ImmunoGen Inc (IMGN) 2015 Q2 法說會逐字稿

Good day and welcome everyone to this ImmunoGen second-quarter fiscal year 2015 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 the Executive Director Investor Relations and Corporate Communications, Carol Hausner. Please go ahead.

Thank you. Good morning. At 6:30 this morning we issued a press release that summarizes our financial results for the second quarter ended December 31, 2014. 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 risks 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. Our Chief Development Officer, Dr. Charlie Morris, will discuss our lead wholly-owned compounds in greater depth, and our Chief Financial Officer, Dave Johnston, will discuss our financial results and guidance. We will then open the call to questions. Dan?

Thank you, Carol, and good morning, everybody. We expect 2015 to be a notable year for ImmunoGen. We are preparing to expand the development program for our lead wholly-owned compound IMGN853 based on the findings we are seeing in the disease specific cohorts of our Phase 1 trial for treatment of patients with platinum resistant ovarian cancer and those with relapsed refractory endometrial cancer. And we plan to move it into advanced testing for one or both of these indications this year. We are targeting ASCO for presentation of the latest findings with 853 so you can see what we are seeing.

We are also excited about the activity being reported with our IMGN529 product candidate particularly among patients with heavily pretreated diffuse large B-cell lymphoma, a significant need. We have seen a 40% objective response rate among the evaluable patients with DLBCL as reported at ASH last month and dose escalation is ongoing. Charlie will discuss 853 and 529 in greater depth in a moment.

Turning to our earlier stage programs, IMGN289 continues in dose finding and IMGN779 remains on track for IND filing in the second half of 2015. IMGN779 is a CD33 targeting compound and it will be the first ADC to use one of our DNA acting payload agents.

We also expect considerable partner activity in 2015. In its quarterly update on Wednesday, Roche reported that Kadcyla sales reached CHF536 million or approximately $600 million in 2014, up 135% over 2013 and about 10% over the prior quarter from increasing international sales. They also announced that they further expanded the Kadcyla clinical program to include assessing it for second line treatment of advanced HER2-positive non-small cell lung cancer, its seventh potential use. And that they have maintained their expectations of having regulatory submissions in 2015 for second line treatment of advanced HER2-positive stomach cancer and for first-line treatment of HER2-positive metastatic breast cancer.

Presumably we will all have more insight into why Roche considers such a submission possible when the MARIANNE data are reported later this year.

Our partners Sanofi and Biotest reported highly encouraging Phase 2 data at ASH for the CD38 targeting naked antibody, SAR650984 and the CD138 targeting ADC, BT062, respectively. As a reminder, ImmunoGen has opt-in rights with Biotest in the US and Sanofi also has three ADC programs in their clinic through their collaboration with us.

Clinical testing is ongoing with the Bayer and Amgen compounds and we are seeing a high level of activity with our newest partners, Novartis and Lilly.

Over the past two years, Novartis has taken all six licenses allowed under our 2010 agreement while Lilly has taken all three licenses allowed under our 2011 agreement. Earlier this month, Novartis advanced its first ADC, LOP628 which targets cKit into the clinic. This triggered a $5 million milestone payment to ImmunoGen.

So there are now 12 novel agents beyond Kadcyla in the clinic through our own programs and those of our partners. We expect this number to increase by as much as one-third this year with the advancement of our IMGN779 product candidate and additional partner compounds to IND filing and potentially even the start of patient dosing for some of these compounds in 2015.

So with that, let me turn it over to Charlie to discuss our wholly-owned product programs in more detail. Charlie?

Thanks, Dan, and good morning, everyone. I will start with our lead wholly-owned compound, IMGN853. This is the first and only ADC to target the folate receptor alpha that presented clinical testing bringing the benefits of both an antibody targeting agent and our validated ADC technology. Folate receptor alpha antigen is highly expressed on many ovarian and endometrial cancers as well as on other types of solid tumors.

As you know we started by assessing IMGN853 administered every three weeks in patients with tumors likely to express this target and once we established its recommended Phase 2 dose began testing it specifically for the treatment of target positive platinum resistant ovarian cancer and relapsed refractory endometrial cancer. We are seeing encouraging activity with 853 as a single agent for this dosing schedule. These findings and resulting investigator enthusiasm for 853 are leading us to plan a three-way expansion of its clinical program in 2015.

First, our (inaudible) and interest in 853, we expect to soon fill the expansion cohort for patients with platinum resistant ovarian cancer with this intent to expand this cohort from 20 to 40 patients which will give us additional efficacy and safety experience with 853 for our discussion of next steps with investigators and potentially with regulatory authorities.

Second, we are planning to initiate Phase 2 clinical testing with 853 this year for the treatment of platinum resistant ovarian cancer or relapsed refractory endometrial cancer or both based on the activity we are seeing with it as a single agent therapy. We are discussing study designs with our investigators and opinion leaders and will seek regulatory discussions if we believe there is the opportunity for accelerated approaches to registration.

Third, we intend to initiate assessment of 853 used as part of combination regimens as this should further expand the opportunity for 853 to help patients including those with less heavily pretreated disease. I will also remind you that we are continuing to explore a modified weekly scheduled to understand whether this could provide additional benefits. Both exploration is ongoing and we have been pleased with patient accrual.

As Dan noted, we would like to have the findings to date presented at ASCO and abstracts are being readied for submission next week.

I will turn now to our IMGN529 agent for B-cell malignancies. The CD37 targeting ADC is currently in the dose finding portion of a Phase 1 trial assessing it as a single agent in patients with non-Hodgkin lymphoma. Data from this trial were presented at the ASH annual meeting in December and include the patients treated at higher doses than the data presented at ASCO in June. The findings reported included the 40%, four out of the 10, evaluable patients with relapsed refractory defused large B-cell lymphoma had an objective response on 529 including three partial responses and one complete response.

Indeed among the five patients with DLBCL receiving the 1 mg per kilogram dose, the most recent cohort completed, one had a CR, one had a PR and one had durable stable disease.

So we are seeing what we believe is an interesting level of activity at this early stage of development.

Dose escalation is ongoing, our best estimation at this time is the maximum tolerated dose and recommended Phase 2 dose will be established in the first half of 2015. Once we have this we will begin assessing 529 at this dose specifically for the treatment of relapsed refractory DLBCL. We will also begin evaluating it for the treatment of chronic lymphocytic leukemia starting with some additional dose finding work. We plan to next report 529 data in the latter half of 2015, most likely at ASH.

As Dan noted, dose finding is ongoing with IMGN289, our EGFR targeting ADC and our IMGN779 compound remains on track for IND filing in the second half of 2015.

With that, I will turn the call over to Dave to discuss the financials.

Thanks, Charlie. As Carol noted, we issued a press release this morning with our financial results for the quarter ended December 31, 2014 which is the second quarter of our fiscal year 2015. I will discuss the highlights and then I will review our guidance.

Our revenues in the quarter were $48.3 million as compared to $30.1 million for the same quarter of last year. The current period includes $41.4 million of revenue from license and milestone fees principally from the amortization of upfront fees received from Novartis and Lily in 2010 and 2011 respectively due to their taking licenses in the current period.

The prior year had $25.7 million in revenue from license and milestone fees which included the $5 million cash payment from Roche on the approval of Kadcyla in the EU. Our second-quarter financials also included $4.6 million in royalty revenue earned on sales of Kadcyla compared to $2.3 million in the same period last year. As a reminder, we receive and recognize royalties on Kadcyla one quarter in arrears.

Operating expenses in our second quarter of fiscal 2015 were $34.5 million compared to $26.3 million in the second quarter of last year. This change is primarily due to increased third-party costs related to the advancement of our internal products, increased costs associated with manufacturing clinical materials on behalf of our partners, and increased personnel and patent expenses. Breaking out those totals, R&D expenses were $27.6 million in the second quarter of this fiscal year compared to $20.9 million in the same period last year. [SG&A] expenses were $6.9 million in the current period compared to $5.4 million in the same quarter of last year.

For the quarter, we had net income of $13.6 million or $0.16 per share compared to a net income of $3.8 million or $0.04 a share for the same quarter of last year. We ended the quarter with $106.6 million of cash and cash equivalents compared with $142.3 million as of June 30, 2014 and we continue to have no debt.

Our cash used in operations was $34.4 million for the first six months of fiscal 2015 compared to $21.6 million in the same period last year reflecting our increased investment in advancing our wholly-owned programs. Capital expenditures were $2.6 million in the second quarter which was consistent with $2.3 million in the same quarter last year.

Our guidance for fiscal year 2015 remains unchanged from that previously provided. Specifically, revenues are expected to be between $100 million and $105 million; operating expenses to be between $160 million and $165 million; net loss between $60 million and $65 million; cash used in operations between $55 million and $60 million; capital expenses to total between $7 million and $9 million and we expect to end the fiscal year with between $75 million and $85 million in cash.

We continue to advance our two-prong strategy of investing in the development of our wholly-owned product candidates and utilizing partnerships to advance therapies which we believe have the potential to make meaningful difference in the lives of patients with cancer.

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

Thank you, Dave. We look forward to providing updates on our wholly-owned programs as well as partner events over the course of 2015. So let me give you a recap of those starting with our own programs.

In April, we expect to have a number of presentations at AACR on additions to our state-of-the-art technology portfolio, our product candidates and research done in collaboration with partners. For the lead compound IMGN853, we expect to report the latest clinical findings at the ASCO annual meeting in June. We plan to initiate Phase 2 testing in 853 in the treatment of platinum resistant ovarian cancer or relapsed refractory endometrial cancer or both in the second half of 2015.

If the data warrant, we would explore with the regulators an accelerated pathway for one of both of these indications. And we plan to initiate assessment of 853 used in combination regimens for ovarian cancer in 2015.

For IMGN 529, we expect to have its recommended Phase 2 dose in the first half of the year and to then initiate assessment of it specifically for the treatment of relapsed refractory diffuse large B-cell lymphoma and chronic lymphocytic leukemia. We intend to report updated clinical findings with it at a major medical meeting in the latter part of 2015, most likely ASH.

We expect to submit the IND for our IMGN779 product candidate in the second half of 2015 and to continue dose finding work with our IMGN289 product candidate.

Turning now to partner compounds, we expect global sales of Kadcyla to continue to increase in 2015 as it gains broader use for is approved indication. We expect the MARIANNE data to be presented and for Roche to provide insight on the outcome of its discussions with regulators sometime over the course of this year.

Further we expect the readout from the GATSBY gastric cancer trial and if positive for Roche to apply in 2015 for Kadcyla approval for the use of study. Beyond Kadcyla we expect data disclosures and/or development events for several of the nine other product candidates in the clinic through our partnerships. And we expect two to three more partner compounds in addition to LOP628 with Novartis to advance into the clinic this year. So all in all, we would expect to see a very active 2015.

With that, let me turn it back to Carol and we can then move to the question-and-answer session.

Thanks, Dan. We are about ready to open the call to questions. We ask that each person limit their questions to one to two per person until everyone has had a chance to ask their questions and then you can get back into the queue and ask additional questions.

Operator, we are ready to open the line for questions.

(Operator Instructions). Chris Marai, Oppenheimer.

Good morning, guys, and thanks for taking my questions. First question really on 853. I'm wondering if you could help elaborate a little bit about the dose schedule that you picked and why you are now looking at also a modified schedule, weekly schedule, for that therapy?

Number two, on 529 CD37, obviously we have seen some folks in DLBCL want to combine therapies with PD-1s. Could you maybe comment on the potential for combining with any checkpoint inhibitors now that you have got some initial safety data and dosing data there? Thanks.

Yes, for the dose schedule, we haven't made the final selection yet to just reiterate what I said in the latter part of the call of my piece of the prepared notes. We are continuing to explore the weekly schedule. Obviously we currently have more information with the three weekly schedule and are very encouraged by what we are seeing with it. But we continue to explore the other dose schedule as well and we will make final decisions on that as we go through the year and have more information. But we still have not established a recommended Phase 2 dose on the weekly schedule.

For 529, yes, certainly PD-1 is a -- and checkpoint inhibitors I think are of interest broadly speaking. But at this stage we continue -- yes, we've got some interesting activity. I think we would like to establish more knowledge about a final dose, more knowledge about more information in terms of safety and efficacy but certainly checkpoint inhibitors and other combinations of course are things that we will look into as we go forward.

Okay, great. Just real quick on 853 dosing, is it ultimately being limited by toxicity? Is that at the end of the day what is guiding that decision? I will jump back in the queue. Thanks.

Well, the major way for selecting doses for oncology agents has been based around establishing the maximum tolerated dose and then from there moving forward. We are looking as we look at the weekly schedule, we are looking at both the potential to have good tolerability and perhaps equal or better efficacy than we have seen with the three weekly schedule. If we believe that we can improve on either end of that we will select that dosing schedule. If not, we like what we see.

But it is always that balance of tolerability and efficacy that we are looking for and at the moment with both schedules we believe that we are doing well in establishing that we can dose tolerably and effectively.

Matthew Harrison, Morgan Stanley.

Great. Thanks for taking the question. So two for me. First on 529, maybe you could just help us think about the competitive landscape there. There are obviously a lot of agents in development and where you see the right place for 529 in that landscape?

Secondly on 853, I know you have characterized the data as demonstrating enough I think to move into some of these expansion cohorts. Can you maybe characterize what the bar was for you to move ahead or what you see as even across the landscape as clinically meaningful data that would allow you to move ahead? Thanks.

So for 529, obviously I think B-cell malignancies broadly speaking is clearly competitive at the moment. There have been new entrants as you know. I think DLBCL clearly there is competition but I think it is less active, there has certainly not been any approved agents for a very long time. And I think in the relapsed refractory space where obviously we have started to see activity for 529, there remains considerable unmet need both for single agents and for combinations.

So I think with DLBCL although there are other things coming into the space, the fact that we have started to see an interesting level of activity encourages us to be very interested in pursuing that as an area where there continues to be a need for new agents.

For 853, I would think where we are is that we started the initial expansion cohorts as we had already planned to do. We are working towards completing the original intent there, the original intent was to include 20 patients. We have decided because of the safety and efficacy profile that we are seeing to expand that to take that to 40 patients.

I think to go deeper into development, to develop it as a single agent, I think if you start to see response rates in the 30% to 40% rate or higher you would be interested in developing it just a single agent. We haven't made all of those decisions yet. Obviously we have got the information that we have to date but we are encouraged and that is what has encouraged us to both expand the cohort and be talking publicly about the notion of going into the next level in the more advanced stages of development.

Michael Schmidt, Leerink Partners New York.

It is actually Jonathan Chang stepping in for Michael. Thanks for taking my questions. First question, can you walk us through what your thinking is on the neutropenia seen with IMGN529?

Yes, as you know we saw some early neutropenia in the early dosing. We felt that as that happened so early after dosing that it was most likely related to some redistribution because of cytokines and that is why we added corticosteroids over the first couple of days of therapy. That seemed to reduce that.

We also then saw some neutropenia a little later and we used and have been using Neupogen to try and overcome that. That seems to be being effective as well. So we are now at a point where we have still seen some neutropenia but it is less and it is at shorter duration and we've been able to continue dose escalation beyond where we were when we first presented data at ASCO last year. That is something which we feel is manageable that is under control and it has certainly not been something which has stopped us from being able to escalate the dose and to find efficacy as well.

Great, thanks. Second question, can you provide some color on the commitment that Biotest has in developing BT062 especially in light of the recent management change there?

We really don't like to get into sort of stating a position on behalf of our partners, Jonathan. BT062 has shown very good data in the clinic. As you probably know, the ASH data was very impressive with their combination study in multiple myeloma. The management change I think was an orderly succession. I think it is interesting they brought in as CEO out of the pharmaceutical area as opposed to blood products but beyond that I will let Biotest speak to what their intentions are around the development of BT062.

All right, thank you.

Jason Kantor, Credit Suisse.

Thanks for taking my question. A couple of them have already been asked but I am just curious on 853, you've spoken about possibly approaching regulators if you have good single agent activity in ovarian cancer. I am just not aware that the FDA has been willing to accept response rate for accelerated approval for other drugs so I'm just wondering if you have had any interactions with the FDA that would change that view? And also you mentioned that you are looking to advance that program in one or both of ovarian and endometrial. I am just wondering what exactly are we waiting on to make that decision?

No, we haven't had any conversations with the FDA at the moment. I just think we are just trying to signal that if the data continues to be interesting and we saw high levels of response with durability of those responses then we believe it is conversation that is of value but obviously when we get to that point we will let it be known.

What are we waiting for? We are waiting for completing the accrual and getting more data out of our expansion cohorts. But clearly this is part of the plan. Those expansion cohorts are going on, they are providing us information. I think we always want just a little bit more on both the safety and efficacy side to pull the trigger on the next level of investment. But clearly we are seeing signals from both sides which encourage us.

And we have also got that little bit of dose work that is going on at the same time as well. So it is just a few factors coming together but we are confident that we will be able to move this forward during this year.

Simos Simeonidis, RBC Capital Markets.

Thanks for taking my questions. A question for Dan. Kadcyla sales in the US have been flat for a number of quarters. Do you have any sense why the drug has not been able to break through any further past the [70] million a quarter it has been at the past few quarters? What are your medical oncologists you are talking to telling you?

Good morning. The only insight that we have would be that that was provided by Roche. I don't know that they reinforced it this quarter but it had been seen in earlier quarters. They still have what they view to be a penetration rate in second line HER2-positive metastatic breast cancer above 40%. I think what they indicated I think would still hold true in that there has been a shift in first-line therapy as they have added PERJETA to a Herceptin plus taxane therapy. The data that we saw suggested a long duration benefit to patients and so I think that we are continuing to see some impact of first-line patients staying on that triple combination for an extended period of time and being slower to migrate into second line therapy.

I don't know that there is anything else taking place from a therapeutic standpoint that would suggest otherwise. All the feedback that we hear from the oncology community is that they have very good views of Kadcyla but as long as first-line patients are getting benefit out of the triple combination, that simply defers to the patients; benefit obviously the point in time when Kadcyla would be an appropriate therapy.

And then I am not sure I got all of Charlie's answers to an earlier question on 529. CLL is a very crowded space and not only is it crowded but it is dominated by Imbruvica that seems to have very good efficacy and safety. Where exactly do you think 529 might find a place there?

So my response earlier was really focused around DLBCL because that is where the initial focus has been, that is where we have the signal at the moment. Based on preclinical information we have we are very encouraged by some early data, some preclinical data around CLL that we have seen in appropriate models there. We don't have any clinical data in that setting at the moment but that is something that we do plan to include in some early studies.

Imbruvica is clearly doing very well but I think that we will continue to -- there will obviously be patients who will progress after Imbruvica. There will be combination opportunities down the line so I think there is always a need for new approaches for disease. As you say, it is very busy but I think our initial focus will be much more on DLBCL though we do plan some exploratory work in that CLL space.

Jessica Fye, JPMorgan.

Thanks for taking the questions. Maybe just digging into one of the earlier questions a little more. With respect to 853 and potentially pursuing an accelerated development pathway there, can you just elaborate on whether there is any potential to design those Phase 2s in a way that could allow them to represent registrational studies either in ovarian or endometrial?

And then also just with respect to beginning combination work for that asset, can you talk about what agents you are considering studying it with? Thanks.

In terms of designs for accelerated programs, clearly that is something that will depend on the data itself and negotiation with authorities. I think if we look at endometrial carcinoma, an area where there has really been no new effective agents for many, many years, we believe that with good response rates that there may be a single arm, single agent study may be possible. But obviously that needs to be a regulatory discussion. Or there could be relatively small, randomized studies against some of the agents currently used such as doxorubicin but obviously those are pretty unsatisfactory comparators from an efficacy point of view so for things that we believe would have an opportunity to compete with and when.

I think on the ovarian side again, it would take a high response rate and durability of those responses to be able to have a serious conversation about single arm studies. But I think we don't rule anything out at this particular point and if that is not there then there is still opportunities for using single agent compared to current standards of care in studies based around progression free survival.

I think in terms of combination, we look as anybody would at what is the current standards, what is being used in the space. This is in the platinum resistant opportunity and we combine with those. We haven't disclosed exactly what the design of those studies would be but there are agents there which are available and which are used and which we believe we will be able to safely combine with and so we are looking to begin those explorations this year.

Okay, understood. Then maybe just one follow-up on the dosing schedule recognizing that you are still evaluating the newer dosing schedule for 853. Can you just talk about whether getting more data on that dosing regimen will represent a gating factor as to when you can start Phase 2? Will you have that data in time or if you are seeing sufficiently good results with the current regimen will you just press forward with that dosing schedule?

I think you probably answered the question for me with the question. If we start to see things with the weekly schedule which make us believe that there is something about it that is a significant improvement we will push ahead. Though obviously the most expeditious way of moving forward would be to use the three-week schedule in which we have the greater amount of information. So we are going to continue those in parallel and if things begin to emerge from the weekly, then we will make the switch. But if there is no compelling reason, then clearly the greater amount of safety and efficacy information to put in front of investigators, opinion leaders and regulators will be from the three weekly and we will go ahead with that.

The three weekly we would -- based on what we currently know, we would be very happy to take forward but we need to also be giving that modified weekly the opportunity. So at this point it is not necessarily a gating decision.

Brian Klein, Stifel.

Great. Thank you for taking my question. Just one financial question. You have laid out I think a fairly ambitious clinical program for all of your candidates and I am just wondering if you could comment on how you might think about financing the Company beyond calendar year 2015? And if you feel that you will need to partner or license out (technical difficulty) for 853 to advance to late stage development? Thank you.

Sure, Brian. Dave Johnson here. Yes, so the current cash guidance that we have takes us into calendar year 2016. We haven't said specifically how far but that is even with kind of a development program that we are talking about.

But your question is valid in terms of eventually especially as these move into later stage clinical trials we are going to want to top up the tanks here a bit. So we do have options and some of those options are as you said -- let's say that as these programs move forward they will move forward with the kind of data that makes it interesting. At that point it might make sense to consider doing a partnership particularly a geographic-based partnership where ImmunoGen retains North American or US rights but there could be lots of interest in ex-US rights. Another option would be a potential monetization of part of the Kadcyla royalty.

And I think lastly as these programs move forward, it would be our hope and expectation that the market would recognize the value and that would change our equity value and that would then open up further options as well.

Great, thank you.

Andrew Peters, UBS.

Good morning, guys. This is (inaudible) calling for Andrew Peters and thank you very much for taking my questions.

So my question is when you speak to KOLs or the regulatory about 853 or other ADCs, how do they view the toxicity from maybe a clinic or regulatory perspective? I am just wondering is there a level of (inaudible) that would be acceptable provided the efficacy benefit is significant and overweight?

I think generally talking to investigators, our opinion leaders adjusting to any new therapy and any new type of therapy takes a little bit of learning but certainly as we look at the rate of recruitment of patients into our studies, it suggests to us that investigators are comfortable with the tolerability profile and encouraged by what they are seeing from an efficacy perspective.

Now we haven't got deep into discussions with regulatory authorities at this point but clearly without major toxicities dominating the picture here, clearly there are tolerability aspects that we continue to work on. But I think the overall profile people are comfortable with and becoming very accustomed to so there is not really -- not seeing it at this point is a real limiting factor in being able to push our lead programs 853, 529 forward.

And also for 853 since you haven't mentioned the potential combination with other compounds, do you perceive concurrent treatment or like a sequential treatment in that case?

I think we would be looking for concurrent therapies. We are pleased with the activity that we are seeing as a single agent that most oncology agents at some point combine with other agents with different mechanisms of action to try and improve the outcomes for patients and the ultimate aim and the ultimate way for us to be successful will be to improve outcomes for patients.

So we will continue the development as a single agent but believe that with combinations as well we have the opportunity to further improve and further enhance the opportunity for the product.

Thomas Wei, Jefferies.

Thanks. I wanted to clarify a couple of things that you have said just trying to piece together some of the 853 commentary. So you had mentioned in response to an earlier question that to go deeper into development as a single agent you would want to see response rates in the 30% to 40% range. I just wanted to clarify so if you do not see a 30% to 40% response rate, that means that you wouldn't move forward with another trial, maybe you would wait for one of these combination studies to report out? Or is that threshold the trigger for pursuing a single agent study versus the randomized PFS study? I didn't quite understand that.

I think part of the challenge, Thomas, is that we are talking in a speculative way. It is always going to be about the totality of the information. I think generally speaking I think for an agent to have a compelling opportunity as a single agent, you're probably talking about 30% range and higher. But with outstanding PFS, with outstanding duration of response maybe there are different levels. So that is sort of a more general statement.

If you don't get to those levels the way you think it is active but perhaps not active enough to cross the line for registration as a single agent, then I think having combination data also helps you to have a secondary approach where you can take an active agent, combine it with another agent and perhaps provide those additional benefits.

So I don't want to suggest that we have got numbers which are cast in stone and those are it. We have got to see the totality of the information at the time. The message is that we are looking at all of these things because we believe that we have an interesting level of activity and if we can maintain that type of level of activity then we will be encouraged to taking the product deeper into development.

That is helpful. My second question was just that 30% to 40% hurdle, was that kind of with platinum resistant ovarian cancer in mind or does that also apply to the endometrial setting?

The 30% and higher range, that is really a platinum resistant ovarian cancer number. I think the number is probably lower for endometrial carcinoma. Sadly, you know the second line and later therapies for relapsed refractory endometrial cancer got very low response rates, very short progression free survival, and I think the bar there is perhaps lower though obviously we will always have ambitions to be as high as we can be. Though I think there will be a path forward even in the 20% range there.

Mara Goldstein, Cantor Fitzgerald.

Thanks very much for taking the question. I have two. The first one is on 529 and the use of steroids in that trial. Is it prophylactic at the outset of treatment or is it at the beginning of symptoms that steroids are deployed? Can you speak to the dose on that?

In terms of the corticosteroids, what we are doing is we dose, pre-dose and two days after for all patients. So this is to prevent that early drop that we were seeing in the neutrophils rather than keep going. And I will actually have to get back to you with exactly what the dose is there because I don't have that at my fingertip.

Okay. The second question is more a financial modeling question on Kadcyla forward revenues. If you look at the landscape of the clinical trials from Roche and how you think about modeling, are the forward projections incorporating the trials that have yet to read out and any part of MARIANNE or are they solely based on Kadcyla and the approval today?

When we model forward, we have generally modeled with the approved indications and then we risk adjust for any other indications that are in, that are still in development. But I have to say that we generally don't look in too much detail beyond three years out so even the other indications would just be ramping up so they wouldn't have I think much impact on the next two or three years when you look at the impact on our near-term royalty stream.

Boris Peaker, Cowen and Company.

Good morning. Just a few questions, more on 853. Just curious if you are comparing the two different doses the weekly and the three weekly dose, what fraction of patients require dose reductions in each one of those dosing schedules? And also are you giving these patients any supporting drugs like steroids and growth factors?

We will disclose the information that we have available for two doses when we present data which as we said earlier we are hoping to submit to ASCO but -- so that level of information has not been disclosed at this point.

In terms of -- and obviously the experience with the weekly being in dose escalation right now is relatively low as well.

In terms of any supporting materials, no, we have been the only additional thing for 853 is using some measures to try and minimize the symptoms that we saw on the ocular side so people aren't using lubricating eyedrops and similar things but no additional medication from the steroid or Neupogen type point of view.

Thank you very much for taking my questions.

John Sonnier, William Blair.

Thanks for taking the questions. Two for Charlie. First, with 853 I think just to clarify, the discussion has been and all the commentary around platinum resistant disease. Is there a strategy where you might go into platinum refractory in combination with Doxil or even into Doxil refractory where there is greater unmet medical need as a rapid to market strategy?

I think if you were looking at single agent development to take it forward then I suspect those would be patients who would know the experience of Doxil prior to going on to the study, Doxil obviously being an approved population there. The platinum refractory population incredibly tough population as you know and thankfully for the patient's, a relatively small population. So while I agree that if you had an agent which could be successful there that may be a faster market path. I think it is a very, very tough population and not one that we have been choosing to pursue to the same extent that we are choosing to pursue platinum resistant.

Okay, that is helpful. I hate to ask the question but I get asked the question a lot. The question I0 get is how do I think about ADCs in a world where immuno-oncology will play an increasingly prominent role? And I guess I will pass it on to you. How has the emergence of a lot of the data over the past couple of years shaped your thinking I guess across the spectrum from target selection to design and development? Thanks.

I mean the emergence of immuno-oncology is a very exciting thing. A lot of patients are benefiting and it is great to see these successes occurring. But no treatment has ever been able to stand on its own and be the only thing that is required to treat cancer. I think in that case, there will always be a role for additional agents. I think ADCs will hopefully continue to fulfill their promise as well. I think there will be opportunities to combine checkpoint inhibitors with ADCs and I think that will become a success and part of the success as well.

So I don't think we should regard that it is all over because checkpoint inhibitors exist, they are doing well but there is still a lot more to do to treat this particular disease. And we continue to think about that extensively about how these things are going to fit together and therefore how we maximize the opportunity for ADCs with all of these new things going on.

But clearly we still have a great opportunity to bring forward active agents as well for targeted populations of patients and we will continue to understand and explore that.

It is Dan, John, if I can add to that and while I'm not trying to lead anyone about anything on the business development side but having just been out at J.P. Morgan a few weeks ago and the dialogue took place with various parties around this space, our technology, etc. you still are seeing, I think that the players in the field large pharma, other people who have a significant position in -- you see people in the space who continue to show a significant interest in ADCs, both current technology and additional innovations that are being brought into the portfolio.

I think it is also -- you could also point to the licenses taken by Novartis, by Lilly, of looking to continue to advance ADCs as another tool in their toolkit to be able to potentially combine with other agents that are evolving.

So clearly immuno-oncology has garnered a lot of attention for a number of very good reasons but I think that key players recognize that complementary agents are going to be able to take the field of cancer therapy farther than checkpoint inhibitors or other immuno-oncology agents can on their own.

So we are very encouraged. We think there continues to be quite a bit of interest in this space and with both our own compounds as well as what our partners are doing we think that it is getting very good support.

John Newman, Canaccord.

Thanks for taking the question. So a follow-up on Thomas's question earlier, can you give us a sense as to the range of response rates that would prompt you to take 853 forward in combination versus sort of the level of response where you would be comfortable pushing it forward as a single agent? And would you say at this point in time that you are closer to single agent moving forward or closer to combination moving forward? Thanks.

I think I'm going to have to refer people to the data that we present at ASCO when we get to ASCO to see where we are. Clearly from what you are hearing from us we believe that single agent is in play. I think to go forward just in combination, you still need an active agent. I think if you couldn't cross a 20% response rate line, then you would probably think that you were not active enough in platinum resistant ovarian carcinoma to be able to go forward. But I think the conversation will be much easier and much clearer when we are able to get the data out to the public domain and we can really frame the conversation with the reality of the numbers rather than the speculation around the numbers.

As I said earlier, I think north of 30% you are probably interested as a single agent, somewhere a little less than that, still interested as a combination agent but I think the conversation becomes much clearer when we are able to present the data and discuss the reality of where we can go at that point.

Do you suspect that you might be able to present some data on the durability of response as well?

Sorry, the question is on the durability?

Yes.

Yes. We have been in the expansion cohort for a little while now so certainly we will start to see, have some sense of durability by the time we are presenting data in the middle of the year. Obviously that always takes longer to get through but I think we will begin to have some sense of the durability by the time we are able to present data. And as we said, we intend to submit that data to ASCO.

Great. Thank you very much.

Thomas Wei, Jefferies.

Thanks for taking the follow-up. So just on a durability front, I had wanted to ask -- I don't know plan numbers in ovarian cancer that well but what would be a durable response in that setting?

I think if you started to see six months of a response then you would consider it durable. Remember the definition for platinum resistant disease means that a patient even though they have had a response it has progressed within six months. So there is clearly from the way that we have defined this disease over the years that we see six months as being an important duration for patients with this disease.

Can you just remind, you said that the expansion cohorts have been going on for a little while. When exactly did you start each one?

They started around about the middle of last year. Third-quarter of last year.

And then I was curious, so you are expanding the ovarian cohort only or were you expanding both ovarian and endometrial?

At this point we are further expanding the ovarian. That is just sort of a mathematical thing if you like. There are more patients with platinum resistant ovarian cancer than there are patients with relapsed refractory endometrial cancer and they are more likely to express the folate receptor target. So we have been, so that one at this point is recurring as you would expect more quickly and therefore the decision to expand this is easier to make for ovarian at this point than it is for endometrial but we don't rule out doing the same thing for endometrial.

I just wanted to be clear, it is Dan. Both endometrial and ovarian are in the planned expansion cohorts so we have more stringent inclusion criteria for patients, we are looking for certain expression levels. So both of those are recruiting today.

What Charlie's reference is that for ovarian we are going to go beyond the planned 20 patient expansion cohort and bring in an additional 20 patients. We have not made that decision for endometrial at this point. So I just wanted to be clear. When we talk about expansion cohorts and expansion of the expansion, I don't want people to be confused.

Okay. But ultimately expanding a cohort -- wouldn't it be more important to expand the one where the response rate is more difficult to interpret so if you only have 20 patients with endometrial and the bar is a 20% response rate, it might be more helpful to have 40 rather than 20 there?

Yes, and as we say as we continue the accrual of patients into that particular cohort we will look at that and certainly that is something that we may do if we are encouraged by what we see. As I said, the reason for talking about this for ovarian at the moment is because the accrual of patients to that cohort has been quicker because it is a larger population that is more likely to express the target so that is a decision that we are ready to make. It is not a decision that we are yet ready to make for the endometrial side.

That concludes today's question-and-answer session. Carol Hausner, at this time I will turn the call back to you for any additional or closing remarks.

Thank you. I want to thank everyone for their interest in ImmunoGen and just as a reminder if you have subsequent questions don't hesitate to call. Have a very good weekend. Take care. Goodbye.

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