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Operator
Good day, ladies and gentlemen, and welcome to the Celldex Therapeutics year-end 2013 results and 2014 strategic outlook conference call.
(Operator Instructions)
As a reminder, today's conference is being recorded. You may now begin your presentation.
- VP of IR
Thank you. Good morning and thanks for joining us. Before we begin our discussion I've been asked to direct you to slide 2 and caution you that today's speakers will be making forward-looking statements. Such statements reflect on current views with respect to future events, and are based on assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
Certain of the factors that might cause Celldex's actual results to differ materially from those in the forward-looking statements include those set fourth under the headings Risk factors and Management's Discussion and Analysis Financial Conditions and Results of Operations in Celldex's annual report on Form 10-K, quarterly reports on Form 10-Q, and its current reports on Form 8-K, as well as those described in Celldex's press releases and filings with the Securities and Exchange Commission.
All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You should carefully review all these factors and be aware that there may be other factors that could cause these differences. These forward-looking statements are based on information, plans and estimates as of those call. And Celldex does not promise to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
Please be advised that the Q&A period will be held at the close of the call. I'd now like to turn the call over to Mr. Anthony Marucci, President and CEO of Celldex Therapeutics. Anthony?
- President & CEO
Good morning and thank you for joining us. Joining me on the call today are Chip Catlin, our Senior Vice President and Chief Financial Officer; Dr. Tom Davis, our Senior Vice President and Chief Medical Officer; and Dr. Tibor Keler, our Senior Vice President and Chief Scientific Officer.
2013 was an exciting year for Celldex and for the broader field of immuno-oncology. I would be remiss if I didn't take a few minutes this morning to talk about the evolving landscape.
The Celldex team has been in this space now for more than 15 years and we've seen enthusiasm of immuno-oncology ebb and flow with the successes and challenges of various therapeutic approaches and drug candidates. 2013 was clearly a breakthrough year. The dialogue fundamentally shifted from if immunotherapy works to what can we do to make sure that we realize its full potential.
The excitement is palpable across multiple audiences -- physicians, scientists, patients, biotech and pharma companies and, of course, investors. We think this excitement is here to stay and we share it.
We founded Celldex on the fundamental belief that harnessing the power of the immune system would break significant barriers in drug development for a variety of devastating diseases. Eight years later, we have one of the most robust, well-staged pipelines it immuno-oncology. We enter 2014 with five drug candidates in the clinic, including two in registration studies, rindopepimut in front-line glioblastoma and glembatumumab vedotin in triple negative breast cancer.
As we look forward to the future, we believe the next great challenge for the immuno-oncology field is to further unlock the immune system to deliver the greatest benefit to the largest population of patients possible. We believe you get there through the use of novel combination approaches that seek to leverage the power of the immune system across multiple levels. Celldex is centered squarely in these crossroads.
Many of our clinical programs have been designed specifically for combination therapy and to help engage the immune system. Critical to this strategy has been our ability to understand and exploit our own assets while also identifying promising external technologies to complement our pipeline.
To this point, on our call today we would like to walk you through the key accomplishments of 2013 and outline our strategic objectives for 2014, which includes the initiation of at least four new Celldex-sponsored clinical studies and several investigator-sponsored studies, including multiple combination regimens that leverage both our own internal assets and complementary external assets.
We will also update you on two assets that are growing in importance and we'll be adding to our development this year. CDX-1401, our antibody-based dendritic cell vaccine and CDX-301, a potent hematopoietic cytokine. We will provide you with a financial update as always, and we will close the call with your questions.
Let's start with a quick review of the major accomplishments in 2013. The first is rindo, a targeted immunotherapeutic for the treatment of patients with EGFRv3 positive glioblastoma.
On slide 3, in 2013 we made excellent progress in accruing to the Phase 3 Act 4 registration study of rindo in frontline glioblastoma. We continue to enroll newly-diagnosed patients across more than 200 sites in 24 countries. While this broad reach has been important to the recruitment efforts, particularly for an orphan disease, we also think it will play a critical role in supporting potential drug launch.
We feel confident that we have put rindo into the hands of a significant number of positions worldwide who treat brain cancer. And that with positive results, rindo will be well-positioned in marketplace. We continue to anticipate completion of enrollment in mid-2014 and we will keep you updated as we get closer to this milestone. Long-term survival of the frontline Phase 2 rindo program continues to be exceptional, and overall very supportive of our ongoing Phase 3 trial.
As outlined on slide 4, at the Society of Neuro-Oncology meeting last year, we announced four- and five-year survival data that points to a substantial and continuing survival benefit in comparison to a matched historical control data set at the median and at all other time points evaluated. 18% of the patients from the Phase 2 frontline rindo program were alive at four years, and 14% were alive at five years. No patients in the matched historical control data set survived beyond three years. These numbers are impressive in the general population of glioblastoma but in v3 population they're even more impressive.
Now turning to slide 5, at SNO Dr. David Reardon of Dana-Farber also presented positive interim data from the Phase 2 ReACT study in recurrent glioblastoma. The data demonstrated promising signs of clinical activity in advanced patient populations, including patients with both naive and refractory to Avastin.
The study is ongoing but the results to date are encouraging. Advanced Avastin-refractory patients treated with the combination of rindo and Avastin demonstrated clear evidence of tumor shrinkage, something no one would have expected from a vaccine. Most importantly, patients appeared to be surviving longer, particularly the Avastin-naive arm, which we have referred to as group 1 in our study. A randomized cohort of rindo plus Avastin versus a control plus Avastin.
As we've seen in the case in our frontline studies, rindo has been very well tolerated even in these later-stage refractory patients. We expect to complete enrollment of this study in late 2014 and plan to present the data at SNO in late November.
Turning to slide 6, in December we initiated our second registration study called METRIC for glemba in patients with triple negative breast cancer that overexpress the tumor associated marker gpNMB. This is a randomized accelerated approval study and is expected to include up to 100 sites in the United States, Canada and Australia. The first patients have been successfully screened and dosed and we continue to add enrollment as quickly as possible.
To support our late-stage programs we began to take steps in 2013 to prepare for potential product launches. We have built a small commercial team to begin prelaunch activation. The key areas of focus include global market opportunity assessments, payer landscape and reimbursement trends, evaluating target product profiles with key stakeholders, development of key scientific messages, clinical trial support and disease education through scientific journals and congresses, brand-name development, commercial manufacturing requirements, and development of a go-to-market commercial model. These efforts will continue to wrap up appropriately as the late-stage programs continue to progress.
Next for discussion are three key assets that we believe can play a leadership role in 2014 and beyond by optimizing the antitumor effect of a number of immunomodulatory molecules, both within our own pipeline and externally through combination approaches. These are CDX-1127, which recently received a USAN name varlilumab, or varli, as we will call it; CDX-1401; and CDX-301.
Tom will go into greater detail on how these assets fit in the immuno-oncology space and our significant plans for advancing this understanding in 2014. But let me recap the strides we have made with these programs in 2013.
On slide 7, as you know, varli is a fully human monoclonal antibody that targets CD27. CD27 is a critical molecule in the activation pathway of lymphocytes.
In November at the SITC meeting we presented interim data from the Phase 1 dose escalation study of varli in both solid tumors and hematological indications. The data established an excellent safety profile which is a critical characteristic given our desire to use varli in combinations with a number of other drugs. We saw clear biological activity that directly speaks to the mechanism at play, and promising signs of clinical activity in advanced refractory patient populations.
We also presented preclinical data on combination studies of varli, including with chemotherapy and checkpoint inhibitors that directly support the concept in the clinic. Expansion cohorts in metastatic melanoma and renal cell carcinoma are completing enrollment, and data is anticipated in mid 2014. Expansion cohorts will also be initiated in hematological indications, as appropriate, later on this year, and a separate T-cell malignancy cohort will be added.
Importantly, in 2013 we announced that the US Patent and Trade Office issued a seminal patent for CD27 agonist to which we have an exclusive license from the University of Southampton to develop human antibodies in CD27. The corresponding patent in Europe was also granted in late 2013, and these patents give us a dominant position in the agonist CD27 therapy for cancer.
Now turning to slide 8, in 2013 we also completed the Phase 1 study of CDX-1401 including longer-term patient follow-up. As you know, 1401 is an antibody-based dendritic cell vaccine targeting tumors that expressed NY-ESO-1 oncoprotein.
In this study 1401 was well-tolerated and elicited robust antibody and T-cell responses in patients with advanced cancer. Some patients had evidence of clinical benefit with significant stable disease and measurable tumor shrinkage despite their advanced stage of metastatic disease. Of note, long-term patient follow-up suggested that treatment with 1401 may pre-dispose patients to better outcome on subsequent therapy with checkpoint inhibitors. Tom will discuss these data in more detail but we think the potential here is exciting and will be explored more fully in 2014.
Next is CDX-301, a potent hematopoietic cytokine that stimulates the expansion and differentiation of hematopoietic stem cells and dendritic cells. At the ASH meeting in December, positive results were presented from a preclinical combination study of CDX-301 in Mozobil, an improved agent for stem cell mobilization, demonstrating that the combination of these agents significantly improved hematopoietic stem cell mobilization and transplantation.
In addition to its role in expanding stem cells, 301 has the unique property of expanding and recruiting dendritic cells, the key cells in initiating immune responses. To that end, an investigator-sponsored sponsored study was initiated in December which combines intratumoral CDX-301 with a dendritic cell activating agent, Hiltonol, together with radiation therapy in patients with advanced lymphoma.
This brings us to CDX-1135 on slide 9. As we previously disclosed, enrollment in this program has been very challenging. In July of 2013 we initiated a pilot study of CDX-1135 to exploit the potential opportunity in treating patients with the ultra-orphan indication dense deposit disease. We estimate there are approximately 300 to 500 patients with DDD in the United States.
Our studies sought to enroll patients, particularly children, at a very specific disease point in their disease course. We needed enough deterioration in disease function to be able to demonstrate improvement, but not so much kidney damage that the kidneys were beyond salvaging. Identifying patients at this particular point in their disease course was extremely challenging.
While we have been tracking a number of patients for potential enrollment, some patients deteriorated too quickly, while others remained stable. To date we have treated two patients with 1135, one under a compassionate use and one under protocol. While the patient in the pilot study demonstrated evidence of clinical improvement, the effect was not sustained.
The bottom line is that we have not been able to find patients, nor did we see the necessary broad disease control that would lead to a feasible approval path in this rare indication. While it is difficult to discontinue a program, particularly in a rare underserved orphan disease where patients need new options, we don't see a path forward at this time and have decided to focus our resources in our growing immuno-oncology pipeline.
At this point I'm going to ask Tom to further discuss the experience with CDX-1135. Tom?
- SVP & Chief Medical Officer
Our interest in DDD was inspired by important advancements in understanding the nature of this disease and preclinical work that supported the rationale for CDX-1135 in treating patients with DDD. We initially treated a patient with deteriorating kidney function under compassionate use. She had progressed to complete renal failure and was on dialysis when treatment started.
Unfortunately, although CDX-1135 could not benefit the patient clinically, we were able to show that the treatment markedly improved C3 levels consistent with control of the abnormal C3 activation that is characteristic of acute DDD. With this result, and preclinical data showing complete disease control in our relevant animal model, we felt that a small pilot study was justified to explore potential for 1135 in the C3-mediated disease.
A key feature of the pilot program is the need to document a large clinical benefit that could be proven in a small number of these very rare patients. Thus the pilot was designed to enroll patients with active C3 breakdown and progressive and deteriorating kidney function but prior to complete kidney failure. As Anthony mentioned, these patients are very difficult to identify despite communication with many of the US practitioners who take care of them.
To support enrollment we modified the protocol and opened accrual to include patients who had received a kidney transplant. And a patient with DDD recurrent after his second kidney transplant was enrolled. He had been treated with eculizumab, or Soliris, for one year with inadequate disease control.
The patient discontinued eculizumab and four weeks late began a course of twice-weekly 1135 treatments. Significant improvement was initially noted in clinical parameters, including urine protein to creatine ratio, hemoglobin, systolic blood pressure, edema and hematuria, but these improvements were short-lived. After nine weeks of dosing with CDX-1135 the patient was taken off the pilot study due to declining clinical parameters including an increase in proteinuria.
While 1135 appeared to control the C3 breakdown there was persistent inappropriate complement activity at multiple levels. CDX-1135 was discontinued and eculizumab treatment was restarted.
Due to the improvement in clinical parameters seen while on CDX-1135, the patient and his responsible physicians requested a resumption of CDX-1135 in combination with eculizumab. And a single patient protocol allowing the combination was recently established. Only two doses of CDX-1135 have been administered thus far. But the patient's condition continues to deteriorate.
Based upon the challenges we have experienced and the variable spectrum of potential complement abnormalities in DDD patients, continuing the development in DDD is extremely challenging. We have made the decision to close the DDD program.
I'd like to echo Anthony's comments, while it is difficult to close a study in the rare disease space where patients so clearly need options, we feel this decision is the best decision from both a clinical and business perspective. We have relayed this information to our investigators and emphasized our appreciation for the support and the generous participation by the patients and their families.
- President & CEO
Thank you, Tom. Before we move onto the clinical development objectives for 2014, I'd like to ask Chip to review the year-end 2013 financials on slide 10. Chip?
- SVP & CFO
Thank you, Anthony. For the year ending 2013, Celldex reported a net loss of $81.6 million or $1.02 per share, compared to a net loss of $59.1 million or $1.02 per share for the comparable periods in 2012. The increase in net loss is primarily due to increased R&D expense to support our late-stage rindo clinical development program, as well as the planning and initiation of the glemba metric study and the expansion of the varli study.
R&D expense in 2013 increased by $20 million compared to 2012. G&A expenses increased by $4.8 million to $14 million in 2013, primarily due to higher personnel-related expenses, professional services, and rindo-related commercial planning costs in 2013.
At December 31, 2013 Celldex reported cash, cash equivalents and marketable securities of $303 million compared to $136.6 million as of September 30, 2013. The increase was primarily driven by net proceeds to Celldex of $181.5 million from an underwritten financing, and net proceeds from the exercise of stock options of $2.5 million. These were partially offset by $2.1 million spent on leasehold improvements to our new headquarters facilities in New Jersey, and our fourth-quarter net cash burn of $15.5 million. As of December 31, 2013, Celldex had 89.2 million shares outstanding.
Now I'll turn it back to Anthony.
- President & CEO
Thank you, Chip. As Chip mentioned in 2013 we successfully completed two follow-ons netting close $280 million. We are extremely pleased with the shareholder base that supported these offerings and are grateful for your support.
As a result of these transactions, our current cash will support our planned operations through 2016, which we believe will lead us to BLA filing and potential approval for rindo, as well as the potential be BLA filing for accelerated approval for glemba. In addition, we have expansion of the glemba program into two new indications and have significantly broadened a development plan for varli, CDX-301 and CDX-1401, which I'm going to ask Tom to walk you through now.
Tom?
- SVP & Chief Medical Officer
On slide 11, on December 2, we initiated METRIC, the accelerated approval study for glembatumumab vedotin in triple negative breast cancer patients that overexpressed the target gpNMB. The clinical team has already opened 32 of the targeted 100 centers in the US, Canada and Australia, with the goal of accruing the study in 15 to 18 months. Our clinical and manufacturing teams continue to coordinate on all fronts, including development of our diagnostic assay, and developing a commercial product that will be used in the latter part of the study and in future clinical studies of glemba, as well.
The METRIC study will enroll approximately 300 patients randomized in a 2 to 1 ratio. Patients will be treated in the first or second line setting with either glemba or the control, XELODA, also called capecitabine. If this accelerated approval study is successful, we will be able to market glemba for this triple negative indication, while we seek full approval in the larger breast cancer population through a Phase 3 study in all gpNMB overexpressing breast cancers.
We are currently developing additional trials that will expand glemba into other oncology indications where we believe gpNMB plays an important role in disease. In 2014 we intend to initiate Phase 2 studies in metastatic melanoma and squamous cell lung cancer, as outlined on slide 12. We know from past studies in melanoma that glemba has approximately a 15% response rate, and have designed this new study to see if enrichment for very high expression can lead to better response and survival based on expression levels of gpNMB.
The study will enroll up to 66 patients with unresectable Stage III or Stage IV gpNMB overexpressing melanoma, and will progress through or after standard therapies. They will be entered into cohorts based upon expression level, and will be followed for overall response rate, progression-free survival and overall survival.
Squamous cell lung cancer overexpresses gpNMB at a high frequency. And we will initiate an exploratory trial to estimate overall response rate, PFS and OS and its correlation with gpNMB expression. The study will accrue patients with unresectable Stage IIIB or Stage IV gpNMB expressing squamous cell carcinoma to the lung who have failed first- or second-line therapy.
The study will include a dose escalation phase that may define a higher dose for this indication. And the Phase 2 portion will assess overall response rates in addition to correlations with expression level. The trial will enroll up to 55 patients.
These two studies will provide clinical data in determining the size of our treatment effect in these patients with advanced disease. And will add to our growing body of knowledge on the role of gpNMB as a potentially important target for cancer treatment. We are also establishing several other collaborative efforts to further expand glemba into additional indications.
As you all know, there has been intense interest in immunotherapy as a treatment for cancer based upon its ability to both induce tumor shrinkage and prolong survival. To date, the survival benefit, while very exciting, has been seen primarily in a limited number of patients and indications. The future of immunotherapy lies in the expansion of these clinical benefits to a much larger proportion of patients.
We believe combination approaches designed to deliver comprehensive control of antitumor immune responses can expand the efficacy to all patients. We also believe Celldex is uniquely positioned to play a leadership role in optimizing the immunologic antitumor effects of a number of immune modulatory molecules, both within our own pipeline and externally through a combination of approaches. We are particularly interested in generating potent antitumor responses using a combination of three of our pipeline agents, as seen on slide 13 -- varlilumab, our anti-CD27 agonist antibody; CDX-1401, a dendritic cell targeted vaccine against NY-ESO-1; and CDX-301, a dendritic cell growth factor.
As we've discussed in past calls, varli is a fully human monoclonal antibody that targets CD27, a critical molecule in the activation pathway lymphocytes. This is distinguished from those molecules that shut off T-cell responses like CTLA-4 and PD-1. CD27 can be effectively activated by stimulatory antibodies that induce and maintain potent antitumor responses in vivo.
Varli is an agonist anti-CD27 antibody for which we now have clinical proof of concept. The Phase 1 data, as presented last November, have shown the good safety profile we expected, impressive biologic activity in the form of T-cell activation, induction of relevant cytokines and chemokine, reduction in regulatory T cells, and evidence of immune-mediated clinical activity.
CDX-1401 is an antibody-based vaccine that targets dendritic cells in vivo. NY-ESO-1, a prominent tumor-specific antigen, is delivered to dendritic cells which then efficiently presented to immune-effector cells. We have licensed this technology from Rockefeller University where it was developed by the late Nobel Laureate Ralph Steinman who served on our scientific advisory board.
The Phase 1 study of CDX-1401 was completed in 2013, including long-term patient follow-up. CDX-1401 was well-tolerated and elicited robust antibody and T-cell responses in patients with cancer. Some patients had prolonged stable disease and measurable tumor shrinkage despite their advanced stage of metastatic disease.
Of note, long-term patient follow-ups suggested that treatment with CDX-1401 may predispose patients to a better outcome on subsequent therapy with checkpoint inhibitors. In particular, of six melanoma patients that went on to receive Yervoy, four had responses. In addition, two PD-L1 negative non-small cell lung cancer patients who received an investigational agent that blocks PD1 signaling within two months of discontinuing CDX-1401, were also reported to experience partial responses. While these are clearly anecdotal experiences, these observations will be explored more fully in clinical studies that we plan to initiate in 2014.
CDX-301, also known as Flt3 ligand, a hematopoietic stem cell and dendritic cell growth factor, has been shown in Phase 1 to have little to no toxicity in normal volunteers. It can dramatically increase the number of circulating dendritic cells and stem cells by up to 50 fold. The dendritic cells serve a critical role in initiating immune responses by presenting antigens to immune effector cells, leading to active immunity.
The strategy in combining these agents is to have CDX-301 increase the number of the critical dendritic cells in the patient, while CDX-1401 will load those dendritic cells in vivo with a tumor-specific antigen. And the dendritic cells will then present the antigens to effector T cells. Adding varli will activate those T cells to generate a potent immune response.
Now, on slide 14, varli continues in Phase 1 with the expansion cohorts in melanoma and renal cell carcinoma wrapping up enrollment. With a lymphocytic malignancy dose escalation arm, we recently amended the study to include T-cell malignancies. While in completion of the dose escalation phase we may enroll expansion cohorts, as appropriate. We plan to present additional data on varli at meetings in 2014, most likely at ASCO.
Based on our preclinical models showing the synergy between varli and various other therapies, several combination studies will be initiated in 2014 with vaccines checkpoint inhibitors and other targeted agents. We intend to initiate the following combination studies as rapidly as possible in the following order of priority.
First, a Phase 1/2 study of varli and Yervoy plus CDX-1401 in NY-ESO positive patients in metastatic melanoma. While it's not entirely clear which line of therapy Yervoy will be used in the future, amplifying its antitumor effect will still be beneficial.
We also intend to initiate this same study in combination with a PD1 pathway inhibitor, as available. There are several mechanisms whereby we can access an inhibitor at this pathway, and we actively pursuing all of them. But at this time cannot provide specifics on timing and agents. Both of these studies will be very valuable in telling us to what extent immune activation through CD27 can improve the effects of these checkpoint inhibitors.
We're also planning a Phase 1/2 study of varli plus Tafinlar and Mekinist, which will very likely be followed sequentially by a checkpoint inhibitor given a standard of care. These patients will have B-raf mutated metastatic melanoma.
This is an important trial because it will test both the ability to generate effective immune responses in combination with small molecule pathway inhibitors, and also whether sequential treatment with checkpoint inhibitors can amplify subsequent benefits. These studies are our top priorities for varli in 2014.
We also have a number of other studies we think are important that we intend to initiate as quickly as possible. First, a Phase 1/2 study of varli and multi-targeted receptor tyrosine kinase inhibitors, such as sunitinib, in metastatic renal carcinoma. Since renal tumors are known to be immune responsive, but are also controlled with cytostatic medications, the ability of an active antitumor immune response to further slow progression will be tested.
Next a Phase 1/2 study of varli and platinum-based chemotherapy in frontline advanced squamous cell lung cancer to help us understand if the flood of tumor antigens released during direct cytotoxic therapy can create effective immune responses. And, finally, a Phase 1 study of varli in combination with stereotactic radiation in patients with prostate cancer. Radiation similar to chemotherapy can induce the release of immune targets. And we hope that varli can induce specific immunity against the tumor.
Now, on slide 15, in addition to the combination of CDX-1401 with varli and the checkpoint inhibitors, we are planning a collaboration with the National Cancer Institute's sponsored Cancer Immunotherapy Trials Network to test CDX-1401 with CDX-301 in the adjuvant setting for melanoma patients. This trial will determine whether CDX-301 will significantly amplify immune responses. The study will be a Phase 2 open-label multi-center trial of CDX-1401 after prior administration of CDX-301 versus CDX-1401 alone.
Flt ligand, or CDX-301, will increase the number of circulating monocytes including dendritic cells. CDX-1401 will target the dendritic cell and Hiltonol will activate the dendritic cell to adjuvant the vaccine. Patients will have fully resected Stage IIB through IV melanoma. The risk of recurrence in the Stage III population is greater than 50% and the risk for resected Stage IV is greater than 80%. The primary endpoint is the level of vaccine-induced antigen-specific T-cell immune response to NY-ESO-1.
We are also finalizing an additional investigator-response study of CDX-1401 in combination with an IDO inhibitor. And we'll update on this when the study begins.
In 2014 we expect CDX-301 to enter combination studies to explore its potential for improving hematopoeitic stem cell transplantation and potentiating immune activation. Based on the data I discussed earlier, we plan to initiate a pilot study of CDX-301 alone and in combination with Mozobil in hematopoeitic transplant. In addition, based upon 301's ability to amplify circulating dendritic cells by up to 30-fold, an investigator-sponsored study of intratumoral CD-301 plus Hiltonol, in combination with radiation therapy in patients with advanced low-grade B cell lymphoma, was also initiated in December.
With this, I'll turn the call back to Anthony to close.
- President & CEO
Thank you, Tom, for that review. As you can see on slide 16, 2014 is going to be a significant year for Celldex. In summary, we will complete accrual of rindo ACT IV Phase 3 registration study in frontline glioblastoma by mid year, and complete accrual of the ReACT Phase II study in recurrent glioblastoma, and report data on such studies at SNO meeting later in 2014.
For glemba, we are focusing on ramping up the accrual of METRIC, the accelerated approval study in triple negative breast cancer, and, as Tom discussed, plan to initiate two additional Phase 2 studies in indications known to heavily overexpress gpNMB metastatic melanoma and squamous cell lung cancer.
A major area of focus for us in 2014 will be expanding the varli development program. We will complete the Phase 1 study, and plan to initiate a number of combination studies, that Tom has discussed, with a broad array of agents, including checkpoint inhibitors, a B-raf inhibitor, tyrosine kinase inhibitors in melanoma.
CDX-1401 will also enter at least one external-sponsored study, initially in metastatic melanoma with 301. We will initiate a pilot study of CDX-301 alone and in combination with Mozobil in hematopoietic stem cell transplant. And will continue to support the investigator-sponsored studies in B-cell lymphomas.
I'm sure with all we have outlined here today, there are a number of questions. So, at this time, I will ask the operator to open up the call for your questions. Operator?
Operator
(Operator Instructions)
Howard Liang, Leerink.
- Analyst
I just have a couple questions on the follow-up data on 1401, I think, which is relatively new, at least to me. Can you talk about the time lag between discontinuing 1401 and receiving Yervoy?
I think you gave the lung cancer number. Also for lung cancer what were the checkpoint inhibitors the patients received?
- SVP & Chief Medical Officer
First on the melanoma patients, they had progressed when they came off study, and fairly rapidly went on to initiate therapy with checkpoint inhibitors, specifically ipilimumab. Those patients initiated treatment within three to four months of completing 1401 study.
The lung cancer patients similarly went on to fairly rapid treatment. But, again, at this point in time we're not able to tell you specifically what drug they received.
- Analyst
Okay. For your study you plan to initiate with varli, can you talk about, I think it sounds like -- is it a double combination with Yervoy but in NY-ESO positive patients, and then you add 1401? If so, what percent of patients are NY-ESO positive in melanoma?
- President & CEO
You're right, Howard. It's a somewhat complicated design. But it gives us several specific advantages. Obviously the varli plus ipi combination is going to generate immune response, and then the checkpoint inhibitor can unleash that response.
But the limitations there, without a specific antigen to follow, we're unable to really assess immune responses and what impact we're having. So in those patients who are NY-ESO positive, and in our experience using our assay that runs to about 30% of melanoma's, we will be able to assess for immunity prior to treatment and then immunity after initiation of varli. Of course, we'll be looking for a superior response when the checkpoint inhibitor is involved, as well.
So, it's a comprehensive study but we think it will provide us plenty of useful information. Of course, we're hoping that we'll see significant improvements from what's already been seen with [ipilimumib itself].
Now, we are alluding, of course, to PD1 with a similar trial design. Again, we like that design because it does give us specific endpoints to follow in the NY-ESO positive patients. But we are still in negotiation phase to determine how best to access PD1, and that's a somewhat more nebulous approach.
- Analyst
Could you talk about how soon can you start the Yervoy combination study?
- President & CEO
We're well on the process of finalizing that protocol and activating the study. We would expect that trial to be going within the next three to six months.
- Analyst
Great. Thanks very much.
Operator
Bret Holley, Guggenheim Securities.
- Analyst
I'm just wondering on the combo Yervoy trial with varli, do you have any idea of how large that cohort is going to be, at least with the double? Then is there a goal -- as I understand it, with the triple combination in NY-ESO-1 patients, what are you thinking of sizing it? Secondarily, going into that, what are your expectations, what is the line in the sand, so to speak, in your view?
- President & CEO
The line in the sand for activity?
- Analyst
Yes.
- President & CEO
The purpose of a Phase 2 study like this, of course, is to find out how much you can add. From our perspective, we would like to add at least 10% to the three-month response rate on top of what's been seen with ipilimumab.
However, there's certainly potential for smaller or larger benefit to still be of value in further development. So this trial will mostly serve to estimate the effect so that we can design the next study.
The patient numbers are -- there's still various stages we need to go through to finalize it but you can expect approximately 55 to 60 patients who are NY-ESO negative and 40 patients who are NY-ESO positive, which course balances out based on the percentages I described earlier.
- Analyst
And is the 10% also the line in the sand for the triple combination in NY-ESO-1 patients? I'm just trying to understand what the parameters are here.
- President & CEO
It's a small population who are NY-ESO positive. We are looking for slightly higher benefit there. The trial is designed around a 15% improvement.
- Analyst
Okay. Thank you very much.
Operator
Mara Goldstein, Cantor Fitzgerald.
- Analyst
Just two things. On the METRIC study, can you just remind us of what the powering assumptions are for the two different endpoints, the PFS and the OS?
- President & CEO
The PFS endpoint is powered to detect a 2.25 month improvement. Of course, we're hoping to see more than that.
- Analyst
Okay. Can you tell us what that powering is? Is that 80%? Is that 90%?
- President & CEO
That's 80% power.
- Analyst
Okay, great. On 1135, there is no compassionate use of that drug anymore, correct?
- President & CEO
We do still have drug left. We certainly understand the need in these patients and I would not rule it out. But we are not formally pursuing the program from the perspective of drug development.
- Analyst
Okay.
- President & CEO
I should add, Mara, you had also asked about the response rate endpoint, and that's a 15% versus 30% response rate, with the same powering at 80%.
- Analyst
Okay. With rindo completing enrollment this year in the ACT IV, is there some expectation for when the first data readout might occur on that trial?
- President & CEO
The interim analyses are all based on events. You can't tell until you get there. Our current estimates continue to be 50% the first interim, at the end of this year, early next year, with the 75% approximately six months after that, and final data in 2015, early 2016.
- Analyst
Okay. Thank you.
- President & CEO
I will say, though, that it's still early in the trial and we're making that estimate based on a relatively small number of events at this point. So, our predictions will be much more accurate in the second half of this year.
- Analyst
Okay. That's helpful. Thank you.
Operator
Boris Peaker, Oppenheimer.
- Analyst
I just wanted to clarify. On 1135, it seems like you guys made a decision on this drug based on one patient. The patient that has had a kidney transplant on Soliris just doesn't strike me as being the average dense deposit disease patient.
So, can you just talk a little about it, just to make sure that the decision is not being made on an outlier patient for the whole program.
- President & CEO
Boris, I think the key data, from my perspective, in this perspective really is our ability to perform a study. Even if we could show dramatic effects in these patients, we would still have to treat 30 or 40 patients in order to have a package that was adequate for registration. It's quite possible that if we spoke to the FDA they would want even more.
Right now, of those patients who are at the right point in their disease where we can confidently say that 1135 has an effect, they're just extremely rare and difficult to accrue. So the decision is mostly driven by the fact that even if the drug worked spectacularly well, I'm not confident that I could complete a clinical trial.
- Analyst
Okay. I see, I understand. Now, on 1127, will you have any solid tumor data at ASCO? Maybe specifically, what kind of data should we expect?
- President & CEO
I've mentioned that we are completing enrollment of the expansion cohorts and analysis of the data. We would expect to have the full outcome from 15 patients with melanoma and 15 patients with renal cell carcinoma for presentation at ASCO.
- Analyst
Okay. Great. Have you received, I'm curious, any inquiries from other pharmaceutical companies to combine 1127 with their specific checkpoint inhibitors?
- SVP & Chief Medical Officer
We're having discussions with those now, Boris.
- Analyst
Great. My last question is financial. Could you provide specifically cash burn for 2014?
- SVP & CFO
I think in the conversation we had we're very confident that we've got a runway through 2016. So we haven't given specific guidance on burn.
- Analyst
Perhaps -- you have many studies ongoing, I'm just curious. Maybe you could do some kind of just qualitative relative to 2013 burn. Would it increase significantly or is 2013 a good run rate for 2014?
- President & CEO
We think for 2014 it will between be anywhere between $90 million and $100 million, Boris.
- Analyst
Great. Thank you very much for taking my questions.
Operator
Jonathan Aschoff, Brean Capital.
- Analyst
I was wondering, is it just folks get 1401 or is there any natural immunity to NY-ESO-1 that you've seen convey an enhanced response to checkpoint inhibitors?
- SVP & Chief Medical Officer
Very good question, Jonathan. There actually are several data sets now published showing that those patients who have an innate immune response against NY-ESO do go on to a better outcome. Jedd Wolchok from Memorial Sloan-Kettering has published some of those data, which are quite convincing that if you do have this target that the immune system can recognize, you're more likely to benefit when the checkpoints are released.
So, of course our hypothesis is that if we can create even stronger and more NY-ESO immunity at the beginning we should have a better outcome.
- Analyst
Thanks a lot, Tom.
Operator
(Operator Instructions)
Biren Amin, Jefferies.
- Analyst
I'll start off with CDX-011. I think you've announced you're starting a Phase 2 melanoma study. Just wanted to assess on gpNMB expression, is this greater than 25%, similar level to what you've targeted in metastatic breast?
I think you've also ran a prior study in melanoma but these were not gpNMB expressed patients. So, what were the key learnings from that study that you're applying to this current trial? Thanks.
- SVP & Chief Medical Officer
We have looked at a lot of different cases of melanoma and it's clear that gpNMB is expressed in a much higher percentage of gpNMB patients at a higher level in melanoma than in breast cancer. So, we actually look at melanoma as being quite a different disease from the perspective of gpNMB.
We currently are expecting over 80% of patients to test positive. We expect that about 50% of patients will have levels greater than 80% of cells positive.
So there, it will be a different threshold and we'll be learning as we go. The previous study simply did not collect tissues so we can't tell what level of gpNMB expression many of those patients had. So, we are definitely focusing on the tissue in this particular study.
- Analyst
Tom, is it the same assay that you're employing in breast that you'll employ in this Phase 2 trial?
- SVP & Chief Medical Officer
It's not exactly the same assay. There are some tweaks that you need to make for it to work optimally in melanoma. But it's essentially the same reagents.
- Analyst
Okay. Then I guess per METRIC, did I hear you correctly that the commercial assay will be available in the back half of the trial? I just want to confirm that.
- SVP & Chief Medical Officer
No, we're using the same assay throughout performed at a central lab. Those data will be the basis for approval of the diagnostic as a co-diagnostic that would go along with the drug.
We were referring to the commercial product, the actual drug that we think would go on the market at the end of the day. Which is essentially the same as the product we're were using now, it's just a question of standards of manufacturing in order to meet FDA requirements. We only mention that because it's important, of course, to have your commercial product used within your pivotal trial, in order to reassure the FDA that everything will be consistent.
- Analyst
Do you plan to run a bridging study between the two products?
- SVP & Chief Medical Officer
We believe that as long as we can include the drug in our pivotal study that won't be necessary.
- Analyst
Got it. Then maybe one last question on CDX-1127. On the hem malignancy dose escalation cohort, I think you mentioned that you've modified the protocol. But have you identified maybe a couple of areas where you could potentially move forward for a dose expansion cohort?
- SVP & Chief Medical Officer
We've definitely seen activity that would support expansion cohorts. It ultimately comes down to the feasibility of completing an expansion cohort versus doing a more definitive Phase 2 trial, and what would make the most sense moving forward.
So, we don't have specific plans until we finalize and can look at all of the data. But there definitely is the potential for some interesting development in hematological malignancies.
The amendment critically adds T-cell malignancy, a whole different area of malignancies that we had not been able to include in the trial until now. So, I think that's an important step forward. The T-cell malignancies will be going through a brief dose escalation, as well, so you should think of that as a third component.
- Analyst
Great. Thank you.
Operator
Greg Wade, Wedbush.
- Analyst
Tom, could you just comment on where FDA stands now with respect to the typical the combination drug rules? You're proposing some novel-novel and novel-novel-novel programs. Just curious as to what the thinking is there.
Then beyond GBM for rindopepimut, are there any plans to test the vaccine in other tumor types with this EGFR mutation? Obviously the quick activity in the GBM study is of interest in other settings I would expect. Thanks.
- SVP & Chief Medical Officer
Good questions. I've always liked to novel-novel- novel things. Realistically, the FDA have no objections to the combination of experimental therapies, provided that you can justify the safety and the rationale behind doing it. We've been successful doing that in the past with our dendritic cell-targeted vaccines where we've added as many as four experimental therapies together without any problem from the regulators.
I think the main issue is usually getting the companies to work together and being able to access drugs from different pipelines to put them together. The advantage we have here, of course, is that we basically have access to all these patients internally and can control them ourselves.
That said, we do need to put the proposals in front of the FDA, make sure they don't have any issues. But knowing that varli has a very safe profile, knowing that 1401 does, as well, we can't perceive that there will be any problems.
- President & CEO
Greg, those are the reasons why we did those Phase 1 dose escalation in both varli and 1401 and 301.
- Analyst
What I was saying was, sorry, was the requirement to demonstrate the activity of novel drugs alone or in combination and prove the components each contribute to the efficacy.
- SVP & Chief Medical Officer
We do have that kind of data from our Phase 1 studies that we can use. I think if we see that the combinations look exciting, we may need to do some additional single agent work in subsequent trials. But at this point being able to accelerate to test the combinations together and really see what the potential is, is the most critical next step.
I think your second question was around EGFRv3 and testing rindo in other settings?
- Analyst
Yes.
- SVP & Chief Medical Officer
As you know, there are literature out there suggesting that v3 is expressed in a broad range of different tumors. To date, using our specific assay we're not able to reproduce those results.
So right now, we have to acknowledge that we're not sure how frequently v3 is expressed in other settings. We will continue to look at that in order to come to a final statement that we would then use publicly, but right now we have no plans to extend beyond brain tumors.
- Analyst
Thanks.
Operator
Steve Brozak, WBB.
- Analyst
Good morning, gents. Actually, Tom, you just talked about something. I keep looking at slide 4 every time there's a presentation.
Obviously, you've got the four-year and five-year survival rates that are now just starting to become really -- they stick out. Can you talk about the v3-positive accruable factor in that, because that's something that makes it even more interesting. After that I've got a quasi-commercial question to go into.
- SVP & Chief Medical Officer
I think you're asking what the v3 positivity means for long-term survival.
- Analyst
That's pretty much what it comes down to and how it really accentuates that visibility.
- SVP & Chief Medical Officer
When you look at the control population in that graph, it's very compelling that nobody makes it out past four years. Only one patient making it beyond two years.
We have a talked publicly about a collaboration we have with a radiation therapy oncology group who looked at a population of patients from one of their studies, RTOG-0525 for v3 expression. In collaboration with us we've presented some of those data, which suggests very few patients have long-term survival, as well.
Those are, of course, RTOG data and we're working with them in order to get them published as soon as we can. But I think those data, which are contemporary to ACT III -- so, they're not really historical controls -- will again reaffirm what we show in that curve.
- Analyst
Okay. Going on to your NCI study, you obviously have great familiarity with that. Many clinicians focus and look on these studies and collaborations that you have. What kind of feedback do you get when you do have an NCI-sponsored study where your expertise there and your collaborations with clinicians, obviously they look at it differently?
That will lead me into the commercial part of it. What do you think, how do you perceive these in terms of the value to the clinicians?
- SVP & Chief Medical Officer
The National Cancer Institute, of course, brings tremendous resources and expertise to drug development, particularly when you work with the cancer therapy evaluation program who have been doing drug development for years, and actually have provided supplemental indications to many of the drugs currently on the market. So, being able to collaborate with them, having their expertise, having them apply their resources and the researchers to it, we feel is a tremendous boon.
The general paradigm, you pursue your primary indication yourself, and priority indications as quickly as you can, but then work with the National Cancer Institute to expand. Those are essentially the relationships that we're trying to establish now.
The Cancer Immunotherapy Network that I allude to does contain some of the most significant researchers in the immunotherapy space. So, being able to work with them as well as the NCI at this point I think positions us very well in the middle of immunotherapy for melanoma.
- Analyst
Okay. I'll end on this, then. You are looking at -- you earlier on the call mentioned that you were hiring some people to start to address the visibility with clinicians and the information. Given the fact that it's a relatively small universe, the number of people that you have and the KOLs that you've got aboard, that should start the process pretty well in terms of making people that aren't aware, although they should be, as to what the possibilities are for different therapy combinations into the future.
Would you say that you're probably in a pretty strong position given the fact that people should already know your technology if they're in the field, and these new people that you're bringing onboard will be a fairly rapid conduit into making sure that they're aware? I'll jump off after that.
- President & CEO
Steve, this is Anthony. Yes, the group that we've brought up does have tremendous amount of commercial experience at their prior companies. So, they've done many launches and they're pretty good at getting access to KOLs and the important parties for these discussions.
In the meantime the studies that we've run, rindo in particular, as I said on the call, in the hands now in 200-plus sites around the world. So, especially for that drug, we think there's going to be a pretty efficient uptake of the drug launch. We're doing the same thing now in the METRIC study with 100 sites, and varli and some of the other programs.
So I think between the fact of this group having a lot of experience, with the KOLs that we've had relationships with for years, going back to 15 years, I think we're in a pretty good position going forward.
- Analyst
Great. Thanks.
Operator
I'm not showing any further questions at this time. I'd like to turn the call back over to Anthony Marucci for closing comments.
- President & CEO
Thank you, operator. Thanks to everyone today for joining us. We believe Celldex enters 2014 with one of the most robust, well-staged pipelines in the immuno-oncology field.
By the end of the year we'll have completed enrollment in two studies for rindo, including, most importantly, our registration program. We should be closing in on completing accrual on the accelerated approval study for METRIC with glemba in triple negative breast cancer, while also broadening that program into additional indications. We will have initiated multiple Phase 1 and Phase 2 studies, including what we view as important combination studies that could play a very important role in the evolving future of immuno-oncology.
We look forward to keeping you up to date throughout the year, but, as always, we welcome your questions at any time. We thank you for your time today and have a great day. Thank you.
Operator
Ladies and gentlemen, that concludes today's presentation. You may now disconnect. Have a wonderful day.