $57 million. Turning to expenses, R&D expense from continuing operations for Q3 2026 was $22.6 million, down from $27.3 million in the third quarter of the prior year. The decreases were primarily due to reduced headcount, lower infrastructure costs, and lower clinical trial and R&d manufacturing costs. SG&A expense from continuing operations was $21.2 million in the third quarter, which is down from $24.9 million in Q3 2025. The decreases were primarily due to lower headcount, decreased operating costs, resulting from Coheris completely exiting the biosimilar business in 2025. For the full year 2026, we reiterate the expectation that combined OPEX will be between $170 and $175 million. With that, I hand the call back over to Denny. Thank you, Brian. Let me summarize, first with respect to our molecule, Atagmo-Ketog, and then I'll review the strategic plan for you. We've now shown we have the right drug at the right target and the right disease to advance development in esophageal cancer. These results exceed benchmarks in first line, expanding on current chemo IO options, and second line addressed the high unmet need for the chemopreoption esophageal cancer is the sixth most fatal cancer worldwide and the US approximately 18,000 cases will be diagnosed each year 16,000 people will die of the disease our immediate next steps are first to follow up with discussions of interested parties both in the US and XUS we're initiating these discussions secondly in line with the FDA on dose trials and development strategy and options for expedited development now regarding the strategic prioritization as Brian described we're right-sizing the organization to align with our sharpened focus thereby reducing costs we're going to drive the commercial sales and towards core burn break even as quickly as possible 2027 and we'll pursue non-dilutive funding options including X US partnering transactions Operator we're ready for the questions. Thank you. We will now begin the question-and-answer session. As a reminder if you wish to ask a question you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question please press star one one again. Your first question comes from Paul Jeng from Guggenheim. Please go ahead. Your line is open. Oh, great. Thanks very much. I appreciate all the detail on the call today. For TAGMO, can you expand a little on how you're thinking about the potential regulatory path in the second line setting? Is this a trial, perhaps, where you could use PFS or even ORR as an interim for accelerated approval within a phase three? and how strong is the precedent for combining esophageal squamous cell carcinoma with EAC in this setting? Thanks. Thank you. Thank you, Paul. I'll let Dr. LaValley, our chief development and regulatory officer, address that. Teresa? Hi, Paul, thanks. Yeah, there is a clear path, and it's commonly done. Many of the PEMBRO studies included both histologies. The FDA recognizes esophageal cancer with two histologies as a disease, so there is clear precedence with Keynote 181 being the most noteworthy and most similar. Secondly, the FDA has shown even with the recent approval with origami for last accelerated approval last week that ORR bicker and with durability is an endpoint that could be discussed so that is what we plan to go with a plan to them showing a randomized study against chemotherapy which is the only available agent for these patients particularly in the PD-1 refractory or PD-L1 low patient population and discuss the accelerated accrual based on that and then what the confirmatory study would look like, either as a seamless study or a standalone second study. Thank you, Paul. Did you have a follow-up question? Yes, one quick follow- up. So obviously, you had very compelling data in the frontline setting as well. So just curious on how you think about the gating factor for initiating a frontline study. Is that something you could do, you know, in parallel with the second-line study, perhaps staggered somewhat? Or would that really be contingent on having a positive outcome in the second line setting first? Great question. Teresa? And they definitely could go forward at the same time. And the FDA would be enthusiastic about that because they'd like to see a commitment to the disease. And with their push with Project Frontrunner to move things earlier, obviously we prioritized second line given the complexity of contribution of effect in the first line and the size and length of the study in the first line, but given the activity that Torapalimab has established in that disease and our objective of moving immunotherapy into earlier line settings, we'll continue to explore ways to develop and get more data in that type of disease type. Okay, thank you very much. Thank you, Paul. Thank you. your next question comes from jay olson from openheimer please go ahead your line is open oh hey um congrats on the new sharpened focus and thanks for taking the question um maybe just to follow up on the frontline opportunity um recognizing that you're prioritizing second line escc um you did have eight of nine confirmed responses in the frontline And I think I heard you say that you would continue building that data set. Can you just talk about what level of evidence would be required to preserve that frontline opportunity and push forward there? And then if I could ask one follow-up financial question. From the current 14 million quarterly base for Lactorsi, what are some of the commercial pushes and pulls that could give you the leverage that you need to get to the new 25 to 30 million quarterly Lactoresi revenue threshold? Thank you. Thanks, Jay. So, I'll let Dr. LaValley take the question regarding frontline and your keen observation that was eight out of nine responding patients quite impressive response rate so Teresa why don't you do that and then Samir will follow up with the 14 million go ahead yeah for the first line I think we need three things to have a further conversation with FDA the first being finish the enrollment and ORR you know I know we all enjoy that early readout but I remind people all the time that durability and cbr and cff are important work leads to see it trending in the right direction but going to fda with a frontline study with orr only and would not lead to the most productive of conversation having 22 patients in the second line study and having randomized data really enables a productive and robust discussion about advancing development particularly in an expedited fashion but we obviously wouldn't um take advantage of the opportunity in a meeting to discuss opportunities and first line to get their thinking while we get more data there and durability thanks jay so um we'll have samir address the issue of uh moving up from the 14 million and the pushes and pulls as you put it to move it up at least past the 15 that we are projecting for next quarter uh samir yeah thank you jay for the question so you know um obviously our immediate goal is to exceed 15 for the guidance but more importantly longer term we want to maximize the opportunity as denny mentioned we have a lot of upside here for the brand uh we if there's too much chemotherapy alone going on, about 30% of patients are getting chemotherapy alone, and too much keep true to an off-label IOS going on. So what are we doing about it, right? So we have a significant strong physician support to help us drive loctrosy utilization. But what's getting in the way is the typical rare disease dynamics and patient flows, which are relatively slow. And then the other thing that's getting inthe way is just habit, right. There's too many physicians who agree to use loctorsy, but six months later when the patient shows up, they don't remember to use Loftorzy. So what we're doing about it is twofold. Our representatives are driving in from the bottom up, educating physicians. The other thing we're also doing is two main initiatives. We're working directly with large clinical organizations and large academic centers and working from the top down to identify patients, put them on Lofturzy. Second thing we'RE doing is partnering with payer organizations to put preferences in place for up totally for utilization for a label. And when we put those two steps in place, we believe that we can accelerate demand in the coming quarters. I would just add, Jay, that our market share is about 22%. So 20, 22%. So there's ample opportunity to grow. We definitely have to encroach on the 30% for the chemo-only patients. But also there's 40% of other IO which we have to pursue. We believe that primarily a growth will come from the step-throughs. To the other point, though, that Samir just made, it's very important in the community that they convert those chemo-only patients to chemo plus lactorsy so those patients get the full benefit of the six-year survival. And we have found that they're very receptive to that when we talk to them about it. Super helpful. Thank you. Thank you, we will take our next question. question. Your question comes from Mike Nedelkovit from TD Cohen. Please go ahead. Your line is open. Hi. Thanks for the question. I have two. My first is on Psegmo, KeyTug, and specifically the combination with Pesiridamig. Were any patients dosed with that combination? And if not, will it be deprioritized before it started? I asked- Hold on. Hey, Mike, hold on to that. Let me get to that one first, and then I'll have rush take care of that and then we'll get hold for your second question go ahead sure sure hey am I good to speak to you so so for the past week study actually we've initiated the study already so there are a couple of sites that are finishing they're in screening already so that is the priority that we are continuing and the important point here is that this is in conjunction with a T cell engager so that's again we talked about the fact that it's person disease but the combination of the teeth and engage so yes we're progressing that just on that point like I think it's very interesting dr. Valley may have additional comments on the tumor microenvironment remodeling that some of the other things we've seen and how that might apply to other TCE undertakings Trisha do you want to comment yes the data that we've shared on the TREC-CHECK program has shown removing the immune suppressor cells, bringing the TBAs in, and really potentiating an immune response. So I am particularly enthusiastic about a T cell engager combination given that the challenge for the magnitude of benefit of those agents has been a lack of T cells and the T rigs being present so we are incredibly excited about that we were excited to see on Saturday that J&J presented combination data with PASRI and their PSMA db28 showing really nice safety and an ability to potentiate the PSA response so we have our benchmarks and we look forward every day in this combination with gifting patients. Teresa, how does that vote for other similar TCE studies if the safety is borne out with pentadermate and prostate? I think I'd be very, very busy with looking at all the options. All right. Okay, Mike, did you have a follow-up question? Awesome. No, that answers it. We'll look forward to hopefully seeing some data from that cohort at some point in the future. My My other question actually relates to Kesdozo PTOG. I guess I was just curious if you could clarify. I assume it's not being deprioritized, per se. Presumably, you're waiting for the HCC data before making a go-no-go decision. If that's right, can you share with us what is the benchmark in your mind to support continued investment behind Kesdoza? Well, I can handle the first part of that, and I'll let Dr. Dyess handle the second part. No, no, no. Cast dose, so ketone has not been deprioritized. It's maturing nicely. I think that we've recently said, I think, that it has shown, I think very strong dose response differentiation is that the response is maturing. And so we'll probably have some additional insights on how that's going and have more to say about that sometime in perhaps Q1, early part of the year. But it just is taking time for it to develop a bit. But, you know, when you have a situation where less than half the patients have a sufficient number of scans, you just have to wait. With respect to the benchmarks, I'll let Dr. Dias talk about that. Raj? Yeah, Mike, I'll just mention two points. So first of all, I will reiterate that what we are seeing so far is dose-dependent activity, right, with calzoso. The second point is that this data does take a little bit of time to mature. You'll recall that from our prior study, Casdozo, Atizo, Bev, the first data set that we reported reported an ORR of 27%, which over time went up to 38%, and also there was zero CRs in the initial cut, which went up through five CRs, and then there was a lot of CRs that went up in the final cut. So we do anticipate that similar pattern with the current study. I think if we see an initial ORR that matches our prior data, we'd be happy because the important point is that we have to see the data mature and deepen and increase with time. So I think that's what we were looking for at a minimum in our initial study. And of course, the safety profile that's consistent, which was very consistent with just the teaser that I've alone previously. Great. Thank you so much. Thank you. We will take our next question. Your question comes from Charles Wallace from HC Wainwright. Please go ahead. Your line is open. Hi. Thanks for taking my question. This is Charles. I'm for RK. So I guess maybe for me, what specifically makes, you know, the second line esophageal cancer setting, you now, the fastest pathway to market? And you know when do you expect to have the meeting with the FDA? And at this point, what have you discussed with the FDA on this program? Thank you. All great questions. Charles, back to LaVallee, could you address those two issues, why second-line metastasis and where we are with the USDA? Yeah. So it's clear that second- line esophageal cancer is a high-end medical need. I mean, reading the most recent approval in second-line ESPT was tizolizumab, and if you read the FDA comments on their approval, they discuss how underserved these patients are repeatedly, and one of the criticisms in that approval package was that they had not tested in PD-Line refractory diseases, and given that PD-1 was established, that this would be limited availability to any patient in the U.S., but given the amount of medical need, it's still going to get approved. So, I mean, just in reading their writings, their perspective of this disease, in second line EAC, there's really nothing approved. so these patients have chemotherapy as an option they're clearly very sick as we saw in our study the overall survival in this patient's population is about eight months so in terms of following up on a compelling signal where we've shown contribution of effect we have 22 patients in the randomized study with an orr and importantly several patients with stable disease out about eight months on treatment so that enabled the conversation as well as the powering of a study for what we would need to see in a randomized study to really go forward with the fda on regulatory approaches so that makes it streamlined fast we know the drugs we can talk about contribution of effect we've had a type b meeting with fda to align on our project optimist randomized cohorts that we just presented the next two meetings that my team is working on immediately and plans to meet with the fda early in 2027 are get the recommended phase 2 dose buttoned up and the second meeting is a type b meeting to discuss development and esophageal cancer so activity in both histologies squamous and adeno patients that are progressing very rapidly unmet need with no real therapy other than chemotherapy and our ability really to positively impact these patients lives and one more thing sorry that i just want to add because um you know there's a lot of chatter about applicability to U.S. medical practice. We have U. S. patients in the study and U.s. patients that are part of the benefiting patients. So I think that really sets us up with meeting many of the FDA's requests for how to go forward in the disease. Thank you, Charles. Great. Thank you for taking my questions. Thank you. Once again, if you wish to ask a question, please press star 1, 1 on your telephone. We will take our next question. The question is from Brian Chang from J.P. Morgan. Please go ahead. Your line is open. Hey, guys. Thanks for asking your questions this afternoon. Just building on the previous question here. As we think about the expedited development map in second line ESCC for Tecmo and TORI, you know, how should we think the potential setup of a study? I know that you, you know Therese talked about Kino 181 is comparable here. You know, is that a fair com to think about, you know, accelerated trial here and also any color on, you know, what kind of response metric and also the size of the study that you will need. Thank you. Great, Brian. Thanks. Trisha, do you want to take that for Brian? Yeah, so the next study we're looking at is a randomized study against chemotherapy. So with both histologies looking across PD-L1 subtypes and that's what we would want to refine like them as a p2 study with an opportunity for accelerated approval on a thicker orr so blinded independent central review orr with a duration of six months so currently chemotherapy is at 10 and and the six months like we said the median os is around eight months so six months is pretty healthy look and I think doubling that to tripling that would be adequate but those will be the conversations we'll have so I'll be able to answer specifically following an FDA discussion. Teresa for Bryan's benefit when do we think we'll those discussions when do you think the package will go in and when do think we will get something to say? So we're actively working on it with a trying to have the meeting in the first quarter so I mean clearly submitting at the end of this year early next year 60 day clock tells you March timeframe is what we're looking at and in terms of keynote 181 I just want to point out a couple things about phase three and keynote 590 the first line I thought the geo study also combined technologies so not unheard of The 181 did fail in the PD-L1 below 10, and also failed in the EAC histology. So we're not looking to repeat that study. We're looking to go beyond that study and also treat patients who have progressed on predline and immunotherapy. But it has been commonly done and accepted by FDA in multiple lines of treatment. There seems to be no further questions, I will hand back for closing remarks. Thank you Heidi. Thank you all for joining us today on our Q3 call. We will be at Guggenheim tomorrow, we'll see you there, and we'll also see you in Jeffries in London. Thank you. This concludes today's conference call, thank you for participating, you may now disconnect.