Celldex Therapeutics Inc (CLDX) 2016 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Celldex Therapeutics year-end 2016 financial results, and 2017 corporate strategies conference call.

(Operator Instructions)

As a reminder, this conference is being recorded for replay purposes.

It is now my pleasure to hand the conference over to Ms. Sarah Cavanaugh.

Ma'am, you may begin.

Thanks so much.

Good afternoon, and welcome to Celldex Therapeutics 2016 year-end update call.

Before we begin our discussion, I'd like to mention that today's speakers will be making forward-looking statements as outlined on slide 2.

Such statements reflect our 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 other 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, factors, new information, future events, or other changes.

Please be advised that the question and answer period will be held at the close of this call.

I'd also like to let you know, that given today's weather, we have speakers dialing in from a variety of different locations.

So please be a little bit patient with us on Q&A, as we try to get people lined up for that.

And now, I would like to turn the call over to Anthony Marucci, Co-Founder, President and CEO of Celldex.

Anthony?

Thank you, Sarah.

Good afternoon, everyone, thank you for joining us.

With me on the call today are Dr. Tibor Keler, Co-Founder, EVP, and Chief Scientific Officer; Dr. Tom Davis, EVP and Chief Medical Officer; Mr. Chip Catlin, Senior Vice President and Chief Financial Officer; and Ms. Sarah Cavanaugh, Vice President of Investor Relations and Corporate Communications.

Celldex ended 2016 with a deep pipeline of assets, derived from a broad set of complementary technologies that are designed to engage the immune system and/or directly inhibit tumors.

With the successful completion of Kolltan in late November, our team undertook a review of our combined programs, to prioritize them in a manner that we feel best utilizes our resources, and positions our drug candidates for success.

With this exercise complete, the purpose of today's call is to outline our strategy and priorities for the next 12 to 18 months, and highlight key upcoming milestones.

As always, we look forward to answering your questions at the close of the call.

I will leave it to Tom to outline the individual programs in detail, but on slide 3, I'll like to walk you through our pipeline for 2017, and the major areas of focus.

For Glemba, we will continue to focus our external resources on driving the breast cancer and the melanoma trials to completion.

We've now seen six-plus months of considerable improvement in the rate of enrollment in the METRIC study, and based on this, we expect to complete enrollment by late September of this year, a major accomplishment for this program, given the inherent challenges in recruiting a targeted patient population within an orphan indication.

We should also have data from the glemba varli study, and the checkpoint refractory melanoma patients later this year, building upon the clear single agent activity we reported at ESMO this past fall.

We have tightened the varlilumab program internally, choosing to eliminate overlapping Phase 2 efforts, and focusing our efforts primarily on the combo studies with nivo and glemba.

These studies, along with the investigator-initiated studies expected to start this year, will afford us multiple opportunities to address additional combinations, and answer key questions about varli.

CDX-0158 and 3379 programs we brought in-house from Kolltan will also be important this year, with an 0158 completing monotherapy, dose escalation in refractory GIST, and 3379 entering Phase 2 studies.

We also plan to complete the dose escalation portion of the Phase 1 study of CDX-014 in advanced renal cell carcinoma by year-end.

Core to our strategy, has always been a commitment to working with external parties to collaboratively advance our drug candidates.

This work will continue, as outlined on slide 4, with glemba studies in uveal melanoma, squamous cell carcinomas, led by the NCI and PrECOG, respectively.

NCI and CITN studies have informed us that they would like to continue to explore the combination studies of 1401 and 301 by enrolling additional cohorts to investigate alternative regimens of 301.

In addition to the studies listed below, we also have an investigator-initiated research program with seven studies ongoing with our investigational agents, and additional studies currently under consideration.

As meaningful data report out on these programs, we will certainly share that information with you.

We continue to drive the science to develop unique drug candidate opportunities.

From our preclinical perspective as outlined on slide 5, the focus will be on CDX-1140, the early stage TAM program we've brought in with the Kolltan acquisition, and our bispecific antibody programs.

Of these, 1140, our full human antibody targeted to CD40, is the most advanced, with an IND planned for later on this year.

We reported data at both SITC and ASH in late 2016, that suggests that 1140 has potent agonist activity, coupled with a safety profile that allow systemic dosing at levels that provide good tissue and tumor penetration in preclinical models.

The TAM program comprised of the targets Tyro3, AXL and MerTK is an emerging field with broad interest in oncology, inflammation, and infectious disease.

Kolltan researchers, together with their academic collaborators, made great progress in developing antibodies and assays to select drug candidates for the development that will add to our future pipeline.

Finally, we are developing a bispecific program that combines different immune targeting antibodies, and we will talk more specifically about these programs later this year.

At the close of the call, I will outline the milestones for our clinical programs, but now will ask Tom to review these programs in more depth, starting with glemba.

Tom?

Thanks, Anthony.

So as a recap, on slide 6, glembatumumab vedotin is an antibody drug conjugate that targets and binds to gpNMB, a specific protein that is expressed in a range of cancers.

In breast cancer, gpNMB has been shown to promote the migration, invasion, and metastasis of the disease.

It is also highly expressed in triple negative breast cancers, where it is associated with increased risk of recurrence.

As an ADC, glemba is designed to release the potent cytotoxin MMAE upon internalization into gpNMB-expressing tumor cells.

The METRIC study as outlined on slide 7, is a 300 patient Phase 2 study in patients with metastatic triple negative breast cancer that over expresses gpNMB.

In this indication, over-expression is defined as greater than or equal to 25% of tumor cells testing positive, as determined by immunohistochemistry.

The primary endpoint of the study is progression free survival or PFS.

Patients are randomized two to one, to either glemba or to Xeloda, also known by the generic name capecitabine as a comparator.

Xeloda, while routinely used in this patient population given the lack of options, has a limited impact, with the PFS ranging from 1.7 to 2.5 months in the published literature.

On slide 8, we present results from our previous Phase 2 study, EMERGE.

In the subset of patients with triple negative disease and high gpNMB expression, a PFS of 3.5 months for glemba compared to 1.5 months for investigator's choice was observed.

It is important to note that the patients in EMERGE were much more heavily pre-treated than the patients in METRIC and as such, we would anticipate a greater PFS in the METRIC study, assuming glemba performs consistently.

While success of the study will be driven by the primary endpoint of progression free survival, the sum of the data including the secondary endpoints of response rate, overall survival, duration of response, and safety will be important in assessing whether the results suggest a clinically meaningful benefit.

As Anthony alluded to, we've seen a consistent improvement in the rate of enrollment in METRIC over the last six months.

Now on slide 9, we implemented a number of initiatives to increase awareness of Glemba and the METRIC study, including broad-based physician outreach initiatives, and expansion into Europe.

Those efforts have had a meaningful impact, and assuming the current rate of enrollment continues, we believe enrollment will be completed by the end of September 2017.

The study is event-driven with the event being PFS, which is defined as the time from randomization to the earlier of disease progression or death due to any cause.

The study calls for 203 events for evaluation of the primary endpoint.

As we get closer to that number, we will be able to predict the timing for data with greater accuracy.

But it's fair to assume that we would have top line results from the study, roughly six to eight months after completing enrollment.

By that time, we should also have a pretty good handle on glemba's potential activity in metastatic melanoma.

Glemba performed well in the single agent setting here, with an 11% response rate, a 52% disease control rate, and a median duration response of six months in patients with primarily Stage IV metastatic melanoma, who had failed both checkpoint inhibitor therapy, and if appropriate, a BRAF/MEK targeted therapy.

Preclinical data reported from Seattle Genetics suggested the anti-tumor activity of MMAE may be enhanced, when combined with immune activators or checkpoint inhibitors.

Microtubule-depolymerizing cytotoxic agents such MMAE have been shown to convert tumor-resident tolerogenic dendritic cells into active antigen-presenting cells.

This presents a great opportunity for us to build on the positive monotherapy results.

As such, we have added two new cohorts to the melanoma study, our glemba plus varli arm, which is nearing completion of enrollment, and should have data this fall, and a glemba plus checkpoint inhibitor arm, including either Opdivo or Keytruda.

Both arms continue to be conducted in patients who have failed prior checkpoint therapy.

There's been a lot of investigator enthusiasm for this study, given the lack of treatment options for patients who progress after checkpoint therapy.

Given this, we're hopeful we will complete enrollment to the glemba checkpoint arm by year-end 2017, that we'll have a more accurate prediction, once we have some initial accrual experience.

As Anthony mentioned, Celldex has a long-standing history of working with academic and government collaborators to answer key questions within our programs.

This provides nice third-party perspective, and allows us to develop a better understanding of our programs, beyond the data from our internally sponsored efforts.

We have a collaborative relationship with PrECOG, a research network established by the NCI funded Eastern Cooperative Oncology Group or ECOG, as many of you may know them.

They're conducting an open label Phase 1/2 study in patients with unresectable Stage IIb or IV gpNMB-expressing advanced or metastatic squamous cell carcinoma of the lung, who have progressed on prior platinum-based chemotherapy.

The initial phase of this study opened to enrollment in April, 2016 and is ongoing.

We have also entered into a CRADA with the National Cancer Institute, under which NCI is sponsoring two studies of glembatumumab vedotin, one in uveal melanoma and one in osteosarcoma.

The uveal melanoma study is a single arm open label study in patients with locally recurrent or metastatic uveal melanoma, and is currently opened to enrollment.

Initial data from the study will be presented at the International Society of Ocular Oncology Conference later this month.

The osteosarcoma study is a single arm open label evaluation of adolescent and adult patients with recurrent or refractory osteosarcoma.

This study had a two-stage design with a pre-specified activity threshold necessary in the first stage, to progress enrollment to the second stage.

While there is some activity in this indication, the study did not meet the relatively high threshold required to progress to stage II, and therefore, a decision has been made not to enroll additional patients.

We expect the data from this study will be presented by the investigators from the NCI at a future medical meeting.

Next in the pipeline is varlilumab on slide 10.

Varli is a fully human monoclonal antibody that binds to and activates CD27, a critical co-stimulatory molecule in the immune activation cascade.

Varli is thought to work primarily by stimulating T-cells, an important component of a person's immune system to attack cancer cells.

Restricted expression and regulation of CD27 enables varlilumab specifically to activate T-cells, resulting in an enhanced immune response, with a potential for a very favorable safety profile.

As outlined on slide 11, varli was initially studied as a single agent to establish a safety profile, and assess immunologic and clinical activity in patients with cancer, but we believe the greatest opportunity for varlilumab, and likely most, if not all of the immune activators, is in combination with other agents.

We conducted a broad Phase 1 combination program for varli, across multiple indications to look at safety and dosing.

We feel very comfortable with varli's safety profile in combination with a range of other drugs.

Varli has generated very little toxicity, despite showing clear immunologic activation and clinical activity.

We've decided to focus our Phase 2 efforts on the glemba varli study in melanoma and on our collaborative Phase 2 study of varli and Opdivo which is covered on slide 12.

The varli Opdivo study is enrolling patients across five indications, 18 patients with colorectal cancer, 54 with ovarian cancer, 54 with head and neck squamous cell carcinoma, 25 with renal carcinoma, and 20 with glioblastoma.

This study includes multiple dosing schedules in the ovarian and head and neck cohorts.

We believe we will complete enrollment across all cohorts in the Phase 2 portion of the trial in the first quarter of 2018, and we'll work with BMS to present data at a future medical meeting.

That said, data, including clinical activity from the Phase 1 portion of the trial will be presented mid-year.

Given the advancement of varli into a multi-tumor Phase 2 study with BMS, including in renal cell carcinoma, and efforts to identify areas of cost containment, we've decided not to advance the varlilumab Tecentriq, and the varlilumab Sutent combination studies in renal cell carcinoma to Phase 2. Both of these studies completed Phase 1 enrollment, and we plan to present data at a future medical meeting.

Beyond the varli combinations with Opdivo, across a variety of tumors, and with glemba and melanoma, varli has significant interest in the field, and we are collaborating with investigators regarding investigator-sponsored studies that will likely initiate later this year.

CDX-0158 on slide 13, was a driving factor in our interest in Kolltan 0158 is a humanized monoclonal antibody designed to inhibit KIT activation in tumor cells and mast cells.

KIT is expressed in many tumor types, including in gastrointestinal stromal tumors or GIST, sarcomas, small cell lung cancer, melanoma, AML, and mast cell leukemia.

It is also expressed on mast cells, and has been implicated in asthma and neurofibromatosis.

We are focusing on initially developing CDX-0158 for the treatment of GIST.

Targeting KIT in GIST isn't new.

Three drugs currently approved to treat GIST, Gleevec, Sutent and Stivarga are all small molecules that inhibit KIT, but innate and acquired resistance develops, due to drug-resistant KIT mutations.

In fact, the single greatest predictor of lack of response to the drugs currently approved for GIST is the presence of additional KIT-resistant mutations, which have been found to occur in the majority of patients over time.

There is a high unmet medical need for new effective therapies that inhibit signaling, despite these mutations, and 0158 appears to be in that category.

0158 could be an important drug for these patients.

CDX-0158 is designed to uniquely prevent KIT activation by inhibiting both receptive dimerization and ligand binding.

We believe this mechanism could be effective, even in tumors harboring the most common resistant mutations to Gleevec, Sutent and Stivarga.

CDX-0158 has demonstrated preclinical activity versus the most common KIT mutations in human GIST, including treatments of mastocytoma in a canine model which has been validated by other KIT inhibitors.

A Phase 1 dose escalation study in patients with advanced refractory GIST and other KIT positive tumors opened to enrollment in December of 2015, to determine the maximum tolerated dose, recommended dose for further study, and characterize the safety profile.

Enrollment is ongoing.

Upon completion of Phase 1, and assuming a successful outcome, we plan to develop CDX-0158 in patients with refractory GIST, given the significant unmet need for these patients.

There are also combination opportunities for CDX-0158 in the in immunoncology in the future.

Preclinical data were presented at [ACI] last year, demonstrating synergy when 0158 is combined with checkpoint inhibitors.

Now on slide 14.

The second clinical asset we acquired from Kolltan is CDX-3379, a monoclonal antibody designed to block the activity of ErbB3, also known as HER3.

It is a receptor tyrosine kinase that belongs to the epidermal growth factor receptor or EGFR family.

ErbB3 is believed to be an important receptor regulating cancer cell growth and survival, and is expressed in many cancers including head and neck, thyroid, breast, lung, and gastric cancers, as well as melanoma.

3379 has a mechanism of action that sets it apart from other drugs in development in this class, and again, may play an important role in overcoming resistance to therapy.

3379 locks the receptor in an inactive state, which prevents both ligand-independent and ligand-dependent ErbB3 signaling.

Additionally, it has an engineered Fc region designed to prolong its half-life, resulting in a very favorable pharmacologic profile compared to published data for other anti ErbB3 monoclonal antibodies.

There are other anti-ErbB3 candidates in development, but we believe that 3379's unique dual mechanism of action, high affinity, and prolonged half-life gives it the potential to be best-in-class.

3379 also has the potential to enhance anti-tumor activity, and/or overcome resistance in combination with other targeted and cytotoxic therapies to directly kill tumor cells.

Tumor cell death, and the ensuing release of new tumor antigens has the potential to serve as a focus for combination therapy with immuno oncology approaches, even in refractory patients.

On slide 15, a Phase 1a/1b study was conducted by Kolltan, including a single agent dose escalation portion, and combination expansion cohorts.

Data from the expansion cohorts were presented at ASCO last year.

The single agent dose escalation portion of the study did not identify an MTD, and there were no dose limiting toxicities.

The most common adverse events included rash and diarrhea, and were predominantly grade one or two.

Four combination arms across multiple tumor types evaluated 3379 with several drugs that target EGFR, HER2, or BRAF.

They include combinations with Erbitux, Tarceva, Herceptin, and Zelboraf.

Patients had advanced disease, and were generally heavily pre-treated and refractory to the combination agent.

Across the combination arms, the most frequent adverse events were diarrhea, nausea, rash, and fatigue.

In the Erbitux arm, there was one complete response in a patient with head and neck cancer.

This patient had been previously treated with Erbitux, and was clearly refractory.

In the Zelboraf arm, there were two partial responses in patients who had lung cancer, one of whom had been previously treated with Taflinar, and was considered refractory.

Additional patients across both arms also experienced stable disease.

Although early, we find that the combination data in refractory patients promising.

The meaningful clinical activity, especially responses are very rarely seen in this patient population.

As such, we are currently exploring plans for advancement into Phase 2.

CDX-014 or 14 is next on the pipeline, and is covered on slide 16.

This is a human monoclonal ADC that targets T-cell immunoglobulin and Mucin domain 1, or TIM-1.

TIM-1 expression is up regulated on several cancers, most notably renal cell and ovarian carcinomas, and is associated with more malignant phenotype of renal cell carcinoma and tumor progression.

TIM-1 has a restricted expression in healthy tissues, making it amenable to an ADC approach.

The TIM-1 antibody is linked to MMAE using Seattle Genetic's proprietary technology.

The ADC is designed to be stable in the bloodstream, that release MMAE upon internalization into TIM-1 expressing tumor cells, resulting in a targeted cell killing effect.

CDX-14 has shown anti tumor activity in preclinical models of ovarian and renal cancer.

In July 2016, we announced that enrollment had opened in Phase 1/2 study of CDX-14 in patients with clear cell or papillary renal carcinoma.

The Phase 1 dose escalation portion of the study is evaluating cohorts of patients receiving increasing doses of CDX-14 to determine the maximum tolerated dose, and a recommended dose for further study.

We anticipate the Phase 1 dose escalation portion of the study will complete enrollment by year-end 2017, rounding out a busy year for us.

With that, I'll turn the call over to Chip, for a review of the financials.

Chip, are you there?

I think we've lost Chip's line related to weather.

So I'm going to go --

I'm sorry, I'm here.

Sorry, Sarah.

Great.

Thank you, Tom.

I am now on slide 17.

For the fourth-quarter of 2016 net loss was $32.3 million, or $0.30 per share, compared to a net loss of $32.7 million or $0.33 per share for the fourth-quarter of 2015.

Net loss for the 12 months ending December 31, 2016 was $128.5 million or $1.27 per share, compared to $127.2 million or $1.31 per share for the comparable period in 2015.

Research and development expenses were $102.7 million for the 12 months ending December 31, 2016, compared to $100.2 million for the comparable period in 2015.

Levels of Celldex's R&D investment were approximately the same between years, as we continued the progression of our pipeline of clinical programs.

General and administrative expenses were $36 million for the 12 months ending December 31, 2016, compared to $33.8 million for the comparable period in 2015.

As of December 31, 2016 we reported cash, cash equivalents, and marketable securities of $189.8 million, compared to $203.2 million as of September 30, 2016.

The decrease was primarily driven by the fourth-quarter cash used in operating activities of approximately $20.3 million, partly offset by the receipt of $4.6 million of cash received, net of transaction expenses paid related to our acquisition of Kolltan, and $3.3 million from the sale of common stock under the Cantor sales agreement.

We expect that our cash, cash equivalents, and marketable securities at December 31, 2016, combined with the anticipated proceeds from future sales of our common stock through to the Cantor agreement are sufficient to meet estimated working capital requirements, and fund planned operations through 2018.

However, this guidance assumes that we elect to pay future Kolltan contingent milestones, if any, in stock rather than cash.

As of December 31, 2016, Celldex had 120.5 million shares outstanding.

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

Thank you, Chip.

On slide 18, you'll see the milestones outlined that we were discussing on the call today.

First, with glemba.

We believe we will complete enrollment of the METRIC study by the end of September of this year.

The study is event-driven, and as we see more events emerge, we'll be able to predict the timing of the data with greater accuracy, but it's estimated to be about six to eight months from enrollment completion, so likely Q2 2018.

If successful, METRIC as a study, with potential for registration both in the US and the EU.

These filings will need to be supported by a companion diagnostic, as well as a fully validated commercial manufacturing process.

Commercial manufacturing for an ADC is considerably more involved, and in turn approximately 50% more expensive, than that for a typical antibody.

While we have made, and continue to make progress on these fronts, we have also made the decision to stage some of these more costly work in these areas, estimated to be an incremental spend of $40 million to $50 million, to begin after we have data in hand.

While this step will extend the time lines to complete our regulatory filings, we think it is most prudent use of our funds, as we seek to advance the rest of our pipeline overall.

We are also open to the possibility of bringing in a partner on board for glemba, who could help maximize the opportunity across multiple indications and geographies, and we believe our staged approach supports this.

We are in the process of refining the commercial manufacturing time lines, and negotiating with our diagnostic partner for the companion diagnostic.

We also plan to seek input from regulators.

When we have a more defined time line for the potential filing, we will certainly share this.

The combination cohorts in melanoma could also play an important role for glemba.

If we see promising data from these cohorts before METRIC reads out, we may consider the timing of these investments.

These data would also be of great interest to potential partners.

We expect data from the varli glemba arm in the check refractory melanoma by the fall of this year, and are working to complete enrollment of the glemba checkpoint arm in melanoma by the end of 2017.

For varli, we expect to present clinical data from the Phase 1 study of varli and Opdivo in the May/June time frame of this year.

And are focused on completing enrollment across all cohorts of the Phase 2 varli nivo study by the first quarter of 2018, at which point, we will work with BMS to report our study results at the appropriate time.

We will also continue to focus on completing the Phase 1 dose escalation study of CDX-0158 in refractory GIST, and plan to report data from this study by year-end 2017.

We plan to initiate our Phase 2 study of CDX-3379 over the course of the year, and intend to complete enrollment of the Phase 1 dose escalation study of CDX-014 in renal cell carcinoma by the end of 2017.

So as you can see, we expect a number of data points over the balance of the year.

And with the number of trials completing enrollment over the next nine to twelve months, 2018 should be a year of data that it will be data-rich.

Finally, we have a change in our leadership team this coming summer.

Chip Catlin, our CFO has announced his intention to retire at the end of June, after serving first at AVANT, and then at Celldex for almost 18 years.

Sam Martin, our current Vice President of Finance will be promoted to the CFO role, concurrent with Chip's departure.

Chip and Sam have worked closely together over the last eight years, and we expect this transition to be seamless.

And we certainly wish Chip all the best in his retirement.

He's been a great colleague, and will certainly be missed.

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

Yes, sir.

(Operator Instructions)

Our first question will come from the line of [Jason Witt], with Aegis Capital.

Hi, thanks for taking the questions.

When you release the Glemba melanoma data, there was an indication that a rash was an indication of activity.

Have you looked at that any further?

You have any further indication, of whether that may be something to look at more closely?

This is Tom.

Definitely, we have.

We found it to be a very intriguing finding, and it certainly does hold up, with a closer review of the data.

The key question becomes, is that a path forward?

And we're currently working through that process, and we'll be able to give greater clarity with further feedback.

And I assume that's something that you'll look at, when there's further data released in the fall of this year, correct?

That's a fair assumption.

We just need to understand the potential for using that to [enrich] patients, which is little more complicated than a standard diagnostic, but may well be doable.

Okay.

Also I saw -- I know that Kolltan had an orphan drug indication.

I suppose, just in terms of rationalizing all your programs, you just felt that wasn't something necessarily worth pursuing at this point?

Is that the right assumption, or do you have any thoughts on that program itself?

What programs, are you alluding to?

I thought -- (multiple speakers)

Is that the NF1 program?

Yes.

Yes, so the NF1 program, we're talking to potential investigators about what a trial would look like there, but that does not figure into the plans this year.

More likely an 2018.

Okay, fair enough.

And then, last question.

In terms of milestone payments, or either through stock or cash, could you just walk us through the potential milestone payments that could happen in 2017 and 2018?

And I guess, what the amounts would be, if it were cash versus stock?

Yes, we don't see anything in 2017 per se, because the programs are early, and they would be in the $10 million range.

It would more likely be a 2018 event, and that would trigger those amounts.

Okay, great.

Thank you.

I'll jump back in Q.

Thank you.

Thank you.

Our next question will come from the line of Tony Butler with Guggenheim Securities, please proceed.

Yes, Tom, two questions.

One is, there's another antibody that's moving forward in triple breast, that the antibody actually binds to Trop-2.

And I don't know this, but maybe you do.

Are there more -- or would you say that there -- that is actually over-produced or over-expressed at a higher level, than what you see with Glemba at, in cells that are greater than 25%, again in triple negative?

And let me just go ahead, and get the second question, because you could address it as well.

In the melanoma study, again with Glemba, remind us how many patients actually developed a response, and were those response CRs that led to that durability?

And then the third question, I will just reserve for Anthony, and I'll wait.

(Laughter) I feel special.

So first, Trop-2, it's certainly an interesting program that has presented intriguing data.

To my knowledge, they've not been using a diagnostic to select for patients in targeting Trop-2.

And I have to admit, we're not very confident with Trop-2 expression rates, but they are more common as reported, than you see with gpNMB.

That said, we do feel that makes it a different patient population.

There is, of course an overlap, but those patients who are gpNMB positive are certainly able to consider Glemba as a therapy, should it be approved.

And we think it is perfectly reasonable to expect that patients will have their antigen expression molecularly defined during their disease course, not just [hormone] receptor, not just HER2, but also gpNMB, and potentially Trop-2, if that ends up being a selector factor at the end of the day and that the agents will all be used as part of the [omnimterrium].

So we're excited to see any agents that might be effective in triple negative breast cancer, but we really don't see the Trop-2 target agent as a direct competitor.

Within melanoma, the responses that we have reported were all partial responses.

I will remind you, that partial responses actually represent about a 66% decrease in tumor volume.

So that is a significant shrinkage, but we are hoping to be able to present updated data, it was relatively preliminary when we first presented it, and you look forward to hearing greater detail on that later this year.

And they were all confirmed?

Yes, they were all confirmed responses.

Yes, Anthony, it's appropriate to emphasize that fact, none of those were unconfirmed.

That's great.

Thank you very much.

And Anthony, more strategic.

I apologize for [putting] you second.

I was not trying to be disrespectful But in furthering the -- (multiple speakers -- laughter) I assume you have thick skin.

You made a comment about possibly partnering Glemba.

And I'm just curious, would you do that only for triple negative, would it include metastatic melanoma?

Would you do that, only on a geographic basis?

If you could provide any additional thought or color, it would be helpful.

Yes, we would probably like to do it on a geographic basis, and do it for all indications.

Certainly, we would like to have at least a co-development with the drugs, as we've developed this as long as we have.

So we would definitely want to have more skin in the game.

We're not going to -- willing to toss it over to wall for a royalties.

But certainly outside the United States, we would consider a partner.

Thanks very much.

All right.

Thank you, Tony.

Thank you.

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

Please proceed.

Thank you very much for taking the question.

First, just on the decision to, at this point hold off on the development of the commercial manufacturing process for Glemba, can you just speak to a little bit about, how far through that process you were?

And whether or not -- what the total additional cost would be to continue with that?

So Mara, I'll let Tibor take this question.

But we're not holding off on the costs, we're just deferring some of the more expensive parts til later on.

Okay.

The development continues.

It's just that we're -- the heavier pieces that are in the $30 million range, we're going to defer them a little bit longer.

But Tibor, if you don't mind answering?

Sure.

So just a little bit more detail.

I mean, we have, and continue to really put a lot of effort into the manufacturing.

We've successfully scaled up to the commercial scale.

And we continue to do, we are performing several manufacturing runs, to put us in the position where the process is completely set up for the validation work, which is really the expensive part for these.

And I would remind you, with a antibody drug conjugate that includes the antibody intermediate, the drug substance which is the conjugate, and then the drug product.

So we feel we are positioning the manufacturing into a very good situation, for pulling the trigger on those activities.

But as Anthony says, that runs in the $25 million to $30 million range, and something where, simply initiating those activities, once we have a clearer picture.

Okay.

But could that, just not to belabor this, but could that clear picture come from let's say, the combination melanoma studies, as opposed to the outcome of the METRIC study?

Sure.

Yes, as we mentioned before, that certainly could change our perspective.

Okay.

And if I could just ask, on the Phase 2 trial for CDX-3379, do you have a clear picture of a comparator arm for that trial?

If there will be one?

Yes, as Anthony mentioned, we are still doing a detailed analysis of the most appropriate trial, but we're particularly interested in the head and neck, in combination with Rituximab, based on the data that we have generated.

Whether that will be a randomized controlled study or single arm depends a lot on that more detailed analysis, and what we can dedicate to completing the trial.

I think it's fair to say, the second half of this year, we'll be able to give you a clear picture of exactly what that study will look like.

Okay, thank you.

Thank you, Mara.

Thank you.

Our next question will come from the line of Biren Amin with Jefferies, please proceed.

Yes, hi, guys, thanks for taking my questions.

Maybe I'll just start off with Glemba.

Given the enrollments about the finish in a few months, what's the split then, between US and Europe, in terms of patient enrollment?

And do you expect the patients in Europe to behave any differently for METRIC?

Thanks.

A complicated question, simply because we're in the midst of accruing at this point, with the accrual in Europe escalating, as we're speaking.

So I can't give you a final number.

Obviously, there will be more patients in the US, and a rough estimate there, which is going to be unreliable, would be probably be 60% to 70% US at most.

Okay.

And then, how many of the 300 patients would have received prior taxane versus -- that's [prior taxane] and anti cyclin versus anti cyclin alone in the trial?

So again, that's somewhat dependent on Europe.

Anti cyclin is used in the US, but probably somewhat less popular than in Europe.

And that's probably for economic reasons, so at the end of the day, we won't know.

But I can't tell you if the majority of the patients will have received anti cyclin in some way, shape or form.

And of course, prior taxane is a requirement on trials, so all patients will have progressed after receiving a taxane.

Got it.

And then, Tom, you've mentioned that uveal melanoma data is going to be available at the Ocular Oncology Conference later this month.

What can we expect from that data?

Well, I can't give you insight into the data, but I can give you a sense of what would be impressive.

Unfortunately, for patients with uveal melanoma, they do not respond to any of the currently approved and recognized agents for melanoma in general, including the checkpoint inhibitors.

So I think you'll find any practicing doctor who treats melanoma patients would be quite impressed to see any responses in patients with uveal melanoma.

Now the study is being sponsored by NCI, and run through MD Anderson, and they will be presenting the data at that time.

But is a modestly sized Phase 2 study, where any sign of activity would be of considered of interest.

Got it.

And then, maybe a question for Anthony.

I think you had mentioned, potential and strategic initiatives around Glemba.

What's your thought process on strategic issues around Varli, given the data sets developing, when would you, I guess, exercise an option to potentially partner that program?

Thanks.

So we would like to definitely wait for the Phase 2 data coming out of the BMS collaboration.

But we'll also get a hint about Varli in combination with Glemba in the melanoma study.

So we may get a look at that, towards the end of the year.

And at that point, we'll look to see what we want to do there.

Awesome.

Thank you.

Thank you, Biren.

Thank you.

Our next question will come from the line of Swayampakula Ramakanth with H.C. Wainwright, please proceed.

Hi, RK

Pardon me, sir.

Please check your mute button.

Mr. Ramakanth -- ?

Hi, guys.

Sorry, it's Sean standing in for RK.

Thank you for taking my question.

For the metastatic melanoma study, the combo with Opdivo and Keytruda, are only in patients that have failed the drug before, am I correct on that?

Or -- ?

Yes.

So in a Glemba study, patients who have previously been treated with, and progressed through the checkpoint, can enter the trial and receive Glemba, along with that same checkpoint again.

Okay.

So yes, that's what I was wondering.

So it has to be the same one that they failed previously?

I only pause -- I'm not sure that it has to be, but that's likely what's going to happen.

Okay.

All right.

And my second question is on 3379.

It was testing quite a couple of different indications, and in combinations.

Do you have a clearer idea on what's the Phase 2 you have planned for this year?

Or at least indication-wise?

We have a good sense.

If you're familiar with the HER3 targeting field, I think there's a strong body of evidence now suggesting, that to those tumors that express the ligand for ErbB3, heregulin are more likely to respond.

And that's been seen with other antibody therapy, where that sub population were likely benefit.

In look at the tumor types that express heregulin at high levels, that may potentially be dependent on it, it looks as though head and neck cancer has the highest expression rates.

In fact, so high, that you would probably not need a diagnostic for that purpose.

So we find that particularly intriguing, as the area with an unmet medical need, with an opportunity for new drugs, and with a clear dependence on the HER3 pathway, in such a way that the combination, I think would be most practical moving forward.

That said, we've not finalized the drug.

There certainly are aspects that need to be addressed, and we'll be able to give you a clearest picture in the second half of this year.

Okay, thank you.

That's all I have.

Thank you.

Our next question will come from Steve Brozak with WBB.

Please proceed.

Hey, good afternoon, gents.

I've got one simple question.

Given the fact, that you've got so many different investigators, collaborators, can you give us anything that you're seeing, or how the process has worked -- is currently working for Varli or Glemba, in terms of what you're seeing with people asking you questions, or presenting to you ideas?

Can you give us any kind of feedback on what you see there?

And what the advantages are for your franchise, given the fact that you are that well-known?

Sure, a good question.

I think most people are aware, that in the field of immuno oncology, combinations are really a key feature.

And in order to do combinations, having access to the different components of the immune system, or agents that will impact different components of the immune system, having them within your own pipeline is very important.

So as you've alluded to, we do have agents that can impact several different components of immune activation, including antigen presentation, which was driven by both vaccination, and by the number of dendritic cells.

So our CDX-1401 which targets NY-ESO, and our CDX-301, which is a growth factor in dendritic cells has received a great deal of interest.

And, of course, combining that with Varlilumab to activate the lymphocytes is important.

We've alluded to our close collaboration with the National Cancer Institute, who have access to all three of those agents, and are managing studies, performing that.

That is been a great boon to us, to have some of the brightest minds in the field, able to access those drugs, and do creative research themselves.

And further combinations with other agents in our pipeline have all worked out well, and we do have a very vibrant investigator-initiated research program, where we work directly with investigators, to answer what we consider to be key questions.

I think many companies take advantage of IIR, but we've been particularly focused on that, because of our close ties with the academic community.

That the downside, of course, is that the data are not really controlled by us, and we have to work with the investigators to make sure they're appropriately presented.

But we will continue to point out those data, when they become available.

So a quick recap.

In 2017, in addition to all the different programs you've got going, it's not unreasonable to expect that you might see something that would not be initially intuitive?

But information could come back, and obviously with a franchise like yours, it's something that should we should always think about.

Now I'll hop offline on that.

Sure.

I think that's well-stated.

Thank you, Steve.

Thank you.

There are no further questions in queue.

So now it is my pleasure to hand the conference back over to Mr. Anthony Marucci, Chief Executive Officer, for closing comments and remarks.

Sir?

Thank you, operator.

And thank you everybody for joining us today, especially with the blizzard conditions that we've seen in the New York area.

And as always, we'd always welcome your questions at any time.

So please, have a great day, and have a safe ride home.

Thank you.

Ladies and gentlemen, thank you for your participation on today's conference.

This does conclude the program, and you may all disconnect.

Everybody, have a wonderful day.