Celldex Therapeutics Inc (CLDX) 2014 Q4 法說會逐字稿

As a reminder this conference call is being recorded I would like to introduce your host for today's conference Ms. Sarah Cavanaugh. Ma'am, you may begin.

Good morning. Thank you. Before we begin our discussion I'd like to direct your attention to slide 2 and mention 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 at such forward-looking statements. Certain of the factors that might cause some actual results to differ materially from those in the forward-looking statements include those set forth under the headings risk factors and management discussion and analysis of financial condition and results of operation and Celldex's annual report on Form 10-K, quarterly reports on Form 10-Q, and it's current reports on Form 8-K, as well as those described in Celldex's other filings with the Securities and Exchange Commission and its press releases.

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You should carefully review all of these factors and be aware that there may be other factors cause these differences. These forward-looking statements are based on information, plans and estimates as of this have call and Celldex does not promise to update any forward-looking statements to reflect changes and underlying assumptions or factors, new information, future events or other changes.

Please be advised that the question-and-answer period will be held at the close of the call. I'll now like to turn the call over to Anthony Marucci, Co-founder, President and CEO of Celldex. Anthony?

Thank you, Sarah. Good morning, everyone, and thank you for joining us. Joining me are Dr. Tom Davis, Executive Vice President and Chief Medical Officer; Dr. Tibor Keler, Co-founder and Executive Vice President and Chief Scientific Officer; and Chip Catlin, Senior Vice President and Chief Financial Officer.

On our call this morning, we will walk through several recent accomplishments, provide you with an update of our clinical programs, review financial results of the fourth quarter and the year 2014 and then outline key objectives for the remainder of 2015. And as always, at the call of our prepared remarks, we look forward to answering your questions.

First on slide 3, 2014 was another significant year for Celldex. We have made tremendous progress especially with rindopepimut, which as we announced yesterday has been issued breakthrough designation by the FDA for adult patients with EGFRvIII positive glioblastoma. To our knowledge, rindo is the only candidate in glioblastoma to receive breakthrough status a disease that desperately needs new treatment options.

Tom will discuss this in more detail about the overall clinical program in a few minutes but I'd like to pause here and really take a moment to highlight the great strides this program has made over the last 12 months.

In December, we completed enrollment to our Phase III study in front line GBM, the ACT IV study. In total, we screened over 4,800 patients for EGFRvIII status for more than 200 clinical sites across 22 countries enrolling 745 patients. Importantly, and consistent with our prior studies, 30% of all samples screened were positive EGFRvIII mutation. This is the most comprehensive study conducted by a biotech company in this orphan indication to date and by far the largest trial ever conducted in this subset of EGFRvIII patients with more aggressive disease. I am extremely proud of our team for the work on the study and very grateful to the patients, families, and physicians who participated in the trial.

Those of us in the world of biotech know full well there's no guarantee, we are optimistic but rindo's chance for success in this setting, based on our positive data across three Phase II studies. Biologically, we are confident that rindo is doing what it's designed to do; generate a strong immune response and eliminate EGVRvIII, which is a growth driver for GBM, associated with more aggressive disease course and poor long-term survival. Data from earlier studies of Rindo have shown extremely impressive EGFRvIII directed immune responses in the vast majority of patients with good immunity after the first few doses which continues to increase over the course of treatment. Importantly, these immune responses have been associated with the loss of EGFRvIII and patients where we were able to obtain a tumor tissue upon recurrence.

Adding to this in the past November, we reported positive interim data from the ReACT study, our Phase II randomized trial a recurrent GBM. The status set exceeded our expectation and a very difficult indication with all end points favoring rindo, including most importantly a statistically significant and clinically meaningful overall benefit.

Given that the only drug approved in the setting of Avastin as that has shown overall survival benefits in GBM overall, there has been a lot of excitement about the interim data especially from the physician community. We certainly share this enthusiasm and are taking all the appropriate steps to be prepared for the potential success as we will outline on slide 4.

You may have noticed this morning that we introduced rindo's new trade name, Rintega. We have been taking important steps to ensure the successful filing and launch of Rintega should we be fortunate enough to have the opportunity. I've mentioned before that we have defined our go-to market business model for Rintega in North America and the European union.

Key business objectives include optimizing product uptake, minimizing access hurdles and supporting customers through innovative high-touch service programs while achieving our financial targets. To this end, we have hired key talent and expertise in new product planning, marketing, sales, pricing, and market access, business analytics, product distribution, companion diagnostics, information technology, and a senior executive leadership. Our goal is to feel a lean commercial organization as nimble and scalable as key development, regulatory and access are achieved. The Celldex global footprint is anticipated to be roughly 150 FTEs at launch. We intend to work with regional marketing and distribution partners for Rintega and other key markets.

With strategies and resources in place, we are confident in our ability to deliver Rintega to EGFvIII positive GBM patients who are in desperate need of new treatment options. In addition all the ground we have covered in Rintega in 2014, we also made significant progress advancing each and every candidate in our pipeline. Before I turn the call over to Tom, let me hit on just a few major accomplishments starting on slide 5.

First up is glemba. We have almost a hundred sites open now in the metric study in triple negative breast cancer. The study currently spans U.S., Australia and Canada and we have plans to enter the EU. Tom will talk in more detail, based on the protocol changes we made at the end of last year. The glemba program has potential to be very broad. The science on glem is targeted continues to be involved and the literature is telling us that gpNMB may be a meaningful target in a number of indications and that list of indications continues to grow.

Our goal is to vet that list and we are going to get through a very careful combination of Celldex list studies and cooperative agreements with others. To that end in December, we expanded the glemba program into melanoma and we would enter other indications in 2015. We also present important data from the varli program in June at ASCO and again in November at SITC. Varli continues to meet all our expectations and to that end we are also implementing a robust development plan here, particularly in combination regimens.

As you know, earlier this year, we announced the clinical trial collaboration with BMS to study varli in combination with Opdivo and have since initiated this study. There is a second study open for enrollment through an agreement with Oncothyreon in combination with their MUC1 vaccine. There are also a number of other Varli combination studies in queue and should see a lot more continued progress building out this program in 2015.

Earlier this year, as outlined on slide 6, we announced the publication of positive data from our CDX-1401 program and a well respected peer reviewed journal science translation medicine. Among other things, the data suggests this candidate which activates a robust immune response so the tumor antigen NY-ESO-1 a pre-disposed patients to better outcomes and subsequent check point therapy. 1401 is currently being studied in multiple trials included NCI sponsored study with CDX-301 and metastatic melanoma and an investigative responsive study of 1401 and an IDO inhibiter and NY-ESO-1 positive ovarian cancer patients at Roswell Park Cancer Institute. Additional studies are slated in 2015, including a Celldex-sponsored study in combination with varli and Yervoy.

Finally, CDX-301 begins to play a more important role in our pipeline. We initiated a study in hematopoietic stem cell transplant patient in 2014 and continue to support an investigative sponsored study of 301 in combination with Hiltanol with radiation therapy and low-grade B cell lymphomas.

With that, I'll ask Tom to dive a little deeply in our pipeline before Chip row views the numbers. Tom?

Thanks, Anthony. First I want to echo Anthony's comments regarding ACT IV. The study was a major undertaking especially in a subset population within an orphan disease. To execute the study of this size and scope with the level of quality that is built into it is impressive. We believe this accomplishment is a reflection of the positive view physicians have about rindo both from a safety and potential efficacy perspective. The ACT IV study was designed to do confirm our experience with Rintega in three prior Phase II studies. In those non-ronrandomized studies we identified a clinically significant survival benefit including long term survival of up to six months of patients with minimal residual disease or small tumor burden after surgery.

That said, we have sized the ACT IV trial to detect a more modest but still clinically meaningful survival benefit reflecting approximately three months. We're confident that given the scope and scientific rigor applied to ACT IV that we have positioned Rintega as best we can for success in this study.

In total, as you see outlined in slide 7, 745 patients were enrolled into ACT IV to ensure reaching the required 374 patients with minimal residual disease as assessed by central re view. These 374 patients with minimal residual are the patient population needed for the primary assessment of overall survival.

All patients including patients with disease that exceeded this threshold will be included in the secondary analysis of overall survival as well as analysis of progression-free survival, safety and tolerability and quality of life. A recent experience with patients with [bulky] disease and the ReACT study give us greater confidence in what the potential might be for an effect in this broader group of patients with more expensive tumor burden.

As for data readouts for ACT IV, the survival study is event-driven and we will be able to more accurately predict the timing for final data read out as we accrue events through interim analysis at 50% and 75%. These interim analysis will be reviewed by an independent data monitoring committee and are in place to assess the safety and potential futility or success of the study they will result in the communication of go/no-go decisions to the company based on predetermined hurdles.

They will not provide us with interim data readouts but their timing will certainly help us better assess when we can expect final data. Right now, we continue to estimate that the first interim will occur somewhere in mid 2015. The hurdle is extremely high for early stoppage for success at 50% of events and as we have said in the past the most likely scenario is if the study continues. Again, we will certainly communicate the outcome of these assessments as they occur.

Now on to slide 8 where we provide the data from ReACT, a Phase II study of patients with relapsed recurrence EGFRvIII positive glioblastoma. As Anthony mentioned, the most compelling feature of these data are the overall complementary nature where all end points support Rintega's activity and the Bev-Naive patients, we presented randomized data showing us statistically significant PFS-6 benefit by investigator read, 27% versus 11% in the control arm with a P value of 0.048. Again, this study was designed to take PFS-6 difference with the 1-sided alpha of 0.2 so we are meeting a higher hurdle here than written into the study.

Further, on slide 9, a clear benefit was also seen in overall survival with early and consistent separation of the curves, a median difference of 12 versus 8.8 months with a hazard ratio of 0.47 and a P value of 0.02. Our investigative [share to belief] that the 3.2 month difference at the median is meaningful to patients and their families while the tail is even more important especially for vIII patients where long-term survival is rarely seen.

I want to point out that there are patients on the curve in both arms, patients without progression, those patients are noted by arrows. They are most likely to improve the data as the average survival after progression is approximately three to four months in this population. There are far more patients without progression in the study treatment arm than the control arm so there's likely that these curves will only improve.

On slide 10, the higher percentage confirmed responses, 24 versus 17%, all responses 38 versus 30%, and ability to taper off steroids for two months or more, 50 versus 11% all support a Rintega treatment effect.

Slide 11 correlates the biology with an association between rapid robust immune response and better survival within the Rintega-treated patients. As Anthony introduced, Rintega induces a remarkable EGFRvIII directed immune response in most patients and these data support that the development of this immune response is important in the treatment effect. We are continuing to dissect the important element of this immune response and how it relates to clinical outcome.

The Bev-refractory data are also supportive when compared to with historical data. At the minimum, seeing several objective responses in these end-stage patients responses that could only be due to rindo therapy gives us greater confidence in the activity of the vaccine.

As we said on the call SNO, the results in Bev-Naive patients were not yet final in November. Since we presented these interim data in November, we have taken the following steps.

First, we have been in initial and formal discussions with the FDA which led to our decision to apply for breakthrough designation. Se believe the FDA's decisions to grant this designation underscores Rintega's therapeutic potential for patients with glioblastoma and speaks to the potential clinical relevance of this particular subset. We've been very candid about the fact that Bevacizumab-Naive group within ReACT was not designed to be an approval study. But given that there is treatment options for patients facing this disease and a statistically significant survival benefit to study demonstrated at the interim. With the urging of our investigators, we feel that we have an obligation to patients to formally discuss the final data set with the regulators assuming that it remains consistent.

To this end, we have arranged for a full expert read for the primary PFS-6 end point. And we believe we will have a final data set by mid year including the mature overall survival. It's our intention to present the data at a peer review medical meeting in the same time frame. Likewise assuming the data remains consistent, we would as previously guided anticipate having conversations with the FDA and EMA in a similar time frame. These discussions can take time and are usually not completed in a single meeting. We will communicate the outcome of this process when it comes to a conclusion.

The bottom line is as Dr. Reardon said as we announced the results at SNO that the final data consistent with the results presented to date, it would offer a new hope for physicians treating glioblastoma, patients and their families. Given the clinical need here, we are going to thoughtfully move through this process to best position the final data set for success.

So with, that let me move on to glembatumumab or glemba on slide 12.

First, the metric study of Phase II randomized study of glemba in patients with metastatic triple negative breast cancers that over expressed gpNMB, which represents about 40% of the triple negative patient population.

In November 2014, we announce that we were implementing a protocol amendment for a few key reasons, namely to align the study with an evolving clinical practice to allow us to pursue full approval in Europe and to improve enrolment. Since this time, the FDA and central European regulatory authorities have reviewed the revised protocol design and we continue to believe the metric study could support marketing approval in both the U.S. and Europe with positive data.

To date, 95 sites are open to enrollment across United States, Canada and Australia and we plan to expand the study into European union later this year. Many of our existing sites, put the protocol amendment through their IRBs in December and January to only a month or two of enrollment under the new protocol. But even with this limited data set, I'm pleased to report that the patient enrollment is accelerating nicely. We will continue to evaluate enrollment over the new few months so that we can better predict when we will expect enrollment to complete but it currently looks likely to complete in approximately the middle of 2016.

In the meantime, we have expanded the glemba program overall. In December, we initiated a Phase II study of glemba in patients with stage III or IV unresectable melanoma, unlike breast cancer in metastatic melanoma, the vast majority of patients -- approximately 85% over express gpNMB.

Given the high expression rates, in this study we will take all comers and then conduct a retrospective analysis to assess whether or not potential clinical benefit is linked to the degree of gpNMB expression. Early studies in melanoma suggest that this may be the case.

Plans -- the expansion of glemba into other indications are also moving ahead as an optimization and validation for Phase II study in squamous cell lung cancer was completed in late 2014 and the study will start this year. As we previously disclosed, we have also entered into a cooperative research and development agreement or CRADA with the national cancer institute on two additional studies of glemba with room for further development into other indications. The first studies will be conducted in uveal melanoma and osteosarcoma. As the NCI initiates these studies, we'll update on their progress.

Next up for discussion is varlilumab or varli on slide 13. Varli is a fully human monoclonal antibody that targets CD27. In November, we presented Phase I data from the completed solid tumor and B cell malignancy dose cohorts and the solid tumor expansion cohorts at the Society for the Immunotheraphy of Cancer Annual Meeting.

The study continues to maintain a very favorable safety profile and proof of concept has been observed with strong biological activity and apparent clinical benefit in selected patients. We reported in November that the complete response in the patient with Hodgkin lymphoma continued at 18.9 months and to our knowledge that response is still ongoing. More recently, we confirmed that the partial response in a patient with renal cell carcinoma is not only ongoing at 11-plus months but includes further decrease in tumor volume.

Finally our stable disease numbers have been updated with since November with 13 patients range from three to 37 plus months. Importantly, these data suggest that these -- responses and favorable disease can be maintained in patients long after they have stopped treatment. For the patients in this range, including the patients out over 30 months, our renal cell carcinoma patient and we think this is an interesting area to further explore in clinical trials.

At this point, our focus is on clinical trial collaboration with Bristol-Myers Squibb to evaluate the safety, tolerability and preliminarily activity of Opdivo combined with varli. This study was initiated in December and is open to enrollment.

Again, while Celldex and BMS is sharing development cost, Celldex is managing the study. We also entered a clinical trial collaboration with Oncothyreon and a combined study of ONT-10, the therapeutic vaccine targeting the tumor-associated antigen, MUC1 and varli in breast and ovarian cancer. This study is run and funded by Oncothyreon and was initiated in November.

Multiple efforts are also under way for additional Phase II studies of varli and we will provide updates on these studies as they are initiated. These include a Phase I/II study of Varli and Yervoy in patients with metastatic melanoma plus CDX-1401 in NY-ESO-1 positive patients. We are very close on this one.

Our Phase I/II of varli plus sinutinib and renal cell carcinoma and a Phase I/II study of Varli plus BRAF and [make path way] agents which will be followed sequentially by a check point inhibiter for patients with BRAF mutated metastatic melanoma.

Moving on to CDX-1401 on slide 14, I just mentioned the combo study with Yervoy and varli. As Anthony said earlier, the inclusion of CDX-1401 in this study is based upon published data showing an increased response to check points inhibiters if patients had an existing immune response to NY-ESO-1 and also long-term follow-up for patients who developed NY-E so immunity and went on to subsequent checkpoints inhibiter therapy after completing Phase I study of 1401. These data are based on small ends but the effect was striking and suggest that the strong immune response generated against CDX-1401 may pre-dispose patients to better response to tripling blockade. Six of eight patients who received checkpoint inhibiters as next therapy had significant clinical responses after treatment including four of six patients with melanoma and two of two patients with [PD01] negative nonsmall cell lung cancer. So this study should give us varied information across both Varli and

1401.

In addition to the plan, varli, Yervoy, 1401 combo study, there are two additional studies of CDX-1401 currently ongoing and open to enrollment. And NCI-sponsored Phase II study of CDX-1401 and CDX-301 -- two of our pipeline agents -- in patients with metastatic melanoma, and investigator sponsored-Phase I/II study of CDX-1401 and an IDO inhibiter in patients with NY-E so one positive ovarian cancer. This study is being conducted at the Roswell Park Cancer Institute.

This brings us to CDX-301 on slide 15, potent hematopoietic cytokine that stimulates the expansion of hematopoietic stem cells and dendritic cells. In addition to the study I just mentioned, testing 301 in combination with CDX-1401 -- in September we opened a pilot study of CDX-301 alone and in combination with Mozobil, a hematopoietic stem cell transplantation.

Finally, CDX-301 is being evaluated in a very interesting investigator sponsored Phase I/II study that involves intratumoral injection of CDX-301 in combination with low-dose radiotherapy for patients with low-grade B cell lymphomas.

Finally, new to the pipeline is CDX-014 on slide 16. This is a program you'll be hearing more about over the remainder of the year. CDX-014 is a fully human monoclonal ADC that targets T cell immunoglobulin and Mucin domain 1 or TIM-1, which is much easier to say.

A molecule that is upregulated in clear cell cancers including renal cell and ovarian carcinomas, associated with kidney injury and the shedding of it's ectodomain as a predictive biomarker for tumor progression.

That said, it has very restricted expression in healthy tissues making it a promising target for antibody mediated therapy.

We are completing manufacturing in IND enabling studies to support the initiation of Phase I clinical studies in renal cell carcinoma and potentially other TIM-1 expressing tumors in 2016.

So this concludes our clinical program updates, I'll now turn the call over toe Chip to review the financials for the fourth quarter and year-end 2014.

Thank you, Tom, I am now on slide 17.

For the fourth quarter net loss was $31.8 million or $0.36 per share for the fourth quarter of 2014, compared to a net loss of $22.1 million or $0.27 per share for the fourth quarter of 2013. Net loss for the 12 months ending December 31, 2014 was $118.1 million or $1.32 per share compared to $81.6 million or $1.02 per share for the comparable periods in 2013.

Research and development expenses were $27 million in the fourth quarter of 2014, compared to $17.8 million for the fourth quarter of 2013. R&D expenses were $104.4 million for the 12 months ending December 31, 2014, compared to $67.4 million for the comparable period of 2013. The increase in Celldex's R&D investment was primarily due to the continued expression of our late-stage clinical development programs Rintega and glemba and the continued expansion of our varli program.

During the 12 months ended December 31, 2014 and 2013, we incurred $45.6 million and $32.3 million in critical trial's expense and $20.9 million and $6.6 million in contract manufacturing expense, respectively.

At December 31, 2014, we reported cash, cash equivalents and marketable securities of $201 million compared to $224.1 million as of September 30. The decrease was primarily driven by our fourth quarter net cash burn of $23.1 million.

We expect that cash, cash equivalents to marketable securities will be sufficient to fund operating expenses, capital expenditure requirements through 2016. However, this could be impacted by our clinical data results from the Rintega program and their potential impact on our pace of commercial manufacturing and the rate of expansion of our commercial operations. As of December 31, 2014, Celldex had $89.6 million shares outstanding.

I will now turn the call back to Anthony.

Thank you, Chip. And Tom as well. As you can see, 2014 was another significant year for Celldex, with multiple major milestones accomplished for Rintega and considerable expansion across every single program in our pipeline. We have continued this momentum into 2015 with the announcement of break through designation and the promise of more data to come from the ReACT study in the coming months. In addition, true to our heritage, as long time believers in combination immunotherapy, we will continue to add meaningful combination studies to our pipeline throughout the year.

To summarize on slide 18, 2015 we anticipate to complete the following milestones for these programs.

For Rintega, continued execution on the ACT IV Phase III registration study and front line GBM, but the first interim expected in mid year.

Reporting of final data from the ReACT Phase II study and recurring GBM in mid year and continued preparation for potential commercial launch of Rintega.

For the glemba program continued accrual of the metric study in triple negative breast cancer and the melanoma study and the initiative and/or support of multiple studies including Celldex sponsored Phase II studies and squamous cell lung cancer and the NCI-sponsored studies in uveal melanoma and pediatric sarcoma.

For the [varli] program continued execution of Phase I/II study of Varli combination with Varli in combination with Opdivo, the initiation of Phase I/II studies of Varli and Yervoy plus 1401 and the NY-E so positive patients and the initiation of multiple combination studies both alone and in collaboration with a broad array of agents.

For 1401 in addition to the varli-Yervoy combination study, we will continue to support NCI-sponsored Phase II studies of CDX-1401 and 301 in melanoma and other investigative supported studies. The 301 continued execution of the 301 pilot study alone and with Mozobil and hematopoietic stem cell transplant and ongoing support for the investigated-sponsored Phase I/II study of CDX-301 [hiltanol] and radiation and B cell lymphomas.

As Tom said, we expect to wrap up the prep work for CDX-1401 for this year so we can put the trial -- the product into the clinic in 2016.

With that review, operator, we are ready to open the call for questions.

(Operator Instructions) Bret Holley, Guggenheim Securities.

Yes. Thanks for taking the questions and congratulations on the progress. The plan on the EU -- it sounds like you're talking about 150 FTEs worldwide. And I'm just wondering about your filing plan for window in Europe and your commercial plan. Could you flesh that out a little bit, please?

Sure. So we plan on marketing the drug ourselves, Bret, as we are planning in the North America. The EU side, we plan on having our own people on the ground in the EU five countries. We also plan on having a headquarters in Europe for this marketing of this drug and hopefully future drugs. And then in the rest of Europe, we'll look for agreements with suppliers and distributors.

And can you -- do you believe there's a path as set rated filing in the react data in Europe or what's your position on that?

Hi, Bret. This is Tom. You know as we said, we are talking to both the FDA and the authorities in Europe about the ReACT data. Their criteria for approval is somewhat different and it won't be until the completion of those discussions we'll really have an understanding of the likelihood there. But we certainly intend to pursue it as best we can knowing that the ACT IV data will come shortly thereafter and should provide a definitive path for approval if those data are positive.

And Tom, I'm wondering if you could comment on the importance of PFS-6 versus OS in ReACT. It's obviously a source of great controversy on the Street. I'm just wondering given the fact that ReACT was not a [pivotal say] or not designed to be a [pivotal say], what's your

perspective on that? You obviously had initial conversations with the FDA and I'm just wondering the relative importance of those two end points in ReACT.

So our preliminary discussions with the FDA have been just that -- very preliminarily at this point so I'm not really speaking from their perspective but from the clinical trial perspective, it's very important to meet your primary end points that the core design of the study revolves around that. And multiple groups in published literature have recommended PFS-6 as the primary end point in this population so it's not an endpoint that we ourselves but rather the one that's recommended by investigators. And hence, PFS-6 in this study is important -- the effect that we need to meet the pre specified hurdle for positivity in PFS-6. And as you heard not only did we achieve that hurdle, but we also performed at a much higher level in this relatively small randomized study.

That said, overall survival is the gold standard in most any cancer, and to be able to show an overall survival benefit is in itself a higher hurled and is most impressive in this particular disease where very few, if any, patients have been able to show a benefit in overall survival.

So I think both are equally important. As it stands right now, we have met the primary end point. We expect to continue that, but final data won't be available until the middle of this year. And assuming we meet the primary end points, then all the secondaries, including that overall survival benefit are in play.

And I guess one last question on the CMC progress for rindo, obviously, that now is coming no play. And could you give us an update on the manufacturing progress and [your] confidence in that timeline should you pursue more aggressive path towards approval for rindo?

Hi, Bret. This is Tibor. Yes. So we've made a lot of progress with our commercial manufacturers for the commercial process in terms of scaling up and being ready for filing. Certainly, that activity has progressed more rapidly with the new information and we believe that we can align that together with the filing processes as necessary.

Great. Thanks very much, guys. I really appreciate it

Thanks, Bret.

Howard Liang, Leerink.

Great. Thanks very much. I guess the first question on the guidance, cash guidance, can you talk about how the progress of rindo impact your cash balance projections. Is the current projection based on filing -- for full data in 2016 for rindo?

So the cash balance that we've guided with the cash towards the end of 2016, Howard, assumes that rindo will get approved on the ACT IV data in our base case. Now that could change if we get an accelerated approval. But the base case is built on an approval on the ACT IV study in its normal course. So that's why we can get through 2016. But if it does move and accelerates, that cash will be burned quicker.

So everything that we would have in 2016 or a good portion of results we have in 2016 for commercial will be accelerated and moved towards the end of 2015. So it will slightly increase our burn rate, but certainly that will be a good thing, certainly, because they can get the drug on the market faster.

So when you say full course, I assume so it's not success -- not filing based on the success at interim analysis?

Well, we have to just base it on what we feel and the Phase III study would be the full approval and that's what we plan our base case on.

Okay. Great. And also, on rindo, Tom, could you say whether you've submitted abstract to ASCO this year for rindo?

Yes. We have submitted an abstract. Keep in mind that the only data available at that time were the previous no data, so the abstract is not going to contain a lot of information, so we believe the data as such that it should position it well at the meeting. Of course at ASCO, you never know.

Okay. Thanks. Maybe one more question on varli. On the combination of study, can you talk about the rationale [limited] to up to four cycles? I know that there is I think another co-stimulatory agonist from DB agonist also. It's limited to few cycles. But is it just a general FDA requirement on this class of molecules?

Well, we don't have specific feedback from the FDA on that perspective. We effectively voluntarily limited ourselves for an assortment of reasons, including availability of drug product and the time frame for the study.

We think with four cycles we should be able to get adequate immune data as well as clinical data to understand. And if those data suggest that prolonged therapy would be more appropriate, we can still amend the study to add that. So I wouldn't not read too much into it. I think this design will give us very useful information and then we will be able to make an informed decision.

Okay. Thanks very much. I'll get back to queue.

Mara Goldstein, Cantor Fitzgerald.

Hello. Thanks very much. Just a couple of questions, on the commercial footprint launch, I know you spoke to the idea of 150 FTEs and folks on the ground in selected territories. But as it relates to these key positions, can you go through what has been hired? At this point, what is still outstanding? Or who rather?

Sure, Mara. We hired the leader of the commercial group Rick Wright. He is the VP of Commercial. We also hired market access leadership, marketing sales, education, medical affairs. Those people of that nature. We will continue to bring in new people to support the sales training, the sales force, medical affairs and regulatory as we move forward towards the year.

Exclusive of field sales force, can you talk about headcount or the number overall what you expect to add, exclusive? I understand you have these 150 FTEs, but what percentage wise has been added and what is outstanding exclusive of sales reps?

Exclusive sales so we need to bring in a couple of account payer managers. We need to bring in some support under the medical affairs group. And that will probably another six to 10 people and then the rest will be MSLs and reps going forward.

Okay. If I could just ask for some clarification on the discussion process with FDA rather on ReACT, you said during the call that you would anticipate being able to discuss the full data set with the method that would be presented sort of in that sort of end of first half. So at what point understanding that the dialogue is a dialogue another single point in time, but how long should you be able to file for approval with ReACT? About how long would that process take after that final decision is made by FDA?

Well, a complex question, Mara.

Hi, Tom.

Yes. Hi. We have meeting scheduled. And of course, the core those meetings will be whether or not the data could support an approval. If we do hear about it positively, the next discussion would be all around what other requirements they have, as you heard earlier the CMC [portion] is critical as well and the timeline for that is very dependent on what their standards and expectations are. We would like to think, we could go through that whole process now that we have breakthrough therapy. There could be a fairly rapid review and there could be a license for marketing in the 2016 time frame, but the exact timing will depend entirely on what we hear.

Okay. All right. Thanks. I'll jump back in the queue. Thank you.

Thank you.

Thanks, Mara.

Boris Peaker, Cowen.

Good morning and congratulations on the progress. Maybe let me just ask directly on the METRIC studies. Can you comment on how many actually patients you have enrolled at the moment?

We have a policy that we do not provide specific guidance on accrual in these trials, because it's highly variable from month-to-month and it's something that we do not even track that closely (Inaudible - multiple speakers)

Do you plan to -- sorry go ahead.

Sorry. The accrual is accelerating quite nicely at this point, but we've not reached the maximum level of accrual that we would predict. It won�t be until later this year that we can be absolutely certain when accrual will end, but I think right now things are going in that 2016 time frame seems like a reasonable expectation.

Yes. So Boris, on the call in August, which would be our mid-year call, we'll have a much better idea of tracking and we'll update everyone at that point.

Got it. Now, I'm also curious on the ACT IV study. How does the event rate compared to your estimated event rate?

Well, again getting back to my previous comment, things bounce around quite a bit. Initially, the events came in more slowly than expected. Recently the rate has picked up, but it could change quite readily any time now.

But on average, is that a little slower than you initially expected? Or is it roughly in line if you aggregate all the months together?

It's basically (technical difficulty).

Okay. And then my last question is in the screening for EGFRvIII mutation in the ACT IV study, I'm just curious do you designate the patients simply as positive or negative for the mutation or do you have a quantitative scale that can be correlated with a response?

Well, the assay is a quantitative assay, but there's a specific cut off that give us the binary readout positive or negative.

Okay. So do you think that eventually you are going to look at this to get a sense of correlation mutation to the response or is that not something that you can think it is important?

Well, yes. We had looked in earlier studies the extent of expression not the correlation at that point in time, we are planning to pursue that further, but we do have the number so we could (technical difficulty).

Great. Well, thank you very much for taking my questions.

Christopher Marai, Oppenheimer.

Hi. Good morning, guys, and thanks for taking the question. First, just to touch upon ACT IV again. Based on the current event rate, do you have any further insight into when that second interim look will occur?

So, again, base on the current event rates, we believe middle of this year for the first interim analysis and then the second would be late this year, early next. Everything really is marching along as we had previously predicted, which in some ways is reassuring.

Okay. Great. And then with respect to some of the combination studies, when do we expect some data from 1401 or 27 varli trial. And then 1401 on the IDOs, what are the sort of the data timing estimates for first look at any of that? And do you expect any additional data to be presented pre clinical data AACR? Thanks.

Well, from the timing for the clinical trials, Chris, we have just started to studies very recently, so we can't predict based on any accrual data at this point, but we are expecting to have some preliminary results roughly at the end of next year, extending into 2017 from these combination studies. Now these are not blinded studies, there may be possibility look earlier, but we're not planning to do that.

And yes. We have submitted an abstract for AACR around varli.

Okay. Great. Great. Thanks for taking my questions.

Thanks, Chris.

Joe Pantginis, ROTH Capital.

Hey, guys. Good morning. Thanks for taking the question and congratulations on rindo's breakthrough designation. It's been great to see the renewed visibility on the product.

Tom, I think the question might be for you with regards to varli. I'd would really like to focus on dosing. When you look at the evolution of dosing of the drug, your earlier proof of concept study was really focusing on getting to maximum exposure of the drug. You then talked about intermittent or metronomic type of dosing. When you look at all the various combination studies that are ongoing, are you going to look at more standard dosing or is there any potential for the type of combination to dictate the type of dosing as well? Thanks a lot.

So, good question, Joe. Our observations from the Phase I study where that we did get very good activation of immunity at or after a single dose and we also saw pre clinical activity in the patient with Hodgkin's lymphoma at a low dose of 0.3 milligrams per kilogram, so putting that information together, it looks very much like a low-dose given two or three weeks apart could be quite effective. In our clinical studies, we are doing dose escalations with roughly that planning and we would expect to see some activity even in the first dose cohorts.

The best thing about that from my perspective at least is that we can basically give varli at a convenient point in time along with the other combined agents, so those agents that routinely given Q2 or Q3 based on standard-of-care, we can readily including infusion of Varli at the same time if we only have use low doses, those infusion can be relatively rapid.

So the studies will be assessing that not just within a single study, but across multiple studies. And again, when data become available from all of these studies in the end of 2016, early 2017 time frame, we'll be able to better characterize how to optimally use the agent.

Thanks a lot guys.

Thanks, Joe.

Steve Brozak, WBB.

My addition to congratulations on everything you'd just announced and really good news. Most questions have been asked and answered, but I do have one concerning reimbursement. I know that you're not going to go out there and talk about pricing, but given the fact that this drug has been out there for quite a while now, what are your thoughts as to the clinician community and how they are going to ask for the drug? Are they are going ask for, I should put as quicker turnaround as far as gaining availability once approved. What are your thoughts on reimbursement and how you will proceed enough fashion? And that is it, really. Thanks.

Well, from a reimbursement perspective, Steve, we're still doing all the work around the pricing of the drug if it is approved, but we're of the mindset that if the drug works as we would hope it will that reimbursement won't be an issue.

Great. And you've got feedback from the clinicians obviously given the length of time that you've been doing this that they really do want it and that they really are impressed, especially the KOLs I assume?

Yes. I mean, and saw Dr. Reardon comments that's now and we have received similar feedback from other investigators and KOLs.

Great. Again, congratulations.

Thank you.

(Operator Instructions) Biren Amin, Jefferies.

Hi. Can you hear me now?

Yes. We can hear you, Biren.

Okay. So thanks for taking my question. Maybe I will start with the rindo and ACT IV. Can you just maybe go over the objectives of the first and second interims for the readout?

Sure, Biren. They're fairly standard interim analyses that includes both futility and an efficacy hurdle, so provided that the study crosses either of those, the data monitoring committee would provide us with the fact that that result has occurred that we need to move forward within an appropriate decision.

Obviously, if it crosses the efficacy threshold, there will be a need to discuss that with the regulators in order to make a definitive decision how to manage the study moving forward, but that would of course be an exciting event.

However, with all of these studies, the most likely outcome is simply a message that the trial should continue, that if it has not crossed those boundaries. At which point that would be the message to us and the message to the Street.

Base on the ReACT data, it is not clear to us whether or not we should expect an early readout. There's a very large effect, but it does appear to be concentrated in the tail of the curves which means it might take some time to get to that point.

Got it. And then on ReACT. it seems you're anticipating presenting the full data at ASCO. Company likely would make a decision on accelerating filing before that. So can you talk about your communication strategy as such or we have to wait for data at ASCO before we learn about filing strategies?

Yes. I think Biren, it's going to take time to clean up all the data and putting in it proper form and ASCO is only less than three months away from now, so I think the ASCO time frame is the appropriate time.

Okay. I think if I could ask a question on glemba. Based on the amendment to METRIC, what was the FDA feedback on the changes that were made to the trial?

The FDA provided some very specific input into some operational aspects of the study, including one stratification factor, but beyond that had no significant comments on the trial design.

I think this is a situation where the FDA like to say it will all depend on the data, but at this point I think it's clear that they and the Europeans accept the trial as we have amended it and we will be happy to talk to us about the data when it becomes available.

Got it. And then maybe one last question on varli. There's I guess option to license to Bristol. At what point does the company make that decision? Is it going to be based on interim data as you see response rates or we'll have to wait for the full data set?

Well, let me make it clear the options is only if we decide we want the license out the product there. So if we wanted to decide to keep the product in-house and develop it ourselves, we maintain it, so that's the only option is if we decide at some point that we would like to license out the varli program that BMS have that exclusive little window.

Okay. Maybe if I ask to follow up on that.

Sure.

What are some scenarios where the company could envision taking this forward all the way versus out-license, because it seems some way peers have chosen to license -- yesterday we saw Bristol sign a deal for access with some significant by buck dollars.

Well, again neither let�s look and see what the data looks like we like controlling our assets as much as we can we feel that is where the real value is created in biotech and so let�s look and see what the data looks like, let�s see where we are at the time that the data comes out as where we would be able rindo with potential market launch but we'll take a look at that point time but we feel that the real value for the company is it to hold on to the assets and see where we can create value rather than milestone and licensing it out.

Great. Thank you.

Okay. Thank you.

David Nierengarten, Wedbush Securities.

I'm showing no further question at this time, I would now like to turn the call back over to Anthony Marucci for any closing remarks.

Thank you, operator, and thanks to everyone for joining us this morning. I know we've covered a lot here today and we appreciate your time and support. We had a very exciting year in 2014. We think 2015 will be every bit as eventful. We look forward to keeping you up-to-date but as always we welcome your questions at any time. We wish you a great day and for those of you in the Northeast areas stay warm. Thank you.

Ladies and gentlemen thank you for your participation in today's conference. This does conclude the program you may all disconnect. Everyone, have a wonderful day.