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Arqule Inc (NASDAQ:ARQL)
Q3 2019 Earnings Call
Oct 30, 2019, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen thank you for standing by and welcome to the ArQule Third Quarter Year 2019 Earnings Conference Call. [Operator Instructions]

I would now like to hand the call over to your speaker today Marc Schegerin. Sir please go ahead.

Marc Schegerin -- Chief Financial Officer

Thank you very much. Good morning everyone. Welcome to the ArQule investor conference call reviewing operational and financial results for the third quarter of 2019. I'm Marc Schegerin CFO and head of strategy at ArQule. This morning we issued a press release that reported results for the third fiscal quarter ended September 30th. This release is available on our website at arqule.com. Leading the call today will be Paolo Pucci Chief Executive Officer of ArQule. Also also present from the company or Peter Lawrence, President and COO and Dr. Brian Schwartz, head of r&d. Before we begin, please note that we'll be making forward looking statements as decline in the private securities litigation act of 1995. The statements will include, among other things, projections regarding the timing of key events related to our fuels, proprietary pipeline, and financial guidance for 2019. Actual results may differ materially from those projected in the forward looking statements due to numerous risks and uncertainties, that exist in ArQule's operations development efforts and the business environment including those factors discussed in our reports and Forms 10-Q and 10-K and other documents filed with the Securities and Exchange Commission. The forward-looking statements contained in this call represent the judgment of ArQule as of today and ArQule disclaims any intent or obligation to update any forward-looking statements except to the extent required by law. We'll provide an opportunity for Q&A at the end of this call.

And now I'd like to introduce the CEO of ArQule Paolo Pucci. Paolo?

Paolo Pucci -- Director and Chief Executive Officer

Thank you very much Marc. Thank you all for joining us this morning for the Q3 call. I would like to give you a overview of the structure of the call. So I will go first with some introductory remarks. Then I will turn it to Brian for a deeper dive into a medical clinical development update. Marc will come back for financials. And then we'll open it up to Q&A. We're going to try to stay brief so that we leave enough time for Q&A. So Q3 was a period of continued and decisive progress for us in completing the enrollment of the Phase I production of our most important program with ArQule 531 our dual BTK inhibitor. And we focused the recruitment of the remainder of the Phase I on two indication CLL refractory C481 mutated as well as Richter's transformation. In June we presented first of its kind clinical activity data at the EHA Congress which showed partial responses in 4 out of 6 evaluable CLL patients after the first scan at -- in the 65 milligram cohort of the Phase I trial for 531.

And I have to say that since that time ArQule 531 has continued to perform at the very high end of our expectation and with each day that fact that we look once it's aid the drug show -- continue to show progress and it shows greater promise if anything. Greater promise in each are both to address we have met needs specifically in the last refractory end C481 mutated CLL population but also in other indications beginning with Richter's but not only because we have observed efficacy across for 2 more times right now. We once again looking at year-end excited to provide additional and meaningfully incremental data update at ASH in December. We expect not only to clinical activity and safety but for the first time meaningful data on durability. Six months will have passed between the EHA presentation and the ASH presentation and so those patients that were presented as responders at EHA had a meaningful period of time to be forward for assessing durability of response. Looking back at the quarter specifically these would be the achievement we have registered for specifically 531 program. First of all we completed the recruitment of the Phase I trial and the term is recommended Phase II dose. Completing timely the enrollment of the Phase I portion of the ArQule 531 clinical program enables us to consolidate our position as first and best in class in this new class of reversible BTK inhibitors. In our previous Q2 call we announced the 65 milligram QD was selected as the recommended Phase II dose and in fact we are deploying that dose in the ongoing Phase II. Second we submitted in -- ASH abstract in mid-July and here let me give you a little bit of color because we have received a lot of questions so I hope I can answer some of those questions with the next few words that I'll say. So our latest data presentation was at EHA Congress in June as you recall.

Several weeks passed between mid-May which is when we finalized the poster that was presented at EHA to mid-July when we finalized the abstract submission for ASH. So the abstract submission of ASH please remember includes whatever data we could QA up to that time not thereafter. Any data that has come after that will be in the poster presentation for ASH. So therefore the ASH submission will include already meaningful and incremental data that -- to what was presented as a baseline at EHA because we had a few week of observations and we were able to QA some additional data in that period of time. All of the ASH abstracts are going to be due on November 6 9:00 a.m. OK? So I hope that clarifies a fairly common question we're getting what will be in the ASH November 6th presentation? Number three we have initiated recruitment of multiple Phase II expansion cohorts for ArQule 531 and this is pretty much in line with our previous disclosures. The scheme of this Phase II trial is included in our corporate presentation that has been on our website now for some time. This trial consists on CLL portion that includes BTK C481 mutant patients as well as patients who are intolerant to irreversible BTK inhibitors such as Ibrutinib as well as Richter's transformation. The results though as you can see from the scheme of the trial in our corporate presentation NHL portion that includes [Indecipherable] BCL MCL FL [Indecipherable] MCL. These trial I remind you the 3 important purposes to us.

First it allows us for a broader signal generation effort that will enable us to explore the drug potential beyond its lead indication on CLL. Secondly it might provide like in the case of Richter's transformation the opportunity to upsize a dedicated Phase II cohorts into a potential registration of cohorts pending of course agreement with regulatory authorities. Third it enables the expansion of our clinical fact network in advance of launching a planned pivotal trial in C481-mutated CLL also provided that the suitable agreement is reached with the regulatory authorities. The fourth item that is important to recall relative to our work on ArQule 531 is that we completed -- and this is the bridge to interaction with regulatory we completed the -- as we completed the Phase I we initiated the congruent end of Phase I interactions with the FDA. So having gathered sufficient data relative to safety efficacy and for the regulators duration of response we have been able to initiate dialog with the FDA.

We have disclosed previously in several settings that we have a draft design full of fields of C481-mutant later line of therapy trial and we are looking for more clarity on how viable that registration of strategy might be. I am pleased to say that the Agency responded quickly to our request for an end of Phase I meeting and that we will conduct this meeting shortly. First we obviously have to enhance also our interaction with the investigators community. That will be part of our future programs. And so we conducted a second this year advisory board that to inform not only our immediate plans for further development, but also expansion of those plans on -- along the period of time. And I shall remind you that this is a drug that had a patent life that goes as a baseline until December of '35. So it's a long patent life. We'd be remiss not to plan carefully for its future having such a long patent life and having such a big opportunity here. So our advisors that we met for the second time this year continued to be enthused by the totality of the 531 data set. Obviously everybody is under CBA and therefore they see live data provided that the live data is being QAed of course. And they have encouraged to move forward expeditiously with our current plan. In addition to that they have encouraged us to move into the proclinical work that is needed to test a number of combination strategies that they feel will play a very important role in the treatment of the various disease B-cell malignancies we have targeted. And I'm pleased to say that that proclinical work is under way. Six and final the commercial potential. We need to refine our understanding of the commercial potential of this drug in the different phases of its long life enabled by this long patent. So this summer we conducted extensive primary for the first time; and secondary but for the second time research.

We were able to conduct primary research because as of EHA the target product profile -- fairly clear target product profile has emerged at least for this drug as a single agent. We have yet to establish the target product profile for the drug in combination but we have an optional one. Not surprisingly given the favorable profile that has emerged for ArQule 531 at EHA we had the possibility to go much more in depth with the second exercise of lifecycle management for the drug. And if anything the second exercise much more stringent much more extensive than the first one confirmed that this is indeed a blockbuster opportunity even if we take CLL alone. And that opportunity in CLL is driven by the U.S. market. This opportunity and we have learned this incrementally can be further enhanced following a confirmatory trial that we have several designs under consideration that would expand very significantly the initial patient population targeted. In addition we can then further expand that patient population beyond CLL into some other selected B-cell malignancies as a single agent and more often in combination. And that's one of the reason why we have such an expansive Phase II multi-arm trial and we are initiating already the combination work on several fronts. Finally we will have a third opportunity to further expand the market by going ex-U.S.

And I shall remind you that the ex-U.S. market even though developing countries are going to become attractive next decade the moment the patents of Ibrutinib expire and the usage of Ibrutinib goes up due to the removal of the price barrier; as more inexpensive Ibrutinib gets more utilizing frontline more patients will be available for second line C481 as mutated. It's very very simple math. So switching gears to overgrowth this concludes the section of our 531. It's a long one but you can imagine that the lion's share of our energy goes into this program right now. It's very important to us to maintain and enhance our position as first and best in class among this new class of reversible BTK inhibitors that holds in our view a lot of promise. Switching gears though now to our overgrowth diseases here we don't -- we put the rest of our effort. We've been focusing on initiating the registrational trial in produce and pros. We have opened sights worldwide and we were very pleased recently to announce the first patient being in this trial that is tremendous excitement for -- among patients the patient community for this very first opportunity that they have to enroll their loved ones in one such trial. And Brian could touch it in person last weekend where he was with the patients association at their annual meeting.

With that in fact I pass the mic to Brian that will give you a little bit more detail on the clinical activities. Brian please.

Dr. Brian Schwartz -- Chief Medical Officer

Thank you Paolo. Let me start with ARQ 531 a potent reversible dual inhibitor of both wild-type and C481S-mutant BTK. Preliminary results from our most recent presentation at EHA suggest that 531 continues to have a manageable safety profile and demonstrates clinical activity in multiple B-cell malignancies. Pharmacokinetic data shows that subjects receiving 65 milligrams exhibited steady state Cmin concentration above 1 micromolar and the plasma half-life is in excess of a day further demonstrating that sustained and complete BTK inhibition can be achieved at 65 milligram once a day. Maintaining a Cmin concentration above 1 micromolar is predicted to be a critical factor in achieving antitumor response and our recommended Phase II dose of 65 milligram appears to comfortably exceed this threshold.

As we approach another meaningful data disclosure at ASH it might be helpful to recap what we have reported thus far in terms of clinical activity observed. As you will remember we declared a total of 7 partial responses in 4 separate tumor types. Four CLL C481S-mutant patients from cohort 7 initially at 65 milligrams; one Richter's transformation also from cohort 7; one follicular lymphoma patient initiated in the first cohort and subsequently dose escalated who remains a responder after Two years on therapy. And finally a DLBCL patient from cohort 8 dosed at 75 milligrams this patient was not yet at PR at the data capital for EHA that was later reported as a PR in the context of our financing in late June. With respect to duration of response in CLL only 2 of the 4 CLL PRs just described had received a second scan which occurred approximately five months on therapy. Both these patients remained a PR at that time.

Their responses were confirmed and they remain on study. At this year's ASH we will present substantially more durability data for these and other patients including second scan at approximately five months as well as many third scans performed at nine months for these patients. In terms of safety ARQ 531 continues to have a manageable safety profile and the side effect profile with respect to timing frequency and grade of adverse events remains on par with what was presented at EHA. To date we only observed the one DLT that was described last March and did not reach an MTD as described in the trial. As we conclude the Phase I portion of the trial let me transition to discuss the expansion trial which is already dosing patients. Seven sights are currently active and we plan to activate approximately 30 more sights in the U.S. and the rest of the world. As Paolo mentioned the trial is divided into 2 parts which will include 8 specific and expandable cohorts. Later we plan to add cohorts to test high-priority combinations that we will select and disclose. Our primary focus remains on CLL at a minimum who have failed an irreversible BTK inhibitor. We are scheduled to speak very shortly with the FDA to explore a fast to market registration trial. In parallel we are conducting preclinical combination studies and working to develop an easier to administer companion diagnostic to rapidly identify and diagnose patients with a C481S-mutation or other C481 mutations.

Moving on to Richter's transformation which as you know is a devastating diagnosis for affected patients and carries a very grim prognosis. We have treated a handful of patients in the Phase I portion of the trial and fortunate to have observed preliminary signs of clinical activity. As soon as we have a more robust data set we plan to discuss a registration trial in this population with regulators as well. And we continue to enroll Richter's patients in the ongoing Phase II expansion trial. In time we hope to have the option to expand that cohort into a registration cohort in an area of extremely high unmet need. Let me now move over to miransertib in rare overgrowth spectrum disorders. As previously announced we have dosed the first patient in our registrational MOSAIC trial. Hope is on the way for these patients. As you know miransertib is a potent and selective AKT inhibitor. Our objective is to be first and best AKT inhibitor in Proteus and PROS family of rare overgrowth diseases. This family of diseases is ultra-rare very heterogeneous and the patients currently suffer from a dismal quality of life and early mortality. No systemic therapy has been approved for these patients and the only current treatment is surgery. On our registration program the MOSAIC trial this will consist of one protocol divided into 3 or 4 cohorts. The first cohort will focus on Proteus syndrome and will enroll at least 10 patients.

The second cohort will focus on PROS family of overgrowth disorders and will enroll at least 20 patients. And the third and fourth cohort will be signal generation and compassionate use on that will include patients from either group who do not qualify for cohorts 1 or 2 but may otherwise benefit from treatment. For ARQ 531 -- sorry 751 the next generation AKT inhibitor we recently published 2 posters at the triple meeting highlighting both preclinical and clinical data that supports 751's highly potent and selective AKT inhibition profile. In addition we plan to announce the final data set from the ongoing Phase I trial once the trial is complete and data has been finalized. Lastly for derazantinib our FGFR inhibitor our partners Basilea and Sinovant continued to implement their plans for the registrational Phase II trial in ICCA and toward the Phase I initiation in China respectively. Specifically Basilea have announced the expansion plans for the clinical program both a single agent and in combination with a PD-1 inhibitor.

With that I would like to now turn it over to Marc to go through the financials.

Marc Schegerin -- Chief Financial Officer

Thank you, Brian. The company reported a net loss of $10.7 million or $0.09 per share for the quarter ended September 30 2019 compared with a net loss of $5.6 million or $0.05 per share for the quarter ended September 30 2018. As of September 30 of this year the company had approximately $174 million in cash and cash equivalents. Revenues in Q3 2019 were $0.2 million compared with revenues of $5 million in Q3 2018. R&D revenue this quarter was primarily comprised of reimbursable manufacturing costs about licensing agreement. R&D expense for Q3 2019 was $8.3 million compared with $7.3 million for Q3 2018. G&A expense was $3.2 million in Q3 2019 compared with $3.4 million in Q3 2018. For 2019 ArQule expects revenue to range between $2 million and $5 million. Net loss is expected to range between $40 million and $43 million. And net loss per share to range between $0.35 and $0.37 per share [Technical Issues] -- year. ArQule now expects to end 2019 with approximately $160 million in cash and cash equivalents which is projected to fund the company's operations well into 2022. With that

I'd like to turn the call over for Q&A. Operator please feel free to open the line for questions.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Jonathan Chang.

Jonathan Chang

Good morning, and thanks for taking my questions.

First question just to clarify have you had your end of Phase I meeting with the FDA yet? And any color on when we might expect to hear more about registrational trial design?

Paolo Pucci -- Director and Chief Executive Officer

No we have not had the opportunity to interact formally with the FDA yet. And as we said in this call we will expect that to happen in the very near future. And depending on the quality of their interaction I mean if there is actionable plans that came out of it then we will disclose accordingly. Just keeping mindful of the competitive environment but once we have something that we can discuss we will. We don't have it at this time. But you know what the plans are. So we going into the discussions to have at the end of Phase I meeting we have a well-developed concept for a biomarker supported plan that we will come to the class market for conditional registration in C481 patients. We have been working hard actually Peter has been leading the effort in developing a biomarker strategy which is necessary companion for that kind of request. Should there be time left and opportunity we would like to understand what would the FDA consider to be an approvable data set for Richter's transformation so that we can calibrate our Richter's portion of the Phase II study eventually accordingly. It's a lot to ask. I don't know how much we're going to be able to cover in this first discussion with them. But we'll try our best.

Jonathan Chang

Got it. Second question and I wasn't sure whether to go there but since you mentioned the competitive landscape as we approach year-end how are you guys thinking about the competitive landscape for 531 with several readouts expected in the reversible BTK inhibitor space in oncology?

Paolo Pucci -- Director and Chief Executive Officer

Well once the other reversible inhibitors prove our -- prove the -- show data equivalent to what we have shown about EHA I'd be happy passing hand to talk about our data in comparison. So right now our competitor is the combination Ibrutinib venetoclax. And we're starting to work to go compete with them preclinically. This is our competitors. The others when they come we'll see. We will see what they have at ASH. We have a big target with this drug. I continue to maintain that with such a long patent life for this drug the horizon is much beyond -- the ultimate horizon is much beyond what everybody is thinking right now. The point of entry is the one that we've been discussing which is refractory patients which C481-mutated. But there is 1 or 2 horizons beyond that point of entry. And the other reversible diseases are not there right now. So after us we'll see what the data set is for everybody relative to points of entry which is C481S-mutated patients which are refractory and then I can maybe speak more intelligently. Right now I can't. All we can say is same old same old. The class comprises 4 compounds. Two of those compounds bring forward the claim of being highly selective against BTK. We are kind of in the middle of the pack with a claim of being the main selective for selected members of 3 just 3 kinase families involved in different malignancies. And then on the other end of the spectrum there is a very interesting compound which is a dual inhibitor of your fleet and BTK. And that's as much as anybody can say because there's not a lot more data to discuss.

Jonathan Chang

Got it. And just one last question from me. Can you expand on the preclinical 531 combination studies being conducted?

Paolo Pucci -- Director and Chief Executive Officer

Well that's -- it depends on the cohort. It -- for the combination study you mean? Can I expand? Yes we are doing the preclinical work at this point in time and we are defining how will we proceed in the clinic once we have passed the preclinical work. We're not in the position right now to say more. We have a very significant in vivo experiment that some of our collaborators have insisted on. But that's going to take some time. So that's probably for next year.

Jonathan Chang

Got it. Thanks for taking the time.

Paolo Pucci -- Director and Chief Executive Officer

questions you welcome

Operator

Your next question comes from the line of Varun Kumar. Your line is open.

Varun Kumar -- Cantor Fitzgerald & Co. -- Analyst

Hey, good morning everyone and thanks for taking the questions So first for the ASH should we expect any meaningful update for safety? And mechanistically do you think reversible BTK as a class can avoid some of the typical irreversible-related toxicities like bleeding or atrial fibrillation?

Paolo Pucci -- Director and Chief Executive Officer

Well every update had always included the safety. We are updating after all on a Phase I trial and the core objective of the Phase I trial is to establish safety reliability and dose. So of course yes there will be a safety update very much following the format of what we presented at EHA. I will remind you this is our first update from this Phase I trial so I think it is one of the most updated Phase I trial that I've seen. We presented at AACR. Then we presented at EHA. Then we presented at ASH. Then we presented again at EHA and now we're concluding by presenting at ASH. So you all have had the opportunity to follow the evolution of this drug in real time across the Phase I data. We'll have a presentation at ASH. You might imagine that being the fifth that we do the reviewers of the process must have found that these are interesting and incremental as we presented it to them. But then --so there will be a safety. And as far as your request it'd be unfair and ignorant of me not to say that the kind of side effect you mentioned the cardiovascular side effects for any class of drugs can be meaningfully observed in the very large studies. And Ibrutinib that reports some of those side effects has been observed being those in a large population by now that have a very large database. That's why we have not observed them. And I can speak for our own drug I cannot speak for the class the other adults in the class will speak for themselves. But thus far we have not observed them. So it's worthwhile for me to say that we have not -- we have not seen a second DLT in this trial as of yet and we have not reached MTD in this trial as of yet. Brian you would like to add anything about cardio safety?

Dr. Brian Schwartz -- Chief Medical Officer

I think the 2 things that you will get at ASH will be long-term safety because we now have a bunch of patients on drug for a period of time. In terms of the first month or two there's not a huge number of patients added there but you will get a much longer duration of therapy and see how patients tolerate the drug in their perspective. In terms of the cardiovascular and bleeding we continue to look both preclinically as well as carefully clinically for any evidence and so far have not seen any signal of those two events.

Paolo Pucci -- Director and Chief Executive Officer

That is a Phase I study so the numbers as I said are smaller to properly assess the existence or otherwise of a signal in that framework that you described.

Varun Kumar -- Cantor Fitzgerald & Co. -- Analyst

And maybe just one last one on FDA meeting. What are some of the disclosure you plan to have? Let's say the FDA meeting is positive in terms of maybe patient number or endpoint for pivotal study. And related to that do you plan to discuss confirmatory study as well with FDA when you have this in a few weeks or so?

Paolo Pucci -- Director and Chief Executive Officer

Well as I was -- I think the last part of your question as I was mentioning before we are not even sure we're going to get to the point of being able to discuss what would a registrational cohort for Richter's transformation might be. And definitely I would think it'd be premature for us to bring up the topic of a confirmatory trial. If the Agency were to bring it up then we will listen and that's going to be the extent of it for now. And as far as these clauses as I have mentioned before the moment we have something that we believe is solid and can be disclosed and Peter reminds me it has to be disclosed then we will consider that for disclosures as always. The first opportunity eventually might be around ASH. And then after ASH it will be I guess Q4 call or before. But that's a fluid. Not having even had the first contact with the Agency I can't do better than that. We do believe that the Agency should be receptive to what we are there to tell them because this is an emerging unmet need it is the first time we are introducing a biomarker which is emerging in a significant way. And so we're hopeful but we have to have the discussion to see if our hope is justified.

Varun Kumar -- Cantor Fitzgerald & Co. -- Analyst

And thank you follow Brian and mark and congrats on the progress.

Operator

Thank you.Your next question comes from the line of Tony Butler. Your line is open.

Tony Butler

Thanks very much, Three brief questions if I may and I'll just recite them all so that it'll be shorter. Number one is if I -- Brian if I heard you correctly you currently have 7 sites open clin trials actually lists 5 and then you will open if I heard correctly 13 that's 1-3 additional sites in U.S. and Europe? And I guess if that's correct how long do you think it will take you to actually open those additional sites? And by time I'm actually thinking about it's not just site approval but it's also a rough time for them to be able to bring in their first patient. That's number one. Number two is if I'm correct you have 2 types of pills; one 20 milligrams; and one 5. And so you take 4 effectively to get to the 65 on a QD basis. The question is are you happy with that? Can you actually manufacture a 65 milligrams single tablet? Would you want to do that or does it matter? And then thirdly in the discussion with the FDA whatever you end up discussing just leave Richter's out for the moment would it actually lead to a change do you think in what you're doing with the 8 cohorts currently in this expanded Phase II?

Paolo Pucci -- Director and Chief Executive Officer

Okay. So Brian's going to take the first question which is on the number of sites that are open. Peter our CMC is going to take your second question related to 2 milligrams. And then I'll take the last one.

Dr. Brian Schwartz -- Chief Medical Officer

So just with regard to sites we've divided up the sites into a number of different buckets in a way. The CLL we believe we have sufficient sites and we need to update clinicaltrial.gov to get most of the CLL patients enrolled in a reasonably good time frame. A lot of the other sites will focus on some of the rarer tumor types or rarer lymphomas that fall into the other buckets. Our plan is to have everybody up and running by the first quarter next year so that the trial will be able to fully enroll by the end of next year. Some of the tumor types are rarer and they may take a little bit longer.

Peter S. Lawrence -- President, Chief Operating Officer

Okay. Thanks Brian. Tony it's Peter Lawrence. Regarding those strengths CMC we don't talk a lot about it because a lot of the things we're doing we consider proprietary. But what I would say is we are -- Paolo mentioned earlier in the presentation that we are doing commercial studies; as we move ahead with our product form we're thinking about what the best form would be for a patient. Obviously we want compliance to be high so you can imagine that we would be thinking about 1 or 2 dosage forms that might simplify things. But we're thinking about a number of things and we will come up with what we think is an optimum product by the time we reach commercial launch.

Paolo Pucci -- Director and Chief Executive Officer

And there is some IP that we are developing around --

Peter S. Lawrence -- President, Chief Operating Officer

That's correct.

Paolo Pucci -- Director and Chief Executive Officer

-- CMC. That's why we limit our disclosures because until the patents are released we are best keeping it for ourselves. And how -- the last question of the three was how would our meeting with the FDA change our plans. One thing that the FDA meeting could change relates to one of the 3 cohorts for CLL. So we have 3 cohorts open. One is C481-mutated; one is for intolerant patients; and one for Richter's transformation. In this section of the trial we could foresee changes based on the discussion with the FDA. So the one that it's unlikely to change is the one that is intolerant to Ibrutinib. It's very interesting information for us to collect. We don't know how interested it is for the FDA but that in my opinion right now least likely to change. The first cohort the one that is C481-mutated laser line of therapy had -- have seen in earlier line of therapy universal enable might actually change my goals altogether. If we are able to find an agreement with the Agency for a registrational trial that also carries a biomarker plan with it; the Phase II does not carry a biomarker plan with it it was not part of the discussion with the Agency at the time; then that will close down because obviously we don't want to compete with ourselves. We want all of our sites to turn their attention to recruit registrational study that -- in that setting. So that's one change that you could -- one can imagine. The Richter's transformation cohort right now is expect as a signal generation cohort. So we have the opportunity -- so we have a clear understanding of what the Agency would be looking for in terms of number of patients enrolled endpoints relative we assume response rate as well as duration of therapy which is generally short then that is the next line that could change because that could be -- we expect to become a registrational cohort as well. For NHL it's very high to hypothesize right now. Another change that could happen to the Phase II is that we might try to bolt on to a combination cohorts but that is for next year. I hope that answers Tony.

Tony Butler

Oh it does. Thank you so very much, Peter. Appreciate it, Brian. Thanks.

Paolo Pucci -- Director and Chief Executive Officer

You're welcome.

Operator

Your next question comes from the line of Gregory Renza. Your line is open.

Gregory James Renza -- RBC Capital Markets LLC Research Division -- Analyst

Hey, guys, thanks for taking my question.

Paolo Pucci -- Director and Chief Executive Officer

You're welcome.

Gregory James Renza -- RBC Capital Markets LLC Research Division -- Analyst

Hello, um, you know, Paolo as you speak about doing some commercial opportunity work and landscape work early on I'm just curious if you could comment a bit on the strategic card that you hold with 531 just around the several upcoming points of interest in value creation potential and any crossroad that you could be at. What is your latest thinking on this road to realization that is going -- moving fast direct-to-market with narrow populations versus balancing the prospects of going broader? Would this prompt you to think about accessing greater resources bringing up a partner even to help perhaps tackle those larger opportunities that you're alluding to? And similarly would any emerging or evolving competition maybe at or at a distance of your heels alter that thinking as well?

Paolo Pucci -- Director and Chief Executive Officer

No thank you Greg. So let me take the tail of your question would any emerging competition change our thinking. Indeed there has been a very big change because for the first time we have one of the big pharma companies that has entered the space. With the acquisition of Loxo by Eli Lilly now Eli Lilly has a role of subordinated claim to be highly selective relatively negative so somewhat of a different profile from our. But Lilly is a very very big company. They can deploy resources we could never muster even though -- even if we get tremendous support from our current shareholders and I'm sure we'll get support from our future shareholders there's no way in the world we can match what Lilly can bring to bear here. So we are mindful of that. I have to say that so far the entrance of Lilly in the field has produced mostly positive results for us in that while before when I would go talk to investors about reversible inhibitors people would say yes we know the story. Now they say no we want to learn what the reason could be for reversible inhibitors. So the entrance of Lilly has brought a lot of interest in our story as well justifiably so and I have seen the full results of our second lifecycle plan which was very rigorous and conducted by an independent consultancy which is probably top of the world in this matter. And so I imagine Lilly is looking at the same commercial projection that I'm looking at and I would think that they would compete vigorously. So that's one thing. So on that basis obviously we remain open to gaining more support for our program provided that the framework is right. No discussion will start oh what is going to be your upfront. No that will be the very last thing we discuss actually the financials of any transaction will be the very last thing. The first thing to discuss is going to be how would you help us to create more value for our shareholders by helping us to grow much broader and much faster than we would be able to do on our own. And then if there is a meeting of the minds on that item then everything else can be discussed. But this said we can wait. So we're going forward full force with all the resources we're able to muster. You've seen that we have focused our call on ArQule 531 mostly and you've seen that we have very little updates for 751. We have some updates for miransertib rare disease but that is a small part of our effort -- is a big part of our value proposition small part of our efforts. So you can see that we are devoting the near totality of our effort to 531 right now. And that means that other programs like 751 they're not gaining as much attention so they're not proceeding as speedily as we would have expected 12 months ago. So we are open to discuss with anybody provided there is no conflict or competitive issues. At the same time we're not waiting for anybody we're going forward on our own. A number of shareholders have supported us in our last race as you all know and they supported us for us to run as fast as we can on our own. We also don't forget that these patients have very poor prognosis and they need therapy sooner rather than later both the C481-mutated patients and even more so the Richter transformation patients. So that's where our mind is at today. But we are open-minded people. We have partnered drugs before. We might partner drugs again on the basis of the strategy that underpins a partnership concept the rest details.

Gregory James Renza -- RBC Capital Markets LLC Research Division -- Analyst

Great that's helpful Paolo. Maybe just one more for me perhaps for you or Brian. You mentioned earlier just about competition really being Ibrutinib plus venetoclax. I'm just curious if you could provide some color on your thinking around mutation profile of patients post Ibrutinib or irreversible only therapy versus really the future with respect to that being that plus venetoclax how should we perhaps think about the profile of -- mutation profiles potentially changing in the future?

Dr. Brian Schwartz -- Chief Medical Officer

Maybe I can take this and I hope I got your question right. With regards to the combination and the development of the mutation I think it's still relatively early days in terms of which resistant mutations might develop. However there are a couple of things that are emerging with the combination. One is the fact that the combination may have a limited duration of treatment followed by a potential maintenance period with Ibrutinib viz the mutation we develop. But it's really very early on in terms of that. What I will say is that both in others -- in other literature and in some of our patients if a patient receives a covalent BTK inhibitor followed by a BCL2 inhibitor that mutation can persist once the patient progresses the BCL2 inhibitor. So one would imagine that you could develop the mutation even on -- while you're on both drugs as well but it's really too early to say.

Gregory James Renza -- RBC Capital Markets LLC Research Division -- Analyst

Thanks for I appreciate that.

Operator

Your next question comes from the line of Chad Messer. Your line is open.

Chad Messer -- Needham & Company -- Analyst

Great, thanks. Good morning, and thanks for taking my questions.

Dr. Brian Schwartz -- Chief Medical Officer

Yes, good morning.

Chad Messer -- Needham & Company -- Analyst

Obviously very excited for the ASH both abstract and presentation. So all my questions were on those -- on that compound. Until we have that data we can discuss it. So maybe just a couple of quick ones on 751 since you just put out some data on that recently I know it's a little bit earlier. It looks like 75 milligrams is what you're going forward in the expansion cohort. You selected that dose and are you going to have to dose-escalate for the combination arms?

Dr. Brian Schwartz -- Chief Medical Officer

So Chad 75 is a single agent dose we have a lot of experience there and finishing off the rarer mutations in that cohort. In terms of the combination with anastrozole the and with Texas Tech, we started a little bit lower and then dose-escalated to 75. But there's a high probability that we will end up with 75 as the recommended dose. Chemotherapy is always -- it's always difficult but with the anastrozole we don't think there's going to be any issue.

Chad Messer -- Needham & Company -- Analyst

Okay. And then maybe just a question on this PIK3CA H1047R mutation it seems others have also observed as you did that this may correlate with response? Any plans to pursue that?

Dr. Brian Schwartz -- Chief Medical Officer

It is one of the broader mutations and it is one of the -- it's actually really nice because that's the mutation we see in the PROS as well which seemed to respond better to miransertib. But it may be that not all PI3K mutations are equal and we will have to focus on a number of the driver mutations. The 1047R is one of the most -- one of the more common mutations or one of the more common mutations. But that is really where we have seen more of that with the -- with that specific driver mutation.

Chad Messer -- Needham & Company -- Analyst

Okay. And then I guess we're still waiting for a full presentation of the Phase I data. You do have all the patients from the dose escalation and their response and duration of therapy already kind of in here. Just wondering what additional data will get highlighted on? I presume more safety data since we don't have kind of that in here. But what else maybe?

Dr. Brian Schwartz -- Chief Medical Officer

I think we're just discussing exactly that with the investigator where we're going to -- what the plans are for the data for the Phase I dose escalation data and the Phase I expansion data. And we'll let you know as soon as we've agreed upon with MD Anderson. We would love to present it.

Chad Messer -- Needham & Company -- Analyst

All right, great. Thank

Operator

Your next question comes from the line of Ed White. Your line is open.

Edward Patrick White -- H.C. Wainwright & Co -- Analyst

Good morning, thanks for taking my questions.So maybe if I could switch gears just quickly over to the MOSAIC study congratulations on enrolling your first patient. Is this patient a PROS patient or a Proteus syndrome patient?

Dr. Brian Schwartz -- Chief Medical Officer

So we have enrolled a number of patients as of now and we can say that both groups have been enrolled as of now one. And we don't really talk too much about accrual but they both have been enrolled as of now.

Edward Patrick White -- H.C. Wainwright & Co -- Analyst

Okay. And since you're not going to talk about accrual I'm just wondering if maybe you can talk about the number of sites open? And are you having any issues identifying patients to enroll? Just trying to get an idea of how quickly we're going to be able to see the trial enroll.

Dr. Brian Schwartz -- Chief Medical Officer

Well this is a little bit difficult to predict in terms of how the accrual go. I just returned from the Proteus Syndrome Foundation meeting where we've clearly identified I would say more than the number of patients we would need in the trial. However they have to go through assessments at the appropriate physician or doctor. One of the more difficult components that we stumbled across in rare diseases is that it takes a while before patients actually get everything together to come into the trial. These are kids that have to travel a couple of hours on a plane to get to one of the sites and the families have to put a lot in place before all the visits are scheduled and all the tests are scheduled. So we're finding that it's been very difficult to predict. It's easy to identify the patients but it's difficult to predict when they're going to be enrolled. In terms of sites we have a number of sites open in the U.S. We have at least 2 enrolling anticipate a number more enrolling. We have 3 sites as of this week open in Europe. So we feel that things have started to really pick up in the last month or 2. And a site in Australia which has just opened this week as well. So we feel that the trial will definitely pick up in the next few months and we'll report an update in our next call.

Paolo Pucci -- Director and Chief Executive Officer

So the challenge -- your question seems to imply that we might have a challenge in identifying the patient. That's not exactly the case. I would say that the -- as we say that the objective -- the challenge we have is the logistics of things. But we have had experiencing the challenge in the past particularly when we had the NIH trial open where there was 1 site only open and people had to travel significant distance have a long stay there. And so we were prepared. But still that's the major challenge in the trial particularly for Proteus.

Edward Patrick White -- H.C. Wainwright & Co -- Analyst

Okay, great. Thank you for the update you want.

Operator

[Operator Instructions] Your next question comes from the line of Justin Kim. Your line is open.

Justin Kim -- Hakkasan -- Analyst

Thanks, everyone. Thanks.for taking the time. From Hakkasan,Just maybe with respect to the Phase II expansion ongoing for 531 will the team communicate if and when a cohort has been expanded by 14 patients and for the requisite 3 partial responses do those require to scan?

Paolo Pucci -- Director and Chief Executive Officer

The partial responses is through scans so it need to be confirmed. And the updates will come as they have come in the past with the Phase I more like -- preferably in the setting of major conferences.

Justin Kim -- Hakkasan -- Analyst

Okay. Got it. And then among the BTK C481S-mutant patients treated I believe the enrollment criteria calls for at least 2 systemic therapies. So do you have a sense on whether the majority of these patients will be venetoclax-experience based on the current enrollment experience?

Dr. Brian Schwartz -- Chief Medical Officer

So it's really mixed. You're right with the FDA the initial one was at least 2 prior therapies but it's really mixed at this point in time. I'd say about 1 in 3 has had venetoclax all of them heavily pretreated most of them high risk falling in one of the high-risk categories. But I'd say that's right now 1 in 3. I think as we move to more sites it may change a little bit.

Justin Kim -- Hakkasan -- Analyst

Okay. Thanks Brian. And maybe just on the preclinical work being done for combinations. Do you have a sense on when you might be able to sort of publish those findings of 531 in combination with things such as venetoclax?

Dr. Brian Schwartz -- Chief Medical Officer

Our goal is to try and get as much information out of these preclinical studies. So they will run longer than most other studies. So sometime next year I would imagine we'd like to...

Paolo Pucci -- Director and Chief Executive Officer

Second parts of next year likely.

Dr. Brian Schwartz -- Chief Medical Officer

Yes. We would really like to see a number of endpoints here looking at some of the questions that were asked earlier about the combination and answer them in the preclinical as well.

Justin Kim -- Hakkasan -- Analyst

Okay. And maybe just a final question. As we think about the update at ASH can you just remind us sort of what the schedule for scans is after the second one?

Dr. Brian Schwartz -- Chief Medical Officer

So it's the first one around two months. The second one between four and five months. Then about three to four months after that. And then they start going on to a 6 monthly schedule.

Operator

Okay, great. Thanks so much, everyone.I'm showing no further questions at this time. I would now like to turn the conference back to Marc Schegerin.

Marc Schegerin -- Chief Financial Officer

Thanks everyone for joining. This concludes the call.

Operator

[Operator Closing Remarks]

Duration: 65 minutes

Call participants:

Marc Schegerin -- Chief Financial Officer

Paolo Pucci -- Director and Chief Executive Officer

Dr. Brian Schwartz -- Chief Medical Officer

Peter S. Lawrence -- President, Chief Operating Officer

Jonathan Chang

Varun Kumar -- Cantor Fitzgerald & Co. -- Analyst

Tony Butler

Gregory James Renza -- RBC Capital Markets LLC Research Division -- Analyst

Chad Messer -- Needham & Company -- Analyst

Edward Patrick White -- H.C. Wainwright & Co -- Analyst

Justin Kim -- Hakkasan -- Analyst

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