Q3 2019 Earnings Call

Good afternoon will begin to Macrogenics 2019, third quarter corporate progress and financial results conference call and just a moment.

Operator: We will begin the MacroGenics 2019 3rd Quarter Corporate Progress and Financial Results Conference Call. All participants are in listen-only mode at the moment, and we will conduct a question and answer session at the conclusion of the call. At this point, I will turn the call over to Anna Krasovska, Vice President, Investor Relations, and Corporate Communications, MacroGenics. Thank you.

All participants are in listen only mode at the moment and we will conduct a question answer session at the conclusion of the call.

At this point I will turn the call over to and of course Oscar.

Vice President Investor Relations and corporate Communications I'm back Oragenics.

Thank you good afternoon, and welcome to Macrogenics. This conference call to discuss our third quarter 2019 financial and operational results for anyone who has not had a chance to review our results. We issued a press release. This afternoon outlining today's announcement, which is available under the investors tab on our website at Macrogenics Dot com.

Anna Krasovska: Good afternoon, and welcome to MacroGenics' conference call to discuss our third quarter 2019 financial and operational results. For anyone who has not had a chance to review our results, we issued a press release this afternoon outlining today's announcements, which is available under the Investors tab on our website at macrogenics.com. You may also listen to this conference call via webcast on our website, where it will be archived for 30 days, beginning approximately two hours after the call is completed.

He may also listen to this conference call My webcast on our website, where it will be archived for 30 days beginning approximately two hours after the call is completed.

Anna Krasovska: I would like to alert listeners that today's discussion will include statements about the company's future expectations, plans, and prospects that constitute forward-looking statements for purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk factors section of our annual, quarterly, and current reports filed with the SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change, except to the extent required by applicable law. And now I'd like to turn the call over to Dr. Scott Koenig, MacroGenics' President and Chief Executive Officer.

I would like to alert listeners that today's discussion will include statements about the company's future expectations plans and prospects that constitute forward looking statements for purposes of the safe Harbor provisions under the private Securities Litigation Reform Act 1995.

Actual results may differ materially from those indicated by these forward looking statements as a result, various important factors, including those discussed in the risk factor section of our annual quarterly income reports filed with the FCC. In addition, any forward looking statements represent our views only as of today and should not be <unk>.

Kind upon as representing our views as of any subsequent date, while we may elect to update these forward looking statements at some point in the future. We specifically disclaim any obligation to do so even if our views changed except to the extent of required by applicable law.

Now I'd like to turn the call over to Dr. SKO, obtaining macrogenics at the President and Chief Executive Officer.

Scott Koenig: Thank you, Anna. I'd like to welcome everyone participating via conference call and webcast today. Thank you for joining us. This afternoon, I will focus my prepared remarks on our more advanced programs and the near-term milestones expected during the remainder of the year. But before I do so, I will first turn the call over to Jim Karrels, Senior Vice President and Chief Financial Officer, who will review our financial results for the quarter.

Thank you router.

I'd like to welcome everyone participating via conference call and webcast today.

Thank you for joining us.

Good afternoon, I will focus my prepared remarks on our more advanced programs in the near term milestones expected during the remainder of the here.

But before I do so let me first turning the call over to Jim Carol Senior Vice President and Chief Financial Officer, who will review our financial results for the quarter.

James Karrels: Thank you, Scott. This afternoon, MacroGenics reported financial results for the quarter ended September 30, 2019, which highlighted our financial position as well as the progress we have made over the quarter. As described in our release, MacroGenics had research and development expenses of $44.9 million for the quarter ended September 30, 2019, compared to $46.2 million for the quarter ended September 30, 2018. This decrease was due to decreased development and manufacturing costs for MgAO-12 and flutatuzumab, partially offset by increased clinical trial costs related to our MgDO-13 study. We had general and administrative expenses of $11.8 million for the quarter ending September 30, 2019 compared to $9.6 million for the quarter ending September 30, 2018. This increase was primarily due to consulting expenses and other professional service fees.

Thank you Scott.

This afternoon Macrogenics reported financial results for the quarter ended September 32019, which highlight our financial position.

As well as the progress we've made over the quarter as described in our release Macrogenics had research and development expenses of $44.9 million for the quarter ended September 32019, compared to $46.2 million for the quarter ended September 32018.

This decrease was due to decreased development and manufacturing cost for Mgo 12, and flow twos Mad partially offset by increased clinical trial costs related to our MTO 13 study.

We had general and administrative expenses of $11.8 billion for the quarter ended September 32019, compared to $9.6 million per quarter ended September 32018. This increase was primarily due to consulting expenses and other professional service fees.

James Karrels: We recorded total revenue consisting primarily of revenue from collaborative agreements of $18.7 million for the quarter ending September 30, 2019, compared to $20.8 million for the quarter ending September 30, 2018. The decrease was primarily due to decreased revenue recognized under our collaboration and license agreement with Insight. This decrease was partially offset by an increase in revenue recognized from the Deferred Upfront Payments under both our Collaboration and License Agreements with Zylab and Servier, as well as revenue related to manufacturing services performed under our clinical supply agreements with Xylab. We had a net loss of $44.6 million for the quarter ended September 30, 2019, compared to a net loss of $34 million for the quarter ended September 30, 2018. Note that for the quarter ended September 30, 2019, this net loss reflected other expenses of $6.7 million, which included $7.6 million in unrealized losses recognized on corporate equity securities held. And finally, our cash equivalents and marketable securities as of September 30, 2019 were $254.4 million compared to $232.9 million as of December 31, 2018. And now, I'll turn the call back to Scott.

We recorded total revenue consisting primarily of revenue from collaborative agreements of $18.7 million for the quarter ended September 32019, compared to $20.8 million for the quarter ended September 32018. The decrease was primarily due to decreased revenue recognized under our collaboration and.

Since agreement with insight.

This decrease was partially offset by an increase in revenue recognized from the deferred upfront payments under both our collaboration and license agreements with Xylem and survey.

As well as revenue related to manufacturing services performed under our clinical supply agreements with this I laugh.

We had a net loss of $44.6 million for the quarter ended September 32019, compared to net loss of $34 million for the quarter ended September 32018 note that for the quarter ended September 32019. This net loss reflected other expenses of $6.7 million, which included 7.6.

$9 in unrealized losses recognized on corporate equity Securities held.

And finally, our cash cash equivalents and marketable securities as of September 32019 were $254.4 million compared to $232.9 million as of December 31, 2018.

And now I'll turn the call back to Scott.

Thank you Jim let's begin with margin talks a map our investigational FC optimized anti hertwo antibody being evaluated in Sofia, our phase three trial in Hertwo positive metastatic breast cancer designed to compare margin talks about plus chemotherapy against tries to them that plus chemotherapy.

We have previously reported that progression free survival in the margin talks about bar was prolong compared to the chose to the map our meeting the studies first sequential primary endpoint.

Scott Koenig: Thank you, Jim. Let's begin with margituximab, our investigational FC-optimized anti-HER2 antibody being evaluated in SOFIA, our Phase 3 trial in HER2-positive metastatic breast cancer designed to compare margituximab plus chemotherapy against trastuzumab plus chemotherapy. We have previously reported that progression-free survival in the Margin-Tuximab arm was prolonged compared to the Trastuzumab arm, meeting the study's first sequential primary endpoint. In October, we reported data from the second pre-specified interim analysis of overall survival conducted after 270 events had been reached. The data showed a trend in OS in favor of margituximab. In the intensity population, the median OS of patients treated with margituximab and chemotherapy was 21.6 months compared to 19.8 months for patients who received trastuzumab and chemotherapy, a prolonged median survival of 1.8 months.

In October we reported data from the second pre specified interim analysis of overall survival conducted after 270 events have been reached the data showed a trend than whereas in favor of margin talks in that.

In the intense tree population the median though as the patients treated with margin talks to NAV and chemotherapy was 21.6 months compared to 19.8 months for patients who receive tries to do not think chemotherapy Pro War median survival of 1.8 months the hazard ratio was zero point.

Hey, nine and the P value was 0.33.

Merger talks about the optimized does seem region bonds with increased affinity to CD Sixteena day, including the 158 F lower for the deal we'll carried by approximately 85% of the human population.

In the pre specified exploratory analysis of this major subpopulation of genetically defined patients in Sofia carrying the one says the eight Appfolio media, though as was 23.7 months in the margin talks about bar compared to 19.4 month in the drugs to the map our approach.

Engaged in a 4.3 months.

Scott Koenig: The hazard ratio was 0.89, and the p-value was 0.33. Marjit Toxomab's optimized FC region binds with increased affinity to CD16A, including the 158F low-affinity allele carried by approximately 85% of the human population. In the pre-specified exploratory analysis of this major subpopulation of genetically defined patients in SOFIA carrying the 158-epileal, median OS was 23.7 months in the margituximab arm compared to 19.4 months in the trastuzumab arm, a prolongation of 4.3 months. The Haas Ratio was 0.79, and the p-value was 0.09. We look forward to presenting further details of the second interim analysis at the San Antonio Breast Cancer Symposium on December 11th. The final OS analysis is planned after 385 events have accrued and is projected to be completed in 2020.

The hazard ratio was 0.79 and the P value was 0.09.

We look forward to present the further details of the second interim analysis at the San Antonio breast cancer Symposium on December 11th the final. It wasn't houses is plan. After 385 events of accrued and is projected to be completed in 2020.

We believe that patients with her two positive metastatic breast cancer need access to new therapies margin tariffs and if approved by regulators will address an important unmet need and could become a valuable treatment option for patients living with this devastating disease.

Therefore, we expect to submit ability to the FDA before the ended the year.

We also seemed to address unmet needs of her two positive cancers beyond breast cancer.

At the ethanol Com causes Congress in September we presented updated data from our ongoing phase two study evaluating larger toxins in combination with Pembrolizumab in second line patients with her two positive metastatic gastric cancer.

This study is testing of chemotherapy free regimen for patients who had received prior first line standard of care therapy with chemotherapy interest to the Matt.

As a reference a response rate of 47%.

Scott Koenig: We believe that patients with HER2-positive metastatic breast cancer need access to new therapies. Margituximab, if approved by regulators, will address an important unmet need and could become a valuable treatment option for patients living with this devastating disease. Therefore, we expect to submit a BLA to the FDA before the end of the year.

With a median overall survival of 13.1 month was reported from the first one chemotherapy and Trastuzumab in the toga study.

In our phase two study in second line gastric cancer patients who are heard too I see three positive we reported a median overall survival of 16.8 months.

Furthermore, in the her two I see three plus and PDL one double positive patients. We observed a median overall survival of 20.5 month and the response rate of approximately 50%.

Scott Koenig: We also seek to address unmet needs in HER2-positive cancers beyond breast cancer. At the Edmonds Congress in September, we presented updated data from our ongoing phase two study evaluating margituximab in combination with pembrolizumab in second-line patients with HER2-positive metastatic gastric cancer. This study is testing a chemotherapy-free regimen for patients who have received prior first-line standard-of-care therapy with chemotherapy and trastuzumab. As a reference, a response rate of 47% with a median overall survival of 13.1 months was reported from first-line chemotherapy plus trastuzumab in the TOGA study. In our Phase 2 study in second-line gastric cancer patients who are HER2, IHC3 positive, we reported a median overall survival of 16.8 months. Furthermore, in the HER2, IHC, 3+, and PD-L1 double positive patients, we observed a median overall survival of 20.5 months and a response rate of approximately 50%.

Notably the safety profile of margins talks about an pembro isn't that observed in our study was similar to that of Pembrolizumab monotherapy.

Based on those promising second line data, we have advance the chemo free regimen, a margin TBSA meb and Mg twice.

12, our anti PD, one that into a phase two three registration study called mahogany in first line patients with gastric cancer, who are hurt too I see three plus and PDL one double positive.

The first patient was dosed in October .

This chemotherapy three part of the study, which we referred to as module. A is designed as a single arm studies to support a potential accelerated approval of this regimen in the U.S. based on a primary efficacy endpoint.

Jeff response rate.

We believe there may be a significant opportunity to change the treatment paradigm for some patients living with metastatic hertwo positive gastric cancer.

The second component of the mahogany study, which we referred to as module will be is designed as a randomized control trial to evaluate the combination of margin talks about with chemotherapy plus either m. jail htwo.

Or MGT go 13, our PD, one by layer three dart molecule compared to Trastuzumab in chemotherapy.

A broader population of patients with her two positive gastric cancer.

The study is designed to evaluate overall survival is the primary endpoint.

Scott Koenig: Notably, the safety profile of margituximab and pembrolizumab observed in our study was similar to that of pembrolizumab monotherapy. Based on these promising second-line data, we have advanced the chemo-free regimen of margituximab and MgAO12, our anti-PD-1 mab, into a phase 2-3 registration study called Mahogany in first-line patients with gastric cancer who are The first patient was dosed in October with chemotherapy.

We expect to initiate module being the first half of 2020 and plan to coordinate the global efforts with our partner in greater China ZAR lab.

Turning briefly to a no Bluetooth among the most advanced in our portfolio molecules targeting disseminate sthree.

Nobody Susan this is an investigational Matt into which we have incorporated the same FC mutation as margin talks in that.

We're planning a randomized phase two three study, but nobody says that plus mgo 12 with or without chemotherapy in patients with first line metastatic head and neck cancer.

Scott Koenig: This study, which we refer to as Module A, is designed as a single-arm study to support a potential accelerated approval of this regimen in the U.S. based on a primary efficacy endpoint of objective response rate. We believe there may be a significant opportunity to change the treatment paradigm for some patients living with metastatic HER2-positive gastric cancer. The second component of the mahogany study, which we refer to as Module B, is designed as a randomized controlled trial to evaluate the combination of margituximab with chemotherapy plus either MgAO-12 or MGD-013, our PD-1 bilat 3-DAR molecule compared to trastuzumab in chemotherapy in a broader population of patients with HER2-positive gastric cancer. The study is designed to evaluate overall survival as a primary impact.

We expect to initiate the Senate shortly and plan to coordinate the global efforts with our partner in greater China Imap Biopharma.

The next program I will discuss is slow the to the map our investigational by specific dart molecule that recognizes both CD 123 and Cdthree.

As we announced this morning, there will be five presentations on flood it isn't that at the Ash annual meeting in December .

These include two oral presentations of updated data from the phase one monotherapy study in patients with relapsed or refractory acute myeloid leukemia or AML.

The study enrolled a total of 50 patients at the recommended phase two dose, including 30 patients enrolled with with refractory am though there will be the focus of the ash presentation.

These patients represent an extremely challenging population to treat where based on our data. We believe there may be an opportunity to address an unmet need.

Scott Koenig: We expect to initiate Module B in the first half of 2020 and plan to coordinate the global efforts with our partner in Greater China, Xi Lab. Turning briefly to inoblintuzumab, the most advanced in our portfolio of molecules targeting B7H3. Anoblatuzumab is an investigational map into which we have incorporated the same FCD mutations as margitoxamab. We are planning a randomized phase 2-3 study of enoblatuzumab plus MgAO-12 with or without chemotherapy in patients with first-line metastatic head and neck cancer.

The second oral presentation will describe data, suggesting an immune signature associated with patients were likely to respond to flow to choose a map supporting a mechanism being exploited by this molecule.

We have initiated discussions with the FDA to define a potential registration path for this molecule and anticipate providing further guidance early next year.

We have also initiated a combination study applauded season that and mgo 12 in relapsed or refractory CLL patients as a potential means to both broad with and laid the duration of response are they a male patients on quota to the math.

The combination is supported by a strong scientific rationale based on data that we have previously recorded.

Turning to our PD one program the first and most advance is mgo 12, which as you know is exclusively licensed Incyte Corporation globally, although we retain the rights to develop our pipeline molecules in combination with Mgo 12.

Scott Koenig: We expect to initiate the study shortly and plan to coordinate the global efforts with our partner in Greater China, IMAP Biopharma. The next program I will discuss is flotatuzumab, our investigational bispecific DART molecule that recognizes both CD123 and CD3. As we announced this morning, there will be five presentations on Clotetuzumab at the ASH annual meeting in December. These include two oral presentations of updated data from the Phase I Minotherapy Study in patients with relapsed or refractory acute myeloid leukemia, or AML. The study enrolled a total of 50 patients at the recommended phase 2 dose, including 30 patients enrolled with refractory AML that will be the focus of the ASH presentation. These patients represent an extremely challenging population to treat, where, based on our data, we believe there may be an opportunity to address an unmet need. The second oral presentation will describe data suggesting an immune signature associated with patients more likely to respond to flotatuzumab, supporting the mechanism being exploited by this molecule.

Insides initially pursuing development of NGL 12 monotherapy.

Through three potentially registration directed clinical trials, one in anti high and the Miccio cancer and one of the Merkel cell carcinoma with initial data anticipated in 2020, and this study and anal cancer with initial data expected in 2021.

In addition, both inside Macrogenics are reached studying AMG IL 12 in multiple combination trials.

In total the expanding development program for Mgo 12 includes approximately a dozen clinical studies as you may have seen from the abstract released yesterday insight has several poster presentations at the said see annual meeting taking place this week.

As a reminder, under the terms of our agreement with inside Macrogenics is eligible to receive up to $405 billion, the potential development and regulatory milestones and up to $330 million in potential commercial milestones.

Is that jail 12 was approved and commercialize macrogenics would be eligible to receive royalties cheered from 15% to 24% on future sales the them jail 12 by insight.

Our second checkpoint molecule is mgo 13 first in class investigational Dart molecule that is designed to provide co blockade of two immune checkpoint molecules expressed on T cells, PD, one and lag three.

We have now enrolled approximately a 150 patients in the phase one dose expansion study in nine tumor types.

Scott Koenig: We have initiated discussions with the FDA to define a potential registration path for this molecule and anticipate providing further guidance early next year. We have also initiated a combination study of flotatuzumab and MgAO-12 in relapsed or refractory AML patients as a potential means to both broaden and lengthen the duration of response of AML patients on flotatuzumab. The combination is supported by a strong scientific rationale based on data that we have previously reported.

We have observed some early signals of clinical activity with the MTO 30 miles therapy across several tumor types, which is very encouraging.

The majority of patients however have not been follow long enough to be evaluated for an assessment of response.

We plan to submit data from this study for presentation at the scientific conference in the first half of 2020.

In summary, our most advanced programs, our position to initiate or complete registration directed studies over the next year as we head to the close of 29 team. We look forward to present the detailed results from the second interim analysis of all as in Sylvia at San Antonio breast and so.

Scott Koenig: Turning to our PD-1 program, the first and most advanced is MgAO-12, which as you know is exclusively licensed to Insight Corporation globally, although we retain the rights to develop our pipeline molecules in combination with MgAO-12. Insight is initially pursuing the development of MgAO-12 monotherapy through three potentially registration-directed clinical trials. One in MSI high, endometrial cancer, and one in Merkel cell carcinoma, with initial data anticipated in 2020, and a study in anal cancer with initial data expected in 2021. In addition, both Inside and macrogenics are each studying MgAO-12 in multiple combination trials. In total, the Expanding Development Program for MGAO-12 includes approximately a dozen clinical studies. As you may have seen from the abstract released yesterday, Insight has several posters of presentations at the CITSE annual meeting taking place this week.

Admitting that believed to support registration margins Hudson that as well as presenting floated season that data that.

We will now be happy to address any questions that callers may have operator.

Thank you and ladies and gentlemen, if you have a question just press Star then one.

And our first question is from Jonathan Chang with SBB Leerink. Your line is helping.

Hi, guys. Thanks for taking my questions.

First question any color on that business development front for merger talks map.

Jonathan Thanks, very much for the question, we continue our discussions with potential partners in that and are extending the discussions with others. At this time, but at this point I have no further updates to report.

Got it thanks, and how should we be thinking about.

I guess the different Leo populations Sophia study is the plan to fill the filed for approval in the overall population or would you filed for approval in just the ethylene ill step.

Scott Koenig: As a reminder, under the terms of our agreement with Insight, MacroGenics is eligible to receive up to $405 million in potential development and regulatory milestones and up to $330 million in potential commercial milestones. If MGAO-12 is approved and commercialized, MacroGenics would be eligible to receive royalties tiered from 15% to 24% on future sales of MGAO-12 by Insight. Our second checkpoint molecule is MgDO13, a first-in-class investigational DART molecule that is designed to provide co-blockade of two immune checkpoint molecules expressed on T-cells, PD-1 and LAG-3. We have now enrolled approximately 150 patients in the Phase I Dose Expansion Study in nine tumor types. We have observed some early signals of clinical activity with MgdO13 monotherapy across several tumor types, which is very encouraging. However, the majority of patients, however, have not been followed long enough to be evaluated for an assessment of response.

Right.

Hi.

Thanks for that question as you know we.

Sure put does statistically significant improvement in PFS and margins Tux Melbourne.

We intend to treat population would they.

Does it have trend in our whereas in both interim analysis for merger talks in that.

And we think that the reason the results, particularly profound and the TV 16, a 158 oleo population so as a result.

Given the magnitude of the effect that we're seeing is primarily in that population that we will certainly be included.

And the filing of the B.L.A. and we assume the will be reviewed in the context. The total package that we submit.

Got it and just one last one from me.

Floated to snap how you think about benchmarks for the overall study as wells I just to the primary refractory population.

So.

As you saw from today is abstract and we're very excited about the results and.

We will be sharing obviously the definitive data at.

The upcoming Ash meeting as you know note in the abstract the additional patients that were included in this phase one study.

Scott Koenig: We plan to submit data from this study for presentation at a scientific conference in the first half of 2020. In summary, our most advanced programs are positioned to initiate or complete registration-directed studies over the next year. As we head to the close of 2019, we look forward to presenting detailed results from the second interim analysis of OS in SOFIA at San Antonio Breast and submitting the BLA to support registration of margituximab, as well as presenting flotatuzumab data at ASH. We would now be happy to address any questions that callers may have. Operator?

We were seeing in the at the targeted dose that we are intending to move forward.

In the refractory population, we were seeing over 30%.

Our.

Response rate, which again was consistent with a 29% response rate that we reported out.

At Ash last year.

As also noted that in the abstract if you look at patients with refractory disease. After they have sell the first chemotherapy and then they're treated with a subsequent chemotherapy.

Richard suggests the best response in the low teens and then subsequent salvage responses are almost close to zero. So given that we're seeing responses, particularly in this population where the mean number of a tree mens wear a threed overtime.

Operator: Thank you. And ladies and gentlemen, if you have a question, just press star, then one. And our first question is from Jonathan Chang with SVB Lyrinc. Your line is open. Hi guys, thanks for taking my question. First question: any color on the business development front?

Three we think that we're in great shape to advancing this towards the registration study with regard to the specifics on what the ultimate response.

Scott Koenig: Jonathan, thanks very much for the question. We continue our discussions with potential partners and are extending discussions with others at this time, but at this point, I have no further updates to report.

One would tame obviously, a greater is better.

But clearly.

If where achieving responses.

Greater than 20% or more I think we won't be in a in a nice range. But this is obviously a discussion that we will add with the FDA to discuss how to move forward in a registration study.

Scott Koenig: Got it, thanks. And how should we be thinking about, I guess, the different allele populations in the SOFIA study? Is the plan still to file for approval in the overall population? Or would you file for approval in just the F allele subgroup at this point?

Got it thanks for taking my question.

Thank you and our next question is from David Lebowitz with Morgan Stanley . Please go ahead.

Thank you very much for taking my question.

The other question on the Sophia trial data.

Scott Koenig: Thanks, Jonathan. Thanks for that question.

Scott Koenig: As you know, we showed a statistically significant improvement in PFS in the margituximab arm of the intensatory population with a positive trend in OS in both interim analyses for margituximab. And we think that the results are particularly profound in the TD16A158 allele population. So, as a result, given the magnitude of the effect that we're seeing primarily in that population, that will certainly be included in the filing of the BLA and, we assume, will be reviewed in the context of the total package that we submit.

Given that the.

The subset was an exploratory and point, albeit its pre specified is it something that can actually have be included in the labeling as a separate.

Group or specifically approved for that group or is it something that would have to be studied to separately what the primary endpoint.

For it to be included to be labeled for that population specifically.

Scott Koenig: Got it. And just one last one from me.

Scott Koenig: For Flodituzumab, how do you think about benchmarks for the overall study as well as just in the primary refractory population?

David Thank you very much for that question and you have appointed quite correctly that we had predefine, there's definitely a population which represents.

Scott Koenig: So, as you saw from today's abstract, we're very excited about the results and, you know, we will be sharing, obviously, the definitive data at the upcoming ASH meeting. As you noted in the abstract, the additional patients that were included in this phase one study, we were seeing at the targeted dose that we are intending to move forward, in the refractory population, we were seeing over 30% CR response rate, which, again, was consistent with the 29% response rate that we reported out at ASH last year. As also noted in the abstract, if you look at patients with refractory disease after they have failed the first chemotherapy and then they're treated with a subsequent chemotherapy, literature suggests the best response is in the low teens, and then subsequent salvage responses are almost close to zero.

85% of all patients and where we're seeing the predominant response.

As you can point out correctly, it was exploratory which means we didn't a lot any alpha to this endpoint.

You know we will include obviously this the the totality of data here make a case to the F.D.A. why while such information should be evaluated and all but ultimately it will come down to the ups. The a view on whether this is approval.

I'm sure that they will seek additional guidance from outside of clinicians and it's probably will be done a adding kodak its.

If you know this is a point that they want to get a further define.

But again, we will make a strong case why while we were we'll be filing on and intend to treat population, we think that they should consider the data given even in the recent overall survival data interim data which is not.

Scott Koenig: So, given that we're seeing responses, particularly in this population where the mean number of treatments was over three, we think that we're in great shape to advance this towards a registration study. With regard to the specifics on what the ultimate response we want to attain, obviously, greater is better, but clearly, if we're achieving responses greater than 20% or more, I think we will be in a nice range, but this is obviously a discussion that we will have with the FDA to discuss how to move forward in a registration study.

Tweet, we're seeing a in that population and overall survival benefit of 4.3 months in the March versus trust season that population.

Thanks for taking my question.

Thank you in our next question is some de Gaulle no from all of its with Citi. Your line is open.

Hi, This is Smith on for your call. Thanks, very much for taking your question.

Oh, yes.

Give me any criticism up.

And that the phase two question at a steady I'm curious at the Gulf or no go a futility analysis what areas. The threshold that will help him that you need to meet in order to move forward or policy, but isn't that plus MJ one two and also in the chemo combo grip.

Operator: Got it. Thanks for taking my question. Thank you. And our next question is from David Lebowitz with Morgan Stanley. Please go ahead. Thank you very much for taking my question.

Scott Koenig: I had a question on the SOFIA trial data, given that the subset was an exploratory endpoint, albeit pre-specified. Is it something that can actually have been included in the labeling as a separate group, or specifically approved for that group, or is it something that would have to be studied separately with a primary endpoint or to be included, to be labeled for that population specifically?

Thank you very much for that question as you know we are very excited about the prospects other noble Susan that given the data that.

We presented that last years, that's ITC meeting, where we were seeing in combination with an anti PD one ocular embolism map a response raise rates in the mid thirtys and that population.

No as as you know in this phase two design, we're comparing a noble choose a map and our anti PD, one mgo 12 as one arm.

Scott Koenig: David, thank you very much for that question, and you have pointed out quite correctly that we had predefined the cephaleal population, which represents 85% of all patients and where we're seeing the predominant response. And, as you again point out correctly, it was exploratory, which means we didn't allot any alpha to this endpoint.

Combination of no, but to some mgo 12, plus chemo as the second and ultimately comparing this to the control arm, which currently the standard of frontline therapy, as Pembrolizumab and chemo, which.

As you probably know at a response rate in the mid Thirtys, So without giving you decision about an exact number we would obviously like for one of those experimental arms are both those experimental arms to approach that range of responsiveness.

Scott Koenig: We will include, obviously, the totality of data here and make a case to the FDA why such information should be evaluated, but ultimately, it will come down to the FDA's view on whether this is approvable. I'm sure that they will seek additional guidance from outside clinicians, and it probably will be done at NODAC if this is a point that they want to get further defined. But again, we will make a strong case why we will be filing on an intent-to-treat population. We think that they should consider the data, given even in the recent overall survival interim data, which is not complete, we're seeing in that population an overall survival benefit of 4.3 months in the Marge versus Trastuzumab population.

Before we proceed to the phase through three head to head up arm well, we'd be looking at primary endpoint to buy Wes.

Thanks for that and if the arm, but does not include came out happens to be in that range at their potential from moving that forward as well or similar accelerated approval pathway that you have for much of my bad gastric cancer.

Well that will be very exciting is if we do achieved that range and again given that we did see.

That range of responsiveness in the.

Later line therapies, albeit it was small numbers of patients.

That clearly would give us.

Reason to approach the FDA to discuss alternative ways of getting such a drug approved.

Scott Koenig: Thanks for taking my question. Thank you. And our next question is from Yigal Nochomovitz with Citi. Your line is open. Hi, this is Samantha on behalf of Yigal. Thanks very much for taking our questions. On a new, excuse me, a new boost to the map, In the Phase 2 portion of the study, I'm curious, at the no-go futility analysis, what is the threshold that will help you, that you need to meet in order to move forward for both the enoblatuzumab plus MGA1-2 and also in the chemocombo group?

Okay, one more for me I'm on slide to keep an eye is there do you see potential registration path forward for Asa other relapse, and though and is there any data.

Jeff that the combination with wells could improve response rate and the relapse population.

Terrific questions. So with regard to define in the population that we plan to move forward towards a registration study as I sit stated we will primarily look at the refractory population given where we've seen the greatest response rate. However, both.

Scott Koenig: Thank you very much for that question. As you know, we are very excited about the prospects of enoblatuzumab, given the data that we presented at last year's SITC meeting, where we were seeing, in combination with an anti-PD-1 molecule, pembrolizumab response rates in the mid-30s in that population. Now, as you note in this Phase 2 design, we are comparing enoblatuzumab and our anti-PD-1 MgAO-12 as one arm, a combination of enoblatuzumab MgAO-12 plus chemo as a second arm, and ultimately comparing this to the control arm, for which currently the standard of frontline therapy is pembrolizumab and chemo, which, as you Before we proceed to the Phase 3 head-to-head arm, where we'll be looking at the primary endpoint of OS.

Based on some of the biomarker data, though that we have shown to date and will be updated at the ash meeting.

Subsequently.

There is a segment of relapsed patients, who relapsed very quickly even though they have an initial response to chemotherapy and this maybe a population that we will be able to evaluate as well and hope to see a salutary effect of flooded twos a map.

Getting back to your second question on terms of combination of 12, our anti PD one with the floated twos about I think again this is purely speculative, but given a very strong preclinical signal that comp combining this with anti PD one or flow.

To sum up in various and they'll models and in vitro analysis leads to much more.

Effective killing of A.M.L. targets and actually given some data that you may be aware of whether to have studies more recently, which obviously is a completely different population combining with anti PD ones also enhancing responses.

In populations they are exploring.

Scott Koenig: Thanks for that. And if the arm that does not include chemo happens to be in that range, is there a potential for moving that forward, as well, or a similar accelerated approval pathway that you have for Margituximab in gastric cancer?

The idea that there is upregulation of check points.

Both on the email blasts as well as PD one on that the T cells that are being activated here I think the I'm. We're very excited to hopefully see an improved response responsiveness in the populations treated with A.M. Mel now the way we're looking at this going forward.

Scott Koenig: Well, that would be very exciting if we do achieve that range. Again, given that we did see that range of responsiveness in the later line therapies, albeit in small numbers of patients, that clearly would give us reason to approach the FDA to discuss alternative ways of getting such a drug approved.

It is is that this could be used up front, but.

It often well we have seen in our studies is that the longer the patients have been able to remain on floated to choose a map therapy. The better. They these patients tend to respond and so again, if the opportunity by combining these two together leads to prolongation of floated twos about treatment.

Scott Koenig: Thank you. One more question. On Flattituzumab, do you see a potential registrational path forward for also the relapsed AML? And is there any data to suggest that the combination with MgAO-12 could improve response rates in the relapsed population?

And better outcomes that would be obviously I'm in the interest so the patients. So we look forward to having.

Scott Koenig: Terrific questions. So, with regard to defining the population that we plan to move forward towards a registration study, as I stated, we will primarily look at the refractory population given where we've seen the greatest response rate. However, both based on some of the biomarker data that we have shown to date and will be updated at the ASH meeting subsequently, we there is a segment of relapsed patients who relapse very quickly even though they have an initial response to chemotherapy. And this may be a population that we will be able to evaluate as well and hope to see a salutary effect of flotatuzumab. Getting back to your second question in terms of combination of O12, our anti-PD1 with flotatuzumab, I think, again, this is purely speculative, but given a very strong preclinical signal that combining this with anti-PD1 and flotatuzumab in various AML models and in vitro analysis leads to much more effective killing of AML targets, and actually given some data that you may be aware of, flotatuzumab studies more recently, which obviously is a completely different population, combining with anti-PD1s also enhancing responses in populations they're exploring.

Some data hopefully next year as we've already begun the dosing of patients with this combination of very recently.

Thanks, very much for taking my question.

Thank you and our next question is from John The 10 Miller with Evercore. Please go ahead.

Hi, guys that thanks for taking the question.

I think I've heard you maybe implies that the FDA would have some more.

Complicated thing to say about that and what do you have a sub population for the much juice that trials, but do you think there's a possibility for an AD com to get that on label or a potential a bottleneck there and then on the flip side, even if you actually t. population is approved.

What do you think the commercial bottleneck is or the adoption in the United Depopulation I know you plan on having a test available a in your conversations with docs. How much are important have they put on that sub population.

Okay, Thanks, John or for the questions Let me.

Go back over the summer from the beginning.

Yeah, Yeah, as I said anything talks about specifics about an AD com My I was speculating that given that the study was designed as an intent to treat population, but given that the the major response appears to be.

Scott Koenig: The idea that there is up-regulation of checkpoints... both on the AML BLAST as well as PD-1 on the T-cells that are being activated here. I think we're very excited to hopefully see an improved response and responsiveness in the populations treated with AML. Now, the way we're looking at this going forward is that this could be used up front, but quite often, what we have seen in our studies is that the longer the patients have been able to remain on flotatuzumab therapy, the better they tend to respond. And so, again, if the opportunity to combine these two together leads to prolongation of flotatuzumab treatment and better outcomes, that would be obviously in the interest of So we look forward to having some data, hopefully next year, as we've begun dosing patients with this combination very recently.

In the affiliate population I was speculating that.

They would likely I'm holding that come to address these questions, but at this point, it's there's to decide a after we submit the the data in the B.L.A. and for them to review, but you know if I had against I would assume that that that would occur.

Well go to the commercial or size of the population.

Clearly, we would like to have the if approved by the FDA the discussion HM.

Labeling to include information regarding the affiliate population.

If it is not there we certainly will be publishing a the data in scientifically reviewed journals and so it will it is obviously out there and available to the physicians now, but obviously the more details will be rhofade subsequently.

Scott Koenig: Thanks very much for taking the question. Thank you. And our next question is from Jonathan Miller with Evercore. Please go ahead.

With regard to.

The opportunity commercially it's just too early to assess at this point our commercial teams.

I'm looking at the landscape, which as you know is continually changing.

Scott Koenig: Hi guys, thanks for taking the question. I think I heard you maybe imply that the FDA would have some more complicated things to say about that 1PV8F sub-population for the margituzumab trials. Do you think there's a possibility for an ADCOM to get that on-label or is there a potential bottleneck there? And then, on the flip side, even if the ITT population is approved, what do you think the commercial bottleneck is or adoption in the ITT population? I know you plan on having a test available. In your conversations with doctors, how much importance have they put on that sub-population?

Right now we are working with to potential.

Vendors to develop a laboratory developed tests, because we think it would be important for both the oncologists in patients that that test available. If the drug is approved so that's the of populations that would most benefit from from merger talks about could be.

It could be selected it'd be included so.

Was there anything else did I Miss anything.

No. Thank you that was that was perfect I guess moving on from merger talks that they had a one or two but the other pipeline. It seems like the PD, one and lag three by specific timing is getting pushed out a little bit is there a reason for that you have any color for why we expect that now and 2020 as opposed to second half of this year.

Scott Koenig: Thanks, John, for the questions. Let me go back from the beginning.

Scott Koenig: The FDA has not said anything to us about specifics about the outcome. I was speculating that given that the study was designed as an intensive population, but given that the major response appears to be in the F allele population, I was speculating that... they would likely hold an outcome to address these questions, but at this point, it's theirs to decide after we submit the data to the BLA and for them to review. But if I had to guess, I would assume that that would happen.

And then secondly, do you have any more details on the food it isn't meant plus PD, one combo trial, which I know it is not on not in contrast.

I'm sorry, the upfront from the floated to the map and PD one did you say.

Ah, yes detailing the second question that trial, which is not on contracts.

Yeah Okay.

So.

Scott Koenig: With regard to the commercial size of the population, clearly, we would like the discussion and labeling to include information regarding the F allele population. If it is not there, we certainly will be publishing the data in scientifically reviewed journals. So it is obviously out there and available to physicians now, but obviously, more details will be provided subsequently. With regard to the commercial opportunity, it's just too early to assess at this point. Our commercial teams are looking at the landscape, which, as you know, is continually changing. Right now, we are working with two potential vendors to develop a laboratory-developed test because we think it would be important for both oncologists and patients to have that test available if the drug is approved so that the populations that would most benefit from margituximab could be selected and be included.

Well, let me answer the first question, which is up PD, one last three or by specific dart molecule as we noted today in my earlier remarks.

Actually now up to over 150 patients or being treated with the PD one lakh three dart molecule in uptick in over nine tumor types.

And.

What we made a decision because a significant proportion.

Those patients had not either been received their first scan or had only received one scan. We didn't think that data was mature enough to.

Hey.

Fair valuation of the result, what I have said previously.

We're very excited about the prospects of this like kill given that we're seeing responses across multiple different tumor types, but we felt.

It would.

Well to have a few more months of maturation of the data to be able to provide this in a very balanced manner. So as was noted we expect to submit to one of the major scientific conferences in the first half for the year for present patient.

Scott Koenig: So was there anything else? Did I miss anything?

Scott Koenig: No, thank you. That was perfect.

With regard to own the flow to the map N. P. PD one the reason why you don't see it on Clin trials up Clin trials Dot Gov.

Scott Koenig: I guess moving on from Marja Tuckson, I had one or two about the other pipeline. It seems like the PD-1 and LAG-3 are, by specific timing, getting pushed out a little bit. Is there a reason for that? Do you have any color on why we expect that now in 2020 as opposed to the second half of this year? And secondly, do you have any more details on the Flodacuzumab plus PD-1 combo trial, which I know is not on ClinTrials?

We've started the study, but the studies being conducted outside the U.S. currently and Ah I believe free countries at this point so.

Oh, Thanks, very much I think we're all very excited to see that anyone like three or data.

Great terrific. Thanks, John .

Thank you and our next question he some debjit Chattopadhyay <unk> with H.C. Wainwright. Please go ahead.

Hey, good afternoon guys.

Scott Koenig: I'm sorry, from the Florida Tooth and Mouth Association...

First a clarification on.

In terms of the activity you're seeing primarily in the refractory patients. How does this did a why is different from say some of the other CD 123, and he sees for example.

Scott Koenig: [inaudible]

Scott Koenig: Yeah, okay. So, let me answer the first question, which is about PD-1 LAD3 bispecific dark molecule. As we noted today, in my earlier remarks, We are actually now up to over 150 patients being treated with the PD-1LAG3 DART molecule in over nine tumor types. [inaudible] We made this decision because a significant proportion of those patients had not either received their first scan or had only received one scan. We didn't think the data was mature enough to give a fair evaluation of the results. As I have said previously, we are very excited about the prospects of this molecule given that we're seeing responses across multiple different tumor types, but we felt it would be valuable to have a few more months of maturation of the data to be able to present this in a very balanced manner.

Great question, Debjit and it really gets to the core observations. We have recently made with regard to a biomarker work and again that will be updated an oral presentation at ash as was pointed out at the last ash meeting it seems.

To be.

Segregation of patients that responds to chemotherapy and patients that respond to immune based therapies.

Based on immune based markers. So clip clearly for the population that are responding to floated to isn't that we're seeing a.

Very significant gamma interferon associated signature with other immune parameters.

Scott Koenig: As noted, we expect to submit to one of the major scientific conferences in the first half of the year for presentation. With regard to the flood of Tuzumab and PD-1, the reason why you don't see it on clintrials.gov, we've started the study, but the study is being conducted outside the U.S. currently in, I believe, three countries at this point.

It turns out that patients who respond to chemotherapy fall in the other group, which are essentially immune depleted and so while it's it's not 100%. The there is a clear segmentation other.

Responsiveness in it and in this population and so.

Scott Koenig: Go. Thanks very much. I think we're all very excited to see that P1 Lag 3 data.

Given that current drugs, which include and as you described 80 Caesars are essentially directed chemotherapy therapeutics.

Scott Koenig: Great. Terrific. Thanks, John. Thank you. And our next question is from Debjit Chattopadhyay with HC Wainwright. Please go ahead.

They fall in the other group that do not have likely to have the immune signature and therefore quite distinctly I think uploaded twos in that provides a mechanism of action.

Scott Koenig: Good afternoon, guys. First, a clarification on... In terms of the activity you're seeing primarily in refractory patients, how does this, why is this different from, say, some of the other CD123 ADCs, for example?

Other therapies that are being explored right now cannot address.

Got it. Thank you and then moving onto a more off up you know 40000 foot question here, given where the stock is under streets reaction to the Sofia data.

Scott Koenig: Great question, Devjit, and it really gets to the core observations we have recently made with regard to biomarker work, and again, that will be updated in an oral presentation at ASH. As was pointed out at the last ASH meeting, there seems to be a segregation of patients that respond to chemotherapies and patients that respond to immune-based therapies based on immune-based markers. So clearly, for the population that is responding to flotatuzumab, we're seeing a very significant gametoferan-associated signature with other immune parameters. It turns out that patients who respond to chemotherapy fall in the other group, which is essentially immune depleted. And so while it's not 100%, there is a clear segmentation of the responses in this population. And given that current drugs, which include, as you described, ADCs, are essentially directed chemotherapy therapeutics. They fall in the other group that do not likely have the immune signature. And therefore, quite distinctly, I think flotatuzumab provides a mechanism of action that other therapies that are being explored right now cannot address.

How do you prioritize the prospect of potentially running three or four registration directed study is over the next year and your balance sheet constraints.

That's an excellent question Dutch and obviously the company is spending considerable amount of time currently both to prioritize the brands that we think Oh has the greatest chance of success and and continue to have a per long runway.

With the current cash position.

So with regard to the prioritization.

What I can first state is is that given the signal that we've seen obviously with March it talks about not only in breast cancer patients, but in the gastric cancer patients. We believe that advance the frontline study.

And metastatic gastric cancer should be a priority and given particularly as we've described this trial as a two modules study we're going to put a strong emphasis to get objective data next year on the east sub population.

Scott Koenig: Got it. Thank you. And then moving on to more of a, you know, 40,000-foot question here, given where the stock is and the streets' reaction to the SOFIA data, how do you prioritize the prospects of potentially running three or four registration-directed studies over the next year and your balance sheet constraints?

Oh.

The PDL one positive.

I see three plus positive population so that we can make a decision whether the signal is strong enough to proceed forward for expansion given that the opportunity that has afforded us for that for that study is a potential accelerated approval.

Scott Koenig: That's an excellent question, Dejan. And obviously, the company is spending a considerable amount of time currently, both to prioritize the programs that we think will have the greatest chance of success and to continue to have a prolonged runway with the current cash position. So, with regard to prioritization, what I can first state is that given the signal that we've seen obviously with margituximab, not only in breast cancer patients but in gastric cancer patients, we believe that advancing the frontline study in metastatic gastric cancer should be a priority. And given, particularly as we've described this trial as a two-module study, we're going to put a strong emphasis on getting objective data next year on the subpopulation of the PD-L1 positive or IHC 3 plus positive population so that we can make a decision whether the signal is strong enough to proceed forward for expansion given that the opportunity that is afforded us for that study is a potential accelerated approval if we meet the So that will certainly be given priority.

If we meet.

The the results both from an efficacy and safety perspective, so that won't be given a certainly a priority.

You've heard today, we're very excited about flow the tourism that and we'll have more to speak early next year and how do we move forward towards registration studies, there and again.

Given that we can honed in on a specific a population.

We think that that could be executed in a very.

Cost effective and a I would say fairly rapid manner or relatively speaking compared to some of them or other larger potential trials again, we still have further conversations with the FDA to get an understanding of how the best way to move forward.

On floated Susan that.

With respect to the other programs I.

Obviously, we are about to initiate a study and I'm the head and neck population with the noble twos amount and here again I will spend that we have partnerships with with that well it killed with Imad. There is an opportunity that they will help to purchase.

The paid and the enrollment there, which obviously will help to mitigate some of the cause and back to the gastric study a partnership with as I labs, we have a very close relationship with them discussing on a weight is on how to accelerate.

Scott Koenig: As you've heard today, we're very excited about FLOTA-2-ZOMAB, and we'll have more to speak about early next year on how we move forward towards registration studies there. And again, given that we can hone in on a specific population, we think that that could be executed in a very cost-effective and, I would say, fairly rapid manner, relatively speaking, compared to some of the other larger potential trials. Again, we still have further conversations with the FDA to get an understanding of how the best way to move forward on flotatuzumab. With respect to the other programs, obviously, we are about to initiate a study in the head and neck population with enoblatuzumab, and here, again, given that we have partnerships with that molecule, with IMABS, there is an opportunity that they will help to participate in the enrollment there, which obviously will help to mitigate some of the costs.

<unk> development of of Ah that molecule in the gastric population and again, the if their ability to contribute patience and obviously offset some of our expenses there.

We'll be up a very valuable.

I should also note that in the past yeah. We've done two partnerships that brought a non dilutive capital and have a very strong history upbringing non dilutive capital of every luxurious portfolio.

And I would not be surprised if opportunities will afford us in the coming here.

Not last but not least is the fact is is that.

As noted in our call today, we have some very significant milestone payments.

That.

May occur if inside is successful in the a registration directed studies that they were undertaking now and the guidance that they have provided is is that.

Scott Koenig: And back to the gastric study, our partnership with Zai Labs, we have a very close relationship with them, discussing ways to accelerate the development of that molecule in the gastric population. And again, their ability to contribute patients and, obviously, offset some of our expenses there will be very valuable. I should also note that in the past year, we've done two partnerships that have brought in non-dilutive capital and have a very strong history of bringing in non-dilutive capital from a very luxurious portfolio, and I would not be surprised if opportunities will afford us in the coming year. Last but not least, the fact that, as noted in our call today, we have some very significant milestone payments that may occur if INSIGHT is successful in the registration-directed studies that they're undertaking now.

Data from these studies will come in the course of the next year to two years, and so again that fits quite nicely with the timing and some of the capital requirements for keeping on these programs moving forward so hopefully that.

Gives 'em some insight on what were thinking we certainly will provide more precision over the course of the next few months as we continue to evaluate them our entire portfolio in depth.

Great and just one last follow up.

So independent of what happens on the regulatory fun to front both Sofia.

If you where did you would have another do over but much like some I've been in a in breast cancer would you consider doing combination, but and that's what you're receptor inhibition plus the syndicate for six inhibition. Thank you so much.

Scott Koenig: And the guidance that they have provided is that data from these studies will come in the course of the next year to two years. And so again, that fits quite nicely with the timing and some of the capital requirements for keeping these programs moving forward. So hopefully, that gives some insight into what we're thinking. We certainly will provide more precision over the course of the next few months as we continue to evaluate our entire portfolio in depth.

So you know that's a nice speculation I haven't thought about specifically on hormone reset there's a a city for K combinations clearly.

You know the opportunity given the signal a March a tonight irrespective of how the the regulators opine on on approval.

We think this drug is quite effective and given us the enhanced signal, we've seen with in gastric cancer with anti PD ones.

We and the design as you know with the anti PD, one and anti PD one lag three we think the opportunity is quite ripe to look at combinations.

Scott Koenig: Great, and just one last follow-up question. So independent of what happens on the regulatory front post-SOFIA, if you were to have another do-over with margituximab in breast cancer, would you consider doing it in combination with an estrogen receptor inhibition plus a CDK4-6 inhibition? Thank you so much.

March a tuck them up with these checkpoint in breast cancer, particularly late wide and potentially early line as well.

And so you know irrespective of how the outcome that.

Comes out on the on the regulatory front, we think that there is quite there is certainly merit to proceed forward and that data and certainly given you know the recent successes reported on a T.K., our eyes, particularly to cabinets stuff.

Scott Koenig: So, you know, that's a nice speculation. I haven't thought about it specifically in terms of hormone receptors or CD4K combinations. Clearly, you know, the opportunity given the signal for margituximab, irrespective of how the regulators opine on approval, we think this drug is quite effective. And given the enhanced signal we've seen in gastric cancer with anti-PD1s and the design, as you know, with the anti-PD1 and anti-PD1 LAG3, we think the opportunity is quite ripe to look at combinations of margituxim And so, you know, irrespective of how the outcome comes out on the regulatory front, we think that there is certainly merit in proceeding forward in that matter. And certainly, given the recent successes reported in TKIs, particularly the Katnipp study that was reported out and will be updated at San Antonio in late-line patients, again, we think mechanistically these work orthogonally and could enhance the responsiveness of patients both in late and early line treatments. But, you know, I think your points are well taken that this could be a broader discussion to include families of Escher's and Blockade as well as the CDK46 molecules. Thank you.

That was reported out will be updated at San Antonio in late line patients again, we think Mechanistically. These work core family.

And could elite enhanced the responsiveness of patients both in late in early line a treatment, but I you know I think your points are well taken that this could be a border discussion to include and families of especially blockade as well as.

The CDK.

For six.

Molecules.

Thank you.

Thank you. Our next question is from Stephen Willey with Stifel. Your line is helping.

Yeah, good afternoon, and thanks for taking my questions.

I guess, just a couple of on merger talks amount for so.

With respect to the upcoming San Antonio presentation, I'm, just curious if we're going to see either a.

The impact if any on of post study therapy.

And then also whether or not you're going to be breaking out overall survival as a function of abele status specifically in those patients that are homozygous for for the field.

Steve Thanks, very much for the question I have not seen a or a final package of slides I know, obviously, we have a very large dataset that we would like to.

Present, there by the investigators so I can't comment what ultimately will get in front of the presentations, but there is clear interest in giving a in depth analysis of the various sub populations.

Scott Koenig: Thank you. Our next question is from Stephen Willey with Stifel. Your line is open.

Scott Koenig: Yeah, good afternoon. Thanks for taking the questions. I guess just a couple on Margituximab first. So, with respect to the upcoming San Antonio presentation, just curious if we're going to see either A, the impact, if any, of post-study therapy, and then also whether or not you're going to be breaking out overall survival as a function of allele status, specifically in those patients that are homozygous for the V allele.

That although exploratory can potentially benefit.

Hi, this treatment and looking at differences among those populations for some insight here. So we're very happy to share that with you, but I can't give you the specifics on what's gonna be included in the final presentation at this point.

Scott Koenig: Steve, thanks very much for the question. I have not seen the final package of slides yet. I know, obviously, we have a very large data set that the investigators would like to present there, so I can't comment on what ultimately will get in front of the presentations. But there is a clear interest in giving an in-depth analysis of the various subpopulations that, although exploratory, can potentially benefit from this treatment and looking at differences among those populations for some insight here. So we're very happy to share that with you, but I can't give you the specifics on what's going to be included in the final presentation.

Alright, Thats where and.

No.

We.

You're planning on filing here before the end of year.

Is there scenario by which you guys supplement the bewley filing with final or less data. If if if that final that I guess is triggered before some kind of regulatory decision is reached.

If the hazard ratios continue to trend in the right direction here and is it your expectation that that would potentially constitute a major amendment that could delay a regulatory decision.

That's an excellent question, Steve you know given where we see the rate of Oh, its accumulation to get to 387 events.

Scott Koenig: Alright, that's fair, you know, we're planning on filing here before the end of the year. Is there a scenario by which you guys supplement the BLA filing with final OS data if that final event, I guess, is triggered before some kind of regulatory decision is reached? If the hazard ratios continue to trend in the right direction here, is it your expectation that that would potentially constitute a major amendment that could delay a regulatory decision?

And not knowing what the timing will be for at yet until we have for regulatory review, whether there will be a ODAC meeting and the timing I certainly putting table that if if the there is results for.

Hello, S, which obviously continues to I'm not only trend favorably, but particularly if you look at.

The P values in the hazard ratios for the affiliate population, although it would be a nominal statistic if that obviously crosses over into.

Scott Koenig: That's an excellent question, Steve. You know, given where we see the rate of OS accumulation to get to the 385 events,

Significance there.

You know would be obviously important to to share that information. So ultimately I can't or I don't have I don't have the a vision right up to know exactly when all those events will occur but that certainly is something for us to consider.

Scott Koenig: And not knowing what the timing will be yet for regulatory review, whether there will be an ODAC meeting and the timing, I certainly put it on the table that if there are results for a final OS, which obviously continues to trend favorably, but particularly the P-values and the hazard ratios for the F-allele population, although it would be a nominal statistic, if that obviously crosses over into significance there, it would be obviously important to share So ultimately, I can't, I don't have, and I don't have the vision right now.

Okay and then.

Maybe just a clarification question on on on flow twos, Matt So it sounds like you're still enrolling.

Primary refractory patients.

Are you using biomarkers selection criteria to two to enrich the patient population from from here on forward and I guess.

What are the logistics of trying to secure you know biomarker data in this patient population.

Specifically just give us great question.

Primary refractory patients are kind of in the midst of acute medical emergency.

Scott Koenig: Okay, and then maybe just a clarification question on Flotat2's map. So it sounds like you're still enrolling primary refractory patients. Are you using biomarker selection criteria to enrich the patient population from here on forward? And I guess, what are the logistics of trying to secure, you know, biomarker data in this patient population? Specifically, just given that a lot of these primary refractory patients are kind of in the midst of an acute medical emergency.

Yeah, No. That's a great question. So let me be quite clear on this which is yes, we are continuing to enroll patients.

And just mostly for refractory patients, but are also treating some relapsed patients as well.

As we pointed out before not only treating as there are people for also obviously just started the combination study with the anti PD. One however, it is not our intent.

To specifically use a biomarker to select these patients we are pursuing debated better to fine populations.

Scott Koenig: Yeah, that's a great question. So let me be quite clear on this, which is yes, we are continuing to enroll patients, mostly refractory patients, but we are also treating some relapse patients as well. As we pointed out before, not only treating as microtherapy, but we've also just started a combination study with the anti-PD-1. However, it is not our intent to specifically use a biomarker to select these patients. We are trying to better define populations that may mechanistically respond, but in the current plans for design of future studies, it will be based on clinical criteria, specifically failures of previous treatments or lack of responsiveness to treatments. We will have some follow-up discussions with the FDA shortly to get a little more, to get a clear definition on how to move forward.

That may be a mechanistically respond, but in the current plans for design of a future studies. It will be based on clinical criteria, specifically often failures of tree previous treatments or lack of.

Sponsoring this to treatments, but again as I pointed out earlier.

We will have some follow up of discussions with the F.D.A. shortly.

To get a little more to get.

Clear definition on how to move forward.

But I think you may have mentioned in your prepared comments as to when you maybe in a position to communicate that too.

Investors, but can you just repeat that.

If you don't mind, yeah, it'll be in the first part of next year. We're in a very good position to be able to do that.

Okay. Thanks for taking part.

Thank you.

Thank you. Our next question is from Michael Schmidt with Guggenheim Securities. Your line is helping.

Hey, guys. This is Charles do on for Michael Schmidt. Thanks for taking the questions first one is a bit of a follow up from a previous ones on for the two than that but could you provide any color around like I.

Scott Koenig: And I think you may have mentioned in your prepared comments as to when you may be in a position to communicate that to... Transcription by Trans-Expert at Fiverr.com. Okay, thanks for taking the questions.

And it seems to work better in primary refractory early relapse as opposed to like relapsed patients and whether or not the ash presentations will provide any insight on this front.

Scott Koenig: Thank you. Our next question is from Michael Schmidt with Guggenheim Securities. Your line is open.

Scott Koenig: Hey guys, this is Charles Zuan from Michael Schmidt. Thanks for taking the questions. The first one is a bit of a follow-up from a previous one about Flodituzumab, but could you please provide any color around why it, for whatever reason, seems to work better in primary, refractory, or early relapse as opposed to late relapse patients, and whether or not the ASH presentations will provide any insight on

Charles or you might have missed that I in one of the responses to one of the questions earlier.

Is that.

In a very thorough analysis.

That was presented initially last year, which will be updated in an oral presentation. This year.

There's been a valuation of looking at patients who respond to chemotherapy based on a nanostring 770.

Scott Koenig: Charles, you might have missed it in one of the responses to one of the questions earlier. Um, is that, in a very thorough analysis that was presented initially last year and which will be updated in an oral presentation this year, there's been an evaluation of looking at patients who respond to chemotherapy based on a nanostring 770 marker profile, which is focused primarily on immune responsiveness. And it seems to be a segregation that in what are so-called immune depleted patients, the patients who will respond to chemotherapy tend to fall in that bucket, whereas those, in theory, who will respond to immune-based therapies fall in sort of the immune-enriched population markers, which particularly include upregulation of gamma interferon-associated genes. We then did an analysis of the patients with refractory disease who were treated with flot For some reason, chemotherapy isn't working very well, and I can't give you the specifics, but that's certainly an avenue of further exploration.

A marker profile, which is focused primarily on immune responsiveness and their tip tense that it seems to be a segregation that and what our so called immune depleted.

No cheers.

The patients whose will respond to chemotherapy.

Tend to fall in that bucket.

Whereas those in theory, who will respond to immune based therapies fall in sort of the immune enriched population a markers, which particularly include upregulation of gamma into a interferon associated genes we.

Then did an analysis of the patients with refractory disease, and who were treated with Florida Tusa, Matt and in fact, the majority of those patients fell in that immune <unk> enriched gamma interferon signature bucket.

And so clearly mechanistically there is some reason that and a.

Environment that has a lot of in flat inflammation for some reason chemotherapy isn't working very well and I can't give you the specifics why but that's certainly an avenue of further exploration.

Got it okay. Thanks.

Scott Koenig: Got it. Okay, thanks. Could you also just remind me again, given the mechanism of action of the PD-1 LAG-3 bi-specific, would you expect activity in the post-PD-1 setting for those 150 patients, and how do you evaluate PD-1 pre-treated versus naive patients for this particular agent? Thank you.

Could you also just remind me again, given the mechanism of action of the PD one like three by specific.

Would you expect activity in the post PD ones that setting for the 150 patients and to help you evaluates.

The PD, one pretreated versus naive patients for this particular age. Thank you.

Scott Koenig: Thanks for that question, and as you might recall, Charles, what we observed in our preclinical studies when we assessed separate in vitro analysis of T cell activity restoration in a bispecific DARD molecule configuration was much more effective at activating T cells as compared to anti-PD-1 or anti-LAG-3 antibodies alone. To assess your question clinically, we are including patients that are both PD-1 experienced and that have progressed on therapy. And I should note that for one example, for instance, when we spoke at ASCO with regard to the design of our mahogany study, we presented a patient with gastric cancer who had been on multiple lines of therapy, which included refractoriness to nivolumab, and yet this patient was able to respond with complete resolution of his target lesions for, I think, over a year.

Oh, Thanks for that question and as you may recall Charles.

What we have observed in our preclinical studies when we assessed separate in vitro analysis of T cell activity restoration in a by specific dart molecule configuration.

That configuration was much more effective it it activating T cells as compared to anti PD, one or anti lag three antibodies alone.

HM.

So to assess your question clinically we are including patients that are both PD one experienced.

And that have progressed.

On therapy and I should note that for one example for instance.

When we spoke at the time.

Ask so with regard to the design of our mahogany study, we presented a patient with gastric cancer, who had been on multiple lines of therapy, which included or refractory needs to nivolumab and yet this patient was able to respond.

Complete resolution of.

His target lesions.

For I think over a year.

Scott Koenig: And so what we believe, and based on very strong data that has come preclinically, combinations of PD-1 and LAG-3 blockade seem to induce an immune response that is superior to individual treatment alone. And there is synergy there in terms of either expanding populations that are in the activation phase or restoring cells that have an exhaustion profile. So, again, we will be examining populations of patients that are both anti-PD-1 naive, looking at historical responsiveness of those patients with those particular tumors to PD-1 therapies, and obviously looking for improved responses in the anti-PD-1 naive, as well as looking at the PD-1 experienced patients to look for responsiveness.

And so what we believe and based on very strong data that has come pre clinically.

Combinations PD, one and lack three blockade.

Seem to induce a immune response that is superior to individual treatment blown up and there is a g. there in terms of.

Either expanding populations that are in the activation phase or restoring.

Cells that having it a exhaustion profile. So again, we will be examining populations of patients that up both PD anti PD, one naive looking at historical responsiveness to those.

Patients or would those particular tumors to PD, one therapies and obviously looking for improve responses in the anti PD, one naive and then as well as looking to the PD one experienced patients so look for responsiveness.

Understood. Okay last question from me and Oh.

Scott Koenig: Okay, last question from me, and I don't know if you kept up with this one, but there was something that happened a couple of days ago. There was another company that had a phase three trial, hit PFS, hadn't had OS as a secondary endpoint yet, and they ended up pushing out an NDA or a BLA. And I guess, has this event, I guess, changed your view on the FDA's level or willingness these days to accept? A BLA or NDA filing based only on a PFS endpoint with OS pending. Yeah, that's the question.

I don't know you kept up with just one but there was something that happened a couple of days ago or there was another company had a you know like needs to be trials. It PFS had had oh, the secondary endpoint, yet and the end of the pushing out of India or be away and I guess you know like does it has.

Ben or I guess changed your view.

On the you level or willingness these days tweaks sets.

On a daily or indeed filing based only on NPL and point out west pending.

Yeah, that's the question.

So I'm not aware of the specific case, you're citing but as you probably are quite well aware there are a very large list of oncology drugs.

Scott Koenig: I'm not aware of the specific case you're citing, but as you probably are quite well aware, there is a very large list of oncology drugs that have been approved based on PSS data that ultimately do not meet OS criteria and OS data statistically, as long as there are trends in terms of favorable responses for the experimental drug. Given the magnitude of the effect we're seeing here, particularly in this ethyl population, we think that it is prudent to file the BLA at this point. Ultimately, it will be the decision by the FDA whether to accept the filing and review it. But we are optimistic that they will accept it and review it, and we'll see very shortly.

That have been approved based on PFS.

Data that ultimately do not meet our west criteria now as data.

Statistically as long as there are trends in terms of of of a favorable responses of for the experimental drugs.

Given the magnitude of effect, where we're seeing here, particularly in this at folio population.

We think that it is prudent to.

All the P.L.A. at this point ultimately it will be the decision by the F.D.A. whether to accept the filing and review it but we are optimistic or that they will accepted and review it and we'll we'll see [laughter] very shortly.

Got it thanks for taking the questions.

Scott Koenig: Got it. Thanks for taking the question.

Operator: Thank you. And we have a question from the line of Boris Peeker with Koen. Your line is open. Boris, your line is open. Mr. Peeker, please check your mute button.

Thank you and we have a question from their line of Boris Peaker with calling your line is helping.

Morgan Your line is helping.

Mr. PK, please check your mute button.

Okay Dot token I moved to the next question.

Operator: Okay, doctor, can I move to the next question? Yes. Okay, and we have a question from Christopher Marai with Nomura Instinet. Please go ahead. Hi Scott, this is Jackson Harvey on behalf of Christopher.

Yes, Okay, and we have a question from Christopher Maher Wright with Nomura Instinet. Please go ahead.

Hi, Scott This is Jackson Harvey on for Christopher Thanks for taking the questions. I was just curious if you could provide some more color around the durability of response that you've seen with floated to some AD in the monotherapy trial and with regards to the PD one combo study with floated to summer.

Scott Koenig: Thanks for taking the questions. I was just curious if you could provide some more color around the durability of response that you've seen with flotatuzumab in the monotherapy trial. And with regard to the PD-1 combo study with flotatuzumab, what do you think, based on the preclinical data, should be the primary expectation for enhancement? Do you think we should be looking for longer duration of response, higher overall response rates, or maybe an expansion of the AML populations that respond? Thank you.

What do you think based on the preclinical data should be the primary expectation for enhancement do you think we should be looking for longer duration of response higher overall response rates or maybe an expansion of the A.M.L. populations that respond. Thank you.

Scott Koenig: Thank you very much for the question, Jackson. With regard to the durability response, I'm going to leave that to our ASH presentation that's coming up in a few weeks. What we had noted before, as I recall from last year's presentation, the responding population was a little over three months. My expectation is that it is now longer in the responsive population. But I'll let the data speak for itself when it comes out in a few weeks. With regard to the combination with anti-PD-1, I think you've hit all the high points. I think we have the opportunity here for greater duration of response, increased responsiveness, and expansion of the population. In one way, what I'm hoping is that, as we study this, particularly in the subsequent cycles of therapy or during periods of consolidation, we will be able to dramatically improve the length in which these patients respond, but obviously, you know, we'll have to wait for the data.

Thank you very much for the question Jackson Uh Huh.

In regard to the durability of response I'm going to leave that to our ash presentation, that's coming up in a few weeks well. We had noted before I as I recall from last year's presentation. The responding population was a little over three months.

My expectation is is that it is now longer in the response of population, but I'll I'll, let the data speak for itself when it comes out a in a few weeks.

With regard to the combination with anti PD, one I think you've hit all the high points I think we had the opportunity here for greater duration of response or increase responsiveness and expansion of the population.

In one way what I'm I'm, hoping is that.

This and as we as we studied this is is that particularly in the subsequent cycles of therapy or during periods of consolidation that we will be able to dramatically improve the length in which these patients respond.

Obviously, we'll have to wait for the data.

Scott Koenig: Great, thank you so much. And this concludes the question and answer session. I would like to turn the call back to Dr. Koenig for his closing remarks.

Great. Thank you so much.

And these complete stay question answer session I like to turn the call back to Dr. Kenny for his closing remarks.

Scott Koenig: Thank you, Operator. I'd just like to thank everyone again for joining us this afternoon and to let you all know that we look forward to continuing to advance our programs in the coming months and providing updates on our progress. Have a good day.

Thank you operator, I just like to thank everyone again for joining us. This afternoon and let you all know that we look forward to continuing to advance our programs in the coming months and providing updates on our progress.

Good day.

Operator: And thank you, ladies and gentlemen. This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you for watching! BF-WATCH TV 2021

Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.

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