Celldex Therapeutics Inc (CLDX) 2015 Q4 法說會逐字稿

Good day, ladies and gentlemen.

And welcome to the Celldex Therapeutics fourth quarter financial results conference call.

At this time, all participants are in a listen-only mode.

Later, we will conduct a question-and-answer session and instructions will follow at that time.

(Operator Instructions).

As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Ms. Sarah Cavanaugh.

Ma'am you may begin.

Thank you.

Good morning and thanks for joining us today.

Just so you know, there are slides available on our Web site if you are looking for them.

Before we begin our discussion, I'd like to 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 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 forth under the headings Risk Factors and Management's Discussion and Analysis of Financial Condition 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 other filings with the SEC 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 that could cause these differences.

These forward-looking statements are based on information, plans and estimates as of this 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 question-and-answer period will be held at the close of the call.

I'd now like to turn the call over to Mr. Anthony Marucci, Co-Founder, President, and CEO of Celldex Therapeutics.

Anthony?

Thank you, Sarah.

Good afternoon, everyone, and thank you for joining us.

With me are Dr. Tom Davis, Executive Vice President and Chief Medical Officer, Dr. Tibor Keler, Co-Founder, Executive Vice President, and Chief Scientific Officer, and Mr. Chip Catlin, Senior Vice President and Chief Financial Officer.

On our call this morning, we will update you on our clinical programs, review financial results, and then outline key objectives for the remainder of 2016.

As always, we look forward to answering your questions as well.

2015 was a significant year for Celldex, as you can see on slide four.

We made tremendous progress, most importantly with RINTEGA.

In February of 2015, we announced that RINTEGA had been issued breakthrough designation by the FDA for adult patients with EGFRvIII positive glioblastoma.

To our knowledge, RINTEGA is the only candidate in GBM to receive breakthrough status, a disease that desperately needs new treatment options.

In May, at ASCO, Dr. David Reardon from Dana-Farber presented our interim results from the randomized Phase II ReACT study in recurrent GBM, noting an overall survival advantage that was beginning to translate into long-term survival for a number of patients, something not seen in this highly aggressive setting.

In November at SNO he presented updated results from the study that continued to improve with long-term follow up reporting that at two years the survival rate for RINTEGA patients was 25% versus 0% for the control patients on Avastin.

The ReACT data has built considerable anticipation for the ACT IV study in newly diagnosed GBM as these patients typically present with healthier immune systems and are more likely to experience benefit.

As you know, we do not know the outcome yet from the second interim analysis of the ACT IV study.

We understand our shareholders are eagerly awaiting this outcome, and I can assure you we are too.

We are confident that the DSMB will meet very soon, and when they do, we will report the outcome in a press release.

Regardless, whether at the second interim or at the final analysis, we fundamentally believe that we have an approvable drug in RINTEGA.

Moving to slide five, we have seen remarkable consistency across four Phase II studies including the most recently ReACT study.

As we have said before, biologically we are confident that RINTEGA is doing what it is designed to do, generating a strong immune response and eliminating tumor cells expressing EGFRvIII, which is a growth driver for GBM associated with more aggressive disease course and poor long-term survival.

More recently, Tibor's team has been able to show that anti-EGFRvIII antibodies in patient's blood were very effective at killing vIII-positive tumor cells in laboratory experiments.

Taken together the link between the biological and the clinical data and the favorable safety profile supports our confidence in this program.

As we near the finish line, we have taken a measured approach to preparing for potential commercialization.

We have discussed in the past with the clinical success we intend to market RINTEGA in North America and the European Union, and work with regional marketing and distribution partners in other key markets.

Accordingly, we recently identified a location in Switzerland for our planned European Union Headquarters.

At the moment, we have a lean commercial team in place comprised of both leadership and supporting roles, covering key aspects of new product commercialization.

As regulatory and access milestones are achieved, we will scale up appropriately.

We anticipate that our global commercial footprint will be approximately 100 FTEs at launch.

With a robust strategy in place, we are confident in our ability to deliver RINTEGA to patients who are desperate need of new treatment options.

We're already planning next steps for RINTEGA from a lifecycle management perspective.

We have identified areas we want to study that will help us expand RINTEGA's potential product profile, and we'll start at least two studies in 2016 to this end.

Tom will walk you through more details about these in a few minutes.

Before I turn the call over to Tom, let me hit on just a few of the major accomplishments outside of the RINTEGA program on slide six.

First up is glembatumumab vedotin, also called glemba.

The metric study in triple negative breast cancer will begin to open up additional sites in the EU in the next several weeks and should complete enrollment in the second half of this year.

gpNMB, glemba's target, continues to gain mindshare as a meaningful target in a number of indications.

A major goal has been to expand the glemba program beyond breast cancer into other gpNMB expressing cancers.

We have had great success here.

We expect to complete enrollment in the Phase II study of glemba in metastatic melanoma by June, and in collaboration with others have started enrollment in uveal melanoma and pediatric osteosarcoma, with a study in squamous cell lung to open to enrollment in April.

Now on slide seven, we also see dramatically expanding the varlilumab program in 2015 (sic, "2016"), initiating four new combination studies, including two under clinical trial collaborations, one with BMS and the other with Roche.

As you saw in today's release, we have completed enrollment for the Phase I dose escalations portion of the study of the varli vivo combination, and have a made the decision with BMS to advance the study into Phase II.

Tom will talk more about this, but this is a significant milestone to the varli program.

We think in the second half of the year we should begin to see some data from some of the ongoing varli combo studies.

We also have multiple studies advancing across our earlier pipeline.

In addition to Celldex-led studies, as we did with glemba, we are leveraging our relationship with key thought leaders in immuno-oncology to fully explore these assets.

There are now three studies ongoing with CDX-1401, and three studies ongoing with CDX-301.

With that, I'll ask Tom to dive more deeply into the pipeline before Chip reviews the numbers.

Tom?

Thank you, Anthony, and good morning.

I'll start on slide eight.

Here you can see the ACT IV study was designed based upon our experience with RINTEGA in three prior Phase II studies in newly diagnosed vIII-positive glioblastoma.

In these studies, we identified a clinically significant survival benefit, including an improvement in median survival of six months in patients with minimal residual disease or small tumor burden after surgery when compared to historical and contemporary use controls.

We are 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, 745 patients were enrolled into ACT IV to ensure an adequate number of patients with minimal residual disease as assessed by central review.

These patients with minimal residual disease are the same patient population included in the previous front line Phase II studies and of a patient population that the primarily endpoint of overall survival is assessed in.

The study required 374 patients with minimal residual disease and we ultimately enrolled 405.

Additional patients with bulky disease were enrolled to determine whether they too might benefit.

All 745 enrolled patients will be included in a secondary analysis of overall survival and additional secondary endpoints, including progression-free survival, safety, tolerability, and quality of life.

Our recent experience with the ReACT study gives us greater confidence in the likelihood of an effect in this broader group of patients with bulky disease.

As the data readout tracks forth, this study is events driven, with the events being death.

ACT IV was designed to include two interim analyses, one at 50% and one at 75% of planned events.

We reached the required number of events for the second interim in late 2015 and the DSMB is scheduled to meet in March to perform the analysis.

When you look at any study, the greatest chance of success is at 100% of events.

Interim analyses are used to capture more dramatic outcomes with fewer events.

The second interim would stop early for efficacy with a P-value of 0.018 or better for overall survival.

Those of you who are familiar with these studies know this is an impressive P value in Phase III oncology studies, particularly in glioblastoma.

So this is a high hurdle.

But based upon our previous results in the newly diagnosed setting and more recent results from ReACT, we think there is a reasonable chance that the second interim analysis could stop early for success.

But it's important to realize that if the DSMB recommend this trial continue, there is greater likelihood to meet the endpoint at the end of the study where the P value needs to be only 0.044 and where we would have a significantly larger number of events and more time for a tail to form.

We certainly saw this in the ReACT data.

When results were first presented at SNO in November of 2014, the dataset was trending positive.

By ASCO of 2015 the data set was statistically significant and that data and P value continue to improve as presented in November of 2015 at the Society of Neuro-Oncology.

As we have come to learn in immuno-therapy, it can take time, and the tail on the survival curve which reflects long-term survivors can be very important.

So we're certainly looking forward to the second interim, but wouldn't be surprised if the study continues to the end.

It would be wonderful for patients if the study were to stop early but at the end of the day as Anthony said, we believe based on data from our four Phase II studies that RINTEGA has an excellent chance for success in this indication.

The recent ReACT data certainly reinforced this.

ReACT is a randomized Phase II study of patients with relapsed or current EGFRvIII positive glioblastoma.

Patients either received the standard of care, Avastin, which did not show a survival benefit in glioblastoma in their approval studies -- it was approved on response rate -- or they received RINTEGA plus Avastin.

What is most compelling about this dataset is the overall complementary nature such that all endpoints support RINTEGA's activity.

As presented at SNO, the primarily endpoint of the progression free survival at six months was met.

Now looking at slide nine, most importantly a clear benefit was also seen in overall survival with early and consistent separation of the curves supported by a hazard ratio of 0.53 and a P value of 0.0137.

An impressive long-term survival benefit was also observed.

At two years, the survival rate for RINTEGA was 25% versus 0% of patients in the control arm.

The long-term survival benefit observed here is unprecedented as it is exceedingly rare for patients with highly aggressive vIII-positive glioblastoma, even in the newly diagnosed setting, to live beyond two years.

To echo Dr. Reardon's comments at the Society for Neuro-Oncology as you see on slide ten, even more striking is the fact that not only are patients living considerably longer, but they also appear to be living better, with minimal side effects and reduced need for steroids.

The significance of getting people off steroids can't be overstated.

It's a huge win for patients and for physicians.

We're planning for success, and part of this includes thinking about how we can expand RINTEGA's impact on patients.

To this end we're planning a number of follow on studies, including two that we can talk about now outlined on slide 11.

In our Phase II studies in the newly diagnosed setting, RINTEGA has been dosed after surgery and completion of chemo radiation concurrent with maintenance temozolomide.

We're planning to initiate a Phase II open label study this year that starts dosing earlier, still after surgery but now prior to and concurrent with the chemo radiation to assess vIII-specific immune response.

The second study is designed to evaluate the role alternative immune modifiers could play in combination with RINTEGA and Avastin in recurrent glioblastoma.

Previous and current studies of RINTEGA have utilized GM-CSF.

This new study will utilize imiquimod, an immune response modifier that is topically administered and will assess EGFRvIII specific immune responses.

We've seen promising preclinical results with imiquimod and think it could potentially serve as a second source of adjuvant if needed.

As I mentioned, we're in the process of planning additional studies including combinations with checkpoint inhibitors.

We'll keep you updated as these progress.

With glembatumumab vedotin on slide 12, it's all about execution.

Completing enrollment of our ongoing studies in triple negative breast cancer in metastatic melanoma.

As a quick reminder, the METRIC study is a randomized controlled Phase IIb study of glembatumumab vedotin in patients with triple negative breast cancer that over express gpNMB.

With positive data, it should serve as a registration study in both the US and EU with the primary endpoint of progression free survival.

The study is enrolling 300 patients, and we believe enrollment will be completed in the second half of 2016, with data approximately six months after completion of enrollment.

In December of 2014, we initiated a single arm open label 60 patient Phase II study of glemba in patients with unresectable Stage III or IV melanoma after progression on a checkpoint inhibitor, an area where there is truly an unmet need.

The primary objective here is overall response rate.

We believe enrollment will be completed in June, and hope to present data at a medical meeting before year-end.

Anthony mentioned that the NCI studies in uveal melanoma and pediatric osteosarcoma are up and running.

We're also very close to opening enrollment, likely in April of a Phase I/II squamous cell lung cancer study, in collaboration with PrECOG.

The Phase I portion of the study is focused on identifying a maximum tolerated dose, and the Phase II portion will assess objective response rate.

Now on slide 13.

We also made considerable progress with the varlilumab program.

In May of 2014, we entered into a clinical trial collaboration with Bristol-Myers Squibb to evaluate the combination of Varli with nivolumab or Opdivo, BMS's PD-1 immune checkpoint inhibitor.

In the Phase I/II study, we completed enrollment of this trial -- of the Phase I portion of this trial without identification of the maximum tolerated dose, and together with BMS have decided to advance this combination into Phase II.

The lack of dose limiting toxicities again emphasizes the focused nature of CD27 stimulation and the safety for this program.

A 3 mg/kg varli dose will be used in the Phase II portion of the study, which we anticipate will open to enrollment in the second quarter of 2016 and include cohorts in advanced non-small cell lung cancer, colorectal cancer, ovarian cancer, head and neck squamous cell cancer, renal cell carcinoma, and glioblastoma.

The primary objective of the Phase II cohorts will be overall response rate.

We hope to present immune monitoring data for the Phase I portion of the study later this year.

In March of 2015, we also entered into a clinical trial collaboration with Roche to evaluate the combination of varlilumab and atezolizumab, Roche's investigational anti-PD-L1 cancer immunotherapy, in a Phase I/II study.

The Phase I portion of the study is being conducted in multiple tumor types and is now open to enrollment with the primary outcome of safety and tolerability.

The Phase II portion of the study will be conducted in renal cell carcinoma to assess overall response rate.

In April, we initiated the Phase I/II study examining the combination of varli, ipilimumab and CDX-1401 in patients with Stage III or IV metastatic melanoma.

The Phase I portion will identify a recommended dose for Phase II.

The Phase II study will include two cohorts, one comprised of patients who are NY-ESO positive and one comprised of patients who are NY-ESO negative.

Patients who are NY-ESO positive will also receive CDX-1401 in addition to varli and ipilimumab.

The primary objective for both cohorts is objective response rate at 24 weeks.

In May, we initiated a Phase I/II study examining the combination of varli and sunitinib in patients with metastatic clear cell, renal cell carcinoma.

The Phase I portion is a dose finding study.

The primary objective in the Phase II portion is again overall response rate.

Moving onto CDX-1401 on slide 14, I just mentioned, the combo study with varli and ipi.

The inclusion of CDX-1401 in this study is the direct result of the long-term follow-up with patients who went on to subsequent checkpoint inhibitor therapy after completing the Phase I study of CDX-1401.

The effect was striking and suggests that the strong immune response generated by CDX-1401 may predispose patients to a better response to checkpoint blockade.

CDX-1401's activity is also being explored in investigator initiated and collaborative studies.

A Phase II study of CDX-1401, in combination with CDX-301 in metastatic melanoma being conducted by the NCI has completed enrollment.

Plans for additional studies are being considered by NCI.

Additionally, a Phase I/II study of an IDO inhibitor in combination with CDX-1401 is being conducted in patients in remission with ovarian, fallopian tube, or primary peritoneal cancer by the Roswell Park Cancer Institute.

Patients' tumors in this study must have expressed NY-ESO-1 or LAGE-1 antigen.

This brings us to CDX-301 on slide 15, a potent hematopoietic cytokine that stimulates the expansion and differentiation of hematopoietic stem cells and dendritic cells.

In addition to the study I just mentioned in combination with CDX-1401, we have recently presented early data from a pilot study of CDX-301 alone and in combination with plerixafor or Mozobil, in hematopoietic stem cell transplantation.

Related donors of patients with hematological malignancies requiring hematopoietic stem cell transplant are administered CDX-301 for five or seven days alone or in combination with plerixafor to mobilize CD34 positive stem cells.

The primary goal of the study is to determine if treatment of the donor results in the adequate collection of stem cells in two collections.

Preliminary results from three donor/patient pairs were presented at the annual meeting of the American Society for Blood and Marrow Transplantation just last weekend.

The data showed that CDX-301, given as a single agent for five days had no limiting toxicity and was effective at mobilizing hematopoietic stem cells in healthy donors.

The stem cell graph contains notable increases in naive lymphocytes and plasmacytoid dendritic cells compared to administration of G-CSF, and is consistent with pre-clinical data suggesting that a possible better outcome might be achieved for patients.

Recipients experienced successful engraftment in an expected time frame.

Additional donor/patient pairs are being accrued to a second planned cohort in order to assess the potential synergy and feasibility of combining CDX-301 with plerixafor in this setting.

In addition to our sponsored studies and the clinical trial collaborations, CDX-301's potential activity is also being explored in investigated sponsored studies at various academic institutions.

This includes the Phase I/II study of CDX-301 and Hiltonol in combination with low-dose radiotherapy in patients with low-grade B-cell lymphomas conducted by the Icahn School of Medicine at Mount Sinai.

Finally, new to the clinical pipeline is CDX-014 on slide 16.

CDX-014 is a fully human antibody-drug conjugate that targets T-cell immunoglobulin and mucin domain 1 or TIM-1, a molecule that is upregulated in several cancers, including renal cell and ovarian carcinomas.

It's associated with kidney injury and high blood levels are predictive of tumor progression in renal cell carcinoma.

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

The investigative new drug application is active and we look forward to initiating the first Phase I/II clinical study in renal cell carcinoma this year.

So this concludes our clinical program updates.

And I'll now turn the call over to Chip to review the financials for the fourth quarter and year-end 2015.

Thank you, Tom.

I'm now on slide 17.

For the fourth quarter of 2015, net loss was $32.7 million, or $0.33 per share, compared to a net loss of $31.8 million, or $0.36 per share for the fourth quarter of 2014.

Net loss for the 12 months ending December 31, 2015 was $127.2 million, or $1.31 per share, compared to $118.1 million, or $1.32 per share for the comparable period in 2014.

Research and development expenses were $23.9 million in the fourth quarter of 2015, which compares to $27.0 million for the fourth quarter of 2014.

R&D expenses were $100.2 million for the 12 months ending December 31, 2015, compared to $104.4 million for the comparable period in 2014.

Levels of Celldex's R&D investment were approximately the same between years as we continued the progression of our late stage clinical development programs, RINTEGA and glemba and expanded our varli program.

During the 12 months ending December 31, 2015 and 2014, we incurred $36.3 million and $45.6 million in clinical trials expense and $14.8 million and $21.2 million in contract manufacturing expense, respectively.

General and administrative expenses were $11.1 million in the fourth quarter of 2015, compared to $6.2 million in the fourth quarter of 2014.

G&A expenses were $33.8 million for the 12 months ended December 31, 2015, compared to $20.6 million for the comparable period in 2014.

During the 12 months ending December 31, 2015 and 2014, we incurred $10.5 million and $4 million in RINTEGA and glemba commercial planning costs respectively.

At December 31, 2015, we reported cash, cash equivalents and marketable securities of $289.9 million, compared to $304.6 million as of September 30, 2015.

The decrease was primarily driven by the fourth quarter cash used in operating activities of approximately $22.9 million, partly offset by the receipt of $9.2 million from the sale of New Jersey tax benefits.

We expect that our cash, cash equivalents and marketable securities will be sufficient to fund operating expenses and capital expenditure requirements through 2017.

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, 2015, Celldex had 98.7 million shares outstanding.

I will now turn the call over to Anthony to close.

Thank you Chip and Tom.

As you can see, 2015 was a significant year for Celldex with major advancements across the entire pipeline.

As we look to the future, this momentum should continue.

We anticipate reporting data from multiple studies in 2016 and early 2017 and we believe that the next 12 to 18 months have the potential to be transformational for the company.

To summarize on slide 18, in 2016, we are focused on the following objectives -- for RINTEGA, continued execution on the ACT IV Phase III registration study and front line GBM with the second interim expected very soon and final data during 2016, BLA preparations for US submission and subsequent EU filing, commercial readiness for successful RINTEGA launch, and continued expansion of the RINTEGA program through additional supportive studies in GBM.

For our glemba program, complete accrual of the METRIC study in triple negative breast cancer in the second half of 2016, and the melanoma study in the first half of 2016, and ongoing support of the investigator and collaborative studies in squamous cell lung cancer, uveal melanoma and pediatric sarcoma.

For varli, continued execution across a broad array of varli combo studies with the nearest term priority being expansion into the Phase II study for the varli/nivo combo.

The CDX-1401 in addition to the varli/ipi combo study, will continue to support the NCI sponsored Phase II study of CDX-1401, 301 combo in melanoma and other investigator sponsored studies.

The CDX-301 continued expansion of 301 pilot study alone and with Mozobil and hematopoietic stem cell transplantation, and ongoing support for the investigative sponsored Phase I/II of 301 in B-cell lymphoma, and finally with the CDX-014 bringing this program into Phase I/II studies in renal cell carcinoma.

With that review operator we are now ready to open the call to take questions.

(Operator Instructions).

Our first question comes from the line of Tony Butler with Guggenheim Partners.

Your line is open.

Yes, good morning.

Thank you for taking the question.

Two for Tom please.

Can you say, Tom, in an ACT IV trial, what would be the median time on study for a patient?

And the second question is around gross resection.

Would all 745 have had gross resection or we're only talking about those in the MRD cohort?

Sure Tony.

Let me take your second question first, just the definition of the patients on study.

All patients entering the trial had to have at least an attempt at resection, but it was not required that they have a gross total resection as the surgeons call it.

So that 745 number represents all patients on study, but 405 patients were identified as having a minimal residual disease following chemo radiation.

Now as far as the median follow up goes, I can't tell you the exact number at this particular point in time.

But of course we did close the study quite some time ago at this point.

So it's certainly measured in years.

We have very limited access to the data at this point and we don't intend to look carefully at all the numbers until we have the readout from the data monitoring committee.

Thank you, Tom.

Thank you.

Our next question comes from the line of Seamus Fernandez with Leerink Partners.

Your line is now open.

This is actually Mark in for Seamus.

Thank you very much for taking my question.

So I was wondering if you could give us a little more color on your planned Phase II varli/nivo program.

You're obviously looking at a number of indications there.

Can you clarify if this will be a single Phase II study or are you looking at multiple separate studies per indication?

How large should we anticipate the study or the studies to be?

Will they be randomized?

Anything you can give us there at this point?

And then a second question on your planned new studies for rindo.

Can you just give us little bit of a sense of what the preclinical data tell you to give you a rationale for picking a different sequencing schedule with chemo radiation and for switching out the adjuvant to imiquimod?

Thank you.

Sure Mark, happy to.

The Phase I/II study that we're performing in collaboration with BMS is what's become a quite common modern design with a dose escalation that's really intended to identify a dose, multiple different tumor histology is being permitted to enter, and then a separation into multiple separate Phase II cohorts.

So the six indications I defined will all be separate cohorts, single arm, not randomized, controlled by historical contemporary control data.

And of course each cohort has a specific expected response rate that would be used to identify success, and then decisions about continued development will depend upon the results in each cohort.

The new studies in rindo are really intended to first make treatment more convenient and appropriate for patients.

The fact that we've initiated RINTEGA after chemo radiation, it was a practical issue in our early studies since many patients are referred into tertiary centers after having started chemo radiation.

So the new trial that will be vaccinating prior to chemo radiotherapy is really designed to initiate the therapeutic potential for rindo as early as possible.

So you can imagine that an extra eight weeks of treatment might slow down progression even further and provide greater benefits.

Now the intent of these initial bio-studies simply is to show that we're still getting the very high immune responses we see after chemo radiation when we start treatment earlier.

But I think this is a trial that may not be tremendously exciting from a scientific perspective, but has very significant practical importance for patients and doctors if the drug is eventually on the market.

At that point of course we'd be hoping that patients would start the RINTEGA as early as possible in order to maximize the benefits.

We're very interested in imiquimod which is a TLR7 agonist.

There is a growing body of data showing that it can create very potent immune responses, with a fairly simple topical application at the vaccination site.

We have evaluated it in preclinical animal models where we saw that it generated significantly higher immune responses than we're seeing with GM-CSF.

So we think this may well be a superior approach to vaccination and gives us greater flexibility in designing and marketing the therapeutic regimen really throughout the world.

I think the additional studies we'll be doing with RINTEGA are also important though, and as you might imagine, the combination with checkpoint inhibitors will be quite exciting in this setting.

There is growing data that the checkpoint inhibitors may have individual activity in glioblastoma, so that the combination may further improve our ability to control the disease.

Okay.

Thank you very much.

You're welcome.

Our next question comes from the line of Joe Pantginis with Roth Capital Partners.

Your line is open.

Hey guys, good morning.

Thanks for taking the question.

Maybe Tom also, I'd like to maybe start the question by pointing to what I consider to be a hallmark comment about the interim analysis, and whether it's going to halt or go to final.

And it was your comment regarding the test for immunotherapy studies.

So with that said, do you think there is a potential lack of understanding of the immunotherapy tail right now, because -- and what I mean by that is there appears to be some, a not necessarily huge amount of sentiment, but some negative sentiment regarding, if you come out and announce a continuous planned announcement, there are some negative views around that.

And but I, that's why I would point to the understanding about the tail.

Well, I think it's a very important question and we certainly are sensitive to the issue.

I think in the last five years since ipilimumab was approved, it's become clear that immunotherapy not only offers short-term clinical response, but also a survival benefit.

And certainly with ipilimumab that appears to be long-term survival based upon the tail, where up to 20% of patients may have complete control of their disease.

I think the data is still out on nivolumab in the PD-1 target agents, but certainly those curves look very promising and we've shown the same thing in our ReACT trial and earlier Phase II studies with RINTEGA, where there is a subset of patients who would not be expected to have long-term survival, but we are seeing that.

So it's very germane for ACT IV where there could be a significant tail forming, and that tail would really drive the hazard ratio and P-values.

But it takes time in order for that tail to become prominent, for the events in the tail to be adequate to influence the P-value.

And hence we really expect the most impressive data to come at the final analysis and with even longer term follow-up on study.

But anything beyond that, it's very important to understand the design of these studies, where we sit down, we look at the numbers that we expect to see on study and design the final analysis to give us the best chance of meeting those numbers.

The interim analyses really are designed to identify very prominent treatment effects, much more significant, better P-value type results in the hope that we are seeing something dramatic, but people should keep in mind that it's the final analysis that is most likely to succeed.

And as I described with ReACT, we clearly saw that phenomenon over the subsequent presentations in the last couple of years.

That's very helpful.

Thank you.

And I guess, when you also point to the varying levels of support for the ACT IV study whether it's the three prior Phase IIs with consistent data, but also you talked specifically to the ReACT study providing support for ACT IV.

I guess, I would link it up to the comment about bulky disease.

So can you talk about the level of residual disease that the current patients had, and then also the concept that many people point to a lot of times including us about the health of the immune systems in the recurrent setting versus the front-line setting?

Well, we had done very little work in patients with bulkier disease early on, and when we looked at ReACT, we didn't know what to expect.

Your question is certainly important, because over half of the patients in ReACT did have relatively bulky disease and quite a few of them had significant tumor.

We didn't emphasize it today, but we clearly saw an improvement in response rates in ReACT when we treated with RINTEGA, including some patients with bulky disease, who had marked shrinkage of their tumors.

We would have guessed that those patients had a compromised immune system.

We do know that Avastin, the drug that was used in combination with RINTEGA in ReACT can augment an immune response, and we saw huge responses in those patients.

So while I can't tell you what would happen with other vaccines, with RINTEGA the combination with Avastin even in patients with bulky disease led to very high immune responses.

Now we designed ACT IV to include bulky patients well before we had seen the ReACT data.

It was partly a measure to make accrual easier for physicians and for patients.

But when we saw the ReACT data, it gave us much greater confidence that that intention to treat population, the total population on ACT IV is likely to show a benefit and of course, it will have greater statistical power, simply because there are a lot more events in the total population.

So there are several endpoints in ACT IV that will be important.

Of course, the primary endpoint in those patients with minimum residual disease will drive our ability to look at the other endpoints.

But I think there are multiple read outs in this trial that could be quite exciting.

Great.

And I don't want to take up too much time here obviously.

But I just wanted to ask really quickly with regard to the varli/nivo study, are you able to disclose what the hurdle rate was to be able to make the move to Phase II?

And then with regard to the 3 mg/kg dosing, are you going to be using your standard dosing or you're looking at the potential for metronomic dosing as you've discussed in the past?

Well unfortunately, I'm not able to give you any specific activity data.

I can say that as you might expect in a trial like this, we did get an assortment of different tumor types put on study.

So there are no hard and fast response rates to be seen in the Phase I, but we will presenting these data.

And let me clarify that, I'm not saying we didn't see responses, I'm saying that it's a mix of patients.

So I'm not going to be able to tell you a specific efficacy.

But we'll be rolling into Phase II and that I think is big news in itself.

There was a hurdle.

We met that hurdle and we are now opening all six of the Phase II cohorts.

So I think we're very happy moving forward with the safety and activity data that was seen in trial.

And then the dosing efficacy?

The dosing of 3 milligrams, we have previously discussed low versus high dosing in this setting.

We have more and more data in pharmacokinetics showing that we can get saturating doses early on but that it tapers off.

I think that 3 milligram dose based on the results we've seen in Phase I makes most sense.

But in our other studies, as I mentioned we have Phase II trials with ipilimumab and others, we continue to look at the low dose to explore whether or not that may actually be superior.

Guys, thanks so much for the added detail.

Thank you, Joe.

Our next question comes from the line of Boris Peaker with Cowen & Company.

Your line is open.

Hey, thanks.

This is actually Joe on for Boris.

Just couple of questions.

So my first question is in regards to the ACT IV second interim.

So maybe based on your experience on the first interim, how long do you expect to hear a decision from the time the committee meets?

When will you expect to hear a decision?

And then if they recommend that the trial continues on, what exactly do you guys see from them?

Did they show you any of the statistics or is it simply a yes/no answer from them?

It's a good question.

The practicalities of these interim analyses are always very interesting to me, but the primary goal is to minimize the amount of information that we as the sponsors and the clinicians have access to, unless the study is stopping.

Basically the data monitoring committee are given the data.

Several days later we have a formal meeting and at that point they are expected to give us a recommendation, although they do have the option to ask for additional questions.

If their recommendation is to continue the study, then we receive no additional information, simply that message.

So that we will walk out of that meeting if there is a continue with absolutely no idea of what the data look like.

Even if they do recommend discontinuation of the study, they'll give us that recommendation and then we'll communicate with the FDA.

We will not necessarily see data at that point until we and the FDA have agreed to a path forward.

So there is a futility analysis built into this second interim?

One of the possible outcomes would be stop the study for futility, yes.

Okay.

And then just a quick follow up maybe in regards to comparing ReACT to ACT IV, and talk about maybe the difference between Avastin and temolozomide as potential immune adjuvants -- I know these are being used in different settings but is there anything to suggest that TMZ would work better than Avastin when combined with rindo?

So the comparison we have is our previous studies in newly diagnosed patients ACTIVATE, ACT II and ACT III versus ReACT and the immune responses there came up in a very similar timeframe and were just as high.

We did see some higher immune responses in ReACT than earlier, but not enough to say that it's actually better.

I guess our conclusion would be that temolozomide and Avastin both work very well with ReACT.

We really can't tell you how much of an immune response we would get without either temolozomide or Avastin.

It maybe that RINTEGA by itself generates huge immune responses.

So I think moving forward we're certainly happy with the temolozomide combination.

We'll be evaluating imiquimod to see whether it too can create high hemo-responses.

And moving forward, I think this is important for the field.

People should recognize that the appropriate chemotherapies and/or Avastin can be very useful in immunotherapy.

Okay, great.

Thanks for taking the question.

Sure.

Our next question comes from the line of Christopher Marai with Oppenheimer.

Your line is open.

Hi, good morning.

Thanks for taking the question.

First, just regarding the synergy between temolozomide and rindo, I was wondering if you could perhaps speak to the chance for success here, the interim look based on any synergies you've seen between the two, obviously the separation of the curves earlier on perhaps due to the non-immune component of that treatment.

And then secondly, if you could perhaps remind us about when we may see the varli combination data presented.

I think last time it was thought that ASCO 2016 would be a time frame for some of that.

And just remind us a couple of the combos that we might be seeing there.

Thank you.

Sure.

Your question again about temolozomide, we think that it makes an excellent adjuvant.

The immune responses really are equivalent to Avastin.

So we're perfectly comfortable extrapolating the results we saw from ReACT to the ACT IV study based on equivalence of the adjuvants.

Again, I emphasize with temolozomide is all about timing.

You need to vaccinate when the immune system is recovering after the chemo has had its marrow suppressive effects.

And that's exactly how we are using it in the ACT IV study.

And the previous studies ACT II and ACT III used temolozomide, generated huge immune responses and we continue to show the long-term survival curves that we've seen from those trials, which clearly show a tail, clearly show that some patients are surviving well beyond what would be expected for vIII-positive glioblastoma.

So we have no hesitation whatsoever about the combination we're using in ACT IV and comparing it to ReACT.

Okay.

And so you'd expect really a differentiation between the two arms to be in the tail here and not in some earlier synergy, that would result in earlier separation?

Well we emphasize the tail, because I think that's very important in immunotherapy, and it's very important in the current situation, where those people who hesitate to believe the final results could be positive if we had to continue with the second interim, need to keep in mind that the tail is important.

However, every curve we've generated with RINTEGA from the start of the program, including the upfront studies, compared to contemporary controls, showed early separation of the curves.

So we certainly are expecting to see a benefit early on.

It's just a question of how great that benefit will be and whether it will be large enough at this point in time in order to generate the required P-value of 0.018.

If we look at all of the experience we have to date, we would expect there to be a clear and persistent separation between these curves throughout their entire path, but we're very excited to see the data whenever we can in order to see if that's true.

Great.

On the varli data timeline?

Thanks.

So we submitted an abstract for a major meeting in the first half of this year.

We've not yet heard whether the abstract is approved and where it will be presented, but you will be seeing the Phase I data at that point in time.

And we're guiding that will include all of the dosing and safety data, as well as immune response data.

Whether or not we'll be able to present activity data is of course something that we'll need to work through with our partner Bristol.

Great.

Thank you.

Thanks, Chris.

Our next question comes from the line of Biren Amin with Jefferies.

Your line is open.

Thanks guys for taking my question.

Maybe I'll start with the varli/nivo combo.

I think Phase I trial design called for three cycles of varli with an optional fourth cycle.

So the patients in the Phase I portion, did they receive that fourth cycle?

And also how many cycles of (technical difficulty) did patients receive in the Phase I portion?

So we basically designed the same regimen in combination with nivo.

So yes those patients can receive four cycles.

And there is the option for continued treatment if they appear to benefit.

I'm sorry, I missed your second question.

How many cycles did the patients receive in the Phase I?

Yes, (inaudible).

I can't really tell you at this point in time exactly what the treatments looked like and how patients did.

I can tell you that we did dose patients as planned on study and did not run into any toxicity questions.

So for us that key issue are we going to see that similar good tolerability with varli, when we combine it with checkpoints and to date that's very, very true.

Okay.

And then just on a choice of the mgs/kg dose, can you tell us how many patients were dosed with this dose in the Phase I?

I'd rather not be getting to the specifics of the patient numbers at this point in time.

I think what has been consistent with varli all along is that we see similar immune effects regardless of what dose we use and the 3 milligram seems to be a very practical dose moving into Phase II.

Again, as emphasized before, we're not saying that this would ultimately be the best dose, but from the data we have right now, that is a very promising one to move into the next portion of development.

Got it.

And then on ACT IV, maybe I could just ask on the futility threshold.

To think the bar is HR of 0.90 or greater.

Given that I think an earlier question talked about the immunotherapeutic effect towards sales, why build in a futility at this juncture?

Well, the intention behind the futility of course is to discontinue the study if there is absolutely no hope.

It has sort of an ethics basis to it.

You don't want these patients being dependent on a trial, if we know that it's futile.

And of course, there can be some cost savings around it.

So that was the original intent to build it in.

It has really very little cost and seemed a practical way to move forward.

The obvious question though is what would the risk be that you would stop the study early inappropriately.

That hazard ratio of 0.9 was calculated to provide an adequate threshold beyond which the study would be truly futile, but it is just a recommendation.

And the way this usually works, if the data monitoring committee looked at the entirety the data as they will and decide that there is promise here, that there's more to be learned, they would recommend that the trial continue.

I think it's extraordinarily rare for studies to truly meet a futility threshold in an interim analysis.

So I would be very surprised if that would happen in this situation.

Thank you.

Our next question comes from the line of Mara Goldstein with Cantor Fitzgerald.

Your line is open.

Thank you.

I apologize, you might have said this and I missed it, but on the decision to expand the varli plus Opdivo trial, was the decision or were the parameters around advancing based off of the immunological data that was collected versus early response rate?

If you could just add some color around that?

And then secondarily, as the data continues to evolve on the ReACT trial, can you talk a little bit about the opportunity to revisit that with FDA irrespective of what happens with ACT IV?

So the combination of varli and nivo.

Again I emphasize it's a fairly typical Phase I dose escalation with some dose level expansions.

In that Phase I as you've always heard, it's very much a safety and tolerability type of endpoint.

And that was really what we were focused on.

We wanted to be sure that we weren't augmenting the toxicity of Opdivo to an unacceptable level.

You can't predict how many patients of what disease type will come into a study when you have really a basket of eligible patients.

So you don't predefine any efficacy threshold that would roll you into Phase II, but it's fairly difficult to look at the results at the end of the day and determine whether or not you've seen something promising enough in one or more indications to expand.

Again, I can't provide a lot of details of what we're seeing in these patients, but we certainly did see adequate activity, both from an immunological perspective and from a tumor perspective to justify expanding out.

Again, we hope to be able to talk about that in a little greater detail later this year.

But I think you should have a sense, if there was a real hurdle here, neither companies would be expending resources if it wasn't promising to continue.

And we have at this point decided to expand into all of the indications.

In fact, we've added additional indications from our initial planning.

Now the ReACT study, the issues that the FDA had with it still exist.

It's a small study.

There is a chance that some of the patients who've done well may have just done well because they were lucky.

We don't believe that's prominent here.

We've looked very carefully at the data and the patients who have long-term survival in the RINTEGA arm are not patients that you would have expected to do well.

They are not patients who had a very long disease course prior to going on study.

So we just think that these are quite impressive data, but they were not convincing to the FDA when we first spoke to them.

And if ACT IV ends up not being positive, I don't think that that will change.

But I certainly can assure you that we'll be discussing the results of ACT IV with them, both positive or negative and we'll continue to raise the question.

But we're not providing any guidance that we would get approval for ReACT in the absence of a positive readout from ACT IV.

Okay, thank you.

Our next question comes from the line of Steve Brozak with WBB Securities.

Your line is open.

Hey, good morning gents.

Most of the questions have been asked and answered, and Anthony you did go into the commercialization questions in the very beginning.

But it's obvious that every neurosurgeon, every neuro-oncologist knows about Celldex.

Can you give us any color as to what they're looking at in terms of feedback, because obviously this is going to be as you progress, and obviously what we're counting on is commercialization, as you get into that, what do you expect the reactions to be?

And I've got one follow up on marketing afterwards, please.

Well, the reactions, they're expecting the drug would be widely used.

We did have over 220 PIs on the study in 24 different countries.

The recognition of RINTEGA as we've done our analyses from a market perspective are they have a recognition rate in the 90 percentile, which is very good for any kind of a drug.

So we think that the expectations are very favorable to this drug going forward.

Okay.

So basically what you just said is that at 90%, I don't even think aspirin has that kind of name recognition.

Going into marketing what are you looking at in terms of patient awareness?

Because obviously Google makes life very simple for people.

Given the body of information that's already out there, is it a situation where you've got something that's already prepositioned?

And based on the data that continues to come out, the data that will come out --

Sure.

By the time we're ready to launch there will be a recognition and awareness and education program in place.

So we're finalizing those now.

We're testing those.

A lot of work has gone into them.

But by the time we launch, all of those plans and education documents will be place.

So the awareness we believe will be there by the patients.

And obviously then -- the last question and I'll hop back in.

So in terms of the pharmaceutical potential partners that are out there, this is the first time obviously that a company has gotten such name recognition, such awareness that you basically -- you will obviously look at working with partners but you can do this collectively just on your own.

Is that a really good way to describe it?

Yes.

We always signal that in North America and the EU we would do this ourselves.

Outside of those areas we would look for distribution and/or commercial partners that we feel would be able to distribute it better than we can outside of those areas.

But certainly in North America and the EU pod, we are perfectly comfortable that we can do this on our own.

All our analysis points towards that.

And opening up the EU headquarters in Switzerland at some point this year certainly signifies that as well.

Great.

Okay.

Thanks.

I'll hop back in the queue.

Thank you.

Thank you.

And our next question comes from the line of David Nierengarten with Wedbush Securities.

Your line is open.

Thank you for taking my questions.

I can squeeze one in here.

So given that three fourths of the events will happen at the second interim analysis, do you -- what are the parameters do you think for the remaining patients to tilt that into statistical significance, assuming you don't quite make it on the second interim and the trial continues as planned?

Do you have enough patients left in your opinion or what kind of survival or hazard ratio with those remaining patients need to get you to that P value, assuming there is not much separation in the early part of the curve?

Thanks.

So good question, I guess I will focus again on the P-value, since that is the statistical requirement seen here.

And you have to keep in mind, that with a P-value hurdle of 0.018 at the second interim analysis, if we already have a P-value of 0.019, then the study will just continue, but we've already met threshold.

It's the final analysis.

So it's not just an improvement in the outcome that's needed, it's actually a very different hurdle for success between the two.

So you can't assume that we haven't hit 0.044 if we continue at the second interim analysis.

That said, we've emphasized the tail, we've emphasized the greater follow-up, which could improve a P-value to well below 0.018 in the additional six to nine months it will take to get to the final analysis.

So there is a lot of variation in these numbers that could happen.

From our perspective, if we don't hit the second interim analysis, it does not mean that we haven't already met the final analysis requirements.

Now, I can tell you our statisticians have done a lot of calculations every which way to figure out likelihood et cetera, and that has been interesting but none of it gives you any definitive answer here.

We still don't know and will have to wait and see.

But I think people should very clearly understand that just because we might have a continue at the second interim does not mean that we don't have great data already.

All right.

Thanks.

Thank you, David.

Thank you.

And I'm showing no further questions at this time.

I'd like to turn the call back to Mr. Marucci for closing remarks.

Thank you, operator.

And thanks everyone for joining us today.

I know we've covered a lot, and we appreciate your time and support.

2015 was a great year.

We think 2016 holds even more promise.

We look forward to keeping you up to date, but as always we welcome your questions at any time.

Have a great day and a great weekend.

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This does conclude the program and you may all disconnect.

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