Dynavax Technologies Corp (DVAX) 2018 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Dynavax Technologies Third Quarter 2018 Conference Call.

(Operator Instructions) As a reminder, this conference call may be recorded.

I would now like to introduce your host for today's conference, Mr. Ryan Spencer, Vice President of Corporate Strategy and Communications.

Sir, you may begin.

Thank you, operator.

Good afternoon.

Welcome to the Dynavax Third Quarter 2018 Financial Results and Corporate Update Conference Call.

With me today are Eddie Gray, our Chief Executive Officer; Rob Janssen, our Chief Medical Officer; and Michael Ostrach, our CFO.

Before we begin, I advise you we will be making forward-looking statements today, including statements regarding clinical and financial information, expectations and anticipated key events.

These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially.

These risks are summarized in today's press release and are detailed in the risk factors section of our current 10-Q and 10-K periodic reports filed with the SEC, which we encourage you all to review.

I now turn the call over to Eddie Gray, the Chief Executive Officer of Dynavax.

Thank you, Ryan, and thank you all for joining us for this conference call.

Since our last quarterly call, Dynavax has achieved several key business objectives in both the HEPLISAV-B commercial program and the SD-101 clinical program.

Our conviction that HEPLISAV-B will become the standard of care for adults has only strengthened as the year progresses.

SD-101 consistently continues to generate encouraging clinical data, with 3 presentations at the recent ESMO conference once more indicating SD-101 in combination with anti-PD-1 therapy provides significant benefit to patients beyond what can currently be achieved with anti-PD-1 alone.

Today, we reported HEPLISAV-B net sales of $1.5 million for the third quarter.

This modest increase from quarter 2 does reflect some effects of summertime, with a slowdown in both P&T reviews and operations at our institutional customers, especially during the month of July.

However, this summer effect is behind us.

Within the quarter 3 number, September was the best sales month since launch.

In addition, although as yet unaudited, we can now see that October continues this trend strongly.

Not only has it surpassed September, but shipments in October are comfortably in excess of the total shipments for quarter 3. September and October combined are 55% of the total shipments since launch.

October was a particularly strong month for orders from new customers, and as we look forward to the ordering patterns in November and early December, we feel confident in saying that we are now experiencing the start of an inflection in HEPLISAV-B sales that we have consistently predicted for year-end.

In addition, looking further forward, we remain firm in our expectation for HEPLISAV-B to be cash-generative by the end of 2019.

Now I realize that a number of investors are unsure how to think about sales and sales growth of HEPLISAV-B in the absence of traditional NRx/TRx data from which to project.

Given that, why can we be confident that the start of our inflection is here?

Well, it's true that we do not capture our share in a smooth NRx/TRx manner.

We capture market share customer by customer.

And therefore, market share growth is often lumpy in individual months, as a new customer joins the HEPLISAV ranks and takes an initial stocking order, sometimes quite large.

And this, then, at a later point, stimulates an increased level of channel stocking to keep pace with improved anticipated demand.

But with 8 full months in the field now, we've accumulated experience and information to begin recognizing patterns in the sales and ordering cycles for typical large customers.

So we see it takes a number of months to schedule and hold a P&T committee meeting, and then, when the institution adds HEPLISAV-B to their formulary, at least 8 more weeks to operationalize that decision and make an initial purchase.

We have discussed this in detail on previous calls.

This first purchase normally represents a small initial order while current stock is utilized and provider education and awareness is established within the customer.

After the initial ordering period, we often then see a stocking order, which represents about 4 to 8 weeks of historical usage, and then beyond that we see repeat orders start to settle into a regular pattern.

So in addition to the healthy increase in the number of units ordered recently by new customers, many of our now over 1,000 customers have begun to reorder.

Importantly, we are seeing customer switches to HEPLISAV-B across the spectrum of customer types, including the largest customers.

HEPLISAV-B has now been approved for use in 6 of the top 10 integrated delivery networks.

Our largest national occupational health customer has begun the process of introducing HEPLISAV-B to its sites of care.

Multiple military bases have switched to HEPLISAV-B, including for new recruits.

And we have secured our first retail pharmacy partner and are in contract discussions with several other national chains.

In addition to what we are now seeing in sales patterns, the progress of new potential customers for the future also continues well.

During our quarter 2 call, we reported 219 of our largest targeted accounts had progressed beyond the P&T review, 91 had ordered HEPLISAV-B and 24 had fully implemented HEPLISAV-B through their system.

As of last week, we had 402 accounts beyond P&T, 200 had ordered HEPLISAV-B and 68 customers have fully implemented our product in their system.

By the end of quarter 2, we had 198 P&T or vaccine subcommittee meetings scheduled and the quarter 3 number is now 291, all of which augurs well for increased sales opportunities going forward.

With that greater insight and understanding, we can see that quarter 4 will deliver the first sign of change in the sales path.

As I said, September was a record month, and October has outperformed quarter 3. In November and early December, established customers and some of the September/October new customers will reorder.

Whilst not perhaps matching October, we can also see further large new customers adding to our roster in this period.

Thanksgiving week and the whole second half of December will likely be pretty quiet.

Perhaps they should, but sadly, nobody asks Father Christmas to bring them a prophylactic hepatitis B vaccine.

What all that adds up to is continued market share gain customer by customer; continued progress, albeit lumpy, on a month-by-month basis, but we are confident quarter 4 will represent the first evidence of inflection in sales as promised, and our expectations to be cash-generative in 2019 remain unchanged.

On the operational side, our manufacturing group achieved several critical objectives this past quarter.

You may recall that when the FDA approval decision was delayed, we suspended operations of our Dusseldorf antigen production facility.

Following approval, manufacturing operations have been successfully re-established, several batches have recently been completed and the Dusseldorf facility is now fully back on-stream.

This is important timing because as those of you who attended the October ACIP meeting will know, the CDC disclosed that Merck will remain unable to supply its adult hepatitis B vaccine through the end of 2019.

Our confidence in HEPLISAV-B and its commercial inflection has led us to take some important strategic decisions for the program.

As the market for this product is driven by institutional sales, varying customer types and complex purchasing processes, having sector knowledge and relationships are critical to success.

These relationships established by our field team are what have enabled us to reach this point of inflection and are critical to ensure that we maintain the momentum we are beginning to experience.

As such, we will directly hire our field team as Dynavax employees and move away from the contract sales organization model, a process we expect to be completed by spring.

This is a move we have always anticipated but deferred out of prudence until we had first addressed the operational challenge of launching HEPLISAV-B before taking on the task of supporting a national field team.

We expect this transition to be cost-neutral and will implement the decision once we have put in place the necessary support services and systems.

At the same time, we plan to take down the $75 million tranche remaining under our term loan agreement.

Along with our existing cash, this would extend our runway beyond the point where we expect HEPLISAV-B to become cash-generative and facilitate expansion of the immuno-oncology clinical programs.

So turning now to oncology, here also we have results giving us considerable confidence.

At the ESMO conference 2 weeks ago, our clinical collaborators presented 3 sets of interim clinical results from trials of SD-101 in combination with KEYTRUDA.

These encouraging and consistent results continue to confirm SD-101's potential to improve outcomes for patients beyond what can be achieved with anti-PD-L1 therapy alone.

Most importantly, in a late-breaker poster discussion, we again reported 70% overall response rate for the 2-milligram dose of SD-101 in patients with advanced melanoma naive to anti-PD-1 therapy.

The patient population had increased by more than 50% from 30 to 47, and yet the ORR remained identical to the ORR we reported in June at ASCO.

This ORR has been consistent throughout the study, and in addition to consistent ORR in the 2-milligram group, as we increased the size of the study, so we saw the ORR in the 8-milligram group improve to 48% since ASCO, up from 38%.

Consistent with our mechanism of action, we see additional responses occur over time, with some patients having responses as late as 6 to 9 months after initiation of combination therapy.

Indeed, this phenomenon has continued, and we now have 3 patients who have progressed from partial response to complete response since our ESMO report, 1 in the 2-milligram group and 2 in the 8-milligram group.

In nearly every comparison, responses were better in the 2-milligram group.

No particular subgroup drove the difference in efficacy between the 2 groups.

In addition to the ORR data, progression-free survival, responses in PD-1-negative patients and the biomarker activity analyses all supported the clear clinical impact of SD-101's activity in this population.

There are ongoing responses now more than 2 years out in the 2-milligram group with more than 70% of patients having ongoing responses or stable disease who are still on the study.

The 6-month PFS in the 2-milligram group is 85% and the median has not yet been reached.

In the 2-milligram group, responses appeared to be independent of baseline PD-L1 expression.

Tumor shrinkage occurred in both injected target lesions and noninjected target lesions, and over 67% of noninjected lesions decreased by greater than 30%.

In the 2-milligram group, approximately 60% of patients had multiple lesions injected, with an ORR of approximately 60%.

The ORR in the patients who had a single lesion injected was approximately 80%.

Based on these data, injections into multiple lesions do not result in a higher ORR than injections into a single lesion.

Additionally, the number of injected lesions did not affect PFS.

Gene expression biomarker data comparing pre- and post-treatment biopsies support the validity of the clinical responses we have seen in the study.

For each of the immune cell groups sampled, we saw a higher gene activity and fold changes from baseline in patients who received 2 milligram than in those who received 8 milligram, in correlation with the better clinical responses in the 2-milligram group.

In our second presentation at ESMO, we reported a 21.4% ORR in 29 melanoma patients refractory or resistant to anti-PD-1 therapy who received the 8-milligram dose, once again supporting the view, SD-101 is providing benefit beyond what could reasonably be expected from KEYTRUDA alone.

These were heavily pretreated patients with predominant metastatic disease involving liver, lung and adrenal glands.

We saw tumor shrinkage in injected and noninjected lesions with durable tumor shrinkage and ongoing responses at 10 to 12 months.

And our third presentation, we reported 27.3% ORR in 22 patients with head and neck squamous cell carcinoma naive to anti-PD-1 who also received the 8-milligram dose.

Our lead investigator stated at the poster discussion that a clinically meaningful ORR should be at least 26% in such a challenging patient population, or about double what can be achieved with anti-PD-1 monotherapy.

The activity we've seen in this group is encouraging because the second-line-or-later patients in this study do progress very rapidly, including several instances of progression even before we could treat them with SD-101.

This late stage of disease may not be conducive to an immunotherapy that takes time to have its best effects.

Nonetheless, because of the better efficacy data in those with melanoma who received low-dose SD-101, we're looking forward to see if the lower dose can induce even better responses in this difficult-to-treat population.

In all 3 studies, adverse events related to SD-101 treatment were transient, mild to moderate flu-like symptoms with no increase in frequency of immune-related adverse events over individual monotherapies reported in other studies, nor was there evidence of any new safety signal.

These results represent the most exciting data set for a combination with KEYTRUDA in melanoma patients naive to anti-PD-1 therapy of which we are aware, with data that remains consistent over time and across multiple tumor types.

In this patient population, our ORR, PFS and side effect profile compare favorably to outcomes achieved with single-agent anti-PD-1 and all other doublets, including the combination of ipilimumab and nivolumab.

We are pursuing multiple paths forward for SD-101.

We met this summer with the FDA, along with our clinical partner, Merck, to ensure we had a clear understanding of the study design and endpoints for approval of a Phase III study in melanoma patients naive to anti-PD-1 therapy.

We are evaluating opportunities to share cost of that trial with a partner.

In addition, we are advancing into valuable clinical applications that we are fully capable of pursuing on our own.

These are tumors where we believe there's high likelihood of responsiveness to our mode of action and a clear registrational pathway.

The first example is the I-SPY 2 trial, neoadjuvant treatments of locally advanced breast cancer, that we recently announced.

We are also testing the 2-milligram dose in patients with advanced melanoma who have tumors refractory or resistant to anti-PD-1 therapy.

If the results with the 2-milligram dose are as good or better than those we've demonstrated with 8 milligram in the recurrent resistant melanoma population, we have a clear registrational path for a study well within our means and capabilities.

In naive head and neck patients, having first decided on the dose, we plan to initiate a controlled Phase II/III study that we have designed comparing the combination to monotherapy in first-line head and neck patients.

In the course of discussions with prospective partners regarding the Phase III program, we may find partners with the capabilities and products that can enhance and broaden the SD-101 clinical program and have an interest in supporting the initiatives that we plan to take forward on our own as well.

I will now turn the call over to our CFO, Michael Ostrach, to review the quarter 3 financial results.

Thank you, Eddie.

Today I'll review our third quarter 2018 financial results and financial position.

We recorded net product revenue of $1.5 million in the third quarter and $2.9 million for the 9 months ended September 30.

Product revenue net represents the net revenue we've estimated we'll recover from sales of HEPLISAV-B after all adjustments such as discounts and returns are realized.

Initial commercial efforts have been focused on ensuring market access to enable healthcare providers to purchase HEPLISAV-B, including payer coverage and securing contracts with group purchasing organizations, physician buying groups and federal government agencies.

Sales efforts are focused on advancing HEPLISAV-B through the complex approval and procurement processes in large institutional accounts across the country, and during the third quarter, several key accounts made positive decisions to make HEPLISAV-B available in their networks.

Based on the progress we've seen in obtaining these approvals and our experience with the time required for implementation and procurement by customers, we expect quarterly sales will increase in the fourth quarter and next year as healthcare providers complete their reviews and the operational activities required to switch to a 2-dose regimen that's provided by HEPLISAV-B.

Our cost of sales product reflects costs of $3.9 million and $9.3 million for the 3- and 9-month periods ended September 30.

Included in cost of sales product are inventory reserves and certain fill, finish and overhead costs for HEPLISAV-B that we incurred after FDA approval.

Cost of sales product also includes costs at our manufacturing facility in Dusseldorf, which previously were included in research and development expense.

These charges are a result of the costs associated with resuming activities at Dusseldorf after receiving regulatory approval of the prefilled syringe presentation of HEPLISAV-B in late March 2018.

These charges we expect to cost of sales to diminish in future periods as we resume the ongoing commercial production at the Dusseldorf facility.

Excluding these costs, we expect our cost of sales to HEPLISAV-B to increase as a percentage of net sales in future periods as we produce and then sell inventory that reflects the full cost of manufacturing.

Cost of sales amortization of intangible assets of $3.8 million and $8.5 million for the 3 months and 9 months consists of amortization of intangible assets recorded for fees and milestone payments under 3 patent sublicense agreements.

At September 30, only 1 of these has not been fully amortized, an intangible asset of $14 million, which has been -- has an estimated remaining life through April 2020 patent expiration date.

R&D expenses for the quarter were $16.8 million, compared to $16.4 million in the third quarter.

The slight increase reflects increased compensation and related personnel costs related to ongoing development of SD-101, DV281 and the earlier-stage oncology programs, and as mentioned earlier, upon approval of the prefilled syringe presentation in Q1, costs associated with resuming operating activities in Dusseldorf were charged to cost of sales product, and the costs incurred to manufacture the product for commercial sale were accounted for as inventory.

SG&A for the third quarter was $15.8 million, compared to $6 million in the third quarter of last year.

This increase is due to an increase in HEPLISAV-B sales, marketing and commercial activities, including full deployment of a contract sales force, costs for the postmarketing studies and consultants for commercial development services.

During the quarter, we used approximately $36 million of cash.

We expect quarterly operating expenses to increase a bit in the fourth quarter as we expand our clinical trial activity and make improvements to the facility plan to replace and expand our current lab and office space in Berkeley.

At the end of the quarter, we had $180.2 million of cash.

In addition, as Eddie mentioned, we're planning to take down the remaining $75 million tranche of our term loan during the first or second quarter of next year.

Operator, we can now open the call for questions.

(Operator Instructions) Our first question comes from Anupam Rama with JP Morgan.

This is Matt on for Anupam.

Just a couple from us here.

So you mentioned that you've designed a Phase II/III study of SD-101 plus pembro in treatment-naive melanoma; just wondering about guidance on when details will be given for the trial design?

And then a follow-up, how has conversations with partners evolved since ESMO on this potential trial?

Thanks.

Sorry, Anupam, confirm which trial you were mentioning?

Was it the melanoma?

Yes, the treatment melanoma Phase II/III.

So -- oh, that was head and neck.

Oh, apologies.

The treatment melanoma one, then.

The treatment melanoma, okay.

Well, Rob, perhaps you can just sort of comment on your confidence that you got the information you needed from the meeting with the FDA, what we know about sort of study design and...

Yes.

The -- so the key element of the study design is that primary endpoint would be progression-free survival, and the size of the study would be about 700 patients randomized 1 to 1. So it would be SD-101 plus pembro compared with placebo plus pembro.

That sample size is based on a hazard ratio of 0.7 for PFS, but the actual size of the study really is based on overall survival, which would be a secondary endpoint.

Obviously, having good clarity about study design is helpful in many discussions about potential partnerships, but I'm not going to comment on the individual discussions at this point in time, Anupam.

Great, thank you very much, and congrats on the HEPLISAV progress.

Thank you.

Our next question comes from Brian Abrahams with RBC Capital Markets.

Appreciate all the helpful metrics on the HEPLISAV launch.

A couple of HEPLISAV questions from me: I'm sort of curious what you see as the key areas of investment going forward to really ensure center education and awareness for HEPLISAV-B, and I would really be interested in hearing about the potential advantages of an in-house sales force in achieving uptake once you're through the initial operational hurdles of this year.

And then I had a follow-up.

Yes, I think in terms of investment around awareness and the like, we have always maintained that there are really 2 key phases of HEPLISAV.

The one is the one that we're in now, which is really around conversion of the traditional markets as identified by the CDC list.

And ultimately, approximately a year or so from now, when we can be confident that if we drive new patients and particularly diabetic patients in for vaccination, that it will be HEPLISAV that's in the fridge and HEPLISAV that they receive, rather than one of the older products.

So at this point in time, those remain the 2 phases.

And the critical issue for us in that first phase, which will underpin the next few years of work, is relationships with key institutional customers.

And it's those relationships which are central to our sales force efforts and being able to ensure that we retain not just a sales force but the individuals who've grown and developed those relationships are extremely important for us going forward, and that's why we've made the decision at this time, coinciding with what we, as I say, strongly believe to be the first signs of inflection.

The last thing we need to be doing at this point in time is stuttering in the performance of HEPLISAV with bringing new customers on because we're starting to sort of lose people.

Human nature is what it is, and particularly when sales -- individuals in sales organizations are not doing the standard job but are taking on greater responsibility and who are holding much more of the value of the relationship between ourselves and the customer in their own hands.

Then increasingly, human nature says to people that they want to be part of the company itself, and if that doesn't happen, then it tends to lead to dissatisfaction and looking elsewhere.

As I said, we've always known that that pattern would emerge.

It's always been our intention to take this step.

It was really, when did we believe we could see in the market the evidence that it was right to do it, and we believe that point's arrived.

That makes a lot of sense.

And then just as a follow-up, I'm wondering if you have a clear sense yet on sort of end-user adoption at this point, maybe relative to the increasing and stocking orders that you're seeing in September and October.

Just wondering if you have a sense of the -- yet of the consistency of orders like this that you'll see going forward.

And then I guess just as a corollary to that, as you -- you mentioned the timeline -- the expectation for cash-flow positivity at the end of next year.

Just wondering if that reflects any changes at all in your spend patterns or your spend expectation for the launch as well?

Okay.

So I think what I would say, if this is a -- is the point of your question, Brian, which is a good question, is that what we have seen is what -- we have not been led in purchases by the distributors and the wholesalers.

This is a product where the distributors and wholesalers have taken a position of saying, look, we have hepatitis B vaccines in the market currently.

As you convert our customers and our customers tell us that they want to order this, then we will service the -- we will order from you, service those orders, and then we will start to build our own stock in the channel on the basis of results.

So this is not a performance which is driven by people stocking the channel; this is a performance which is being driven by institutional customers telling their wholesalers or their -- or their vaccine distributors that they are going to use this product, and here is the first order.

And on the back of that, the channel is starting to adjust and build a sensible stock level.

So whilst I don't have hard and fast numbers that says, X percent, I can tell you that X percent of what we've sold in now in patients' arms.

It's very clear that we're not making these sales to stock the channel.

The channel's being very lean about the product, and therefore we do know that this is getting through to customers and customers are putting it in patients' arms.

I think in terms of the spend pattern, Michael, you may want to comment in addition, but certainly for the HEPLISAV-B expenditure, we would expect that on a quarterly basis to remain pretty similar.

As I say, we expect the sales force decision to be, at worst, cost neutral.

The normal ebbs and flows of manufacturing capacity will probably drive any changes more than anything else.

But a consistent expectation for HEPLISAV, I think.

Michael, anything else?

Right.

I think with respect to HEPLISAV, what's been refreshing is to realize that, well, of course the sales and marketing team are continuing to make adjustments.

They're not major adjustments, meaning that we've misestimated how best to cover the market.

So we're very confident that there doesn't need to be any meaningful changes in what we're allocating to the spending for the product.

And that also actually includes manufacturing.

With respect to the rest of the company, there will be, I think, year to year, a modest increase in the immuno-oncology investment as we move DV281 into an expanded trial, beginning early next year, and we have plans to add a few more Phase II studies for HEPLISAV, for SD-101, during the year as well.

Our next question comes from Katherine Xu with William Blair.

I have a number of questions.

For relationship between the integrated delivery networks and your customers, can you clarify that a little bit?

And also, Eddie, when you mentioned -- you were talking about talking with a number of retail pharmacies right now, one of them probably close to some kind of deal.

Is that sort of targeting the diabetic patients already?

And then, can you just update us on where the postmarketing study is at this point?

And also, DV281, the next data point timing on that.

That would be great.

Thank you.

Okay.

The first question -- sorry, I was scribbling forcibly.

The first question was about IDNs.

And distributors.

And distributors.

Well, IDNs, generally speaking, employ a set number of distributors, some more than others.

It's a sort of cultural thing within each IDN.

Some have exclusive arrangements with individual customers.

We -- part of what we have spoken about in previous quarterly calls has been our need to ensure that all the electronic connections between all branches of customers, including IDNs and the different delivery options that they have, are in place.

I have to say, so far, we're feeling very pleased that that's going well, and we're not getting feedback from our customers about difficulties and when orders are put in.

Deliveries -- appears to be consistently going to where it should.

I think on the --

Retail pharmacy.

Retail pharmacy, yes.

Actually, retail pharmacy already captures a part of the traditional market, and we are primarily at this point in time talking to them about servicing customers in the traditional market.

We will be ultimately talking to them, and we have had some early conversations with some of them who are more proactive about seeking out vaccine opportunities about the desire to reach out to diabetics.

I would say that in general, they see that as a very exciting opportunity and see it as a business chance going forward.

In terms of the postmarketing study, it was -- got up and running in August, and at the moment, we know that it is recruiting on schedule.

We expected recruitment to be about an 11-month-or-so time frame, and so far, Kaiser report that that is, as they say, on schedule.

And the DV281 question was?

Just update.

Oh, update, yes.

Rob, perhaps you could just summarize where we are on this.

Right.

So the dose escalation, we're still in the middle of the dose escalation, which should wrap up late this year, early next year.

And I would anticipate we'll be reporting data at AACR or ASCO.

Our next question comes from Joseph Thome with Cowen.

Just a couple, first, on HEPLISAV: So you have about 400 patients that are through committee approval, another 300 that are having this scheduled.

I guess, what proportion of the addressable market do you think this represents?

And of those 200 that have purchased, are there some that maybe have chosen not to purchase drug?

And if you've experienced this, maybe what is their reasoning?

So the number of people who say no to HEPLISAV is remarkably low.

So -- and I think the rest of it is really the sort of split that we've always indicated exists in the market, which is that -- which is dependent, really, upon the culture of the individual customer.

Some cultures -- some customers have quite high control structures and have a tendency to make a decision in favor of a single result, in this case HEPLISAV, and convert all of their system actively to HEPLISAV.

Others have more open cultures where they make products available and then it's our role, talking to the physicians in the system, to understand why HEPLISAV is the best choice for patients and get them to make that choice.

So we see both.

I think we would say so far that we are very encouraged.

I don't have percentages I can give you, but I think we're encouraged by the number of customers who are opting to go completely to HEPLISAV, and we do see customers who perhaps initially make a decision to make both available, then start to realize that actually now they're dealing with one 2-dose vaccine and one 3-dose vaccine and they come back round then to look at it again and say, you know what?

Actually, if we're going to make this move, we should make it properly.

So we don't necessarily get the 100% move first time out, but there are customers who've gone down that route who are now showing signs of circling back round to take that final step.

So I think we're very encouraged by those things that we see, and I think I would just reconfirm that the number of people who feel that they don't have the patient population or this is the right -- not the right thing for them are quite remarkably low.

Great.

And then one follow-up on SD-101: You mentioned in your prepared remarks the Phase II/III study in first-line -- front-line head and neck cancer.

Are there any additional details you can provide around what that study would look like and timing and whatever else you think would be relevant for that?

Rob?

Yes.

We're looking at -- because we're enrolling our 2-milligram cohort right now and looking at doses in head -- at the dose level in head and neck.

It'll be some time, probably Q2 at the very earliest, I would think, for beginning that study, potentially even the second half of the year at the earliest.

Okay.

Thanks, Rob.

And I think at that point we should probably bring the call to a close, so let me just make a few final remarks, if I may.

So in the latter part of the third quarter and at the start of the fourth, we've seen the HEPLISAV-B launch begin to gain momentum.

By the end of next year, it will be a net generator of cash and will be well on its way to becoming the standard of care for adult vaccination against hepatitis B.

SD-101 is consistently generating encouraging results in multiple settings that only seem to improve over time.

Later this week, we will present a poster at the SITC meeting demonstrating consistent pharmacodynamics and immunological responses to SD-101 in 3 cancer types, including biomarker data, supporting the higher response rate we've seen with the 2-milligram group compared to the 8-milligram group.

We expect to report additional SD-101 clinical results, including, in particular, results for patients in the 2-milligram groups for head and neck and resistant refractory melanoma studies, as well as follow-up for the melanoma patients naive to anti-PD-1 at major medical meetings next year, and the first safety results, as we've heard from Rob, for DV281 early next year.

Additionally, we're planning SD-101 clinical studies in additional tumors, and as a result of the encouraging results so far in patients with head and neck cancer, a Phase II/III study in combination with anti-PD-1 in first-line treatments of patients with head and neck cancer.

During the next months, the expansion of our clinical data set will inform important strategic choices, including partnership options, expansion of tumor types in the study, and selection of the best options for progression into registrational studies.

Thank you again for joining us.

Ladies and gentlemen, thank you for participating in today's conference.

This does conclude today's program, and you may all disconnect.

Everyone have a great day.