Inovio Pharmaceuticals Inc (INO) 2017 Q3 法說會逐字稿

Greetings, and welcome to the Inovio Pharmaceuticals, Inc. Third Quarter 2017 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Jeff Richardson. Thank you. Mr. Richardson, you may begin.

Good afternoon. Today's call may contain certain forward-looking statements relating to our business, including our plans to develop DNA immunotherapies and electroporation-based delivery technologies, products and product candidates as well as our capital resources, all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause actual results to differ materially from these statements. A description of these risks can be found in our latest SEC disclosure documents and recent press releases. These statements speak only as of today's date, and we undertake no duty to update or revise them.

Presenting for you today are Dr. J. Joseph Kim, Inovio's President and CEO; and Peter Kies, our Chief Financial Officer. Now Dr. Kim?

Thank you, Jeff. Good afternoon, everyone. Before talking about our operations and financial results, I want to remind you of the path we're traveling and the milepost we have passed, because I think that underscores the reason why we're so confident about achieving our goals.

What are these goals? My vision for Inovio is to become the leader in the following 3 critical areas: First, we will be the company that transforms the treatment of HPV-associated disease with the first immunotherapy to treat both precancer and cancer caused by this common infection.

Second, in the field of immuno-oncology, our T cell activating immunotherapies will be considered the go-to combination therapy with checkpoint inhibitors.

Third, through public/private alliances, Inovio will become the leader in rapid vaccine development to combat emerging infectious diseases and biodefense threats.

I'll take each one of these goals briefly and show you how far along the path we are in achieving our objectives.

First, Inovio will be recognized as the leader in HPV-caused diseases. Overall, Inovio is well positioned to comprehensively treat HPV-associated diseases across the continuum of HPV infections, from precancerous conditions through to cancer in both women and men, with VGX-3100 already the most advanced product for treating these diseases.

In June of this year, Inovio commenced its Phase III clinical program to evaluate the efficacy of VGX-3100 to treat cervical dysplasia caused by HPV. The pivotal data from this program will support the licensure application of VGX-3100. And I'm proud to point out this product will be the first immunotherapy and the first nonsurgical therapy for this disease.

In a little over 3 months since Phase III initiation, Inovio has already opened nearly 35 U.S. sites and now initiated several sites internationally, all recruiting and ready to dose patients. By the end of the year, we expect to open at least 50 sites in at least 6 countries. Our team is focused on executional excellence.

In April, Inovio also commenced a randomized, open-label Phase II trial to evaluate the efficacy of VGX-3100 in women with high-grade HPV-caused vulvar neoplasia, a disease with high unmet medical need. The primary endpoint of the study is histologic clearance of high-grade lesions and virologic clearance of HPV virus in vulvar tissue samples. In the past 90 days, we've opened 10 sites in the U.S., recruiting and ready to dose patients. You may not be aware of the significant morbidity associated with current surgical treatments for VIN in young and middle-aged women. This includes long-term pain, disfigurement and sexual dysfunction. And the recurrence rate for VIN is very high, resulting in a repetitive need for invasive surgeries.

In 2018, we also plan to initiate a Phase II proof-of-concept study to extend our HPV franchise into anal neoplasia, another HPV-caused disease with high unmet medical need.

Our collective efforts here are simple. We plan to bring VGX-3100 to the market as the first immunotherapy to treat all HPV-associated precancers, offering an alternative to surgery and a means of treating both the disease and the underlying HPV infection. We expect the Phase III data from the 2 cervical dysplasia studies to be available in 2020, with VIN and AIN open-label Phase II data in 2018/2019 time frame.

Moving to HPV-caused cancers. Inovio's T cell activating product, MEDI0457, formerly called INO-3112, which MedImmune in-licensed from Inovio in 2015, targets all HPV-caused cancers.

Just last May, Inovio announced that MedImmune initiated a new clinical trial investigating the combination of MEDI0457 with MedImmune's PD-L1 checkpoint inhibitor. MEDI0457 is a novel immunotherapy designed to generate antigen-specific killer T cell responses targeting HPV-associated tumors. I'm pleased to report the combination trial is enrolling and dosing patients at a strong pace. These are patients with metastatic HPV-associated head and neck cancers with persistent or recurrent disease after chemotherapy treatment.

Also as a part of a $700 million, 2015 MedImmune-Inovio deal, the 2 companies are also collaborating on a new funded research program, in which MedImmune has selected a novel cancer immunotherapy candidate to advance into the clinic in 2018.

This new product was designed and developed by Inovio to treat an undisclosed cancer. The clinical development of this product will trigger milestone payments from MEDI to Inovio as well as royalties based on sales. A Phase I milestone payment from this study is expected to be received in the second half of 2018.

Transforming the treatment of HPV disease is our first goal. Establishing our T cell activating immunotherapies as a foundational component of combination strategies to improve patient responses to checkpoint inhibitors is our second objective. In this regard, Inovio already has one of the most expensive and dynamic T-cell immunotherapy combo portfolio in our field with 3, let me say again, 3 different PD-1 or PD-L1 immuno-oncology combo efficacy studies with 3 different collaborators: MedImmune, Regeneron and Genentech. I've already summarized our advancements with MedImmune's checkpoint inhibitor.

Within the last -- past 30 days, Inovio initiated 2 Phase II immuno-oncology trials combining Inovio's INO-5401 along with 2 other PD-1, PD-L1 checkpoint inhibitors from Genentech and Regeneron. The first is combining Genentech's PD-L1 inhibitor with Inovio's INO-5401 to evaluate the safety, immune response and clinical efficacy of the combination therapy in approximately 80 patients with advanced, unresectable or metastatic bladder cancer.

The majority of the patients enrolling in the bladder trial have previously received and failed to demonstrate meaningful response to an anti-PD-1 or PD-L1 checkpoint inhibitor alone. Thus, the study will evaluate potential benefits of this combination therapy within a bladder cancer patient population with very limited treatment options and poor outcome. And just last week, we initiated a Phase II trial in patients with a newly diagnosed glioblastoma, or GBM, designed to evaluate Regeneron's PD-1 inhibitor in combination with Inovio's INO-5401.

This is an open-label trial of 50 patients evaluating safety, tolerability, immune responses as well as the progression-free survival and overall survival. I'm proud of the road we've taken here. It's certainly not the easiest path going up against a deadly, very aggressive brain cancer. But we joined the fight with our proven T-cell activating immunotherapy combined with Regeneron's PD-1 inhibitor. I really like our chances. Remember, GBM is the most aggressive brain cancer, and its prognosis is extremely poor. The median overall survival for patients receiving standard care therapy is approximately 15 months, and the average 5-year survival rate is less than 3%. So if combination -- if this combination treatment shows at least a moderate level of efficacy against this aggressive cancer, we would expect to have a clear and expedited path to bring this product to market.

All of these PD-1 and PD-L1 open-label combo studies could have efficacy data by 2019. And of course, we're not limited to combination trials with just PD-1, PD-L1 checkpoint inhibitors. Inovio's T-cell activating immunotherapies may enhance the effectiveness of a range of other immune modulators, and we are actively seeking additional collaborators.

Our third objective is to utilize public/private partnerships to become the leader in rapid development of vaccines to combat emerging infectious diseases and biodefense targets. Importantly, we see Inovio achieving this goal through full external funding, as we have been doing before. And ultimately, we plan to leverage our platform safety and immunogenicity data sets to build out a novel, commercial vaccine franchise. More to come here.

We were proud to have opened our mailbox to find the October issue of the prestigious New England Journal of Medicine, which highlighted results from our Phase I trial of Inovio's Zika vaccine, generating high levels of binding antibodies to Zika in 100% of the study participants.

Let me remind you that Inovio was, and remains, the first organization in the world to report positive Zika vaccine data from a clinical study. We've also posted similar encouraging HIV, Ebola and MERS vaccine data consistently posting greater than 90% immune response rates across the vaccine trials, all rising from our product development engine or DNA vaccine platform.

A second Phase I Zika vaccine study, now fully enrolled, with 160 participants in Puerto Rico, is designed with a placebo control to explore a potential trend towards clinical efficacy. We expect to have this data in 2018.

Because our DNA vaccine can be rapidly designed and manufactured, our products are well positioned to meet major public health challenges. Fully funded via a previous $3.5 million grant from the NIH and working with our collaborators at U.S. Army, Inovio last month announced the publication of a study with -- in which our vaccine provided 100% protection for nonhuman primates challenged with a lethal dose of the Lassa fever virus, a virulin haemorrhagic virus similar to Ebola, which infects approximately 300,000 people annually.

Because of the rapid and wide global travel and commerce, Lassa is not only a major health threat in native Africa but throughout the world. The Lassa virus has been classified as a Category A biological threat agent by the U.S. CDC. And along with MERS and Nipah viruses, Lassa virus has been singled out as the top potential global epidemic targets for new vaccine development by newly formed, multibillion-dollar Coalition for Epidemic Preparedness Initiative (sic) [Coalition for Epidemic Preparedness Innovations], or CEPI, in 2017.

That's the review of our 3 main objectives and our accomplishments towards our goal today.

Now I'd like to introduce our CFO, Peter Kies, who will discuss our solid financial outlook. Peter?

Thanks, Joseph. Total revenue was $2.6 million for the 3 months ended September 30, 2017 compared to $12.5 million for the same periods in 2016. Operating expenses were $31.8 million for the current year quarter compared to $32.7 million for the prior year quarter.

The net loss attributed to common stockholders for the quarter ended September 30, 2017, was $34.1 million or $0.39 per share compared to $20.8 million or $0.28 per share for the quarter ended September 30, 2016. The increase in net loss for the quarter resorted -- resulted primarily from lower revenue recognized from our DARPA Ebola grant and a higher noncash accounting expense related to the change in the fair value of the investment in our affiliated entity. The decrease in revenue was primarily due to nearing of successful completion of our DARPA Ebola grant.

Research and development expenses for the third quarter of 2017 were $25.5 million compared to $27 million for the third quarter of 2016. The decrease in R&D expenses was primarily related to less expenses incurred related to our DARPA Ebola program. General and administrative expenses were $6.3 million for the third quarter of 2017 versus $5.8 million for the third quarter of 2016, a slight increase from our increase in headcount.

On July 25th of this year, we closed an underwritten public offering of 12.5 million shares of our common stock, raising $75 million. Looking at the big picture, this raise nearly doubles Inovio's cash position. It will strongly support advancement of our Phase III trial and 4 Phase II immuno-oncology trials and other pipeline advancements. And the financing brought in new investors -- new institutional investors into the stock.

We also amended our partnership with ApolloBio, such that Inovio would receive $15 million in upfront payment and $35 million in equity investment with a share price of $7.22 in return for ApolloBio obtaining a license and commercial rights to VGX-3100 in the Greater China region. The agreement will become effective upon approvals by ApolloBio's shareholders and the Chinese government, which could occur by year-end.

Finally, our financial position remains very solid with total cash and cash equivalents and short-term investments of $141.9 million as of September 30, 2017. At quarter end, the company had 90.3 million shares outstanding and 99.7 million shares outstanding on a fully diluted basis.

Joseph, back to you.

Thank you, Peter. Let me close with this message. There are 2 attributes I want you to remember when you think of Inovio: first, relentless innovation; and second, executional excellence.

Inovio is innovation, advancing a broad pipeline of activation immunotherapies and vaccines for people in need. And we continue to innovate with new immunotherapies and DNA-based monoclonal antibodies targeting new disease areas in new ways.

Inovio is also executional excellence. That is, we do what we say we're going to do, and we do it with efficiency, speed and quality. And we hold a recent track record to prove it.

We started a pivotal Phase III and 4 Phase II trials for important precancers and cancers. We forged cancer immunotherapy partnerships and collaborations with top-tier pharma companies like MedImmune, Genentech and Regeneron. And we supported global health -- global public health, advancing clinical vaccine initiatives in HIV, Ebola and Zika, all advanced with third-party funding, which demonstrated consistent 90% to 100% response rates across all studies.

For a company that really began with a 2009 merger, I'm proud of our accomplishments, which gives me great confidence in our -- meeting our 3 major goals. We always remember that patients are waiting.

Thank you for your attention. I'm pleased to address your questions and comments.

(Operator Instructions) Our first question comes from the line of Charles Duncan of Piper Jaffray.

Joseph, I want to ask you about the cervical dysplasia trial, or the REVEAL program, I guess, there are 2 trials. Do you have any operational goals in terms of that -- which you'd like to share for -- or with us? And then, in terms of the visibility we may have on that trial over the course of, say, the next 18 months or 2018? Let's call it 2018, not 12 months.

Yes, absolutely. So as you know, each of our REVEAL trials will enroll 198 patients across the globe. About -- approximately half or slightly less than that were from the United States. The rest will come from Europe, Asia and even a site in South Africa. So we're very excited to get this launched. And as you know, we got held up a bit with a device-related hold, but we were able to overcome that. So our teams, our highly dedicated and efficient team members are dedicated to keep our heads down, get these sites opened. As I mentioned, over almost 50 sites in 6 different countries. Those sites will be open and operating to recruit patients as rapidly as possible, and that will continue on. We will add additional sites in 2018 as well. So really, it's all about executing the site openings and utilizing those sites to recruit the patients. So REVEAL 1, just to talk about the time line, is the last patient in plus 9 months on drug, plus 12 months follow-up. So it's a total of 88 weeks study. REVEAL 2, in contrast, is 9 months on drug with a 1-month follow-up. So it's a total of 40-week study. So we're still targeting enrolling all -- almost 400 patients across the 2 trials, landing the unblinded data in 2020 from both REVEAL 1 and REVEAL 2. And there's nothing that I see that we can't achieve those objectives. So we're very excited about the progress we're making. And you know and I know, we were just dying to go from our clinical hold. So we have a team that's truly dedicated in executing with excellence, as I mentioned, in the enrolling of these patients.

Okay. And I know that IRB, institutional review boards, are proving to be more challenging than in the past for a whole host of companies, but your excitement over the progress is related to perhaps a few sites being open and maybe even available for enrolling patients. And would you anticipate being able to give some incremental updates over the course of next 12 months on site initiations and patient enrollment?

Yes. we -- thank you. First part of what you said, IRBs, in our experience, have not been a real limiting step for Inovio. Our products have -- fortunately, have an extremely strong record of safety across our platform programs. We've dosed, to date, 1,500 patients across all of our pipeline products, over 5,000 different administrations, with stellar, stellar safety records. So we haven't had any, knock on wood, IRB issues, just both in the United States and overseas. So we will continue to execute. And really, I don't want us to give a -- like a play-by-play of the enrollment rates. Rather, I'd like us to provide the guidance on how we're tracking compared to what I said, and our goal is to have the unblinded, including safety data, of the results from REVEAL 1 and 2 by 2020.

Okay. That's fair. I appreciate that added color. And then, in -- as you look at 2018 and 2019, what is your -- what's the thing that you're looking forward to in terms of turning over a card or whatever that could further enhance your conviction in the technology and growth prospects for Inovio?

Yes. We're going to continue to add new trial data. We have a couple of very exciting posters in -- at SITC this weekend, both our hTERT vaccine, INO-1400 as well as our MEDI0457 updates from our Phase I with some signal of efficacy. So we're very excited about additional data that will be coming out from all of our oncology and infectious disease programs. And staying on the infectious disease, we expect to have additional -- or data from our hepatitis B immunotherapy, INO-1800, in the first quarter -- first half of 2018 along with additional Zika vaccine data from our Puerto Rico trial. That's got the signal of clinical efficacy built in to a typical immune response and safety vaccine study with 160 persons participating in Puerto Rico that we'll report in 2018, among other things. So -- and we always like to have some positive surprises. So we expect data and other business development progress in the coming year.

Now I also -- just on a -- since I mentioned the Puerto Rico trial, you may be wondering, because of the hurricane and so on, so we were able to dose all 160 participants prior to the hurricane devastation. So -- and there is a 1-year follow-up. So we're in that 1-year follow-up stage from this summer on, so I'm pleased to say we expect minimal impact to our Puerto Rican Zika vaccine trial. I mean, that's not to say that we may find additional impact as we go, but so far, the sites and others are up and running. So we are very encouraged by that.

Our next question comes from the line of Joel Beatty of Citi.

This is [Sean] calling in for Joel. My first question is, with the goal of -- your primary corporate goal of kind of becoming the go-to HPV precancer therapy, is the goal to kind of receive a broad HPV label then? And if so, what signals do you think are most important to get you there from your REVEAL and vulvar and anal neoplasm studies?

So thank you for that question. We're going to block and tackle each indication one at a time because of the differential in timing. Obviously, we're going to get to send cervical data first from REVEAL 1 and 2. Our primary endpoint for our REVEAL 1 and 2 are similar to our VIN Phase II endpoint and will be similar to our AIN study that we'll launch in early 2018. These are both the histologic clearance of the lesions, so the actual clearance of the lesion or the regression, and the clearance of the virus HPV in the tissue, which caused the problem in the first place. So that's the primary endpoint for our cervical dysplasia study as well as our VIN study. So really, I think, we're -- based on our CIN Phase IIb data, we believe we will be able to demonstrate a tremendous impact on both the lesion regression and the clearance of the virus. Because ultimately, if you can clear the virus, you can remain -- you can provide long-lasting therapeutic impact to these patients, and that's what we're going for.

Great. That's very helpful. And I also had 2 quick questions on your hTERT program coming off the heels of SITC abstracts. The first one, with hTERT kind of being a very prominent and ubiquitous tumor antigen, can you comment on what the path forward could look like in that [pan neo antigen] setting there?

Yes. So the current Phase I study was actually an enabling study looking at 9 different solid tumors with our hTERT antigen therapy alone. But now based on our early promising data, we've placed hTERT antigen as the anchor antigen for INO-5401 along with PSMA and WT1. So we're not planning to develop hTERT as a monotherapy; rather, we have added 2 other brother antigens that can provide, in a similar way, a pan -- a very broad universal cancer treatment using these 3 pan cancer antigens, hTERT, PSMA and WT1. So in our poster, we're showing safety because these are cancer antigens. We want to see that we can deliver this in a safe way, answer is yes. And we will -- we are showing some immune responses to hTERT in the early look at these patients. So quite excited about the progress. Just staying on the topic, we've already shown that anti-PSMA immune responses in our prostate cancer study. So we know that PSMA and hTERT are generating specific T-cell responses in cancer patients. And we have pretty good indication from our preclinical data that WT1 is also an excellent generator of T cells. So why am I so psyched about INO-5401, is that we have a pan, potentially "pan cancer immunotherapy" that can generate specific CD8+ T cells, and we're going to hit -- we're going to combine -- we are combining with Genentech's TECENTRIQ PD-L1 for bladder cancer and Regeneron's REGN2810, recently declared breakthrough therapy for -- as a PD-1 inhibitor for our glioblastoma trial. So we have 2 shots on goal there with 5401. Very excited about that. Our third shot on goal for PD-1 combination is with MEDI0457. And we're going to show some very exciting data at SITC in the poster session. So please stay tuned.

Our next question comes from the line of Matthew Eckler of RBC Capital Markets.

Great. So Joseph, just to kind of follow up a little bit on the upcoming SITC data. I know we'll see a poster presentation on MEDI plus nivolumab in a single head and neck cancer patient who was given the 2 drugs sequentially. So I guess, thinking a little bit about, one, what data we might see, as well as any read-through to the logic and potential outcomes from the ongoing combo study being run by MedImmune. Maybe if we could just start there.

Yes. So it looks like you've read the abstract. So thank you for pointing that out. This is a very exciting data because we know we had a 22-patient Phase I study with MEDI0457. It's a monotherapy trial. We were able to generate a very -- in significant percentage of these patients, very strong T-cell immune responses measured both in the blood and T cells infiltrating in the tumor tissues in the head and neck in some of these patients. So we've shown that data. What's exciting about this is one of the patients who had modest level of T cell immune responses started to progress at month 11. And so this person -- this patient was subsequently taken out of our trial. And then, the oncologist provided PD-1, nivolumab in this case, inhibitor. And just within 4 doses, the patient completely -- had a complete response. And the patient remains, through 16 months, a -- disease-free of the cancer. So now you have to temper this with this being just [anyone], but it's only one person that subsequently had a checkpoint therapy post dosing with MEDI0457. So what does this mean for MEDI0457 plus IMFINZI study, the PD-L1 inhibitor from MedImmune? Very excited. I think it's a metastatic head and neck cancer patient setting. 50 total patients, so it's not a small study. ORR typically in this level is less than -- significantly less than 20% with checkpoint alone. So our goal is to see ORR of higher percentage than that. And we're very optimistic. We're very bullish on this, because we know we can generate anti-HPV, antitumor T-cells from our Phase I study. And what is doubly exciting here is we're dosing PD-L1 inhibitor at the same time as the dosing of MEDI0457. So it's a true one-two punch, and we couldn't be any more excited about any study because of the potential of what we found in the earlier Phase I study results that is being presented at SITC.

Okay, great. Very helpful there. And then, maybe shifting gears a little bit, thinking about the VGX-3100 studies in vulvar and anal. So based on [all] the time lines you've discussed, we'll very likely see that data ahead of the Phase III CIN readout. So maybe just talk a little bit about what you see as the threshold for go/no-go decision in terms of moving either of those indications forward.

Well, we -- it's an open-label study, and unlike cervix, vulvar and anal areas are more determinable throughout the study period. So -- and there are very little spontaneous regressions. So the placebo was not needed. And I -- we don't want to give what the threshold is because it's a highly unmet medical need indications, where surgery is the only option. And God, these -- those surgeries are -- have tremendously negative impact to these patients, and they recur. Even after a successful surgery, over 50% of these patients recur. So they have to undergo another painful surgery, and sometimes in the same year. So -- and those recurrence is devastating. And what we want to do is to not only treat the lesions, which is a great goal, but also clear the virus that caused it. And we've -- we're heartened by the fact that we saw that in our cervical dysplasia Phase II studies, and we look forward to showing that in our REVEAL 1 and 2 studies. So we -- what do we expect? We expect to see similar results with some tempering, because it's first time we're going to vulvar tissues and it's first time we're going to anal tissues. And all tissues are not the same, not all organs are the same. But we think we have a immunotherapy that leverages these CD8 killer T-cells targeted against HPV antigens that are present in all of these regions. I like our chances.

Okay, great. Great. And then, is REVEAL 2 still on track to initiate by year-end?

Actually, because of the timing and so on, and I just alluded to, the FDA agreed in having the follow-up period -- the safety follow-up period for REVEAL 2 to be limited to 1 month after the efficacy readout, unlike the REVEAL 1. That gives us a little lower leverage. So we probably will start later than that, but we -- our goal is to end and land the 2 planes at the same time. Two planes are taking off at a different time. And we know we need to enroll a total of 400 patients. So it really doesn't matter what sequence we do, although because REVEAL 1 has a 11-month longer follow-up time, it behooves us to start that first. So that's what -- that's where we're focusing on first, but we are still on track with our time line that I gave previously.

Our next question comes from the line of Yi Chen of H.C. Wainwright.

Regarding the 3 collaboration therapies in the immunotherapy space, could you give us some idea when we can likely see some updates or data readout for those 3 trials?

So you mean the immuno-oncology studies, the combo studies?

Yes. Yes.

Yes. So I mean, I could speak less on MEDI-run studies, because they control it. We're just a passenger in that trial. They're the drivers. But INO-5401 studies, we're the drivers. So -- and these are open label, and we'll be tracking the progress. So I think I estimated by 2019 will be a significant amount of data. We might see early indications in 2018. We're -- we have our fingers crossed. But definitely by 2019, we hope to have a significant [elucidated] efficacy result. So we're -- we want to -- these are very exciting data -- studies, and we definitely want to get to efficacy readouts as rapidly as possible. And they're powered and they're sized to be significant. So bladder is 80 patients, 60 of them are going to be enrolled from the PD-1 refractory patient population with very little other treatment options ahead of them. So we hope to recruit these patients very quickly. And glioblastoma, the newly diagnosed glioblastoma, again, very dire prognosis going forward. It's the same indication that Senator John McCain has been diagnosed with this year. And we also want to enroll those patients and provide some avenues potentially with 5401.

Assuming the results from these 2 trials with 5401 are positive, is Inovio considering further development for those 2 indications by yourself? Or you have other strategies planned for these 2 indications?

If either or both have moderate level of efficacy above what's been seen, I think you'll have to beat the potential partners away with sticks. In other words, PD-1 alone -- PD-L1, are in less than mid-single digit in ORR, maybe even less than that. Most companies don't even quote what their efficacy levels are for GBM. So that's a high, high bar or low bar in terms of showing efficacy to move forward into pivotal and licensure. So we should be that lucky, and we hope to be there in the near term. And then bladder, one of the most immune responsive tumors, but still over 80% of the checkpoint therapies, these patients are refractory. So we're drawing from a large population. And if we can turn their PD-1/PD-L1 nonresponsive status to responsive status, even in a moderate level of percentages, we think that's a home run. So in those cases, I think we would have plenty of potential partners, including the ones that we're collaborating with currently, along with others who are just watching, enviously, I think, with the -- with this progress from these studies. And not to mention what we expect -- exciting data from MEDI0457. Obviously, that's already spoken for to MedImmune, but I think that will be a great indicator of what's to come.

Our next question comes from the line of Jason McCarthy of Maxim Group.

My name is [Joanne]. I'm calling for Jason McCarthy. The first question he had was, if you could walk us through the glioblastoma trial design. In particular, the enrollment criteria for the patients, will patients be stratified based on MGMT status? And in addition, since a checkpoint will be used in the study, will you have a biomarker data from the patients' recepted tumors profiling the level of PD-L1 expression?

Last question first. We're going to look at those biomarkers in PD-L1 and so on. And the first question, yes, we will enroll both MGMT positive as well as negative or unknown, and they'll still be stratified, so total of 50 patients, and post surgery and radiation, along with temozolomide. So really, just these GBM patients are going to be treated with standard therapy, which still -- and we'll be dosing them with 5401 and Regeneron's PD-1 inhibitor post that. And typically, they have pretty low 15-month median survival, with 5-year survival rate of less than 3%. So we're hoping to see the change in overall survival as well as other biomarkers, including immune responses to these antigens as well as other -- the markers that we'll be tracking. So this is going to be a highly informative and hopefully -- with efficacy endpoints. So it's a very ambitious but highly -- should be highly informative study for the power and the impact of 5401 with checkpoint inhibition.

Okay, great. Could you also give us an update on the DNA-based monoclonal antibodies? And plans to move candidates in other infectious disease and oncology into the clinic?

Yes. So we've published the dMAbs as a earlier technology program. We actually only started this 2 years ago. Fresh is an application of our platform to generate monoclonal antibodies directly from our DNA -- injected DNA sequences. We were challenged by a $54 million contract from DARPA across 2 grants as well as additional funding from the NIH and the Gates Foundation. So we've, just in the last 3 months, published 3 impactful research publications in cancer immunotherapy and as well as nature communication and so on. So we've published actually 6 papers in the last 2 years. Our plan is to take one or more of these candidates funded with grant funding into clinical studies in 2018, which we see as a -- not just a product development, but also as a platform-validating clinical study. So behind all of our published dMab work, we have some exciting other candidates. We have our own version of Humira, which is the largest-selling rheumatoid arthritis drug -- or I think it is highest-grossing pharmaceutical product today, over $10 billion in sales. We have our own dMAb version of that. We have our own dMAb version of PD-1, PD-L1 and other undisclosed checkpoint inhibitors. So these are all preclinical, but we're developing them in our very prolific research engine. So we're going to show some proof of concept or proof of principle with the early infectious disease targets to show that we can generate the level that are relevant clinically in people, and we look forward to starting that in 2018. Along the way, obviously we're going to show our expression in higher animal models like the nonhuman primates and so on, leading up to that. So you should expect a lot more publications on dMAbs coming from our group as well as our collaborators, executing on our funded research from various places, and certainly, we are moving in lightning speed and transforming this once a -- just a exciting thought into a clinical product to be evaluated starting next year.

We have a follow-up question from the line of Charles Duncan of Piper Jaffray.

Hello? I think...

Sorry.

Oh, Charles, you're still there.

Yes, still here. Just talking to myself on mute. Sorry about that. So quick follow-up, a question that I've been asked by investors is relevant to the REVEAL program. When a person is being -- or actually, the other 2 programs as well for VIN and AIN, when a person is being treated in those programs, how do you deal with the prospects of potential reinfection? Or do you believe that the technology prevents that from getting traction as well?

So first of all, I think that's a great question. I'm not sure we have -- other than our follow-ups, and we -- so if -- for instance, if it's, let's say, HPV type 16, and the new infection, let's say we cleared it and then the person gets reinfected from a partner or wherever with the same type of virus, we believe we can -- the -- how the immune system works is the T-cells existing in the patient's body should clear the new invading virus of the same type. But clinical trials, we're not -- it's going to be very difficult to track whether that is a unfinished clear virus from originally or the person has been reinfected. In reality, in my knowledge of 25 years in T-cell immunology is, it shouldn't matter. So T cells don't care whether it's a virus from last year or 10 years ago or from today. As long as the T-cells can recognize those specific viral antigens from the same virus type, they will clear it. So that's a long-winded answer, but that's a very interesting question, which will have -- which will be really difficult to prove one or the other. But all we care is, during the study period, are we clearing the virus and clearing the lesion? And then -- and during the follow-up. And we also plan to have post-licensure Phase IV follow-ups, get the information and so on. And we have other efforts to investigate how long are the true timing, the long-term impact of this. And we could only evaluate that in the clinic. But what I can tell you is in monkeys, and monkeys aren't people, and using HIV virus vaccines, our collaborators have tracked up to 8 years at the NIH. I mean, the -- just the cost and the efforts in generating killer T cells that last for 8-plus years in preclinical studies. So we think, potentially, and this is how the immune system works, once you have memory T-cells against an antigen, they should last for a very, very long time. And potentially, that's what we would see, and that's -- but that's going to be very hard to show in a short study, but we will continue to -- we plan to continue to track them, even through licensing and having this product on the market.

Yes, makes sense to me, certainly based on my rudimentary knowledge of immune system function. But I'm wondering if you have any evidence from tracking patients from previous studies. Certainly, it would make sense to me that if you bolstered T-cell responses, it ought to do that to any further infection. But any data that you can rely on there?

Yes. And we should have a lot more preclinical and clinical studies, which could add insight to those through publications and more study reports. So we look forward to bringing those and adding to the vast data set that we are starting to amass in this area.

There are no further questions over the audio portion of the conference. I would now like to turn the conference back over to management for closing remarks.

Thank you very much for following up on our progress. Please stay tuned for the rest of the year and beyond. Thank you.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful rest of your day.