ImmunoGen Inc (IMGN) 2014 Q2 法說會逐字稿

Good day everyone and welcome to this ImmunoGen second-quarter fiscal year 2014 financial results conference call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Executive Director, Investor Relations and Corporate Communications, Carol Hausner. Please go ahead, ma'am.

Thank you very much. Good morning. At 6:30 this morning we issued a press release that summarizes our financial results for our quarter ended December 31, 2013, which is the second quarter of our 2014 fiscal year. I hope you have all had a chance to review it. If not, it is available on our website.

During today's call we will make forward-looking statements. Our actual results may differ materially from such statements. Descriptions of the risk and uncertainties associated with an investment in ImmunoGen are included in our SEC filings which also can be accessed through our website.

In our call today our Chief Executive Officer, Dan Junius, will provide an update on ImmunoGen, and our Chief Financial Officer, Dave Johnston, will provide our financial results and guidance -- will discuss our financial results and guidance. We will then open the call to questions. Our Chief Development Officer, Dr. Charlie Morris, is here with us for the Q&A section of the call. Dan?

Thank you, Carol. Good morning, everybody. We come into 2014 with quite a bit of momentum having closed out 2013 with a high level of activity. We are making important progress in our three wholly-owned compounds in clinical testing IMGN853, IMGN529, and IMGN289. We also recently made the decision to discontinue development of IMGN901 and I will take you through that in just a moment.

Beyond our proprietary compounds, we have seen a significant uptick in partner activity in 2013 particularly in the latter part of the year. Clinical data was reported on six compounds by four partners in 2013; data on four of these was in the latter part of the year. Also Amgen, Lilly, Novartis and Sanofi all took licenses to our ADC technology in 2013, four of these came in the back half of the year, two from Novartis.

We also took some steps to continue to augment our technology portfolio in particular with a cross license with CytomX. Let me walk you through the details of these starting with our wholly-owned compounds and let me start first with IMGN901.

Recall that in November we announced we were stopping our IMGN901 small cell lung cancer study. This was due to an imbalance of deaths due to infection without sufficient proof of benefit to justify continuation. Once we took that step we wanted to assess available data before deciding on any further path for IMGN901. As you might expect, we did quite a bit of analysis and through that there was no suggestion of an issue with the compound or with the technology. However, the analysis was challenging as we had only a handful of events to evaluate for each different dimension that we were looking at out of this study.

From that we were unable to identify a clear reason for the imbalance. We do suspect the combination played a role in increasing the level of infection from what one would see with etoposide carbo alone because we did see a level of infection in that arm of the study that did not include 901. But out of that we decided to discontinue development of the compound. This is certainly disappointing for us for the potential that it offered to patients suffering from small cell lung cancer although I expect this outcome doesn't come as a surprise to many of you.

With this decision, we will now focus on our newer high potential products and let me now turn to those.

I will start with IMGN289. This is an ADC that targets EGFR. It advanced into the clinic since our last call. We are in the dose escalation Phase I study and enrollment is proceeding well. We are looking for patients and enrolling patients likely to have EGFR positive solid tumors and will open expansion cohorts once we have established the maximum tolerated dose.

There is quite a bit of interest in this compound. Part of it stems from this being a target EGFR that is well known by clinicians. It also includes an active antibody so it has a potential dual mechanism both from the antibody itself as well as from the cytotoxin in the ADC.

It also parallels with Kadcyla, both concerning the target and that it is in the HER-B family in solid tumors as is HER2 for Kadcyla as well as the design of the product. It has the same linker, the same cytotoxin as Kadcyla.

The second proprietary compound I will mention is IMGN529. This is an ADC that targets CD37. As just noted with 289, it has the same linker, the same payload as Kadcyla and also similar to 289, it has an active antibody, an antibody that is actually was very active pre-clinically. Right now we are in dose escalation with this compound for NHL.

We have noted on earlier calls that we saw biologic changes as well as evidence of activity at lower than anticipated doses. Based on an analysis after we had seen that we believe we know the reasons for these changes and what we have done is added premedication to the protocol which allowed us to resume dose escalation. We have submitted an abstract to ASCO that will give us the opportunity to discuss the things that we have seen in early patients more extensively than we have been able to thus far.

And then the final proprietary compound is IMGN853. As we previously discussed, we are dosing patients once every three weeks with a dose that is now based on adjusted ideal body weight. We are enrolling very well and we expect to move into the expansion cohorts in the next few months. While the expansion cohorts will be for patients dosed once every three weeks, we will also be assessing a weekly dosing schedule concurrently. This is based on PK analysis that suggests more frequent dosing may offer advantages to patients.

The dosing there will be weekly for three weeks on a four-week schedule and as I say, we are very interested in the results that will generate. Based on those two approaches, the every three weeks and the modified weekly, we will select the best schedule then for ongoing evaluation of the compound.

We have submitted an abstract and expect to present data at AACR on the PK modeling that gets us to the adjusted ideal body weight. We are also submitting an abstract to ASCO that will provide additional data, so a more expanded clinical database that will reference the PK modeling work that we have done so we think you will find that interesting.

In terms of the first meaningful amount of disease specific data, that won't come until the back half of this year, probably at ESMO or at EORTC.

Beyond the clinical programs we continue to focus on other pipeline development looking to expand the opportunity for substantial new therapies through both our internal research as well as in-licensing. In our last call we discussed our new DNA acting agents as well as another of our new linkers, both of which were at a medical conference late last year.

On the delivery side, we announced a collaboration with CytomX earlier this month. This will allow us to create anticancer compounds using our ADC technology and combining it with their antibody masking technology. This affords the opportunity for further improvement in the therapeutic window for ADCs and potentially can expand the universal targets such as those with less discrete expression on cancer tissues.

So let me now turn from our proprietary compounds and talk about our partners because there has been quite a bit of activity there since our last call and let me just cover a few of the key compounds.

I will start with Kadcyla, as yesterday Roche reported 2013 Kadcyla sales of CHF236 million or approximately $250 million. Almost all of those sales, CHF222 million out of the CHF236 million came from the US where Kadcyla was approved and launched in early 2013. Kadcyla was approved in the EU in November and they were able to launch soon after approval in some countries such as Germany. However, many of the countries require agreement on pricing or reimbursement first. We expect this will lead to gradual Pan-European launch over the course of 2014 and commensurate sales with those launches.

In terms of other Kadcyla activity focusing on label extension, the results from the MARIANNE Phase III study are still expected in the back half of 2014 with filing in 2015. Roche also expects data and filing in 2015 for Kadcyla for use in HER2-positive gastric cancer -- this will be second line. As well as in late 2015, they should have data on neoadjuvant use based on pathological complete response again in HER2-positive breast cancer.

They also recently announced that they have started a Phase III study in the adjuvant setting, this is a study that they have termed or named KAITLIN. This would be looking at Kadcyla in combination Perjeta, versus a triple combination of Herceptin plus Taxane and Perjeta for up to one year. This all would be after three to four cycles of standard anthracycline-based therapy.

Two other compounds I would like to note where there were important presentations that ASH, the first being BT-062 which is being developed by Biotest. This has their antibody alone with our ADC technology. Recall here we have the opt-in right for co-development and co-commercialization with Biotest in the US.

In an oral presentation at ASH, they reported initial results from a trial assessing BT-062 used in combination with Rev/dex to treat relapsed refractory multiple myeloma. Virtually all of the patients in these studies in this particular study had prior Revlimid and Velcade and 76% had prior autologous stem cell transplant. We thought the data was quite interesting that in 100% of your evaluable patients had stable disease or better. This included two patients with CRs, four VGPRs and five PRs. So very interesting activity from this compound with the Rev/dex combination.

Overall the objective response rate was 73%. This includes patients who are refractory to Rev/dex. The overall response rate in patients who were refractory to Rev/dex was 75% and the overall response rate was 89% among patients treated at the maximum tolerated dose.

At the same time, the tolerability profile looked very good. The MTD was 100 mgs per meter squared which is about 2.7 mgs per kg when dosed weekly for three weeks every four weeks on top of Rev plus low-dose dex.

The other compound that was featured at ASH and actually was another oral presentation and it was selected for Best of ASH, was SAR650984 which is a compound being advanced by Sanofi and this is a naked antibody so a little different than most of the compounds we talk about in that it is not an ADC. The antibody targets CD38, it was created by ImmunoGen during our Sanofi collaboration and in that it is a naked antibody, I think it does a very nice job of demonstrating the company's expertise in the antibody area.

In terms of the data reported at ASH, here it was used as a single agent again in patients with heavily pretreated multiple myeloma. Among that population, 77% of the evaluable patients had stable disease or better and there was a 36% objective response rate among evaluable patients receiving higher doses. This included two CRs, one PR, a minimum response and a number of patients with stable disease. Now obviously it is a small number of patients but given that this was a naked antibody with heavily pretreated patients, these look to be very interesting results.

With 984, Sanofi also has a trial underway assessing 984 in combination with Rev/dex.

Let me now turn it over to Dave to discuss our financial results and I will come back to you during the Q&A.

Thanks, Dan, and good morning. Since we issued a press release this morning outlining our second quarter 2014 results, let me just review the highlights and then we will speak to the balance sheet and updated financial guidance.

Revenues for the quarter were $30.1 million as compared to $2.6 million for the same quarter last year. This increase is principally due to greater revenues from license and milestone fees and that will be a recurring theme through my review here. So the current quarter revenue includes $18.2 million in amortization of upfront license fees from the multi-target agreement established with Novartis in fiscal 2011. We recognized these fees this quarter when Novartis took two licenses to use our ADC technology and executed a one-year extension of that multi-target agreement.

Additionally, the current quarter includes $2.2 million in amortization of upfront license fees from Amgen and a $5 million milestone payment from Roche which was earned with the approval of Kadcyla in the European Union. Revenues for the quarter also include $2.3 million of royalty payments from Roche on sales of Kadcyla during the quarter ended September 30, 2013.

Our operating expenses for the quarter were $26.3 million, similar to the $27.1 million in the same quarter of last year. We reported a net income of $3.8 million or $0.04 per share for the second quarter. This compares with a net loss of $24.4 million or $0.29 per share for the same quarter in our 2013 fiscal year. The difference is primarily due to increased revenue from license and milestone fees earned in the current quarter. However, we continue to expect to have a net loss for our 2014 fiscal year overall.

Cash used in operations during the first six months of fiscal 2014 was $21.6 million compared to $42.7 million for the same period in fiscal 2013 with the difference primarily due to an increase in milestone payments, upfront license fees and royalties.

We have updated our guidance for 2014 fiscal year which ends June 30, 2014. We now project that our net cash used in operations will be between $64 million and $68 million compared to our previous projection of between $69 million and $73 million and that our cash balance on June 30, 2014 will be between $124 million and $128 million compared to our previous projection of between $119 million and $123 million.

These changes in projected cash used in operations and ending cash balance primarily reflect reductions in anticipated cash expenses consistent with those that we have seen year to date. On a P&L basis, however, we anticipate that these reductions will be offset by non-cash expenses that we expect to record related to the CytomX collaboration that we entered into earlier this month. However, the accounting treatment of that transaction has not yet been finalized.

We believe our cash position combined with expected cash inflows from royalties and other revenue sources is enough to fund us at least through our 2015 fiscal year as we continue to invest in the development of our proprietary product pipeline.

The rest of our guidance is unchanged from that which we provided in October. We continue to project that revenue for our 2014 fiscal year will be between $71 million and $75 million. Operating expense for this fiscal year will be between $140 million and $144 million and our net loss for the 2014 fiscal year will be between $67 million and $71 million.

So with that, let me turn the call back over to Dan.

Thanks, Dave. Before we get to the Q&A let me just take you through anticipated events over the course of 2014. I noted at the outset that we feel we have a great deal of momentum coming into the year. I think that is demonstrated as I will take you through the events themselves and it is not just the events but it is the quality of the events. We think that over the course of a year we are going to gain very important insight into our proprietary portfolio as we get deeper into expansion cohorts, as we move to expansion cohorts with 289, but also with her partner compounds as many of them are getting to a stage where there will be next stage development decisions forthcoming, we expect to see some expansion of the pipeline from our partners in terms of new compounds coming into the clinic. But let me get to the specifics.

So for IMGN853, we expect the expansion cohort to start sometime during the first half of this year. We will have data on the relationship of dose, efficacy and toxicity in the second quarter. And as I noted during the earlier portion, we would expect to see the first disease specific data in the second half of this year.

For IMGN529, we will have the first clinical data in the second quarter of this year and look to begin expansion cohorts in the back half of the year.

For IMGN289, there is the potential for the first clinical data and/or development event sometime in the back half of 2014. For partner compounds, we will gain increasing insight into sales in the US and the rest of the world for Kadcyla as Roche reports their quarterly data and we will see the MARIANNE results that is anticipated right now to be in the second half of this year.

Off of the seven other compounds in the clinic, we would look to see data at ASCO, ESMO, EORTC, ASH etc., possibly at some of these smaller medical conferences that would be disease specific over the course of the year. There will be other progress from our partner compounds. We will get some development insights as they report data, we would look to see one or more INDs being filed by partners over the course of the year. Accompanying that, we look to see some preclinical data on a number of compounds being evaluated by partners.

And while it was an active year for target licenses in 2013, we would expect to see more target licenses being taken over the course of 2014 as well.

So with that, let me turn it back to Carol and she can moderate the Q&A for us.

Thanks, Dan. We are about to open the call to questions. I would like to ask you to limit your questions to one to two per person until everybody has had a chance to ask questions. You can then get back in the queue.

Operator, we are now ready to open the call to questions.

(Operator Instructions). Adnan Butt, RBC.

Good morning, everybody, and thanks for taking my question. First, Dave, congrats on joining. Two questions here. First on 853, have you decided which disease specific indications to pursue? Is non-small cell lung cancer one of them or isn't one of them?

Then the second question for BT-062, when is the opt-in decision made, when will it be made and what do you need to see? And if you can disclose the terms that would be helpful as well. Thanks.

We will start with Charlie answering the 853 and then Dan for BT-062.

Yes, for 853, I think primary focus at the moment I think we will be looking at ovarian and endometrial carcinomas primarily because that is where the majority of the patients that we have recruited so where we have the greatest amount of information. Obviously we remain interested in the non-small cell lung cancer opportunities within that as well as other potentials which will come through our screens. But I think that certainly as we start to hopefully bring more data to you over the next few months you will see that most of our information at the moment is in the gynecologic area.

On the question on 062, the opt-in, we haven't disclosed the specific event. We have noted that the opt-in fee is $15 million and it is development related. I don't think that we will be facing a hard decision on that for probably a couple of years. So you can sort of figure out where that might be in terms of development. But it is one that we are watching very closely.

As I noted during the initial comments, we are quite excited about the data that it generated and reported at ASH. The fact that they now have a couple of -- well they have one study looking at a couple of indications in solid tumors, should generate some additional, we hope, interesting data and we have a good dialogue with Biotest. We will monitor the progress of the compound very closely.

Simos Simeonidis, Cowen and Company.

Good morning, guys. Thank you for taking the questions. I actually have two on Kadcyla. The drug had a very good year overall in terms of sales in these first 10 months it was used, $255 million in sales worldwide but we did see a slowdown of the growth in the last couple of quarters. Can you tell us where do you see the drug being used? I mean where has it been used this year and do you have any quantitative data on conversion of patients that were on Herceptin and chemo for example since that was essentially the goal or one of the goals for Roche to put the drug in the market? Thank you.

It is Dan. We don't really have any insight to help you with that. That is something that you really you would want to go to Roche to gain any information about conversion, etc. I think my comment would be it was a very strong start from zero to generate about $250 million in sales. I think that with the approvals now in place in Europe and Japan we would look to see growth with what right now is a relatively narrow label but still see good growth over the course of 2014 as they move to submission for meaningful label expansion in metastatic breast cancer as well as in gastric cancer moving into 2015. But that is the best I can do for you.

Okay. Maybe you might not be able to answer this one either then but I will ask it anyways. There has been a lot of excitement at least on the investor side about another HER2-targeted drug, neratinib. Do you see any change in the direction the two adjuvant and one new adjuvant trial [KATHRYN], KAITLIN that is ongoing or do you not see that as a potential threat in the early setting? Thanks.

Again, I'm not going to be much help here. I mean we are always going to see competitive markets. I guess the reference point I would have is the anecdotal comments we get from physicians who describe dosing with Kadcyla as dosing their patients with water. They find it to be astonishing that they can administer something with such a benign tox profile that has very good benefit for many of their patients.

So I think that if that is the underlying attribute of the compound I have to think it will continue to perform reasonably well but it is going to be a competitive market because there are a number of people focusing on HER2.

All right. Thank you for taking the questions.

Cory Kasimov, JPMorgan.

Thanks for taking the questions. The first one is on partner compound with Sanofi 1984. Is there any work that is ongoing to add a payload to the naked antibody or is this just going to be as it is and no plans to change it?

Cory, it is Dan. That being a partner compound, we can't really comment on any plans that they may have for how they take that forward. Right now they have it as a naked agent. They do have it in a combination study with Rev/dex but anything further would have to come from the partner versus us.

Okay. Dan, you mentioned in your prepared comments that there is quite a bit of interest in 289. Are you talking investor interest or is that coming from the industry and do you have any desire strategically to partner that compound at some point in time in its development path?

I gave the interest as coming from investigators. We have a lung cancer advisory panel and they have shown quite a bit of interest in participating in that study as we have enrolled various centers. Charlie said if we wanted to take them all in, it would be the world's largest dose escalation study.

But it is also coming -- we have a dialogue with potential partners to always keep them aware of what is going on in our pipeline. We think at some point as our portfolio matures that there could be productive discussions around how we would globally develop a compound recognizing all the obstacles that exist for regulatory pricing reimbursement as you move outside of the US. We also think that for something like 289 where you have had a target that is expressed on a wide range of diseases that thinking about moving against a number of indications simultaneously, bringing a partner in to assist with that could make sense but that is really the extent of the discussions at this point.

Thanks for taking the questions.

(Operator Instructions). Joel Sendek, Stifel.

Two questions. So between those three drugs, the proprietary drugs which -- I guess they are all in Phase I -- which do you view as the lead compound? Do you view any of them as the lead compound? And where do you have the potential to move one of them into Phase II the quickest? Maybe that might be a different answer. Then I have a quick question on Kadcyla after that. Thanks.

I think just by stating the amount of information we have available, I think we would have to see 853 as the lead compound at the moment and we are certainly confident that we will be moving into dose expansion phase of the Phase I pretty soon which for all intents and purposes is the Phase II portion of that particular study. So I think that is clearly there though as you rightly say the other two are beginning to be fairly close behind as well.

So I think we have got a wealth of opportunity but I think we will be seeing the nearest near-term opportunity to really invest more heavily in one of the compounds I think is likely to be 853.

Okay. Thanks a lot. And then with (inaudible) Kadcyla I guess the biggest market for Herceptin is adjuvant and obviously you laid out the strategy that they have for gastric and neoadjuvant and things like that. I am just wondering in your models where do you put in Kadcyla revenue from adjuvant? How long until we get there not only the data but the label? Is there any way you can help us with that? Thanks.

We do some work internally but that is speculation on our part which probably isn't a whole lot better than yours. I think the fact that they now have the study open and you look at the precedent of the adjuvant work that was done with Herceptin says sometime -- it is certainly in the back half, we are close enough to the back half anyway, but deep into the back half of this decade before you would logically have mature data that would look for label expansion. But that is just based on the precedent of how the Herceptin assessment went to introduce it into the adjuvant setting.

Thanks, Dan.

Jason Kantor, Credit Suisse.

Thanks for taking my question. On the upcoming data regarding the dosing strategy I think it is for 853, is that going to be Phase I patient data or is that going to be animal data? What exactly are you going to be showing and how do you think that is going to impact the way people think about the drug or the strategy?

The data will be taken from patient data from the Phase I study and then with some modeling of that data which I think will help deepen the understanding of what we have been saying about the reasons for changing the way of calculating the dose. So the primary data we have submitted to AACR and we hope to have some additional follow-up on that using PK data from patients in the Phase I follow through at ASCO so everything that we are talking about is clinical data.

And the AACR data, will that include clinical activity as well or that is just going to be PK, PD?

I think for AACR, I think we should really be anticipating the pharmacokinetic piece of the story. We hope to have some additional -- there may well be a small amount of clinical response data in the ASCO follow-up as well.

And could you just comment on how many patients worth of data we might see at AACR and at ASCO?

I think I have given you quite a bit.

Thank you.

Michael Schmidt, Leerink.

Good morning. I had one on 289. How does the antibody use in that product differ from Erbitux and how might that affect tissue selectivity?

And then I have a bigger picture question. You note you (inaudible) earlier today, how do you see the overall product strategy to evolve for the Company? Are you looking to introduce more compounds in the clinic going forward looking at established targets? Are you looking at new targets that you might have discovered? What is the overall strategy long-term? Thank you.

I will take the piece a little bit about the 289 antibody. I think when we originally screened for antibodies for the EGFR project, the essential thing that we were looking for in fact initially was an interactive antibody which could just deliver maytansinoid to EGFR expressing cells. But during that process, we were able to identify an antibody which had both inhibitory activities of EGFR while in skin models did not seem to have the same skin toxicity. We believe that is because it is not a complete antagonist.

So Erbitux and other drugs which have been developed have tended to be developed because they are complete antagonists. This is a partial antagonist so it is able to turn off EGFR signaling sufficiently in cancer cells to enable some antitumor activity in and of itself while leaving enough signal keratinocytes that it does not seem to have the same level of direct killing effect on keratinocytes and also does not have the same cytokine release profile.

So obviously from our perspective that was quite a big deal to be able to identify something which could contribute to the activity of the agent adding a direct anti-EGFR effect as well as carrying the maytansinoid payload with a hypothesis that we may be able to see some sparing of the skin toxicity.

Now obviously we are now in Phase I and we hope to be able to explore that further in the real world but clearly this is where the rubber hits the road as we have given the dose escalation portion of that study. I will let Dan take the (inaudible) piece.

To your other question, Michael, I think we have demonstrated having brought three compounds into the clinic that we wholly own over the last two years and introducing through a number of different scientific conferences, press releases, etc. with the scientific conferences talking about a new effector molecule, a new linker that is available for future compounds, with the CytomX relationship that we announced earlier this year, we clearly have an interest and I think the wherewithal to be bringing new compounds and enhanced compounds with new technology into the clinic.

There is a balance there in terms of how much we can support on the development side plus just the time it takes to get it right with a compound before we introduce it into the clinic. But we remain very interested in expanding our proprietary pipeline. I think it will come from a number of avenues. The compounds we brought in to date all contain 100% if you will ImmunoGen technology from antibody through linker through cytotoxin. We have active discussions with parties who have other antibody capabilities that may bring us more interesting targets, antibodies with different attributes. We look at other targeting vehicles outside of antibodies.

So I think you will see the portfolio continue to expand over the next several years in some cases with compounds that look similar to ones that we have introduced thus far, in other cases, ones that are introduced that may have meaningfully different attributes.

Got it. Thank you.

John Sonnier, William Blair.

Thanks for taking the question and first of all, welcome to Dave. It is wonderful to have you at ImmunoGen.

My question I guess is for Dan and it is a bit of a continuation of the last one. Your development organization has evolved meaningfully since the change in the Sanofi deal and it is arguably much, much more depth-ful now than it was even just a few years ago. And I guess the question is as you look at the experience with 901, are there any lessons that you feel you can take from that into the current organization to better equip you to handle your proprietary candidates as they progress through the clinic? Thanks.

That is one thing that you always look for, John, as a compound develops well or not well as we saw with 901, what can be learned. I do think there are some things that we have learned about 901.

One of the attributes that we have known for some time but we thought based on clinical data that we had seen from earlier studies is that 901 has a very short half-life in part due to target expression being in places other than cancer cells in particular on NK cells. And as we digest the experience and think about what may have led to the results we saw with 901 or what prevented it from being a successful compound, short half-life certainly plays prominently. Half-life was I think about a day, maybe even a little bit below one day and therefore it says that the biologic system is processing a lot of conjugate in a very short period of time and therefore may be placing undue stress on some of the metabolism to be able to deal with that.

So that is one attribute that we take and as we look at other compounds, there are thresholds that we will evaluate. I think there are others but that just maybe gives you a taste of making sure that we maximize the information we get from every study to help us develop better compounds going forward.

I don't know if, Charlie, your comment on the development organization I would agree with, Charlie, being here alone is I think manifestation of some of that but he may have some other thoughts on lessons learned out of 901.

I mean I think we all need to recall of course just that 901 was in development for a long period of time. I think rather than necessarily speculating on lessons learned, I think you already see us applying ourselves in a different kind of way taking a lot of care and diligence over trying to get the dosing schedule right for 853 is an example of that, a much greater focus on patient selection that I think we have talked about previously.

So I think what we're trying to do is spend our time in the sort of Phase I, Phase IIa portion of these studies, derisking the projects as best we can for later development and we will continue to do that so that as and when we get to a point of being ready to move into a development for launch phase, we do that with the highest level of confidence one could have.

That is actually very helpful. I think just the question was really more from a process standpoint and that spoke directly to it so I appreciate that, Charlie. Thanks for taking the question.

Shaunak Deepak, Jefferies.

Good morning. Thanks for taking my questions. Just had a couple on 853, first. I am curious if you are evaluating this modified weekly dosing scheme because you are seeing ocular toxicity with the current dosing regimen?

Second, when do you think we would see some data from this weekly dosing schedule? Is ASCO too early?

Let me take the first one first. Yes, ASCO is too early. A couple of things that we have observed and this will become I think much clearer once we have presented data at AACR and ASCO this year. What we have seen is a relationship between the initial exposure and the occurrence of ocular toxicity and we also believe that there may be a relationship between clinical activity and overall exposure as defined by [AUC]. So we think that on a modified weekly schedule we can keep that maximum exposure down and keep the overall exposure up.

So based on the data that will be presented, I think the intent here is to explore that question but doing it in parallel with the three weekly -- because we have seen clinical activity, we believe we will have a dose identified for dose expansion in the near future and so obviously we don't want to pause that without having any knowledge of what is going to happen when we move into that weekly schedule.

But I think it is really trying to get the -- I would say yes, it comes from ocular toxicity to some extent but ultimately we're trying to maximize a therapeutic window and we believe that this may enable us to do that.

Just a comment so it is clear. I think that what we're doing with the adjusted ideal body weight takes us a long way to finding a therapeutic window that addresses itox. This is simply an enhancement that you would normally go through trying to optimize the dose before you commit to future studies. So I think that it is just the normal course of the events as you are going through dose optimization.

Great. Thank you.

Matthew Roden, UBS.

This is actually Andrew Peters in for Matt. A couple of quick questions. I guess first being more broad-based strategic one. When you think about your wholly-owned pipeline, is it more of a decision whether you want to kind of take it as far as you can and then partner or are these the programs that you see kind of taking -- you know, running the gamut yourself?

Then a question on 529. As you kind of look at the NHL or B-cell opportunity, are you going to focus on patients ibrutinib PI3K failure patients or is it going to be a little bit of a broader kind of program there?

Dan, do you want to start and then Charlie will talk about the second question.

Maybe we ought to just spend a second when we talk about partnering to make sure it is clear how we would define that. So as we look at the pipeline and generate data from it, when I think of partnering that is different from out-licensing a compound to a third-party. We are looking at being able to advance a compound, developing a commercial organization and supporting that ourselves although we may limit the geography for an initial compound as we go through the process as something of a risk mitigation strategy as well as I indicated earlier, an opportunity to advance these compounds as broadly as possible both geographically and in terms of indications as quickly as possible.

So it is a little bit of I think in response to your question, a mixed answer. Yes, we intend to advance these all the way on our own but not necessarily all the way on our own on a global basis. And that would be true for the first compound. I think let's not get ahead of ourselves in terms of what we might be interested in doing were we to be successful with more than one of these compounds moving forward. I will let Charlie answer the 529 question.

In terms of 529, I think you hit on a really important question. This is going to be a changing treatment area with the introduction of ibrutinib, (inaudible) and other very interesting B-cell receptor signaling inhibitors.

What we continue to need to understand where better to position ourselves as we think about moving that forward I think that may well be, could well be as an initial play, you could look at post some of those agents. We would also be interested of course in obtaining combination data for some of those agents. And obviously we also need to try to understand where there remain areas of unmet need which are not necessarily being served by any of these agents where we may have the opportunity.

So don't think we are necessarily going to commit today to saying yes, it would be in this population or that population. I think what we are trying to do is ensure that we are fully aware of all the patients that we treat, all of their history, all of their risk factors so that as we see clinical activity we can understand who we think is best going to be served by the product.

But I think you identified an important point which is that this will be a changing area and obviously the other question may inform some of our thoughts around partnering on that particular compound as well.

Okay, thanks. And the expansion cohort you have mentioned expected for the second half of year, is that going to be based on the data that we are going to see at ASCO?

Be dose escalation phase is still relatively early so by the time of ASCO, I think what you will see is some of the data to explain some of the effects that we have talked about in the past and what the changes are that we have made in terms of our approach to dosing. I think we will have more insight into expansion cohorts later in the year.

Great. Thanks so much.

Bert Hazlett, ROTH Capital.

Thanks. I have three short ones. On 289, given that the EGFR landscape is reasonably well trodden, well-characterized, is there an ability for you to get to proof of principle or proof of concept with that molecule a bit more rapidly than with others? Then I have two other questions.

Yes, we hope so. I think frankly there are, I think that is true for 289 because of familiarity with the target but that -- and I would also point to 853 when you are talking about pace. While we think through the traditional path forward, I think with 853 because there is data around that particular target outside of the work that we are doing but also a meaningful unmet need, I think that the path forward there could potentially be compressed were we to see data out of these disease specific expansion cohorts. And so I look at both of those as being opportunities to move quickly if the data supports it.

Okay, thanks. Then just two quick ones on partner programs. Back to Biotest 062, you said that there is the decision for you to specifically opt in some time several years down the road I think you indicated. Are you having dialogue with that company with regard to potential development areas? Can you give us a sense of the dialogue kind of given your interest and your rights with that particular agreement?

We maintain different dialogues with each one of our partners. I'd characterize the dialogue with Biotest as probably being one of the more broad ranging and constructive may be the wrong term but we have an active dialogue there. But also I would have to couch that in saying that they control the compound and so development path is defined by Biotest. We have worked with them in a number of areas to explore the range of opportunity for that particular compound. As you know, Bert, they have looked at a number of solid tumor targets where CD-130 is expressed and have published some encouraging preclinical data. They are following up on that with the study right now for pancreatic and triple negative breast cancer.

So we will just have to see. I think that they are taking a somewhat aggressive path in developing the compound and we will just see where that goes but there is a good dialogue but we have no rights either now or frankly post exercising the opt-in that would give us control of the compound. That would still rest with Biotest.

Okay. Thank you for that color. And then just a brief one with 984. Again exciting results there. Has an MTD been reached with that compound? Has Sanofi said anything along those lines and when we would expect more mature data with that particular trial?

The only thing that I am aware of that they have said beyond what was published at ASH was a comment that they made in the Q&A at JPMorgan where they talked about their enthusiasm about the compound but they disclosed no further data or status update.

Okay. Thank you very much.

Steve Byrne, Bank of America.

In your opinion where do you think further progress in ADC technology is going to come from? Perhaps you could prioritize these buckets, the new targets, better binding affinities, new linkers, or new cytotoxin?

That is a tough one. There is, as you know, quite a bit going on and it is tough to handicap it because of the scope of advances or understanding maybe is a better term than just advances that have taken place over the last three or four years. I think that if you talk to people about the ADC space including probably us maybe going back five years, we probably would have been -- we wouldn't have seen the opportunity with targets that has developed over the last several years.

As we talk to potential partners about the scope of targets because that is always going to be an issue for somebody who wants to enter into a license agreement, well how much real estate really is left? We have been surprised at the range of target availability and target opportunity that has been there. So I don't think that by any means we have reached the limit of what is available from a target standpoint.

I think there is a lot of opportunity coming forward with targeting vehicles. There are some innovative approaches there that may prove to be interesting. I think not to just tout CytomX alone, I think that is indicative of what can be done with targeting vehicles that potentially can further expand the range of useful targets.

In terms of binding or linkers, we will see. I think that we think that the portfolio that we have today is extremely useful from a functional standpoint in terms of the properties it conveys with the cytotoxin once released within the cancer cell. So maybe there will be innovations that will stretch that, we do an awful lot of chemistry and biochemistry work there but certainly there are other approaches being taken.

Some things that are being advanced as significant innovations in this space I think have yet to be proven and so we will just let that evolve and see whether even if proven whether they convey some of the advantages that are being promoted before there is any clinical data to support it.

Cytotoxins, we have done some additional work there. We think that there is opportunities. I don't know that the opportunities will be replacements for what exists as much as maybe defining new -- I will call them niche opportunities and I don't know how large or small niche is but they may open avenues that can't be adequately serviced by the cytotoxins that exist today but I don't know that they will render today's toxins by any means obsolete.

I am not helping you a lot, Steve, in terms of saying which is more important than the other. I have said on a number of occasions we are dealing with a system here that involves all of the elements that you know of and I don't think that you can necessarily point to one or another as being the secret sauce. I think it is each one bears different attributes and how they interact really is going to define what -- how you optimize the solution.

Actually, Dan that was helpful. Just one follow-up to that. Do you think there is merit to considering also modifying the constant region of these antibodies? As part of an ADC, would there be incremental benefit to also affect effector cell interactions?

There you start to get into the space and we will be learning more about this over the next couple of years, I think you start to get into the space of saying is there an advantage to an ADC that has an active antibody to one that uses simply a targeting vehicle? And I think there is a bias to say the more you can do to impact cell death the better certainly and if some of that can come from the antibody, all of the better. But I think there is going to be a limited universe of active antibodies. Now whether modifying the antibody in some way can impact that I guess remains to be seen. Charlie, do you have any thoughts there?

No, obviously the greatest success that we've had with our technology to date has been Kadcyla where we have an active antibody and I think anything where there are active antibodies. But then you have also trying to ensure that you have antibodies whose activity is there at about the same level where it is delivering adequate payload to the cell.

So I think it is always an interesting one but I think to my mind that and the work that we have done with CytomX, the work that we have done around cytotoxins is broadly about addressing more targets, those with lower target expressions, through more potent payload where perhaps there is more expression on normal cells is the concept behind the Probody deal.

So I think overall we are prioritizing all of them in a sense but with a view to my mind at least of addressing more targets and I think that will come in with looking at effector regions on antibodies as well.

You mentioned Kadcyla, I was actually thinking more along the lines of what is the other Roche, Gazyva, where it is the interaction with effector cells that is being pulled in. Is that logical to consider doing something like that on an ADC?

We may not have the right people in the room and that particular one, there you are dealing with CD-20 as a target. I am not sure again in thinking about the system and realize it is a broad question but just to focus on that one, CD-20, when you think about targets is not a particularly attractive target for an ADC because of the behavior of that particular target and not internalizing well.

So you think about different things with different targets. I know you weren't asking specifically about CD-20 but we would have to have people that are more knowledgeable about that particular dimension to be helpful beyond that, Steve.

Okay, all right. Appreciate that. Thank you.

That does conclude our question-and-answer session. At this time I would like to turn the conference back over to Carol Hausner for additional or closing remarks.

Great. I would like to thank everyone for your attention and interest in ImmunoGen. If you have any subsequent questions don't hesitate to call and have a great day.

That does conclude today's teleconference. We thank you all for your participation.