OPKO Health, Inc. (OPK) Q3 2026 Earnings Report, Transcript and Summary

Good day, and welcome to the OPKO Health Third Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Vivian Cervantes, Alliance Advisors Investor Relations. Please go ahead.

Thank you, operator. Good afternoon, everyone. Thank you for joining us in today's call to discuss OPKO Health's financial results for the third quarter of 2026. I'd like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward-looking and as such, are subject to risks and uncertainties that could materially affect the company's results. Those forward-looking statements include, without limitation, the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2025. Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, November 4, 2026. Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Regarding the format of today's call, Dr. Phillip Frost, Chairman and Chief Executive Officer, will provide opening remarks. Dr. Elias Zerhouni, President and Vice Chairman, will then review OPKO's pipeline and business. After that, Adam Logal, OPKO's Chief Financial Officer, will review the now's LabCorp transaction, the company's third quarter financial results and its outlook. We will then open the line to the call for questions. I'd now like to turn the call over to Dr. Frost.

Good afternoon, and thank you for joining us today. The LabCorp transaction marks a defining moment for OPKO. Once closed, it will complete our exit from clinical laboratory services, sharpen our focus and allow our management attention, our people and our capital to focus on biotech innovation and our global products business. Adam will provide the transaction and financial details later. This reflects the approach we have applied throughout OPKO's history, build differentiated businesses and assets, validate their value, monetize them at the right time and redeploy capital into our highest return opportunities. Going forward, OPKO is centered on 2 continuing businesses. Innovative Biotech brings together ModeX and OPKO Biologics with a broad portfolio across oncology, immunology, infectious disease and endocrinology. Global products include Rayaldee and our international pharmaceutical operations with established commercial capabilities and recurrent cash flow. The third quarter was one of steady execution across our pipeline. ModeX expanded its clinical activity, completed enrollment in the planned Phase I cohorts for MDX-2301 and continue advancing our differentiated in vivo CAR-T platform toward the clinic. Elias will discuss that progress. The collaborations with Merck, Regeneron, Entera Bio and BARDA continue to add scientific capability, external validation and nondilutive support, while NGENLA, Rayaldee and our international operations contribute to the strength of the business. During the quarter, we purchased over 7 million shares of our common stock, leaving over $80 million of our $220 million authorization for additional purposes. With that, I'll turn the call over to Elias for a review of our pipeline and business. Elias?

Thank you, Phil, and good afternoon, everyone. I'll begin with ModeX, where our work during the third quarter was centered on clinical execution and preparation for the next stages of development. We continue to advance multiple clinical programs while building the foundation for the next wave of opportunities across our portfolio. So let me start with MGX-2001, which is our tetra-specific T cell engager for solid tumors. MDX-2001 targets 2 tumor antigens, TROP2 and c-MET while engaging CD3 and CD28 on T cells. The design is intended to address tumor heterogeneity while providing both T cell activation and co-stimulation. As of September 30, we had enrolled 41 patients in the Phase I study. We continued intravenous dose escalation against diverse tumor types in order to establish a positive safety profile and then refined our enrollment strategy to focus on tumor types with the biology and emerging clinical experience suggests the greatest potential for activity. We have also received regulatory approval to proceed with subcu dosing, subcutaneous dosing, which may provide greater dosing flexibility, potentially improve tolerability and make treatment more convenient for patients. And these studies will begin in late 2026 or early 2027. Our priorities are to continue enrollment in selected tumor populations, further characterize the safety and pharmacologic profile and initiate subcutaneous dosing cohorts. We're also planning to submit early clinical data at an upcoming scientific meeting. Now MDX2003 is our CD19, CD20 tetra-specific T cell engager and expander. MDX2003 targets CD19 and CD20 on B cells and CD3 and CD28 on T cells and dual targeting on the tumor cells is designed to address antigen loss and immune escape, which is a frequent cause of relapse, while CD28 co-stimulation, combined with CD3 activation is intended to support more sustained T cell activity and hopefully greater efficacy. Our initial focus remains B cell malignancies with autoimmune indications as a potential follow-on opportunity. During the quarter, we continued dose escalation designed to generate safety, pharmacologic and dose selection information. 6 sites were active across Australia and Israel as of September 30, with 2 more sites being added this quarter. We have also received approval to begin clinical trials of MDX2003 in Europe with 8 additional sites being added in Spain and Italy by early 2027. We're also preparing for subcutaneous administration, which we expect to begin in 2027, subject to regulatory and ethics approval. Now MDX2004 is our multi-specific immune rejuvenator. MDX2004 is designed to activate and support T cells through CD3, D28 and 41BB signaling. Now rather than targeting a tumor antigen, it is intended to stimulate the patient's immune stem cells to replenish T cell function that is often exhausted by chronic stimulation. Our vision is to make MDX2004 applicable to a wide range of indications where enhancement of the immune response against tumors or other targets is necessary. As of September 30, 16 patients have been enrolled and the study has progressed into its fourth dose cohort. And during the quarter, we moved to weekly dosing to improve drug exposure and received approval from relevant health authorities to begin subcutaneous dosing, which will enable easier and more convenient administration. These studies will begin in early '27. We also opened a clinical site in Moldova, where checkpoint inhibitors are not routinely available through the public health system, and this allows us to study MDX2004 in PD-1 naive patients and to understand whether prior checkpoint exposure affects its activity, which will help inform whether a future combination with a PD-1 inhibitor is warranted. Our MDX2301 is our multi-specific COVID-19 antibody developed with funding from BARDA. bar2301 targets conserved regions of the SARS-CoV-2 spike protein and is designed to maintain activity across evolving variants, particularly for immunocompromised individuals who may not be adequately protected by vaccination. All planned cohorts in the Phase I study have been enrolled. -- and the blinded safety profile has been favorable across the dose levels evaluated. The final repeat dose was scheduled in September, and the team is now completing follow-up and compiling pharmacokinetic, immunogenicity and viral neutralization data. We're also advancing a high concentration formulation to support a more practical subcutaneous presentation. And so together, this will inform potential Phase II and Phase III development in higher-risk populations and product also continues to support our multi-specific influenza program. Now MDX3001 is our first in vivo CAR-T development program. Our in vivo CAR-T platform combines targeted lipid nanoparticles with ModeX multi-specific antibody to deliver a CAR payload directly to several selected cell types in the body. We believe this approach offers important advantages over ex vivo CAR-T, including off-the-shelf administration, the potential for redosing and more efficient targeting. Preclinical studies have demonstrated in vivo CAR-T cell generation and B-cell depletion in blood and lymphoid tissues in humanized mouse as well as nonhuman primate models. We continue to target first-in-human studies in mid-2027 initially in autoimmune disease. This shift from our previously announced time line reflects new regulatory requirements for initiating investigator-initiated clinical trials in China. Now moving to our partnerships. Our collaboration with Merck on the Epstein-Barr virus vaccine continues to progress. The Phase I analysis is intended to support adjuvant selection and inform the design of a potential Phase II study with timing and design subject to Merck's decisions. Our Regeneron collaboration remains focused on 4 initial discovery programs combining Regeneron's antibody binders with the ModeX multi-specific platform and all 4 programs have advanced per plan. Next, let me switch and talk about our OPKO Biologics and Global Products, which continue to also make meaningful progress. So outside of ModeX programs, the Phase I/IIa study of OPKO-88006, which is our once-weekly GLP-1 glucagon receptor agonist continues in healthy volunteers. We're currently screening participants with presumed MASH for a planned 20-week portion of the study. We're also advancing our long-acting growth hormone antagonist for acromegaly and our oral PTH program with Entera Bio for hypoparathyroidism. NGENLA continues to expand globally through Pfizer, supported by ongoing label expansion studies. And within our Global Products segment, Rayaldee and our international pharmaceutical operations continue to deliver recurring revenue and cash flow that help fund our innovation. And now finally, BioReference Health. First, let me just recognize the BioReference team. Over the past 2 years, as you know, they restructured the business around its core New York and New Jersey operations, correctional health and the 4Kscore test. Significantly improving its operating efficiency, that work helped position the business for the transaction with LabCorp. And until closing of the transaction, which remains subject to regulatory approvals and customary closing conditions, BioReference will continue operating and serving patients, physicians and clients, and we will work very closely with LabCorp to support a smooth transition following closing. And now further details will be provided by Adam Logal about this transaction. So in closing, this is really a transformational period for OPKO. Once closed, the LabCorp transaction will complete our transition to a focused biopharmaceutical company, as mentioned by Phil, and our pipeline continues to advance on multiple fronts. Our priorities remain to be disciplined to generate and follow the data, concentrate resources on the strongest opportunities, engage in partnerships strategically and advance each program along the most efficient path with optimal resource allocation to avoid unnecessary costs. So with that, I'll turn the call over to Adam to review the LabCorp transaction, our new financial presentation and our third quarter results and outlook. Adam?

Thank you, Elias, and good afternoon, everyone. As both Phil and Elias mentioned, the LabCorp agreement was announced on October 15 and is a defining step for OPKO. I'll start with the deal terms, then explain what it means for how we report our results and then turn to the quarter. The LabCorp will acquire select assets of BioReference for approximately $722 million in cash at closing. That cash is subject to an adjustment based on the revenue of the business leading up to closing. And OPKO is eligible to receive royalty payments of up to $150 million based on 4Kscore revenue over the next 10 years. The assets include our clinical and women's health testing, urology and corrections businesses as well as more than 80 patient service centers and finally, our FDA-approved 4Kscore test. As Elias mentioned, closing is subject to regulatory approvals and customary closing conditions. For shareholders, this does 2 things. It completes the repositioning of OPKO that we began in 2022 when we sold GeneDx and acquired ModeX, leaving a focused company built around our Global Products and Innovative Biotech. It provides substantial capital to fund the pipeline Elias just walked us through, and it also changes how we present our numbers. So let me cover that first. On September 30, our Board approved a plan to sell substantially all of our remaining BioReference operations to LabCorp. And as a result, BioReference is now classified as a held-for-sale asset and is presented as discontinued operations for all periods with all prior periods being recast. In practical terms, the results I'll walk through today reflect only the business OPKO will keep after closing. We now report those continuing operations through 2 segments: Global Products and Innovative Biotech, with unallocated corporate costs shown separately. This matches how our executive team evaluates performance, allocates resources and manages the business. Global Products include our commercial pharmaceutical operations, OPKO Iberia America, our pharmaceutical businesses in Spain, Chile and Mexico; Eirgen, our specialty manufacturing business in Ireland and Rayaldee. Our Innovative Biotech segment includes our intellectual property assets, royalty interest, strategic collaborations and development programs, including ModeX, NGENLA, Economics and our biologics platform. Until the transaction closes, BioReference will continue to operate as usual and will report its results in discontinued operations each quarter. So turning to the quarter. Revenue from continuing operations grew 16% in the third quarter compared with the third quarter of 2025. Both product revenue and licensing, collaboration and other revenue came in ahead of our expectations, led by OPKO Iberia America, Rayaldee and our Mazdutide royalties. We have also strengthened our balance sheet with $125 million of nondilutive financing from Healthcare Royalty while continuing to repurchase shares of our common stock. Consolidated revenue was $65.4 million for the third quarter of 2026 compared with $56.4 million in the third quarter of 2025. Our Global Product segment generated a total revenue of $48.4 million in the third quarter of 2026, with product revenue growing 11% to $41.8 million, led by OPKO Iberia America and the continued growth of Rayaldee. Licensing, collaboration and other revenue of $6.6 million was driven by $5.8 million of Mazdutide royalties from Lilly through Innovent's commercialization of Mazdutide in China. Global Products segment costs and expenses were $42.4 million compared with $40.6 million in the prior year quarter, resulting in operating income of $6 million compared with an operating loss of $1.2 million for the third quarter of 2025. Our Innovative Biotech segment generated total revenue of $17 million, all from licensing, collaboration and other revenue, including Pfizer gross profit share of $8.7 million compared to $8.8 million in the third quarter of 2025. In the quarter, gross profit share faced a headwind in the U.S. market where Genotropin had a negative gross to net impact due to the utilization of certain government programs. Pfizer continues to make progress with the global commercialization of NGENLA with meaningful contributions of growth from in the European, Japanese and U.S. regions. Weekly growth hormone therapies continue to gain share as the market moves away from daily injections and NGENLA remains well positioned to benefit from that shift. The segment also included BARDA funding of $7.5 million during Q3 2026 compared with $8.2 million in 2025. The decrease reflects our move from CMC activities in the prior quarter to the clinical phase of the program, which Elias outlined. Our Regeneron collaboration generated revenue of approximately $800,000. Our Innovative Biotech segment costs and expenses were $43.8 million compared with $39.5 million in the prior year quarter, reflecting increased activity in our early-stage clinical programs. Its operating loss was $26.8 million compared with $22.5 million in the third quarter of 2025, with the difference coming from our increased investments in our research and development activities. On a consolidated basis, R&D expense was $32.2 million compared with $29.8 million and depreciation and amortization expense was $18.9 million compared with $18 million in the prior year quarter. Our consolidated operating loss was $31.4 million compared with $33.6 million in the third quarter of 2025. Moving to our balance sheet. We ended the quarter with $403.2 million in cash, cash equivalents and restricted cash, which is more than enough to fund our operations and development plans while we continue to return capital to our shareholders. As I mentioned, in August, we expanded our relationship with Healthcare Royalty Partners by issuing an additional $125 million of secured notes, which are secured by our Mazdutide royalty interest. The notes mature in 2044 and total payments are capped at 1.5x the amount funded. Once the cap is reached, OPKO keeps the future royalty economics, which gives us nondilutive capital today while preserving meaningful long-term upside in the Mazdutide franchise. During the third quarter of 2026, we repurchased approximately 7.2 million shares for $10.6 million with an average price of $1.48 per share, and we have approximately $84.3 million remaining under our current authorization. Now I'll turn to our outlook. And given our exit from Diagnostics and the pending LabCorp transaction, we're withdrawing our consolidated full year guidance for total revenue and costs. After closing, we'd expect to enter into a transition services agreement or TSA with LabCorp to support the transition of the business which we expect to continue for approximately 1 year after closing. And we expect the total costs and expenses related to the sale of BioReference to be approximately $125 million, which will record between the fourth quarter of 2026 and through the completion of the TSA. As the timing of the closing becomes more clear, we'll provide more detail on the expected results of operations for discontinued operations as well as our anticipated gain that is expected upon closing. For the fourth quarter, we expect total revenue from continuing operations of $62 million to $72 million, including product revenue of $41 million to $46 licensing, collaboration and other revenue of $21 million to $27 million, including Pfizer gross profit share of $12.5 million to $15 million; and finally, BARDA funding of approximately $3 million to $5 million. We expect our total costs and expenses from continuing operations to be between $100 million and $105 million, including R&D expense of $32 million to $35 million. Depreciation and amortization expense is expected to be approximately $19 million and our loss from discontinued operations of approximately $40 million or approximately $0.05 per share. This reflects BioReference's operating loss expected during the quarter, employee retention costs and costs related to the anticipation reduction in the useful life of certain assets -- for the full year, we're updating our guidance for continuing operations. Our business has some seasonality, and we expect the fourth quarter to benefit from the improved gross to net on NGENLA. We expect our total revenue from continuing operations for the year to be approximately $268 million to $278 million, including product revenue of $164 million to $169 million. We expect licensing, collaboration and other revenue of $105 million to $110 million, including Pfizer's gross profit share of $34 million to $37 million and total BARDA funding of $20 million to $22 million. We expect full year cost and expenses from continuing operations of $390 million to $395 million, including R&D expense of $125 million to $130 -- we expect depreciation and amortization expense of approximately $75 million. That concludes our prepared remarks. Operator, would you please open the call for questions?

[Operator Instructions] Our first question comes from Edward Tenthoff with Piper Sandler.

On the LabCorp sale. Really looks like it's going to finance the company for a while going forward. Questions on the data readouts on 2001 and 2004 in the first half. Can you give us a little bit more of a sense of what to expect from those in terms of patients, maybe doses, things along those lines? What should we be expecting from those initial updates?

Yes. We are going to present actually the data we have on the -- all of the -- what we learned about the molecule and how -- whether there are ADAs or not. But I'll let Gary speak to your questions, both on 2001 and 2004 is closest to the execution. Gary?

Yes. Thanks, Elias. For 2001, the 2 products are obviously in different stages. For MDX2001, we treated 41 patients as of the end of September. What we're doing at this point is we think we're probably fairly close to the maximum tolerated dose by the IV route. Our goal is to reach that point where we think we'll probably be there by early 2027. As we're doing that, because we are seeing some signs that the molecule is engaging targets and causing some element of immune stimulation. We're starting to shift the types of patients that we're enrolling to tumors where we might expect to see more immunogenicity and therefore, maybe a greater likelihood of regression. So that's the plan for the IV dose. While that's going on, we now have approval for 2001 to begin subcutaneous dosing. Elias mentioned the very compelling reasons to begin that. we'll start dose down from the current IV dose and then continue the escalation with subQ. And a big reason for this is that the kinetics of distribution of the drug when it's given IV is very different than the IV route, subQ versus IV. And it's a way of both minimizing side effects and potentially maximizing efficacy. We think those studies would probably start in early 2027. It could be a little sooner, a little -- not much later, but somewhere in that time frame. 2004 is earlier in its study. But we are making progress with the IV route. And essentially, it's the same playbook. We're probably a little bit earlier in terms of the dose escalation, but we will begin the transition to subcutaneous as soon as we clear the next dose level. And again, the expectation would be late this year, early next year. With 2004, it's a little bit unclear what the tumor types will be at this point because you'll recall that 2004 is tumor agnostic. And so what we'll be doing is starting to look for tumors that tend to be more immunogenic, but there's a little bit -- and there are other indications we can explore for 2004, but we really want to get up to the maximum tolerated dose by both routes.

And just one quick follow-up. Would you continue with those? Or would you only develop subQ once you've got that data in hand?

Yes, it's a great question. I think we've got to be careful not to get too far ahead of ourselves. We don't know yet that subQ will be well tolerated. If it is well tolerated, we will continue to accelerate it. I think we will -- if it's not, obviously, then those studies will have to stop. And what we do know is that there is a path for IV dosing, we are able to manage side effects at the doses we've administered. So I'd just say that IV is first priority. And then once we see how subQ goes, we will make the decision. We'd love it if subQ works for all the reasons Elias mentioned earlier.

And the next question comes from Kevin DeGeeter with Ladenburg.

I mean, I guess just maybe 2 for us on capital allocation, particularly post the potential close of the LabCorp divestiture. Just how do you think about your path to perhaps accelerate the timing of return of capital to shareholders in light of a very significant cash balance potentially after the close of the transaction? And Adam, can you just give us a baseline as to how to think about kind of core burn rate or operating use of cash after adjusting for all of the transactional components and the divestiture of the diagnostic services business on a quarterly or annual basis?

Yes. So maybe I'll take the questions backwards. So Kevin, on the burn, we're going to continue to generate cash from our global pharma business. I think if you look this quarter generated about $6 million of operating income, and that had about $6 million of depreciation, amortization, noncash expenses included in it. So there's some good cash conversion coming off of that business. And then when you compare that to the operating results of the Innovative Biotech segment, that used -- it had about a $26 million operating loss, but then again had about $14 million of depreciation and amortization. So those 2 numbers come pretty close to funding each other. I think we would expect to see growth in the R&D numbers as the products move through the clinic. But we would expect to have a pretty managed balance against the operating results of the business. So investing $100 million into operations if we're going to accelerate programs or take on new programs, I think, is not an unreasonable annual number to think about. Obviously, we'll service the outstanding notes that are out there as well through the cash flows that come off the partner products that we have with Lilly and Pfizer. So more broadly speaking, as it goes to capital allocation, I think as we get closer to the timing of the closing of the LabCorp transaction, we'll give more clarity. We'll talk through that. The Board, I'm sure, will want to consider how to accelerate additional share repurchase programs and expand those as appropriate.

And the next question comes from Yi Chen with H.C. Wainwright & Company.

My first question is, can you tell us whether you are satisfied with the current growth trajectory of NGENLA sales and how the sales progressing across different geographies?

Yes. So, thanks for the question. So the short answer is it's delivering against our expectations. So we guided -- we increased our guide last quarter slightly for NGENLA. We held it for the year. We held it consistent this quarter. NGENLA is growing pretty nicely across all regions. We are seeing headwinds in the Genotropin in the daily space. So that's offsetting some of the payments that we receive. But I think overall growth it's growing quite nicely and taking share in the U.S. market while the market grows, maintaining its share in the Japanese region and really continuing its leadership position throughout Europe. So I think as Pfizer gets the additional indications approved, as Elias mentioned, those trials are ongoing. We would expect the market share to continue to increase and the growth rate to pick up over the next several years.

Got it. And my follow-up question is regarding the royalty stream from Lilly's Mazdutide. So how should we look at the economics for OPKO now you have the royalty-backed notes issued with the healthcare royalty?

Yes. So as you know, we did the royalty financing last -- well, in August. That provided us with $125 million of cash when we closed that financing. So that pulled forward about what we would estimate around 8 to 10 years of royalty streams under the current run rates. So all of the Mazdutide royalties that come in are going to be returned to pay down those notes interest first and then any remaining principal gets applied. So effectively, all of the economics will go to Healthcare Royalty until the cap gets reached as it comes from Mazdutide.

Got it. That's helpful. Lastly, can you give us a quick update regarding the status of the Rayaldee commercialized by Nicoya in Greater China?

Yes. So they are currently marketing the product through an economic zone in Macau, but they are pending Chinese FDA approval for the indications to go on to the national coverage there. So that's ongoing. Once they have that formal FDA approval in China, we would expect the sales to start to increase and grow from there. But as of now, it's slow going, but through the Internet channel that they're using out of Macau.

And the next question comes from Yale Jen with Laidlaw & Company.

Given you guys have so many pipeline products in development, would that be -- would you guys be able to sort of summarize a little bit in terms of data-driven catalysts over the next 12 months? And I have a follow-on question.

Yes, sure. I can start. And maybe, Gary, correct me if I'm missing something. I have a little bit of a problem with my voice. But I think the first catalyst, obviously, is the Merck's decision relative to the Phase II that should happen, I hope soon. The second is obviously our 2301, which has finished its Phase I, and that should really tell us what to do next. The third one is going to be the 88006, which is our glucagon GLP-1 agonist and has a 20 weeks trial period so that we will probably get some information within 2027. The same is true for 2001. We hope to get some definitive information for 2001. So '27 is a busy year. 2004, I would say we would get a good sense. We've already gotten all the 3 dose escalations. We're going to the fourth. And for -- I'm talking about 2004 now. And so that should really be an interim results in terms of Phase Ia, consider it the Phase Ia. And then the CAR-T program will obviously be going to IIT, which are not too long. So I think we'll probably read out to late end '27, beginning '28 at most. The other programs, which are interesting is the acromegaly program, which has already started dosing patients. And these rare disease trials don't really involve a large number of patients. So we should really have a readout on that one within 2027. And the antiparathyroidism is also going. And can't tell you exactly when you get a readout on that one. Adam, can you help?

Yes. We haven't started that trial yet. So once it does make it, the clinic, we'll get.

Right. So I'm not so sure about that one. So I hope that helps.

Yes. That will be very valuable for us. And maybe just one more question here. You mentioned about 2004 and -- which is the tumor agnostic.

Yes. Forgive me, I forgot 2003. So 2003 is ongoing, as we said, it's really in its early phase. And also with the number of sites that we're opening, we really need to hope to get the Phase Ia data for 2003 by the third quarter, fourth quarter of '27.

Okay. Great. That's no problem. That's a very useful addition here. And in terms of 2004, you mentioned this is tumor agnostic and more for immunoactive tumors potentially. Would you -- would the melanoma, kidney as well as lung cancer be the possible candidate as we think about it going forward?

Yes, it's hard to tell. I mean think of it like a -- it's tumor agnostic the same way PD-1 is tumor agnostic, right? It's just the checkpoint inhibitor. So PD-1 removes the brakes that are usually appearing in T cells because tumors send a signal to the T cell to go to rest. And it blocks the activity of the T cell, okay? However, the second way to get a strong immune response, just like you get with PD-1 is to accelerate the system, activate the system with CD3, CD28 and 4-1BB. And we have very strong data that it's really a powerful potential powerful lever, if you will. However, when you think about what would be the best tumor, the best tumor would be tumors that have already shown response either historically or through other trials or in our own trials because, obviously, a tumor-agnostic molecule is going to act on the T cells, increase their numbers, enhance their survival, which is what we do with 2003, by the way. But then even more so, with the addition of 4-1BB, you're going to get an increase in the population of stem cell memory cells, which hopefully will magnify the immune response to a degree that's not achievable by PD-1 alone. And that's what we're trying to do, right? So I can't tell you which tumor would be ideal until we really figure out exactly how do they get exhausted, when do they get exhausted and how you can really rejuvenate them. That's the idea of the program. This is what I call a pipeline in the drug because it has multiple indications. But the entry indication at this point, I just can't tell you. Gary, am I saying anything that you'd like to.

Yes. Let me -- I think you've got it. Let me maybe phrase it in a way that could be helpful to -- for answering the question. I think really what Elias is saying at the end of the day is we will have to do some type of a basket trial. We will look for preliminary signals. It is very likely that some of the tumor types that you mentioned will be high on our list because they are naturally responsive to immune stimulation. The only other thing I would add, though, just to make sure that you're clear on the explanation. PD-1 acts on the immune system by releasing the brakes. MDX2004 acts through a different mechanism. It's like stepping on the gas. And so a very high priority for us will be once we establish the safety to also look in the immunogenic tumors that have already been treated and are resistant to PD-1 because there, we have an orthogonal approach. So I think the answer is basket trial, sampling of some of the PD-1 failures and then like in all cancer trials, just looking for signals, the Phase Ib type approach and then doubling down where we do see them.

This concludes our question-and-answer session. I would like to turn the conference back over to Dr. Frost for any closing remarks.

I'd just like to thank everybody for participating in the call and for your very good questions. We look forward to meeting with you again after the fourth quarter to go over the fourth quarter and full year results. So be in touch with you then.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.