GlycoMimetics Inc (GLYC) 2017 Q4 法說會逐字稿

Good morning, and thank you all for joining GlycoMimetics' call. (Operator Instructions) I would now like to turn the call over to Shari Annes of the Investor Relations group at GlycoMimetics. Please, go ahead.

Good morning. Today, we will cover not only GlycoMimetics' Fourth Quarter and Year-End financial results, but importantly, update you on our Phase III development plans for GMI-1271 in AML. Press releases from both yesterday and today are available in the News section of the company's website at www.glycomimetics.com.

This call is being recorded. Dial-in phone replay will be available for 24 hours after the close of the call. The webcast replay will also be available in the Investor Relations section of the company's website for 30 days.

Joining me on the call today, from GlycoMimetics, is Rachel King, Chief Executive Officer; Brian Hahn, Chief Financial Officer; and Dr. Helen Thackray, Senior VP of Development and Chief Medical Officer.

We will start today's call with high-level comments from Rachel regarding the company's strategic progress, highlighting the overall development program for GMI-1271 in AML. After that, Helen will provide more detail on the planned GlycoMimetics-sponsored Phase III trial of GMI-1271 in relapse/refractory AML. She will also discuss a recently announced trial with the HOVON Group in Europe, which has the potential of expanding the use of GMI-1271 to an entirely new patient population.

Before we move to Q&A, Rachel will provide a quick overview of our other ongoing clinical programs and related upcoming milestones. And then Brian will provide an overview of the company's financial position.

I'd like to remind you that today's call will include forward-looking statements based on current expectations. Forward-looking statements contained on this call include but are not limited to statements about the development plan for GMI-1271 and for rivipansel, GlycoMimetics' product candidate licensed to our collaborator Pfizer, and our other pipeline program, GMI-1359. Such statements represent management's judgment and intention as of today and involve assumptions, risks and uncertainties. GlycoMimetics undertakes no obligation to update or revise any forward-looking statement. Please refer to GlycoMimetics' filings with the SEC, which are available from the SEC or on the GlycoMimetics' website for information concerning the risk factors that could affect the company. I'd now like to turn the call over to Rachel.

Thank you, Shari, and thank you all for joining our call this morning. In the wake of exceptional accomplishments over the past 12 months, we begin 2018 with significant momentum across our clinical portfolio, and I look forward to sharing our plans with all of you today during this call. We'll be focusing the majority of our comments today on GMI-1271, our wholly owned drug candidate for AML. We've put in place a comprehensive development program that will in combination with our other clinical programs provide you with multiple important clinical readouts starting year-end 2018 and continuing in 2019 and 2020.

First, at the end of 2018, we anticipate top line data from the ongoing Phase III trial of rivipansel in sickle cell disease. Then in early 2019, we anticipate top line data from our proof-of-concept trial of GMI-1271 in multiple myeloma. And with the plans we're outlining for you today, in Q4 2020, we anticipate top line data from a registration trial in relapsed/refractory AML. In addition, our GMI sponsored program will be augmented by data from the HOVON AML trial in Europe, in the newly diagnosed AML population unfit for chemotherapy, which is being conducted in the same time frame.

With that high-level overview setting the stage for near-term value creation, I'd like to make some initial comments about our Phase III plan.

GMI-1271 is a unique molecule with a differentiated mechanism of action. We've shown, for example, that it selectively disrupts known pathways of drug resistance within the bone marrow microenvironment to potentially improve clinical outcomes in patients with AML.

In addition, GMI-1271 shows potential benefit in reducing one of the most serious side effects of chemotherapy, severe debilitating mucositis. Because of its novel mechanism of action, we believe GMI-1271 has the ideal product profile to potentially become a new standard treatment across the continuum of care in AML because it's a drug which could potentially be combined with intensive, non-intensive and targeted therapies.

Before turning to Helen, who'll discuss the details, I want to outline for you some of the key considerations that have gone into the design of this program and then the focus of our discussions with FDA under the breakthrough therapy designation. I want to emphasize that we are outlining today a comprehensive development plan for GMI-1271 in AML that's capital-efficient, time-efficient and that gives us the greatest likelihood of approval and best potential market positioning both in the U.S. and in Europe and in multiple AML patient populations.

The first key point I'd like to make is that we intend to use the Phase III trial in relapsed/refractory disease as the cornerstone of our registration strategy, but it is not the only trial that we intend to conduct in AML. In addition to our company-sponsored Phase III trial, thanks to the high level of interest from key opinion leaders on both side of the Atlantic, we have the unique opportunity to execute a broader, more comprehensive development plan with additional trials run and financed by clinical consortia in the U.S. and in Europe.

The first of these is the recently announced study to be run by the HOVON Group in Europe in patients with newly diagnosed AML who are unfit for intensive chemotherapy. We believe that the data to be generated by HOVON can potentially support use of GMI-1271 beyond relapsed/refractory disease in this additional patient population. This could, therefore, give us an opportunity both rapidly and cost efficiently to get to broader uses in AML, potentially increasing the size of the market opportunity for GMI-1271.

The second key point is the selection of a primary efficacy endpoint for the core registration study in relapsed and refractory AML. Following discussion with the FDA, we have selected overall survival, or OS, as the primary endpoint for the trial.

Here, it's important to highlight that the FDA has specifically agreed that the primary efficacy analysis will not be censored for transplant. Based on our own Phase II data, we expect GMI-1271 may allow more patients to receive a transplant, and therefore, this is a great outcome and major benefit of this study design. Specifically, this means that those patients who go on to transplant will be included in the primary survival analysis, and achieving transplant increases the likelihood of their surviving longer. This is a critical consideration and our preference for this endpoint versus a response rate analysis. As Helen will explain in a moment, we are confident that OS best captures the unique set of benefits both in efficacy and in safety seen in our Phase II trial and that this study can be completed in a time frame that is not much longer than what we would -- we believe would have been required to get the data based on response rates.

Finally, overall survival is the global gold standard for demonstration of clinical benefit in oncology. Unlike other surrogate endpoints, there is no debate that a statistically significant benefit in overall survival would best position GMI-1271 for regulatory approval in AML in both the U.S. and in Europe. Furthermore, if we meet the primary endpoint, we will be in a position to submit for full approval versus taking the risk that a second trial might be required, which would extend GMI-1271's clinical evaluation over several more years. Finally and importantly, I might add, showing benefit in overall survival would also provide the best possible market positioning at launch, supporting the value proposition for reimbursement for adding GMI-1271 to the standard of care.

Based on the many things we've learned from our Phase II, I'm confident that the design of this trial gives us best chance of demonstrating a statistically significant result and securing full approval for the relapsed/refractory indication with a single pivotal trial.

With this as background, I'll now turn to Dr. Helen Thackray, our Chief Medical Officer, to describe our plans in more detail. Helen?

Thank you, Rachel. I'm pleased now to describe in greater detail the Phase III trial that has been designed by our team, with input from the FDA under the breakthrough therapy designation. Based on an extensive analysis of the efficacy and safety data from our Phase II study in this same patient population, our plan is to initiate a randomized, controlled trial with overall survival as the primary endpoint.

This pivotal trial will target a total enrollment of 380 patients at approximately 30 to 40 centers in North America, Europe and Australia. This study is powered at 90% to detect a difference in OS at a hazard ratio of 0.68 or better.

I'd like to highlight some key aspects in the study design for this Phase III trial.

Patients enrolled will be those with relapsed or refractory AML. This is the same population studied in our Phase II, the robust results of which underlay our confidence about moving forward with single registration study.

As for dosing, the GMI-1271 dosing schedule remains the same as in our Phase II. That is, we will be dosing for 1 day prior to initiation of chemotherapy, twice a day through the chemotherapy and then for 2 days after.

We are also pleased that FDA has agreed to a fixed-dose regimen of GMI-1271 for the program and in this study as opposed to weight-based dosing. Moving from a weight-based dose to a fixed dose simplifies the administration of the drug both in the clinical trial and in the commercial setting as well as ensuring more consistent exposure to GMI-1271 for each patient.

As to backbone induction chemotherapy, induction will include 2 of the most commonly used cytarabine-based regimens. Patients will receive either the chemotherapy regimen known as MEC, mitoxantrone, etoposide, cytarabine, or the regimen known as FAI, fludarabine, cytarabine and idarubicin, based on physician's choice of regimen, in each case, plus or minus GMI-1271.

In the Phase III, we plan to offer multiple cycles of consolidation therapy in both arms of the study for patients who achieve remission. In the Phase II, we only offered one. We believe that multiple cycles of treatment in patients who respond may drive an even deeper response in patients treated with GMI-1271. If this is the case, it could lengthen the duration of remission with potential for additional benefit on survival.

We are very pleased to have achieved agreement with the FDA on this critical aspect of the study design.

Finally and importantly, as for mucositis, a debilitating side effect to chemotherapy, we were very encouraged by low instances of severe mucositis in our Phase II trial. This could be an important benefit of treatment with GMI-1271 if it leads to improved tolerability of the underlying chemotherapy. Therefore, we will formally evaluate severe mucositis as a key secondary endpoint in the trial. Similarly, response rates, both CR and CR with complete -- incomplete count recovery, will also be evaluated as key secondary endpoints.

One of the most significant decisions that we had to make in designing the Phase III trial was the selection of the primary endpoint. As you know, we observed clinical benefit across multiple efficacy metrics in our Phase II study as compared to historical controls: high response rates, reduced early mortality, extended durability of remission and prolonged overall survival compared to what would be expected. After interrogating all the pros and cons of each potential primary endpoint, we continued to arrive at the same conclusion: overall survival, which provided the most compelling efficacy signal in our Phase II trial, also captured the multiple potential effects of the drug in one measure.

In addition, regulatory agencies worldwide find it an appropriate measure of clinical benefit, the gold standard. While we did consider selecting remission rate as the primary endpoint, we strongly believe that there are other potential efficacy and safety benefits with GMI-1271 that only overall survival truly captures.

For example, we want to be sure to capture potential benefits of increased transplant rates. In addition, better tolerability of chemotherapy could lead to patients receiving more cycles of therapy, which could potentially drive deeper and longer remission. An OS endpoint would capture these benefits. Response rates would not.

There were several key factors that helped us with this decision. For one, and as you recall, we observed not only a high rate of durable remission, but also a high transplant rate, even in the older population of patients. We believe, this high rate of transplant reflects both the ability to get to remission and the durability of that remission, allowing the sometimes lengthy transplant matching and preparation process to successfully complete. In addition, patients must be in good medical condition to proceed with the transplant regimen, and we believe GMI-1271 may improve the tolerability of induction, leaving patients well enough to go to transplant. Therefore, we view achieving transplant as a treatment success, and we believe this could be a key measure of benefit with GMI-1271.

Importantly, the FDA has agreed that the primary survival analysis will not be censored for transplant, which allows that success to be reflected in the overall survival data. This is a critical point. We are very pleased that getting more patients transplant would be captured in our analysis.

In addition, an overall survival endpoints also captures improvements observed in short-term induction-related mortality such as those we observed in our Phase II trial. Thus, when considering what we observed in our Phase II trial and the potential for benefits on both efficacy and safety with GMI-1271, it became clear to us that overall survival would be a more complete measure of the drug and, therefore, should be the primary endpoint for the pivotal trial. Simply put, OS best positions GMI-1271 for clinical success, regulatory approval, commercial uptake and reimbursement in both the U.S. and in Europe.

We don't believe compared to response rate endpoint that OS adds significantly to the cost or duration of our Phase III. The Phase III trial in relapsed/refractory AML will be our operational focus and the core of our efforts to obtain regulatory approval for GMI-1271. We are on track to initiate this trial later this year, and based on projected enrollment, we estimate having top line data available in fourth quarter 2020. As Rachel mentioned, our overall plan for the program is to have this Phase III trial serve as the centerpiece of our registration strategy.

While our internal focus is on initiating our own GlycoMimetics-sponsored trial, we and others have not lost sight of the potential benefit GMI-1271 may have in the newly diagnosed AML population, both in patients fit and unfit for intensive chemotherapy.

We have been gratified by the significant interest we've received from collaborative groups. And our strategy is to complement our GlycoMimetics-sponsored registration study with clinical trials conducted in additional AML patient populations by one or more major clinical consortia in the U.S. and Europe.

As these consortia will fund and conduct those trials, this collaborative development approach provides us a streamlined and capital-efficient path to potentially realize a very broad label for GMI-1271 in AML.

In that context, on February 8, we announced the first of these collaborative network partnerships, an agreement with the prestigious HOVON Group in Europe, to initiate startup activities towards conducting a trial of decitabine with and without GMI-1271 in newly diagnosed AML patients. And these activities are already under way.

Specifically, this trial is being planned for treatment of patients with newly diagnosed AML or patients with high-risk myelodysplastic syndrome who are unfit to receive intensive chemotherapy and will be treated with the hypomethylating agent decitabine on study. This study anticipates enrolling approximately 140 patients in total. Patients will be evaluated for response after 3 cycles of therapy, and they will continue to be followed for event-free survival, disease-free survival and overall survival.

Importantly, patients who are in remission will be able to continue on therapy with decitabine plus or minus GMI-1271, giving us an opportunity to evaluate longer-term administration of GMI-1271 to determine whether such use can prolong the durability of response. This will be an exciting and important opportunity to evaluate GMI-1271 in a longer-term treatment setting, which could represent an important commercial opportunity for GMI-1271.

We anticipate this trial will initiate in the second half of this year. I want to note that GlycoMimetics will also be providing support to the HOVON Group for data collection and monitoring to ensure that the quality of data for this trial meets regulatory standards in both the U.S. and Europe.

The data generated by the HOVON Group may be submitted to regulatory agencies here in the U.S. and abroad and could facilitate use of GMI-1271 in this front-line, unfit population.

I'll now turn the call back to Rachel.

Thank you, Helen. As I hope you can now appreciate, we believe that together these studies could position GMI-1271 for strong and broad uptake and for significant potential market opportunities across the continuum of care in AML.

We also remain very interested in evaluating GMI-1271 in newly diagnosed patients who are fit for intensive chemotherapy.

Our plans for evaluating GMI-1271 in this setting have also progressed, and I hope to be in a position to be saying more about those plans in the very near future.

In addition to the progress we're making in our GMI-1271 AML program, we believe that our platform remains robust with key milestones in other programs also slated for the coming year.

Most notably, we anticipate top line data readout at the end of 2018 from the ongoing Phase III trial of rivipansel being conducting by Pfizer. As you may remember, that drug is now being tested as a treatment of vaso-occlusive crisis of sickle cell disease. In its presentation at the JP Morgan Conference in December, Pfizer, for the first time -- I'm sorry, in January, Pfizer, for the first time, described rivipansel as a potential blockbuster, which was explained in the Pfizer presentation as meaning possible peak sales are greater than $1 billion. Under our agreement with Pfizer, GlycoMimetics is entitled to double-digit royalties on rivipansel product sales. GlycoMimetics is also entitled to receive remaining milestones of up to $285 million with the next milestone payment due to us on acceptance of the NDA.

If the Phase III trial is successful, we would anticipate that milestone occurring during 2019. The next milestone after that is for first commercial sale in the United States. While exact numbers have not been disclosed, these are meaningful milestones, which together with potential royalties would add substantially to the GlycoMimetics runway.

We also continue our ongoing proof-of-concept study with GMI-1271 in multiple myeloma in Europe. We initiated that trial in Ireland and have now expanded to major myeloma research centers in England, Germany and Denmark. To reiterate, we anticipate initial top line data in 1Q 2019.

GMI-1359, as you'll recall, is our novel combined E-selectin and CXCR4 antagonist. Our Phase I trial in healthy volunteers is ongoing, and we are in the process of defining plans for trial in patients, the details of which we anticipate discussing further during 2018. Finally, I want to let you know that we continue to research additional novel compounds based on our specialized chemistry platform. This focus is now on the galectins, which are important targets in cancer and fibrosis. We've already filed patent applications that we believe will be important in this space.

In addition, we continue preclinical studies to explore further possible uses of the drugs currently in the clinic as well as for potential follow-on compounds.

I would now like to turn to Brian Hahn, our Chief Financial Officer, to provide an update on our financial position.

Thank you, Rachel. As of December 31, 2017, GlycoMimetics had cash and cash equivalents of $123.9 million as compared to $40 million as of December 31, 2016. The company raised $86.8 million in net proceeds from the public offering of common stock completed in May 2017 and an additional $19.3 million in net proceeds under an at-the-market equity facility. Research and development expenses increased to $6.7 million for the quarter ended December 31, 2017, as compared to $6.1 million for the fourth quarter of 2016.

Research and development expenses increased by $0.8 million to $24.1 million for the year ended December 31, 2017, from $23.3 million in the year ended December 31, 2016. During the year ended December 31, 2017, there was increase in the manufacturing costs related to clinical supplies for GMI-1271 as we advanced towards a planned Phase III clinical trial, which increase was also in part by a decrease in clinical expenses as the GMI-1271 Phase II clinical enrollment was completed in May 2017.

General and administrative expenses increased to $2.8 million for the quarter ended December 31, 2017, as compared to $2.3 million for the fourth quarter of 2016. General and administrative expenses for the year ended December 31, 2017, increased to $9.8 million as compared to $8.7 million in the prior year. These increases were primarily due to increased labor-related costs and stock-based compensation expenses.

I'll now turn the call back over to Rachel.

Thank you, Brian. To close, we believe the differentiated mechanism of action of GMI-1271 and the efficacy and safety benefits that we're seeing in our Phase II study uniquely position this drug for potential use across the continuum of care in AML and multiple AML treatment settings.

Our Phase III trial in relapsed/refractory disease will form the core of our registration plan. Our confidence in this study design is supported by our Phase II data from that program as well as by our ongoing conversations with the FDA around how best to capture the benefits that we've seen in our Phase II.

The high level of interest and support from key opinion leaders on both sides of the Atlantic also gives us the unique opportunity to conduct studies with clinical consortia such as the HOVON Group with the potential to expand uses of GMI-1271 across the continuum of care in AML.

This is a unique approach compared to most other agents being tested in this disease, which are targeting more and more narrow populations.

Our trial design is one which we believe will maximize the likelihood of achieving success with an endpoint that is also the global gold standard and which would best position us in the commercial marketplace at launch.

To conclude, the company is now positioned to achieve key clinical data readouts for each of the next several years. At the end of 2018, we anticipate top line data from the ongoing Phase III of rivipansel in sickle cell disease, in early 2019, we anticipate top line data from our proof-of-concept trial of GMI-1271 in multiple myeloma, and in the fourth quarter of 2020, we anticipate top line data from our registration trial in AML.

I'd like to close this call by thanking all of my colleagues here at GlycoMimetics. They've worked passionately to try to improve human health and to create value for all stakeholders with a commitment to world-class research in drug development and efficient use of capital.

The fruits of our labor are paying off, and I very much look forward to the year ahead. Now having given you an overall perspective on our progress and plans, I'd like to open the call for your questions. Operator?

(Operator Instructions) Our first question comes from Yatin Suneja with SunTrust.

Just a couple of questions. Maybe, if you could give us a little bit more color on how the discussion with the FDA evolved. I mean, what was their response to the CR or some sort of a surrogate endpoint? Like, did they specifically ask for an OS? Just trying to understand, just given the breakthrough designation, there were some expectation that it could enable some sort of an accelerated development time frame. So just trying to understand what the feedback was from the regulators.

Yes. Well it's true that the breakthrough therapy designation has offered us some very good opportunities to have ongoing dialogue with the FDA, which we very much appreciated. The agency did agree that we could potentially use response rate as an endpoint for the trial as well as the possibility of using overall survival as an endpoint for the trial. And as we continued our review of the Phase II data and we contemplated what we really view as a unique constellation of benefits for the drug, we became more and more convinced that overall survival was actually the best way to capture that constellation of benefits, in particular, as Helen described, the potential benefit of transplant, the potential benefit of improving tolerability of chemotherapy and thereby allowing additional cycles of chemo, which might lead to greater duration of response. As well as the opportunity to get, as we indicated, to a gold standard for regulatory approval, potentially in the U.S. and in Europe and better positioning at launch. So while we could have pursued a response rate endpoint, based on our discussions with the agency, we determined that the overall survival endpoint was really the better way to capture the benefits.

And then the OS, like, somehow -- I think you made the comment that it could be a cornerstone study. So do you think you would not have to run a fully blown Phase III trials to expand the label in the frontline setting? And that what gives you confidence that the consortia-funded trial could serve as one of those trial to expand the label much faster than what other companies have done?

Well, because we have an opportunity to conduct these trials with the consortia, we have an opportunity to get that -- to gather that data in parallel with gathering the data that we're going to be collecting at our own registration trial. We think that the focus on the registration trial on overall survival, in particular, positions that trial as a very strong trial where we're going to get a definitive endpoint. And we believe that, that increases the likelihood that supportive data from these other trials could potentially be used to expand the use of the drug in the other patient settings.

But it -- just -- maybe one more question. With regard to the requirement of not having to censor for transfusion, could you maybe elaborate on how will that help you or maybe if it can help you to get more robust outcomes and if there are other -- any other AML trials that have employed this methodology prospectively.

And so I'm going to turn that question to Helen, who can, I think, address that in more detail.

Yes. So transplant is considered a success if you achieve remission and achieve remission with long enough durability to get through the transplant preparation process, matching and the myeloablative therapy. That enables the patient to have the transplant, which is really their best opportunity for a long-term cure. And so improving the rate of transplant in patients is the best opportunity to improve their long-term survival, and capturing the rate of transplant and capturing, therefore, the benefit on survival will be important to measuring the effects of GMI-1271. So we feel that including patients who can successfully get to transplant in the analysis for survival will be an important benefit. It's something that you also want to assess for the ability to have patients emerge from induction chemotherapy well enough to proceed with any additional therapy, and transplant is one of those options. And we think GMI-1271 also will improve the tolerability of the induction chemotherapy and therefore, also through that improve patient's ability to get to transplant. In terms of what other studies have done, there are different approaches to censoring for transplant that depends on the drugs and what you're measuring for the drug and so some studies do censor and some do not. We feel that for GMI-1271, it is important to be able to include patients who transplant in the overall analysis.

And that's why we were so pleased to get that agreement with the FDA before starting the trial.

And you did employ this strategy in the Phase II clinical data that you presented earlier?

Correct. The data that we presented at ASH was presented in the same manner.

Our next question comes from Jotin Marango with Roth Capital.

I have 2. One about the background therapy and then one about endpoints. So about the salvage therapy that you are combining with, for powering purposes, what is your internal historical reference for the performance of MEC and then of FLAG-IDA, the response survival, so that we can look at it in order to think correctly about the control arm. And then also about the background therapy, it seems to me like there are big centers out there which only seem to use MEC and then others that only seem to use FLAG-IDA. So do you have the insight on why that is? Is this sort of a grandfathered in system? Or are there underlying reasons that they cite to you? And then I have a follow-up.

Thank you, thank you, I'll turn that question over to Helen, also.

Yes. So one of the challenges with salvage chemotherapy in AML is that nothing works well. And there are many historical papers describing outcomes with MEC induction chemotherapy with FAI and with other salvage regimens. And the survival is not good for any of them. So I think we have had the opportunity to look at what other studies have done, and there's not a lot of range in baseline survival that you've seen. One thing that is very interesting in looking at centers and as you comment on the preference for centers for using MEC chemotherapy induction for relapsed/refractory disease or using FAI, is it -- there is some central preference, there is some regional preference. One thing that stands out is that most patients can be treated in the relapsed/refractory setting with MEC or FAI. And if you have the combination of both as background therapy available in the trials, you will be able to include most centers locally, regionally and globally in your trial. And so for us, we find that, that is a very good cytarabine-based set of backbone chemotherapy options that will make this trial something that is feasible for many different centers. It fits with their standard of care, and it also allows us to collect the data and evaluate GMI-1271 across what is essentially the standard of care broadly for this treatment setting.

Yes, it's important to add to that too that we will be stratifying the randomization to make sure that we get comparable use of each of those chemotherapy agents within both the control and the treatment arm.

Very nice. And then something about endpoints. So as I try to piece a part the protocols, so -- and look for the root of the benefit. To me, it seems that the study is also betting in a way on the quality of the response, which then directly facilitates transplant. So along that line, other than transplant itself, which will bleed through to survival, are there other secondaries or other prespecified analyses that would explore just the quality or the duration of the response?

So we will be exploring a number of secondary endpoints that will be getting at this question of quality of response. In the end, it all contributes -- it should all contribute, we hope, to a readout in overall survival. And that's why, again, overall survival is such an important endpoint. Because, again, when we think about the constellation of benefits that we saw in our Phase II, we can hypothesize that there are ways that each of these could, on its own, contribute to a benefit in overall survival. And as I indicated, we had a big discussion, transplant is one. The possibility of going onto multiple cycles of chemotherapy because of improved tolerability is another. And as Helen indicated, we were also really pleased to get an agreement with the agency that we will be doing multiple cycles of consolidation on protocol in this clinical trial. So we could have an opportunity potentially to drive a deeper response, which may also contribute to longer duration, ultimately, potentially, to greater survival. So we believe, there are many ways to potentially contribute to the overall survival benefit. And we will be capturing multiple other endpoints as secondary endpoints. The key secondary endpoints that we described are, as we indicated, mucositis and then response rates, but we will be looking at a number of other secondaries. And Helen, do you want to add to that?

I would just add that we are also looking at some other things where we saw additional potential benefit. In the Phase II study, we did see a very low short-term mortality rate. And that we think also is a benefit of the drug. Protection from mucositis may contribute to that short-term mortality rate. And therefore, you're better able to get patients to remission and better able to get them to further therapy and longer-term survival.

Our next question comes from Stephen Willey with Stifel.

I was just wondering, I guess, if you can, maybe give us a little bit of color around patient inclusion/exclusion criteria. And I guess, whether or not, if there's any meaningful shift then relative to what was used in the Phase I/II trial. And then you mentioned stratifying based on chemotherapy backbone. Just also wondering if you can provide us with any color around some other baseline variables that you might be stratifying for in this study.

Sure. Helen, do you want to comment?

Yes. Sure. So in terms of the inclusion and exclusion criteria, those will, of course, define the population enrolled in the trial. They are very similar to the Phase I/II trial and the Phase II component of that trial as well. So we are including a population that will essentially be very, very similar. We are -- now that we know a little bit more about safety of the drug, we are able to broaden in terms of the medical eligibility for the trial, but that does not affect the risk factors from AML, the disease risk factors. So in terms of disease risk factors, like refractory disease and relapsed disease, those will be very much the same. In terms of some of the other medical factors that might be more limiting to enrollment, we are able to loosen those a little bit to improve the opportunity for enrollment in the trial. And then on stratification, we will be looking at those factors that are most likely to influence the study outcome and stratifying for those factors to make sure that we are balancing those effects in the 2 groups being treated and assessing just the effect of the drug and the data from the trial. So specifically, the backbone chemotherapy, whether it's MEC or FAI, it's one of the things we will stratify for us to make sure that, that is equally represented in the drug and control arm. We will also be looking at patient age and stratifying by age, and we will be looking at disease factors such as whether they have refractory disease or relapsed disease and stratifying for that. So the backbone chemotherapy, the age groups and the disease risk factors will be balanced between the treatment and control arms, allowing us to assess the difference of GMI-1271 across those factors in the final analysis.

Okay, that's helpful. And just with regard to the transplant and not having to censor for those patients, is there some internal estimate that you have with respect to the proportion of patients that you would expect to achieve transplant on chemotherapy only? I know, in the Phase II trial, I think, you guys showed that about 1/4 of patients were able to get the transplant. Just wondering how that may compare to what your internal expectation is of historical data.

So the rate of transplant is something that has been a little difficult to capture in historical data. Transplant -- the ability to transplant and the medical care around it is getting better over time, and so transplant rates are going up. We did see a 24% transplant rate reported in the ASH data for this group in our Phase II trial. And we think that it's quite high, quite good relative to what you might expect. Our assessment of that is based on what we hear from the investigators in the trial, the other key opinion leaders with whom we have discussed the data from the trial to some depth. And in their experience, currently, we are seeing a higher rate of patients get to transplant than they would expect for the nature of the population. It is probably going to be similar in the pivotal trial, although we will, of course, be able to capture any differences in transplant rate and any improvement in the data and include that in the analysis.

Okay, and just a quick question on mucositis. Is there any reason to believe why either MEC or FLAG-IDA might preferentially drive higher rates of mucositis? Or do each of those chemo backbones generally contribute to mucositis rates pretty equally, both in terms of severity and frequency?

So each of those chemotherapy backbone regimens do have substantial rates of mucositis and severe mucositis associated with their use and induction. So we would expect to see a fairly significant number of patients having severe mucositis in the standard of therapy control arm. And we will be looking for that -- the improvement that we -- similar to what we saw in the Phase II study when the addition of the GMI-1271 is given to patients getting both regimens.

Yes, and I would add to that, as you recall, the mucositis observation that we had in our Phase II was, I think, certainly, the very exciting results from that trial. And so this gets to the point of your earlier question around stratification and the fact that since we will be stratifying based on chemos, even if there were any slight differences we'll be able to pick those up, but as Helen indicated, we think both of them would be expected to be associated with high rates of mucositis. And we're certainly excited about the opportunity to evaluate that outcome also in the Phase II -- in the Phase III study.

Understood. And then just a quick financial question. Is there any headroom remaining under the at-the-market facility? And just wondering if there were any equity sales in the first quarter of this year under that as well.

Yes. We still have -- so we've sold about $20 million off that ATM, so there's about $80 million left, but no, we have not used it since the third quarter sales.

(Operator Instructions) Our next question comes from Biren Amin with Jefferies.

Maybe if I could just start with the geography split for the Phase III trial. Do you expect any differences in treatment based on geography given the trials enrolling in U.S., Europe and Australia?

In the Phase I/II, we did have sites enrolling in the U.S. and in Europe and Australia. So we have some experience with centers in each of those areas. Those centers will be participating in the Phase III, and so I think feel pretty comfortable that we understand the standard of care and what we would expect from centers in those regions.

Okay. And then, maybe just I want to elaborate a little bit on the hazard ratio of 0.68 or better for the survival endpoint. How should we think about assumptions on survival in both arms? Should we be using 9 months, 9.4 months for the active arm? Is that what the company is using for survival in the active arm? And what should we assume for the control arm?

Actually, we're not planning to describe the details under the powering assumptions, but simply to say that, that is our powering assumption, 90% to achieve the 0.68 confidence interval. But we've powered it conservatively, and I think you see that reflected in -- well in those assumptions and in the numbers that we've -- that we're planning to enroll.

Got it. Rachel, maybe, just one other question. How should we think about patient distribution for the Phase III in terms of primary refractory versus relap patients given you sometimes see differences in responses across the 2 populations?

Helen, do you want to comment on that?

Sure. I think, we will expect to see a distribution that's going to fit with -- quite similar to the Phase I/II. That is, interestingly, relatively similar to what's seen in other studies in terms of the -- studies that have the opportunity to enroll both refractory and relapsed patients generally enroll at similar proportions. So we would expect to have something of about the same, but we think that both the refractory population and the relapsed population are seeing benefit from GMI-1271 in the Phase II data, and I think it's quite appropriate to include them.

Our next question comes from Ritu Baral with Cowen.

Can you walk me through what your current cost estimates for the Phase III are? And how we should think about when spend occurs, I guess, the way that it's spread out.

Ritu, we're -- estimated a conservative $50 million for the study, cost to start ramping up in this quarter, throughout the year and as enrollment starts to have the ramping up all throughout 2019 and then winding down towards the end of 2020.

Got it. Is there any sort of interim built into the protocol currently?

There is no interim analysis built in the protocol.

Okay. And then as we look at the improvement in mortality and survival from the Phase I/II data, how in your mind, in your interpretation do you split that between improvements in induction-related mortality versus improvement in post-transplant-related mortality? I'm just trying to think how to think about, basically, the lack of censoring and the risk that introduces.

I think -- let me make a comment and then I'll turn it to Helen for more. I think, the way to think about this is really in the aggregate. And you look at the aggregate of the benefit, because as we said, we believe that there's a constellation of benefits that drive potentially from the use of this drug that come from many different aspects of benefit that we believe we saw in the Phase II study, which each contribute, in their own way, to the potential outcome of improved survival. And so I think, it's really not productive to try to parse where the specific benefit has come from -- is coming from and what exactly is contributing to the survival benefit that we believe we are seeing in the Phase II and that we hope to see in the Phase III. Really, it's an aggregate of benefits that together contribute to what we believe is an improved outcome in survival. Helen, do you want to add to that?

Yes, I would just add that it is an incremental improvement. Each piece of the data, each piece what we saw in the Phase II, so the short-term mortality, improvement in mucositis, improvement in the ability to get to transplant, each of those is an incremental additive portion of the overall benefit. And so you see a few more patients get to induction -- to the end of induction alive and in remission, and you see a few more patients who are then also well enough to have additional therapy whether it's transplant or consolidation or something else. And you also have a few more patients who are well enough to get to transplant, and each of those incrementally adds to your ability to improve survival for the overall group. And that improvement in survival then is capturing each of those pieces, and the signal for the treatment arm with GMI-1271 is improved by the aggregate of those benefits.

Okay, that's helpful. Do you have any concern around safety given the change in allowing multiple consolidation cycles at physicians' discretion?

So we've actually observed that the safety profile and studies to date have been very good for GMI-1271. There -- it's been quite benign and there's been no emerging toxicity signal. We think that there's been no additive toxicity when adding to chemotherapy. We have had patients in the Phase II trial who were treated with 1 round of consolidation on the relapsed/refractory arm. We've also had patients in the newly diagnosed arm who received 3 rounds of consolidation chemotherapy with GMI-1271. And so we know from that experience that patients are tolerating the addition of GMI-1271 to multiple rounds of consolidation very well. That experience now, we have the opportunity to add up to 3 cycles of consolidation for this relapsed/refractory population as well, and we expect that to be quite tolerable. And that will, of course, be part of the findings of the study.

Okay, last question. Helen, can you take a couple of minutes to talk about the mechanistic read-through to what we might see from the multiple myeloma data early next year?

I'm sorry, can you say that again? We didn't hear.

Sure. I'm just wondering, like, mechanistic read-through from data we've seen in AML to how we should think about obvious success of the multiple myeloma data in Q1 of 2019.

Okay. So the mechanism of the drug is one of interrupting the adhesion of cells in the bone marrow, as you know, and the blasts in leukemia and the myeloma cells in myeloma and changing the cell activation state, and which then enables chemotherapy to kill the cells, so you get chemo sensitization with the addition of GMI-1271. And that takes place in both leukemia and myeloma. And we are adding GMI-1271 to effective chemotherapy in both diseases and assessing the outcome in terms of improvement in remission rate and then longer-term outcome in both diseases. They are different diseases, and so the chemotherapy is different, the disease state is different and the treatment course over time is also different, but the underlying approach with GMI-1271 has great similarities between the 2 diseases. So in the myeloma trial, we are adding GMI-1271 to chemotherapy for patients who have relapsed/refractory myeloma and assessing outcomes for the patients, and it's that trial that we expect to continue to enroll and observe and report out data later on.

Yes, and this gets to the important point, Ritu, which is that as what you've seen as we've gone through first the preclinical work and now the clinical work, is increasing opportunities to use this drug potentially more and more broadly. And what we saw and what we are seeing in AML, again, as we've gone through preclinical and now clinical, initially combining with a particular chemotherapy agent and then expanding that as we've done now to the point where we are in the clinic with the drug in multiple treatment settings as we look to both our registration study and these consortia trials. So that's -- so the story in AML is the story of the drug going more broadly, as you've indicated, potentially across the continuum of care. One of the things that's exciting about the myeloma study, is it's an opportunity to see -- to ask the question, can we potentially take this drug not only into AML but into other hematologic malignancies as well? And the preclinical data supports moving into myeloma. I can refer you to the leukemia paper that's on our website for more mechanistic background for your question, but the exciting thing is to think -- is to ask the question, which we're doing in myeloma, not only can we go more broadly in AML, but could we potentially go more broadly in the hematologic malignancies, more generally, and multiple myeloma is the first opportunity to begin to ask that question. Great. Well, let me conclude then -- I'm sorry, there's one more question, I'm sorry.

We have a follow-up from Stephen Willey with Stifel.

Just a quick question on the dosing changed from weight-based to fixed. Just wondering, I guess, the level of confidence and perhaps any data that you can point us to that would suggest that the pharmacokinetics and, I guess, patient exposure levels won't be fundamentally altered via switch in the dosing regimen from weight-based to fixed.

So we have fairly high confidence in this assessment and in the switch to fixed dose. We have a very rich data set on pharmacokinetics in humans from the healthy volunteer studies that we ran before this AML study and also from patients in this AML study across the age range and across those populations in AML and chemotherapy types assessed in the Phase I/II study. That data set has given us a very, very robust foundation for assessment of exposures with the drug and assessment of exposure that allows rigorous modeling that needs regulatory requirements for understanding the exposure and the range of exposures and what then affects exposure. It's using that data and in this discussion with the FDA that we have arrived with confidence at fixed dose being the appropriate dosing method for this program, going forward and at the fixed dose selected for the Phase III study being extremely -- extremely representative of the same exposure level at the recommended Phase II dose level assessed in the Phase I to II trials. So we do not see this as a change in dose level or exposure for patients. We see it as an opportunity to better dose and more efficiently dose while achieving similar exposures for the patient population.

At this time, I'm showing no further questions. I'd like to turn the call back over to Ms. Rachel King for closing remarks.

Great. Thank you. So based on those -- on our comments and all the questions, I hope that you'll all appreciate why we feel that this was such a well-designed study that we think would both capture the benefits of the drug and potentially position this drug well both with regulators and in the market at launch. So we're very pleased with the study design, and we hope that we've been able to share that clearly with you to convey some of our enthusiasm for it. And so I want to conclude by reminding you that we will be delivering over the next 12 months on a number of key milestones including the Phase III readout for rivipansel in sickle cell, the Phase III initiation of our first AML registration trial, the initiation of the HOVON trial and potentially another consortium-funded Phase III as well and then looking at early 2019, getting to the initial look at our multiple myeloma data. So thank you all for listening to the call and for your questions. We will be in the office all day today, and we'll be available for calls if anyone wants to reach out to us. Thanks very much.

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