Arena Pharmaceuticals, Inc. (ARNA) CEO Amit Munshi on Q3 2021 Results - Earnings Call Transcript

Nov. 04, 2021 11:07 PM ETPfizer Inc. (PFE)
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Arena Pharmaceuticals, Inc. (ARNA)

Q3 2021 Earnings Conference Call

November 4, 2021 16:30 ET

Company Participants

Patrick Malloy - Vice President of Investor Relations & Corporate Communications

Amit Munshi - President, Chief Executive Officer & Director

Laurie Stelzer - Executive Vice President & Chief Financial Officer

Conference Call Participants

Emily Bodnar - Cantor Fitzgerald

Yatin Suneja - Guggenheim Securities

Chi Fong - Bank of America

Chris Shibutani - Goldman Sachs

Chris Howerton - Jefferies

Joseph Schwartz - SVB Leerink

Jessica Fye - JPMorgan

Kennen MacKay - RBC Capital Markets

Joseph Stringer - Needham & Company

Jason Butler - JMP Securities

David Hoang - SMBC

Prakhar Agrawal - JonesTrading

Operator

Good day and thank you for standing by, and welcome to the Arena Pharmaceuticals Third Quarter 2021 Update Conference Call. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Vice President of Investor Relations and Corporate Communications, Patrick Malloy. Thank you. Please go ahead, sir.

Patrick Malloy

Great. Thank you, Nika, and good afternoon, everyone. Thank you for joining us today. We hope you had a chance to review the press release we issued this afternoon announcing our Q3 2021 financial results and key program updates. Joining me today on the call are Amit Munshi, our President and Chief Executive Officer; along with Laurie Stelzer, our Executive Vice President and Chief Financial Officer. With regards to the format for today's call, in just a few moments, I'll hand the call over to Amit, who will make some opening comments, and then we will open up the call to a Q&A session.

Before we begin, I would like to remind you that we'll be making some forward-looking statements today that involve risks and uncertainties about our goals, expectations, plans, beliefs, timing of events or future results, including those risks and uncertainties related to our pipeline, financial projections and the COVID-19 pandemic. Forward-looking statements involve certain assumptions, risks some of which may be beyond our control. All forward-looking statements are based on information currently available to Arena, and we disclaim any obligation to update these forward-looking statements. A full description of these risks can be found in our earnings press release and our latest SEC disclosure documents.

Now, I'd like to turn the call over to Amit Munshi. Amit?

Amit Munshi

Thanks, Pat, and I hope everyone has got a chance to review the press release and thanks for everyone being on the call today. So let's jump right into Q&A.

Question-and-Answer Session

Operator

Okay. [Operator Instructions] Your first question comes from the line of Neena Bitritto-Garg from Citi. Your line is now open.

Unidentified Analyst

Hi, thanks guys for taking my question. This is Dina [ph] on for Neena. Our first question, and if maybe we can squeeze in a second would be, can you just share any additional details on the baseline characteristics for the ELEVATE UC studies in terms of how they compare to OASIS, in particular, the commentary on baseline disease severity and previous anti-androgen use and versus OASIS? That would be very helpful.

Amit Munshi

Great, thank you. So just quick comments on two things we've disclosed publicly. Number one, the overall characteristics are very similar to OASIS with one exception, in the OASIS study, we had 60% of patients who are naive and 40% who are pre-treated. ELEVATE 52 is running about 70%-30%, and UC 12 is running about 60%-40%. So they're both in the range, but naturally won't be exactly the same. So that's the only notable difference as we have more naive patients in the ELEVATE 52 trial. Other than that, everything is robust.

Operator

Your next question comes from the line of Alethia Young from Cantor Fitzgerald. Your line is now open.

Emily Bodnar

Hi, this is Emily on for Alethia. Thanks for taking our questions. I was just curious about your thoughts on the read-through from the ELEVATE UC studies in 1Q '22, if those come out positive, would that kind of increase your confidence going into the Crohn's data readout in the second quarter? And I guess just any thoughts around that.

Amit Munshi

Sure. I mean, look, there are two separate diseases. And there are two separate study designs, one is a large-scale Phase III trial, very robust in size. And naturally from a disease mechanism of action perspective, it increases our confidence that UC will be -- or Crohn's will be successful. But again, keeping in mind all the caveats of the Crohn's study is a 70-patient 2-dose no placebo-controlled trial. So with the caveats of the trial differences, we would naturally expect our confidence to go up.

Operator

Okay. Your next question comes from the line of Yatin Suneja from Guggenheim Partners. Your line is now open.

Yatin Suneja

Hey, guys. Thank you for taking my question. I love the format that we just straight go into the Q&A. So two for me. One is, so you were using a treat-through design which obviously facilitate a comparison with the gold standard of Remicade, right? But how does this trial affect the comparison from ozanimod? So that's first question. The second is regarding the placebo rate. If you look at the remission rate, specifically in the induction phase, the placebo rate tend to be low. But for naive patients, we have seen placebo rate in the 15% to 16% range. And given that you have 60% to 70% of patients that are naive, how should we think about the placebo rate for both studies? And then what is actually embedded in these studies to reduce the risk of higher placebo responses?

Amit Munshi

Yes. Thanks, Yatin. So let me take the second question first, and then we'll come back to the first part. So the placebo rates are in a pretty narrow band across all the comparative trials. And you're right, the placebo rates are higher in the naive and lower in the pre-treated patients. And that's consistent between our OASIS trials, consistent across most of the trials that are out there. So we don't anticipate placebo rates being dramatically different than what's been seeing historically. If you recall, the ozanimod trial was, I think, about a 70%-30% split. Ours is a 70%-30% split, between 70%-30% and 60%-40%, you're not going to see a huge variation at least based on historical evidence. For the 52 design, you're correct, it gives us a much clearer point of view between both the two main products used ulcerative colitis, Remicade and HUMIRA. And we think that that's really the important discussion to have. We also chose that design for a couple of other reasons, which we've discussed historically. But most importantly, it's a real life example of how the drugs will work. And in the real world, you don't have to re-randomize just your responders.

And importantly, there are some ways to do some cross trial comparisons. There are some published methodologies, and we'll be doing some of that work when we disclose the data so that you as the analyst community as well as the investor community can begin to take a look at how etrasimod backs up. So we'll do some arithmetic to kind of help people out with all of the caveats across trial comparisons. But we really think that the Th2 study design is a superior design simply because it mimics real-world treatment.

Operator

Your next question comes from the line of Jason Gerberry from Bank of America. Your line is now open.

Chi Fong

Hey, good afternoon. This is Chi on for Jason. Thank you for taking our questions. I guess two for me this afternoon. I guess first one on clinical trial progression. Given COVID has remained somewhat of a fluid situation with the new variant and whatnot. Curious if you can provide any commentary on overall clinical trial progression? Is everything on track in terms of enrollment and data collection? And I guess, if you can confirm there isn't any new repeated or like new signals an alarming lymphopenia or any protocol violation like what you've seen with the Atopic Derm Phase II study that will be helpful? I guess my second question is, curious if management has any thoughts or commentary on the early commercial launch of ozanimod in UC, whether you see there's any read across you can draw to etrasimod, whether it is physicians appetite or market opportunity for the S1P costs?

Amit Munshi

Thanks, Chi. So in terms of study conduct, no change from the commentary we had over the last couple of quarters. Everything remains on-track. Our discontinuation rates, dose interruptions, all of that is well below our pre-planned statistical expectations. So we're very pleased with study conduct across the board. As far as ozanimod is concerned, it's still early days. We have a couple of data points suggesting that things are looking pretty good and there's good appetite for a once-a-day oral without the boardings that the JAK inhibitors clearly have. And so we're pleased with the early read, but again, it's very, very early, and I caution anybody into reading too much into this juncture. I'll also remind everybody that ozanimod is priced at a significant premium to the products in the category, but the early data seems encouraging. But again, with all the caveats it's been super early. I think a couple of quarters from now, we'll have some more data points, and we'll be able to understand exactly what's going on. It's also early in the reimbursement cycle, as you know, it takes a while to get broad coverage of compounds and make sure that they're available to patients. And so again, we'll be monitoring and tracking all that. We'll continue to provide additional commentary on this as more data points become available.

Operator

Your next question comes from the line of Chris Shibutani from Goldman Sachs. Your line is now open.

Chris Shibutani

Great. Thank you very much. A couple of questions. Over the past quarter, we've seen some other mechanisms and drugs have various experiences from a data as well as a regulatory standpoint, and that you referenced the issue that the FDA has with the JAKs. I'm curious to know what your perceptions are of that and your views in terms of how that guide how you're thinking about your own regulatory approach? And then the Tyk2 from Bristol was at the lower dose was a surprising disappointment. I'm curious to know your take there would be my first question. Perhaps if you could address that.

Amit Munshi

Sure, Chris. Yes, I mean, look, there's multiple modalities in clinical development, both biologics and then other variants of the JAK inhibitors, including the Tyk2 inhibitors. Our overall take is, there's a tremendous market need for a once-a-day oral without a black box. It's got a safe, durable effect, one that does not take tremendous monitoring and ongoing monitoring of patients over time without black box for malignancies and thromboembolic events and all the other things that we've seen to-date. So we remain confident the profile of etrasimod has a position to be potentially the gold standard in terms of where it could end up in the human paradigm. So again, it's a once a day oral, and I emphasize oral, because we get a lot of questions around many of the other biologic type approaches that are being developed and single cytokine inhibitors, for example. And we'll remind everybody that the disease is more complex than a single cytokine and being able to affect the disease pathology at the right point in its physiology is really, really important.

And we think we're kind of navigating the sweet spot here with etrasimod. So we remain confident that we've got the right profile coming out of Phase II and hope to replicate that in Phase III. And sorry, what was the second part of the question?

Chris Shibutani

And the Tyk2...

Amit Munshi

The Tyk2, yeah, we've said for quite some time that the Tyk2 agents are still working on the JAK-STAT pathway. And as they increase the Janus, they'll continue to see a side effect profile that we think will be consistent with the JAK inhibitors, as you guys know well, we've been talking about this for going on 3 or 3.5 years now. And our prognostications in terms of what's going on with the biology have been fairly spot on, I think, and using a very low dose JAK or using a low-dose agent in the JAK-STAT pathway, whether it's a JAK1, JAK13, JAK1, 2, 3, whatever specificity you talk about or even the Tyk2,where we're going to see some of the same profile. So again, we come back to the fact that once a day oral agent without the liabilities of JAK inhibitors has the opportunity to be very significant in terms of the treatment of the disease.

Operator

Okay. Your next question comes from the line of Chris Howerton from Jefferies. Your line is now open.

Chris Howerton

Great. Thank you very much for taking the question. I guess mine is pretty simple. Obviously, you have $0.8 billion of cash on the balance sheet now, but pretty significant burn as you finalized the clinical trials. So do you anticipate having sufficient cash to commercialize etrasimod assuming success?

Amit Munshi

Well, let me hand that off to our CFO, Laurie, who's on the call. Laurie?

Laurie Stelzer

Yes. So our cash burn has been about $120 million, $125 million a quarter. And we haven't given forward guidance as to cash burn, but we can expect that with the UC Phase III rolling off some decline in costs there. And that would be offset by the start of the AD Phase III and some of the early commercial builds. So we feel very good about the cash position with a little over $800 million. And hopefully, with the finalization of the budget and positive UC data we will be able to give some forward cash guidance at that time.

Chris Howerton

Okay, cool. And Amit, if I may, I just don't remember seeing this before for the Temanogrel Phase II for Raynaud's Phenomenon. Could you tell us a little bit more about that opportunity? What is that exactly?

Amit Munshi

Sure. So as you know, our agents have multiple potential indications, even our two cardiovascular agents have quite a few different phases they can go in terms of disease pathologies. As we all know, biology is quite conserved across various disease states. So you can follow some of that biology. In this case, we believe that serotonin plays a major role in this condition, specifically, we're not secondary to systemic sclerosis. And it's really quite striking there. There's quite a significant prevalence of these patients, so almost 200,000 patients with systemic that were not secondary to systemic sclerosis. So given that the disease pathology is spot on, given that you can actually look at an outcome measure that's quantitative in nature. In this case, we're using infrared thermography, we think there's a really interesting opportunity here to explore with a compound that's already in-house and already working in another Phase II indication already progressing in another Phase II indication. So again, continue to expand the broad utility of these fantastic compounds that we have. So we're excited about it, and we're excited to get that study up and running.

Operator

Your next question comes from the line of Joseph Schwartz from SVB Leerink. Your line is now open.

Joseph Schwartz

Hi, thanks very much. I was wondering if you can give us any insight into how the geographical distribution of patients who have been enrolled in ELEVATE 12 and 52 compares to each other, and also other studies in UC? And if this could skew the results in any direction based on differences in the way clinicians or patients behave or account for disease activity?

Amit Munshi

Sure. So I'd answer that two different ways, Joe. First is, it's really the same clinical sites that move from one study to the other. So if we were ever able to get a detailed breakdown on clinical sites for ozanimod, for example, and then our 12 and 52, and we do a Venn diagram, you'd see a very, very substantial overlap on clinical sites. There's only so many clinical sites that can work in this area. That's number one. Number two, endoscopies are centrally read, and that helps with the heterogeneity, way back in the day, a decade ago, two decades ago, a lot of the endoscopies were read locally, and that created a lot of noise in the data. So to standardize, again, this is going back a decade plus, that we then move to centralized endoscopy readings to eliminate a lot of that geographic variability.

Operator

Your next question comes from the line of Jessica Fye from JP Morgan. Your line is now open.

Jessica Fye

Hey guys, thanks for taking my questions; two. I was hoping if you could just talk about specifically what is thought to make etrasimod more efficacious than ozanimod? I think the differentiated safety is more clear, but can you just remind us of the -- just basically how you think you were able to show such a stronger efficacy result in Phase II? And then second question is thinking ahead to what you could learn from sub-study Crohn's, how clear of an indication do you expect to get from this study on which dose to move forward with or maybe put differently, how likely do you think it is that these does end up looking truly different from each other?

Amit Munshi

Yes. So on the first part, I think it goes back to the history of the compounds. To refresh everyone's memory, ozanimod was a tool compound at Scripps did not go through a formal medicinal chemistry program in the same way that etrasimod did over a decade. I'll remind everyone, we don't just have a etrasimod. We've got libraries of S1P modulators and some of the most important SAR work that was done on the receptor on these compounds was done at Arena. So we're the beneficiaries of the fantastic chemistry that was done historically. And the implications of that are multiple fold. Number one is, not only do we not have the titration schedule, we've got the lowest intrinsic heart rate effect. But from an efficacy perspective, the ability to profoundly affect dendritic cells, for example, we think, plays a role of via the S1P and of P4 axis. And we think those are the kinds of things that really begin to differentiate on efficacy.

The last point to make on efficacy is something that we're exploring in even more detail, and we'll continue to do this over time. It has to do with barrier function. And all the diseases we're talking about, whether it's UC or Crohn's or Atopic Derm or barrier dysfunction conditions. And we know from the literature and it has been well-known and characterized over a long period of time that S1P1 plays a role in closing the junctional proteins in VOC in these diseases. And really closing these barriers, we know that S1P2 actually does the opposite actually opens those barrier functions. And in our hands when we published this data, there is an indication that ozanimod hits the S1P2 axis, and that would, again, work against itself in a sense. So we think the combination of the fact that it's just a cleaner, better compound that's gone through some very rigorous medicinal chemistry over a decade at Arena.

The activity on the dendritic cells, we think is a major contributor, and we're continuing to do a lot of work to elucidate that even further. And as I mentioned, we're doing a significant amount of work on barrier function. We think that's going to be an important thesis that the scientific communities is very intrigued with, and it has to do with this activity on S1P1 closing cecaljunctional proteins and S1P2. As far as looking at 3 milligrams versus 2 milligrams in etrasimod Phase IIa study or Study A in Crohn's disease, we really don't know. It's early days. We haven't really explored 3 milligrams in a patient population. We know that 3 milligrams drives about 15% increase in mean lymphocyte reductions compared to 2 milligrams. So it's not a linear step. So for example, 2 milligrams drives about a 50% increase over 1 milligram, 5-0, and 3 milligrams about 15%. So we don't know how that's going to translate in the clinic in Crohn's, and that's what we're hoping to find out here. The heterogeneity of Crohn's, the severity of Crohn's makes the right condition to really explore the higher dose.

Operator

Your next question comes from the line of Kennen MacKay from RBC Capital Markets. Your line is now open.

Kennen MacKay

Hi, thanks for taking the questions. Maybe on the ELEVATE trials, just wondering if you can help us conceptualize what kind of impact we should think about from the COVID-19 pandemic as it relates to potential missed patient visits or censoring of, for instance, an endpoint? Is there anything built into the trial to potentially make up visits or ensuring data collection there? And then sticking to that, I was wondering if the team could comment on some of the commercial work you've been doing. This is something I've been thinking about since your UC KOL event. Just wondering if you can there sort of contextualize really what etrasimod is bringing to the table beyond ozanimod as it relates to some of your conversations with clinicians? Really, just trying to again understand how much this can expand the market versus what is etrasimod is doing in UC?

Amit Munshi

Sure. So coming back to the -- starting with the Phase III ELEVATE trial, when you design these trials, as you guys won't know, you have pre-planned expectations that you work in, in terms of dose discontinuations or study interruptions or patients dropping off. And we're really pleased that through the pandemic, our very rigorous process in terms of attracting these patients has allowed us to keep those rates below our pre-planned statistical expectations. So that's really the metric that we pay attention to, which is we've seen things that are not what we had forecasted ahead of time, and I'm really pleased to say we are not. So overall study conduct has continued. As I've mentioned before publicly, when the pandemic hit, we went to a very, very hands-on manual process where we track every patient, every site, every day, every visit around the world at every site in every country and to ensure that patients got their medications, were compliant in terms of their diary inputs, and were compliant in terms of their endoscopy, and making sure patients could get to their endoscopies, making sure the sites were active in terms of being able to perform the endoscopies. That was all work we put into place right at the beginning of the pandemic, and I think that's paid dividends in terms of the discontinuations and dropouts being below our pre-planned statistical expectations.

In terms of the commercialization of the product, I think there's sort of three ways, I think, three different levels to think about our commercial readiness. Number one, of course, we think the compound has some intrinsic features that are dramatically different, a much faster on rate, the absence of a titration schedule, the lowest first dose heart rate effect. We haven't seen consistent changes in LFT as ozanimod has. And then most notably, and what's the most important for clinicians from all of our quantitative research is the off rate. When you withdraw the drug, 100% of patients are back to baseline, off the sites within a week by label. You have to wait 90 days to introduce another immunomodulatory agent for after ozanimod. So we think that makes etrasimod very different intrinsically and then those are intrinsic features that have to do with the physicians having a certain level of control. So all of that will translate into the eventual label as we hope. And that will give us a foundation for a differentiated product from ozanimod. So that's number one. And again, coming back to the quantitative research, it goes back to these points over and over and over.

Number two is really the work we're doing with the GLADIATOR study. It's a landmark study. Nobody has ever studied this more moderate patient group. We think having that data, it's a peri-approval study. We expect to have that data post approval. We think that expands the market quite dramatically. There are literally hundreds of thousands of patients who have active disease, but don't meet the criteria for advanced line agents today. We have tremendous amount of excitement in the investigator and the KOL community about the study. And we think that will be a game-changer in terms of how the product is adopted in the marketplace.

And the final piece I'll add is we're not leaving a lot of things to chance in terms of payer uptake. We're spending a lot of time with payers now. We're working with payer data in real-world evidence using an outside vendor who can evaluate this data, understand the cost structures, understand where the costs reside in these payer groups, whether they're straight-up payers or they are integrated delivery systems and help them understand exactly when and how to intercede in the disease pathway with etrasimod. So we think that will pay huge dividends in terms of our ability to get rapid uptake in the payer community. So as most of you know, we began building out commercial infrastructure very early. We began building these platforms out very early, much earlier than companies our size traditionally do. And we've had the privilege of having the balance sheet to be able to do that. But that's all towards having a line of sight into commercial success. So it's not enough to just have great Phase II data. It's not enough to get a drug approved, but none of this matters until patients actually receive the drug. And that's the most important thing for us.

And so again, that work began a couple of years back with thinking about the GLADIATOR study with the work we're doing with payers, we've also had over 50 medical science liaisons on the ground working with clinical sites and KOLs for over two years now. So these are all things that don't get a lot of attention today, because the focus is on the Phase III data endpoint, and I understand that from an investor perspective. But if you don't make these investments early, you could run into substandard launches later on. So I think that's super-important from our point of view is to really kind of aim past the target, make sure we're getting the work done now in order to make sure we have commercial success on the back end.

Operator

Your next question comes from the line of Joseph Stringer from Needham & Company. Your line is now open.

Joseph Stringer

Hi, everyone. Thanks for taking our question. Our question is on the Cultivate sub-study A. I understand you increased number of patients from 50 to 70. Just wanted your thoughts on your confidence level at least based on your design here to increase it. I guess would be assuming favorable results, would there be any scenario in which that would not allow you to go directly to a registrational trial. For example, if you would need to increase the number of patients further or run an additional study. Just trying to think about the scenarios there. And then for the alopecia areata results second half of next year, would you include data from the 3 mg cohorts in that one?

Amit Munshi

Yes. So in Crohn's, as we've discussed before, ozanimod had approximately 70 patients in their study, the upadacitinib Phase II study was approximately 70 patients. We think that's sufficient to see a clinical signal and allow us to move to a registrational program. Naturally, the quality of the data there will be important and as well our regulatory interactions. But the fact that there's clear precedent that a database of that size on top of a UC database in terms of total safety for the GI regulators in being able to see a meaningful clinical signal is sufficient to move to a registrational trial. So that's really been our focus, and working off of precedence really. If we think about the alopecia areata study, we did at 2 milligrams, again, AA is a much more difficult to treat disease than Atopic Derm, just as Crohn's is a more difficult to treat disease than ulcerative colitis. And so we thought the risk benefit to add 3 milligrams was important there. Again, we don't have data from 3 milligrams in any patient group only in healthy. And so we'll see the Crohn's data first at 3 milligrams. We'll be looking for a dose response there. And then similarly, we're looking for the same thing in the AA study.

Operator

Your next question comes from the line of Jason Butler from JMP Securities. Your line is now open.

Jason Butler

Hi, thanks for taking the questions. Amit, just wondering if you could give us an update on the VOYAGE trial in EoE, and also any perspectives on the evolving treatment landscape given the recent data for Dupixent. Are you also looking to enroll severe patients into VOYAGE?

Amit Munshi

Yes. So I think the patient makeup will be similar to what we've seen in other trials, whether it's the simplicate antibody or Dupixent. And again, if we're able to accomplish what those agents accomplished, but we're able to do the once-a-day oral, we think that's a substantial game changer. Dupixent is a fantastic drug, has meaningful effects across multiple different agents. We know that most of these diseases are not pure Th2 diseases. There's Th1 activity, Th1 cytokines are active in the chronic phase of these diseases. And unlike some of these agents, we're hitting multiple parts of the disease process. Also, I'll just remind everybody that on histology, you don't just see eosinophils, you see CD4-positive CD8-positive T lymphocytes. You see a variety of other cell types, including dendritic cells as well as mast cells, and we've demonstrated activity against all of those cell types in multiple models as well as human histology. So we think again, we're following the biology based on everything we know today, based on all the work we've done over the last decade. And we think having a once-a-day oral in that population could be a significant game changer. And the patient population makeups are consistent across most of these trials.

Operator

Your next question comes from the line of Patrick Trucchio from H.C. Wainwright. Your line is now open.

Unidentified Analyst

Thank you so much for taking my question. Myself Jason [ph], I'm speaking for Patrick. And I have two very, very quick questions. So my first question is, will the NDA be filed before or after the data from GLADIATOR is available? And if before, would there be a need for a supplemental NDA filing to include the details from GLADIATOR program? And my second question is, can you discuss Arena's business development strategy going forward and how the strategy could change, if all assuming a positive outcome on the ELEVATE program next quarter?

Amit Munshi

Sure. So the GLADIATOR study is the peri-approval study, it's designed to readout after the approval. So we'll pass the NDA after the approval and would look for opportunities to include that in the clinical experience section of the label at that time. The data is really designed for the clinician community as well as for the payers. That's really the context of the GLADIATOR study. And we'll assess that as we get closer and as we get through approval and we'll see the GLADIATOR study, we'll have to make some decisions about how aggressive we go after that patient population in terms of additional studies and maybe even supplemental NDA. But again, just to refresh, we won't have that data until after approval. The business development, as you know, we recently did a transaction with Aristea Therapeutics. We're very excited about that. And we think it adds another leg of the stool for the company, potentially in two dermatologic conditions, PPP and HS, as well as potentially in IBD, and we think that will continue to build out our portfolio over time. We have a very rigorous BD process. We, before getting to our stable over 200 opportunities over the last three years, we wanted programs that had novel biology. We thought things that for a therapeutic area are important. And we really put an emphasis on the quality of the compounds and the quality of the chemistry. So there's just not that many of those things that are out there. But we'll continue to be as rigorous post ELEVATE data as we are today in thinking about how we build-out our pipeline overtime.

Operator

Your next question comes from the line of David Hoang from SMBC. Your line is now open.

David Hoang

Hey, thanks so much for taking the question. So, I just wanted to get a little bit refreshed on the Aristea asset, which you in-licensed, in terms of our expectations for the development path of that asset, when should we be thinking about seeing some of the first data from PPP, and any other comments on other indications you might pursue with that asset?

Amit Munshi

Sure. So we're looking at three indications there. Phase IIb in PPP in Phase IIa in both HS as well as potentially in such an IBD patients that have more neutrophilic disease. Again, the rigor which we approach business development is substantial, and we spend a lot of time thinking about finding the right compounds with the right chemistry, the right pedigree. That's really important to us in terms of where these compounds come from, how much medicinal chemistry work has been done, how well characterized are they? And the Aristea team had done a fantastic job with this compound that originated at AstraZeneca. And so we're extremely excited about the collaboration. And Pat, correct me if I'm wrong, but I don't believe we've disclosed any timing for any of those clinical milestones at this point.

Patrick Malloy

Correct. No, we have not disclosed anything.

Amit Munshi

But we will over as we move forward in time, provide some more context in terms of when those clinical data readouts will look like. Having another Phase II asset with potentially three indications in our portfolio allows us to continue to build the company, both in terms of compounds, in terms of market opportunity, but also in terms of key data readouts and catalysts well beyond the UC data.

Operator

Your next question comes from the line of Prakhar Agrawal from JonesTrading. Your line is now open.

Prakhar Agrawal

Hi, thanks for taking my question. Firstly, on the treat-through design in UC [ph], HUMIRA and Remicade have produced slightly diverging results in the maintenance phase versus induction. HUMIRA clinical remission on a placebo-adjusted basis increased slightly in maintenance relative to induction, but Remicade actually decreased in the maintenance phase. So my question is whether HUMIRA treat-through trial is the right competitor or Remicade trial for UC 52? And secondly, on the Phase III A Derm trial, do you plan to include Dupixent refractory patients also, and whether rescue therapies be allowed in the Phase III mono-therapy trial? And just as a follow-up, if you can confirm that the trial is still on track for initiation by year-end.

Amit Munshi

Yes. So yes, we will have a small proportion of Dupixent -- remember, Dupixent is only penetrated about 4% to 5% of the AD market. So we wouldn't anticipate seeing a lot of Dupixent refractory patients in that study, and the study is on-track to initiate by the end of the year for patients enrolling in the first part of next year. Coming back to the treat-through study design. I think this is always the challenge of cross-trial comparisons and not just cross-trial comparisons, but cross-trial comparisons might be separated by 10 years temporarily. So you have to take that with a tremendous resolve. The patient demographics and Remicade when it was first developed, remember, there were no other biologics approved in the space. And so they had 100% naive patients. HUMIRA had a slightly different situation. So this is always the challenge across our comparisons, especially when they're separated by upwards of a decade temporarily. And so, I'd caution you in making any comparisons at this point, I think we have to take the data on its own merits, understanding today's treatment paradigm and today's treatment patterns and understand where the unmet need is today in those patients.

As you also know, Remicade has a far higher rate of neutralizing antibodies. That plays a pretty big role. We know HUMIRA has a pretty substantial drop-off in effect. We know a substantial portion of patients at between six and nine months, either double the dose or double the intensity of HUMIRA treatment. And we think that's also largely due in part to neutralizing antibodies. So with a small molecule, you don't have that. So get different modalities, different time points, different structures, and we'll spend more time talking about this as we get to the data.

Operator

There are no further questions at this time. I'll turn it over back to Patrick Malloy.

Patrick Malloy

Great. Well, thank you, everybody, for joining us on today's call. And with that, we'll look forward to speaking with you next after the first of the year. So thanks very much, everybody, and enjoy the rest of the day.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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