Agios Pharmaceuticals Inc (AGIO) 2015 Q2 法說會逐字稿

Good morning and welcome to Agios' second quarter 2015 conference call. At this time all participants are in a listen-only mode. There will be a question and answer session at the end. Please be advised that it call is being recorded at Agios' request. I would how to like to turn the call over to Ms. Renee Leck, Senior Manager, Investor and Public Relations of Agios. Ma'am, you may begin.

Thanks, Nakita. Good morning, everyone and welcome to the Agios's second quarter 2015 conference call. You can listen to a live webcast with slides or a replay of today's call by going to the Investors and Media section of our website, agios.com. With me on the call today with prepared remarks are Dr. David Schenkein, our Chief Executive Officer, who will review our program progress to date and provide an outlook for the remainder of the year, Dr. Chris Bowden, our Chief Medical Officer, who will review our recent clinical development updates, and Glenn Goddard, our Senior Vice President of Finance, who will summarize Agios' second quarter 2015 results.

Before we begin, I would like to remind you that today's discussion will include statements about the Company's future expectations, plans and prospects that constitute forward-looking statements for the purposes of the Safe Harbor provisions 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 Report on Form 10-K which is on file 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.

With that, I will turn the call over to David.

Thanks, Renee. And good morning everybody and thanks for joining us today. 2015 has been a busy year for Agios so far and we are excited to share progress we have made across all our programs over the past can quarter. This progress is consistent with the clear priorities we laid out earlier this year -- specifically, executing on our planned global registration programs, building out our capabilities and continuing to invest in research to maintain our leadership position in cancer metabolism and rare genetic metabolic disorders.

We're pleased to share, due to the incredible work from everybody in the Agios family, that all four of our clinical programs remain on track, and we expect to achieve all of our 2015 goals and milestones. For our lead IDH programs, AG-221 and AG-120, we continue to execute on our strategy of speed and breadth by aggressively moving ahead in the relapse refractory acute myelogenous leukemia setting, while expanding that other settings and hematologic malignancies. These efforts are highlighted by the speed with which we moved that expansion cohorts and our plan to initiate the first global Phase III trial for AG-221 later this year with our partner Celgene. We are driven by the fact that doctors that see patients with relapse refractory AML haven't seen a truly novel treatment nothings more than 30 years, and as many of you know, I'm one of those physicians and I know firsthand that patients and their families are counting on us. Behind our lead programs we continue to be very excited by the next wave of novel medicine being generated by our research team and look forward to providing further details as they advance.

In the past quarter, we have also added many new Agios' employees into critical positions as we build out our capabilities to support field trials and become a fully integrated late stage development and commercial organization. Our board of directors also continues to evolve and we are thrilled with the recent addition of Maykin Ho, formerly of Goldman Sachs, as an independent director and appointment of Mark Tessier-Lavigne as the new Chairperson of our board. We believe that our high level of productivity, which resulted in the creation of four novel investigational medicines in the six years since our inception, truly sets Agios apart. It is the result of the hard work from a fantastic team, our focus on patients and culture, and our unique approach to dysregulated metabolism in cancer and rare genetic diseases. This combination of vision and clarity of purpose, people and progress set us firmly on the path to becoming multiproduct sustainable biopharmaceutical company with a broad pipeline of first in class assets.

I will now turn the call over to Chris to review clinical updates and specifics of the clinical development milestones.

Thanks, David. We have made important progress on the clinical front so far this year. And I would like to begin by highlighting the data we presented at the European Hematology Association's annual Congress EHA in Vienna in June.

I will start with the AG-221 study in hematologic malignancies. This Stage I trial included a dose escalation stage, which is now closed, and five expansion cohorts. The updated data we presented from the dose escalation phase as well as early data from the first four expansion cohorts demonstrated impressive clinical activity, durability, and an easily managed safety profile -- an important consideration for an oral drug in patients with advanced disease. For the full study population an overall response rate of 40% and a complete remission rate of 16% was reported, with some patients staying on treatment for more than 15 months. For the patients with relapsed refractory AML, the overall and complete response rate was 41% and 18% respectively.

As I mentioned, this is a very sick patient population with mainly advanced AML. The survival and standard of care would only be expected to last a few months. So we are very pleased with the durable responses we are seeing with AG-221. We believe these responses are attributable to our molecule's unique mechanism of action which by lowering levels of 3HG, effectively remove the block and differentiation. Put simply, the medicine is repairing the cancer cells.

We are also encouraged by the long treatment durations observed in a number of patients who have achieved less than complete remission, suggesting that they may be deriving significant clinical benefit from AG-221. For example, 18 patients with AML were reported to have a partial remission defined by the normalization of their hematologic parameters included neutrophil and platelet counts. This is particularly is significant in AML since patients often die from infection or bleeding rather than the disease itself. We are extremely interested in these findings and will continue to work with physicians on determining their significance as we gather more data.

Outside of the relapse refractory AML population, we also presented early proof of concept data in untreated AML and myelodysplastic syndrome. In the group of 22 AML patients who are too sick to receive standard of care chemotherapy, seven patients had an objective response, including three complete responses. Of the 14 patients with myelodysplastic syndrome, seven had an objective response, include two complete responses. This group of patients had no standard therapies outside of hypomethylating agents such as dicytidine and azacytidine. We will be announcing our development plans in this indication by the end of the year. Enrollment for the Phase I expansion cohorts are on track and we plan to initiate the registration enabling Phase III program in relapse refractory AML patients by the end of the year. We also plan on beginning combination trials to evaluate AG-221 as a potential frontline treatment for AML by the end of the year.

We are also studying AG-221 in a Phase I-II trial in IDH-2 mutant-positive advanced solid tumors and angioblastic T-cell lymphoma. This study is on track and will continue to dose escalate this year.

And now for AG-120. As with AG-221, we are studying AG-120 in AML and other hematologic malignancies as well as in solid tumors. At EHA, we presented new data from the dose escalation portion of the Phase I study of AG-120 in hematologic malignancies, which is now closed. These data showed an overall response rate of 31% and a complete remission rate of 15%, with some patients on treatment for up to 11 months. The overall safety profile remains consistent in the 40 additional patients treated as of the last analysis and therapy has generally been well-tolerated. Similar to AG-221, with AG-120 we are also seeing a number of patients with long treatment durations who have not achieved a complete response, which again introduces the potential of significant clinical benefit for this very sick group of patients who are not expected to live beyond a few months.

This trial also includes three expansion cohorts that were initiated during the second quarter and remain on track. AG-120's future development plan in hematologic malignancies is similar in scale and scope to AG-221. We are working to begin combination trials to evaluate AG-120 as a potential frontline treatment for AML by the end of this year and plan to initiate a registration-enabling Phase III study in AML patients in the first half of 2016.

Now to the AG-120 Phase I study in solid tumors which is ongoing. The purpose of this study is to evaluate the safety, pharmacokinetics, pharmacodynamics, and clinical activity of AG-120 in the broad side of advanced solid tumors that harbor IDH-1 mutation. People with certain tumors such as intrahepatic cholangiocarcinoma, chondrosarcoma, and glioma have a higher frequency of IDH-1 mutation and are therefore more likely to be represented in the trials. At the moment the patients also have limited treatment options.

With AG-120 unique mechanism of action, we are continuing to evaluate how treatment with our molecule affects solid tumor cells and how this relates to criteria such as response rates and other measures. This is new biology; unlike with hematologic malignancies with solid tumors there is no precedent to gauge the therapeutic affects in removing the block and differentiation. We plan to provide more background and education on this area at an investor and analyst event in October. We also submitted an abstract with the first dose escalation data to the AACR-NCI-EORTC triple meeting in Boston in November.

And finally from the cancer metabolism portfolio, I would like to highlight the recent milestone achieved for AG-881, a small molecule brain penetrant IDH inhibitor developed by Agios scientists. This is the third program from the portfolio of IDH inhibitors to enter the clinic in less than two years. AG-881 represents a potential second generation molecule that we believe will expand our opportunities for clinical development across the spectrum of IDH-1 and IDH-2 mutant positive tumors. The brain-penetrant molecule may be especially important for glioma patients with earlier preparation of the disease and that indication is represented in our Phase I trials.

In June, Agios dosed the first patient in a Phase I study of AG-881 in patients with IDH mutant positive advanced solid tumors including gliomas. And this week the first patient was dosed in a second Phase I trial for patients with advanced IDH mutant positive hematologic malignancies. This most recent Phase I trial is focused on patients whose cancer has progressed on a prior IDH inhibitor. As with all of our Phase I studies, both of these trials will include first a dose escalation phase followed by an expansion phase to help us gather as much safety from clinical data as quickly as possible. We look forward to keeping you updated on this program as things progress.

Now turning to AG-348 our lead and wholly owned novel first in class oral pyruvate kinase activator. We are evaluating AG-348 IN DRIVE PK, a Phase II trial in adult transfusion-independent patients with PK deficiency. We initiated this study following the presentation of the final Phase I multiple ascending-dose data in healthy volunteers at EHA. DRIVE PK is a global open-label multicenter randomized study that includes two arms of 25 patients each receiving 50 milligrams or 300 milligrams twice daily for at least six months. Aside from and tolerability we will evaluate the pharmacokinetic and pharmacodynamics of AG-348 to confirm activation of the PKR pathway. Hematologic indicators of clinical activity, including hemoglobin levels, will also be measured. We opened this study in June and enrollment is on track. We will keep you apprised of our progress.

I would like to take a moment to remind you about the disease we are treating in this first inpatient study. Pyruvate kinase deficiency is a serious hematologic disorder that cause severe symptoms associated with lifelong hemolytic anemia in adults and children and can result in an extremely poor quality of life. Current treatment options which include transfusions, splenectomy and iron chelation, only address patient symptoms. Our program would be the first to correct the underlying cause of the disease.

Our partners at Boston Children's Hospital also presented the first data from the ongoing natural history study at EHA. While the data showed a range of severity for the disorder, they also identified unifying characteristics such as iron overload which are common in all age groups regardless of transfusion history. We look forward to working with them as we continue to learn more about this rare disease. And David mentioned we are very excited by when is coming next in the pipeline and look forward to keeping you updated on the progress across all of our programs during the remainder year.

With that, I will turn the call over to Glenn.

Thanks, Chris. Agios is in a very strong financial position today, and is well capitalized as we advance multiple programs into late stage clinical development. As David noted, we are on track to achieve all of our corporate goals and milestones for 2015. With our rour clinical stage medicines advancing, approximately $434 million in cash, and a great partnership with Celgene, we believe we are in a strong position to build a sustainable multiproduct biopharmaceutical company.

Now moving on to the financial results for the second quarter. Our cash, cash equivalents, and marketable securities as of June 30, 2015 were $434 million, compared to $467 million as of December 31, 2014. The decrease was driven by cash expenditures for operating activities of approximately $64.9 million, which was offset by $43.3 million of funding received from Celgene. The $43.3 million of funding from Celgene was comprised of the following items -- a $20 million extension fee related to the final year of the discovery phase of our 2010 collaboration agreement, $10 million from the signing of our new worldwide development and profit share collaboration agreement for AG-881, and finally, $13.3 million related to IDH development cost reimbursements.

Our total revenue was $13.2 million for the second quarter of 2015 compared to $8.4 million in the second quarter of 2014. During the three months ended June 30, 2015 we recognized $8.8 million related to the delivery of the AG-881 license with Celgene.

Research and development expenses were $36.4 million in the second quarter of 2015 compared to $22.6 million in the second quarter of 2014. The increase was largely due to increased investment in our three lead investigational medicines as they advance into later stage clinical development along with early development costs for our forth clinical program, AG-881.

General and administration expenses approximately $8.9 million in the second quarter of 2015 compared to $4.2 million in the second quarter of 2014. This increase was largely related to increased headcount, personnel-related expenses, and other professional expenses to support our growing operations.

Today we are also raising our previous year end cash guidance and now expect to end 2015 with more than $350 million of cash, cash equivalents and marketable securities. Our year end guidance does not include program-specific milestones that we may be eligible to receive under collaboration with Celgene. In addition, we expect the cash position to give us runway through late 2017. And with that, I will turn the call back over to David.

Thanks, Glenn. We are proud of our 2015 accomplishments to date and look forward to keeping you updated as we execute on all our remaining milestones. As we mentioned previously, we plan to host an investor and analyst day this fall where we will spend more time reviewing key disease areas we are targeting, as well as future development plans in both cancer metabolism and the rare genetic disorders. I want to thank you all for your time today and as always we can to thank all of the patients, their care givers and nurses and doctors who have participated in our clinical trials, and of course all our employees and shareholders for continued support.

And with that, we can now go to questions and I will turn it over to you, operator.

(Operator Instructions). Our first question comes from Yatin Suneja with Cowen & Company. Hi, guys.

Hi, guys. Congrats on the progress, and thank you for taking my questions. The first question on the planned Phase III trial that is supposed to start later this year. Could you give us a little more color in terms the trial design? Have you received any input from the regulatory body, both in the US and Europe? Or when can you share more information about that trial? And then I have one more question.

Okay. Yatin this is David. Yes, thanks for the question. So we are obviously very excited to begin this trial later this year. Our policy in general is not to really give out trial details until we are starting the trial. And so you can expect to hear all of the details as that trial begins later this year. We are very pleased with all of the regulatory discussions we have had on both sides of the pond but have -- we don't typically share any of those details. What is your second question?

Yes, so could you just broadly talk about the development strategy behind AG-881? Is this compound going to compete with any the other molecules? I know you have two trials ongoing and especially the hematology, the heme trial you are treating patients who have already progressed. So are you planning to develop it as a later line molecule? Could you give a sense of your strategy here? Thank you.

Yes, good question. I will start and then Chris can maybe give you a little more detail on the trials that are ongoing and what we are trying to get out of them.

What we have always said is from the very beginning when we broke open the IDH story our plan was to lead the IDH space both in biology and clinical development and to do that you really need as much flexibility as possible and that is why doing good drug development means having the lead molecules in the clinic and next generation molecules coming right behind. The obvious main reason that 881 was developed is that it is fully brain penetrant which may be important in some patients with glioma, particularly in the patients early on in the disease where the blood/brain barrier is likely to be more intact.

I will tell you at a high level and then Chris can walk you through trial designs ongoing in 881. In the heme malignancy side, there is no question, 120 and 221 going into late stage development and into the market as quickly as can and nothing will interfere with that from the 881 perspective. But it is an important molecule to give us flexibility and maybe Chris can talk a little bit with the current trial designs.

So the two Phase I studies are dose escalation trial one in patients with IDH-1 or IDH-2 mutant positive solid tumors and the other is in patients with advanced hematologic malignancies. And like all of our Phase I trials have a dose escalation component where we are looking to understand pharmacokinetics and safety primarily across the different doses that we test in an effort to understand the initial safety the drug in patients and also to determine what potential doses we might study if we move into further development. And so that is really the key, that first building block of the development of the drug and in terms of if you can move into your next wave of clinical development, you have really got to first establish that you a safe drug with a dependable dosing pharmacokinetics.

All right. Thank you very much.

Thank you. Our next question comes from the line of Anupam Rama from JPMorgan.

Hey guys. Thank you guys for taking the question. Just two quick ones for me. In AG-348, the DRIVE PK study, we know you are studying two doses there, the 50 and 300. Could you talk about when kind of dosing frequency optionality you have, given some of the EHA data we saw in healthy volunteers? And then just a quick follow-on -- in DRIVE PK we know that there is optionality for a third arm. Can you talk about the leverage and factors for consideration in potentially using that third arm? Thanks so much.

Great question -- Anupam, this is David. Great questions, and I am going to ask Chris to attack both those.

So the dosing frequency -- you can get randomized to two doses, 50 or 300 milligrams bid. And that's daily dosing. The protocol has various and sundry stipulations that the treating physicians and investigators can use if they run into toxicity and that is fairly well stated in the protocol. Based on our understanding of the molecules' preclinical as well as clinical attributes and findings from the healthy volunteer study, we are very comfortable with the dosing or the twice daily dosing regimen that we put forward in terms of the initial investigation of both clinical activity as well as the impact on the pharmacodynamic endpoints published and talked about to date, mainly 2,3-DPG as well as ATP.

The aspect of a third arm is built in there and it is a flexibility mechanism that we want to reserve the right to quickly without amending the protocol be able to study another dose and potentially schedule if the data puts us in that direction. So there are no concrete set plans hat point to have the third arm in there. It is much more of allows you to move relatively quickly versus having to stop and amend the study and move in that regard. I want to say at the same time we have oversight of the trial here within the company as well as working with the investigators who are going to be looking at the data with us if we need to make these types of decisions.

Great. Thanks so much for taking our questions.

Thank you. Your next question from the line of Keenan MacKay with Citi.

Hi, thanks for taking may questions. Question on the design of the 881 trial in heme malignancies. Can you elaborate on the rationale for the going in behind progression on a (inaudible) inhibitor? Is that to potentially counteract resistance mutations in the other IDH gene or is this more for tumor heterogeneity or is this more for a different bonding modality from your IDHs? Thank you.

Yes, hi. It's Chris here. The reason why we set the inclusion and exclusion criteria in terms of patients being eligible after they have been treated with an IDH inhibitor is that we want to move our AG-120 and 221 programs for those patients as quickly as possible. Those trials are well advanced and we know a lot about those drugs in terms of safety and efficacy and have a pretty ambitious development clinical program that we continue to outline. At the same time, as we continue to engage in rigorous drug development and looking at the second generation molecule of AG-881 we want to be able to offer an opportunity to study the safety of the drug in those mutant positive populations whether they have an IDH-1 or IDH-2 mutation.

Terrific. And then with AG-348 and the DRIVE PK, are there any options for doing sort of an interim --

To do a what? Keenan I couldn't hear you? An interim?

An interim analysis of any sort?

Remember, this is -- this is David here. This is an open label study and it is a Phase II study so there is no formal need for any interims. We will be evaluating data at the frequency which we normally do which comes in in discrete intervals so we can evaluate the data. But it is an open label study.

Got it. Thank you.

Thank you. The next question comes from the line of John Newman with Canaccord.

Hi, guys. Thanks for taking the question. It's sort of a follow-up to the last part of the last question. For 881, in solid tumors I also notice that the inclusion criteria allows for failure of a previous IDH inhibitor. I'm just wondering if you can give us some sort of a sense as to maybe what portion of the patients in the solids that are enrolling in the solid tumor study for 881 are coming from the 120 study or if you know that?

Yes, John. David here. Thanks for your question. As you know, we don't typically talk about data coming out of the individual trials themselves until the data is presented at a meeting. So -- and the 881 trial is just getting started so it is a little too early to even think about that. We think the likelihood is that patients treated with a previous IDH inhibitor who likely come from one of our trials but as you know there is another IDH inhibitor in the clinic, and it is possible that it could come from that as well. We have no strong preference where they come from. We are just not giving out any of those kind of details at this time.

Okay. For AG-348 as we get closer to the back half of the year how should we think about the data in the context of what is meaningful to the physicians that are treating the disease? Thank you.

Well, I will start and then Chris can elaborate a little more. I will just reiterate as you know that we have not put out any guidance yet on when to expect to see data from this trial. It is obviously recently started and we look forward to enrollment continuing as well as it is today. And we will give our guidance at a later date in terms of when to expect to see data. In terms of expectations I will turn it over to Chris.

Well, it is -- at this point we are really just moving into new ground and we are going to be looking at with the investigators a lot of different parameters here. The thing that people are most interested in is do changes in 2,3-DPG, ATP translate into some increase in hemoglobin ultimately and how does that correlate with how patients feel ultimately? And/or does it reduce their need for transfusion and/or eliminate or reduce the need for iron chelation, splenectomies, and some of the other really wad things that happen with the disease. So it is a complicated multifactorial problem and we will be looking at linking laboratory outcomes that we are going to be following on this trial with our pharmacodynamic endpoints that we have talked about, and ultimately how they translate to clinical outcomes. It is too early to make black and white correlations if marker X, 2,3-DPG goes down by a certain percentage this is equivalent to a clinical benefit. We just can't say that yet at this point. But it is a very exciting time given that the trial is open and enrolling and we going to have data to start thinking about inpatients with this disease.

Okay. Great. Thank you.

Thank you. The next question from the line of Ling Wang with Oppenheimer.

Thank you. Can you comment on what are the key tumor types beyond glioma for the 881 Phase I trial?

Yes Ling, David here. Thanks for your question. So we allow any patient into those -- into the 881 trial who has any solid tumor as long as it carries either an IDH-1 or IDH-2 mutation. We are not specifying one tumor type over another. And we certainly as you know never give out guidance in terms of what we are actually enrolling. As Chris mentioned on the call, the frequency of mutations is higher in certain diseases and so you would expect over time to see more patients with cholangiocarcinoma, chondrosarcoma, and glioma because those are the most frequently mutated. But by no means are they restricted to those tumor types. So again, it will be open to any patients with a solid tumor who carries mutations.

Yes, it's Chris here. Let me just add one other thing about the conduct of Phase I trials in that we develop drugs and with the IDH inhibitors. That's certainly true, that are targeted to a certain population -- IDH-1 mutation positive tumors or patients or people who have IDH-2 mutation positive tumors. And in a Phase I trial we are looking to understand aspects around safety and pharmacokinetics. You want to have as broad of a patient population that you can within that genetically defined subset. So that is why we are allowing patients in who may have had prior IDH treatment because we are just trying to get initial safety and pharmacokinetic safety.

That is helpful. Also I wanted to clarify the 120 solid tumor Phase I trial you said the abstract was submitted for the EORTC meeting is that right?

Yes, that's correct. We have submitted abstract for the dose escalation phase of the AG-120 solid tumor trial for the triple meeting in Boston in November and hopefully it will get accepted and if it is we will be presenting.

Great. Thank you.

Thank you. The next question from the line of Debjit Chattopadhyay.

Good morning and thanks for taking the questions. Just wondering, the collaboration with Foundation Medicine -- any kind of update on that regarding identifying the right kind of patients who are most likely to respond to the IDH drugs that are currently being developed?

Yes, thanks, Debjit. We are obviously very pleased with the collaboration with Foundation Medicine which goes back to the first clinical trial that we conducted with 221. And it is important for us because it allows us to look for additional mutations that may give us information about activity or safety issues with any of our molecules and we think that is the right way to do clinical medicine these days. Obviously, we have shown the first data for AG-221 at recent EHA meeting where we showed that the on-study tumor genetics above and beyond IDH-2 did not predict poor response. But we are early in learning the biology here and so for all of our trials we are continuing to work with Foundation Medicine to give us the broadest the picture of the genomic profile of the patients not only as they come into the study but over time. And that data will come out over time, as we clench it. They have been a terrific partner for us and we look forward to continue working with them.

And then for 348, was there any kind of preclinical signal or any kind of mechanistic rationale for the aromatase inhibition that you saw?

Well, we do know that -- we had mentioned this before when we were at EHA that we had some preclinical data that the molecule did have some off target binding of aromatase. And that's why we decided to look for hormonal levels in our volunteer study. As you remember from the data, those levels were altered in some of the volunteers all in the normal range and of unclear clinical significance and that is why Chris and his team have built in a more robust look at that in the DRIVE PK study. But we knew there were potential for off-target binding of aromatase.

And just one last question. In terms of looking beyond the IDH mutations in the broader cancer metabolism path space what would be the most logical thing you would go after? And thank you so much for the questions.

Obviously Agios was started with a clear mandate to explore what we hunk is one of the most exciting new areas of cancer biology and that is cancer metabolism. And we built a robust research team that allows to us fully explore the area. Every target we are working on beyond IDH are essentially novel targets that we have in large part discovered here at Agios. And we are very cited about the next wave of cancer metabolism targets. But we are not disclosing them for competitive reasons for quite a while until we're ready to get closer to clinical trials. We think it as reach area for cancer discovery for truly novel targets that we think can make a meaningful impact in patients' lives. We are early on, and we're just very excited about continuing to explore the space. But I couldn't give you yet which target are we most excited by because we have quite a few.

Would Celgene have first right of refusal for those upcoming programs as well or once the collaboration finishes in 2016, right, then Celgene doesn't -- it belongs to you at that point?

That is essentially correct. So the research relationship with Celgene in which they get an option to license cancer metabolism molecules does end in April of 2016. And anything that is in the early stages of research comes back to Agios wholly owned. There may be a handful of molecules that are very close to clinical development in which case they get split between Agios and Celgene and we have articulated that in the past. But certainly, all of the early research that Agios is doing will we all wholly owned after that time period.

Thank you, David.

Thank you. (Operator Instructions). Our next question from the line of Arlinda Lee with MLV.

Hi, guys. Thanks for taking my questions. I have two. One can you clarify what accounting changes that if you get any additional milestones from Celgene, how you would recognize that? And then secondly with the ASH abstract deadline I think last week, or this week can you comment on what you submitted to be presented there? Thanks.

Yes, I will answer the second one and then Glenn will answer the first one. We are not commenting around abstracts for ASH at this time. If we do plan on presenting at ASH we will obviously give you guidance on that at a later date.

This is Glenn. On the rev rec, the likely scenario would be those would be substantial milestones at the time of receipt. We would have met the obligations and recognize it immediately. Remember in the milestones that could come up in the future are clinical regulatory approval and commercial.

Sorry, I couldn't hear you. Could you say that again?

So the milestones that were eligible or would be treated would be substantive milestones that would be recognized likely immediately when he would receive them.

Okay. In the cash or in the -- in both cash and revenue?

Exactly. We would -- once the cash is received and the obligation is fulfilled or milestone has been met -- the cash receipt is a critical piece of that. Once the cash is in, we would likely recognize the revenue in that order.

Okay. Great, thanks.

Thank you. The next question from the line of James Kuo with Summer Street.

Thanks for taking the questions. I guess as we look forward to the 120 solid tumor data, maybe could you help us in setting our expectations here? I guess compared to AML which is an aggressive cancer it appeared that survival was a strong indicator of therapeutic activity. For the solid tumors where some of the tumor types are much less aggressive will we be needing to look at survival or are there other reliable biomarkers we could be looking at? And also for 348 as you begin to enroll patients in the DRIVE PK trial, could you give us a sense of the level of difficulty it is in finding these patients and the spectrum of symptoms they are experiencing? Thank you.

Yes, so James I will start with first one and Chris will take the second one.

So on the solid tumors, as Chris pointed out, we are in a new area of biology here. We will try and spend some time at our analyst day in October and walk you through some of the diseases that we are enrolling into the solid tumor trial. These are very sick patients with very severe diseases and I also want to remind you that the first part of the trial, which is what will be in the abstract, is dose escalation. And the primary endpoint and expectation there is to focus on safety, pharmacokinetic, pharmacodynamics as we dose escalated at a variety of different doses. But we will give you an update on the individual diseases and their severity and expectations at our analyst day in the fall. And I will have Chris walk you through the 348.

Thanks. So the two points of the question were around enrollment challenges and what is the constellation of symptoms we might be seeing in the trial. It is early days, the trial recently opened but we are encouraged by the accrual and activity we are seeing so far in terms of patients coming in and patients being screened and all of those types of operational details that give one a sense of how things are going.

I want to point out that the natural history study which is being run at Boston Children's Hospital with Dr. Rachel Grace as the principal investigator also has -- provides an opportunity with the patients with the diagnosis of pyruvate kinase deficiency who might be eligible for the trial gives them a potential mechanism to be informed of the trial that they might not see if we didn't have the history study. Yes, this is a rare disease but we are encouraged by what we are seeing so far.

With regard to the symptoms it is too early to tell. We haven't commented on any data. The trial just opened. It's a transfusion-independent adult population. And I think some might come away with the feeling with that that this is a less sick or less symptommatic group, and I don't make that assumption myself because one thing we do know from talking to investigators and looking at a little bit of the natural history data presented at EHA is that the range of hemoglobins that those patients have can be quite low. So if you take the adult hemoglobin should be 12 or 13 or higher and we see patients in the eights or area like that so they will be clearly symptomatic from the disease. And the big question for us will be -- does our drug increase their hemoglobin to make them feel better? So stay tuned.

Thank you.

At this time I'm showing no further questions. I would like to turn the call over to David Schenkein for closing remarks.

Yes, I just want to thank everybody for your support and for your questions. I hope you enjoy the rest of the summer and look forward to seeing you in the fall. Thanks again.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Have a great day.