MacroGenics Inc (MGNX) 2017 Q3 法說會逐字稿

Good afternoon. We will begin the MacroGenics 2017 Third Quarter Conference Call in just a moment. (Operator Instructions) At this point, I'll turn the call over to Jim Karrels, Senior Vice President and Chief Financial Officer of MacroGenics.

Thank you, Operator. Good afternoon, and welcome to MacroGenics' conference call to discuss our third quarter financial and operational results. For anyone who's not had the chance to review our results, we issued a press release this afternoon outlining today's announcements, which is available under the Investors tab on our website at www.macrogenics.com. You can also listen to this conference call via webcast on our website, where it will be archived for 30 days beginning approximately 2 hours after the call is completed.

I would like to alert listeners that today's discussion will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual, quarterly and current reports filed with the SEC.

In addition, any forward-looking statements represent our views only as of today, and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change, except to the extent required by applicable law.

And now I'd like to turn the call over to Dr. Scott Koenig, MacroGenics' President and Chief Executive Officer.

Thank you, Jim. I'd like to welcome everyone participating via conference call and webcast today. Thank you for joining us.

The third quarter of 2017 was one of continued clinical progress, and most recently, an exciting new collaboration. We presented encouraging Phase 1 flotetuzumab data at ESMO, enrolled the first patient in a Phase 1 trial of MGD013, submitted an IND application for MGD014, and executed a global collaboration and licensing agreement for MGA012 with Incyte, which we expect will close in the fourth quarter.

We will be sharing more data on our various PD-1 based programs at the Society for Immunotherapy of Cancer, or SITC, later this week. And we'll have two posters and an oral presentation of flotetuzumab at the American Society for Hematology meeting, or ASH, in December.

I will discuss the MGA012 licensing deal in greater detail, and provide an overview of all our programs after Jim has reviewed the financial results for the quarter. I will now turn the call back over to Jim.

Thanks, Scott. This afternoon, we reported financial results generally in line with expectations. As described in our release, MacroGenics had R&D expenses of $41.0 million for the quarter ended September 30, 2017 compared to $30.3 million for the quarter ended September 30, 2016. This increase was primarily due to the initiation of the MGA012 Phase 1 study and continued enrollment in multiple ongoing clinical trials.

We had G&A expenses of $8.4 million for the quarter ended September 30, 2017 compared to $7.2 million for the quarter ended September 30, 2016. This increase was primarily due to increased professional fees, including consulting expenses, and increased employee compensation and benefit expense to support our overall growth.

On the revenue side, we recorded total revenues consisting primarily of revenues from collaborative agreements of $1.7 million for the quarter ended September 30, 2017 compared to $3.3 million for the quarter ended September 30, 2016. Revenue from collaborative agreements includes the recognition of deferred revenue from payments received in previous periods, as well as payments received during the period.

Revenue recorded during the third quarter of 2017 does not include the $150 million we anticipate receiving from Incyte as an upfront payment for the recently announced MGA012 collaboration. We anticipate receiving such an amount upon closing of the transaction in the fourth quarter of 2017, and expect to recognize the full $150 million in the fourth quarter of this year.

For the quarter ended September 30, 2017, we had a net loss of $47.0 million compared to a net loss of $33.8 million for the quarter ended September 30, 2016.

Our cash, cash equivalents and marketable securities as of September 30, 2017 totaled $203.6 million, which compares with $285.0 million as of December 31, 2016. Before including anticipated $150 million upfront payment from Incyte, and based on our current operating plan, we believe that our cash, cash equivalents and marketable securities, combined with anticipated revenue under our existing collaborations, fund our operations into 2019. Obviously, we believe the $150 million from Incyte, once received, will extend our cash runway. But we will defer providing specific guidance until after we've closed the transaction, as well as finalize our multiyear operating budget later this year.

And now, I'll hand the call back to Scott.

Thank you, Jim. As I mentioned in the opening, we recently announced the global collaboration and licensing agreement with Incyte for MGA012, which targets PD-1, and is one of the three programs within our PD-1-directed immuno-oncology franchise. Through this agreement, Incyte has obtained exclusive worldwide rights for the development and commercialization of MGA012, while we retain the right to develop our pipeline assets in combination with MGA012.

We believe that MGA012 will remain a core strategic asset and be the basis for potential combination therapy with several molecules in our pipeline, including our T-cell redirected DART molecules, mainly flotetuzumab, MGD007, and MGD009, as well as margetuximab and enoblituzumab. We plan to initiate the first study of MGA012 in combination with one of these internal programs by year end 2017.

As a monotherapy, MGA012 is currently being evaluated for safety and tolerability across 4 solid tumor types. Enrollment in the dose escalation portion of the Phase 1 study of MGA012 is complete, and the results will be the subject of a poster presentation at this week's SITC meeting.

In exchange for worldwide rights, Incyte will pay MacroGenics $150 million upfront upon deal close. MacroGenics will also be eligible to receive potential milestone payments of up to $750 million and tiered royalties of 15% to 24%, assuming approval and commercialization.

We also have the right to manufacture a portion of both company's global MGA012 clinical and commercial supply needs. We will fulfill these needs using both our existing and future GMP manufacturing suites, the latter of which is under construction and we believe on track to be operational in 2018. We believe that this strategic collaboration with Incyte will expand and accelerate the development efforts for MGA012.

MGA012 is the first in our franchise of PD-1 directed candidates. Let me now provide an update on our other PD-1 based programs, which rely upon the same specificity as MGA012 for the PD-1 variable regions, knowing that we can address any additional details related to the collaboration and licensing agreement in the Q&A session.

We believe that MGD013 is the first bispecific checkpoint blockade molecule in the industry to enter the clinic. It is now actively proceeding through dose escalation. We are developing MGD013, an Fc-bearing DART molecule, to provide co-blockade of PD-1 and LAG-3, two immune checkpoint molecules expressed on T-cells for the potential treatment of a range of malignancies. We will present preclinical data, as well as the trials and progress poster describing our Phase 1 study at SITC.

MGD019 is a preclinical DART molecule candidate we're introducing at SITC. This product candidate is also designed to provide co-blockade of two immune checkpoint molecules expressed on T-cells; in this case, PD-1 and CTLA-4. We are conducting activities to support the potential submission of an IND application for MGD019 in 2018.

MacroGenics has also made important advancements with our flotetuzumab program, our DART molecule that recognizes both CD123 and CD3, which is being developed for the treatment of acute myeloid leukemia, or AML, and myelodysplastic syndrome, or MDS. At ESMO in early September, we showed that flotetuzumab demonstrated acceptable tolerability in the dose escalation portion of a Phase 1 study with encouraging initial anti-leukemic activity observed in AML patients.

As if the data cut-off date of August 1, of the 14 response-evaluable patients treated at the threshold dose, 6, or 43%, experienced an objective response. This included 4 patients, or 28%, who achieved a CR or Cri, with 1 patient who had a molecular CR. We and our partner, Servier, continue to enroll the expansion cohorts for the study, including a 24-patient AML cohort and a 24-patient MDS cohort in the U.S. and in Europe.

Updated Phase 1 flotetuzumab data will be featured in 3 presentations at ASH in December, including an oral session, as well as a poster, that provides a rationale for combining flotetuzumab and MGA012.

I'll now provide an update on our B7-H3 franchise, our most advanced candidate, enoblituzumab, an Fc-optimized monoclonal antibody that targets B7-H3. We and our collaborators continue to recruit patients in multiple ongoing studies in enoblituzumab. These studies include a combination study with an anti-PD-1 antibody and a neoadjuvant prostate cancer study. We continue to believe that by the end of the year, we'll near completion of enrollment in the PD-1 combination study, which is evaluating the combination in 4 different indications and be in a good position to provide a clinical update in the first half of 2018.

The second clinical candidate in our B7-H3 franchise is MGD009, a DART molecule that recognizes B7-H3 and CD3, and is being evaluated in a Phase 1 study in patients across several different solid tumor types. We continue to explore the dosing schedule for MGD009 administration.

The third candidate in our B7-H3 franchise is MGC018, an anti- B7-H3 antibody drug conjugate that has shown potent anti-tumor activity in an in vitro and animal models. We are conducting activities to support the potential submission of an IND application for MGC018 in 2018.

Two additional DART molecules in the clinic include MGD007, which recognizes gpA33 and CD3, and MGD014, which recognizes the HIV envelope protein and CD3. We have completed dose escalation of the Phase 1 study of MGD007, and are evaluating various expansion cohorts to further refine the recommended dosing schedule of this molecule. Our IND submission for MGD014 was cleared by the FDA, and we anticipate that a first patient will be dosed in early 2018.

Finally, margetuximab is our Fc-optimized monoclonal antibody that targets the human epidermal growth factor receptor 2, or HER2. We are actively enrolling patients with metastatic HER2-positive breast cancer in the pivotal Phase 3 Sophia study of margetuximab, in which we are evaluating the efficacy of margetuximab plus chemotherapy, as compared to trastuzumab plus chemotherapy, following progression after previous therapy.

Enrollment to the study, which will include approximately 530 patients across trial sites in North America, Europe and Asia, remains on track. We expect to complete and announce the results of an interim futility analysis by year end 2017 or early 2018, and then complete enrollment of the study by late 2018.

In addition, we continue to enroll patients in a Phase 2 gastric cancer study that will assess the combination of margetuximab with an anti-PD-1 antibody for patients with advanced HER2-postiive gastric cancer. We expect to complete the enrollment of two 30-patient expansion cohorts in 2017 and present clinical data during the first half of 2018. The combination of margetuximab and anti-PD-1 has the potential to provide these patients, who have limited treatment options, with a chemotherapy-free treatment option.

We continue to advance our diverse portfolio of clinical product candidates, are in a strong financial position that we expect to further strengthen upon closing the deal with Incyte, and have entered an important agreement that will expand and accelerate the development of MGA012. We look forward to continuing to update you on the company and our programs as we continue to advance our molecules and execute on our strategy. This concludes my prepared comments, and we'd now be glad to address any questions that callers may have. Operator?

(Operator Instructions) The first question comes from Christopher Marai with Nomura.

First, just maybe you can touch upon 007. I was wondering if you could help us understand if some of those expansion cohorts in colorectal might include the combination with your anti-PD-1. And then secondarily, if you could elaborate a little on how you might choose to combo the anti-PD-1s with next candidates going forward. Specifically maybe a little bit of the rationale or data behind doing that with the CD123 targeted bispecific DART. Thank you.

With regards to MGD007, just refresh your memory, this is a molecule targeting gpA33 and CD3, the target expressed on a GI tract and on colorectal cancer. And we had pointed out at our R&D Day late last year, we were seeing on target effects of the drug, but were challenged by effects on the target on the normal GI tract. And so over the course of the past year, we have been designing ways for providing additional support care, as well as doing dose modification. One of these involved the delivery of oral budesonide to provide a topical steroid for the normal GI tract as the drug was able to bind to tumor and metastatic sites. Using this, plus a combination of reduction of dosing, initially we were dosing at 1 microgram per kg on a q2 weekly basis. We've now looked at two other dosing regimens, including the concept of using a lead-in dosing on a q2 weekly basis, as well as dosing on a q weekly basis. What I can say is is that we've been very satisfied with the progress we've made here, and the drug is seem to be much better tolerated by the patients. We are right now have completed those analyses, and we're expanding several of these cohorts to test the drug in additional patients as monotherapy. And then we are planning to combine this with MGA012 likely starting next year. We should be able to provide an update at one of the oncology conferences, either AACR or ASCO, in 2018. Could you repeat the question? I didn't hear the second question, Chris. It was regarding 123. Are you there?

Pardon me. It looks like Chris is no longer connected. Our next question comes from Peter Lawson with SunTrust Robinson Humphrey.

I guess thinking about the SITC data, is there anything you can give us around tumor types that we'll see? Do you have anything around for the 012 that is kind of --. I guess we've seen in the abstract, there was a response to ovarian cancer. You thinking that could suggest the broader utility of the drug? So anything around the tumor types and then how you think about the eventual utility of this drug.

Yes. Thanks, Peter. As noted, we have 5 abstracts submitted or posters that will be presented at SITC. Two related to MGA012, the PD-1 molecule, two related to the DART bispecific PD-1 by LAG-3, and one, an introduction of preclinical data on our first DART molecule targeting PD-1 and CTLA-4. With regard to the data that's going to be shown for MGA012, this was -- we're going to show the dose escalation in which we're essentially all-comers of tumors, and the establishment of the dosing, obviously the PK and PD associated with the occupancy data. And evidence of objective responses in various tumor types. We have started already the expansion as monotherapy in 4 distinct tumor types, and that will be revealed at the time of the SITC poster. But of course, that data's just too early to discuss at this time.

Got it. Thank you. And then can you just, thinking about that Incyte payment, I didn't get that. Does it hit just once in the P&L in Q4, or does it get spread out over longer period of time?

Yes. Hi, Peter. The $150 million, we expect to receive in the fourth quarter upon closing of the deal. And our current thinking is that it would all hit the P&L as revenue during the fourth quarter.

Our next question comes from Yigal Nochomovitz with Citigroup.

Could you spend a few minutes discussing sort of how you see the target product profiles for 013 and 019? I know it's early days still, but they're similar in some respects, obviously, because of the PD-1 anchor, but is there anything you can say about how you see them positioned differently in the market for CTLA-4 versus LAG-3 at this point? Thanks.

Thanks very much, Yigal for the question. With regard to both molecules, as you know, first of all, they both went through preclinical toxicology in primate studies. MGD013, the PD-1 by LAG-3, is now in dose escalation in patients. As we view this molecule, particularly given a very substantial database now in a very (technical difficulty), and the expression pattern of LAG-3 on normal tissues, we think this particular molecule is going to be very exciting because number one is from previous studies, it seems that the engagement of blockade of LAG-3 may increase or restore sensitivity to PD-1 in patients that have become refractory to PD-1. And in fact, in some of the tumor models, as has been shown, is even in the expression of other checkpoint molecules such as TIM-3, the blockade of LAG-3 is sufficient to restoring this activity and providing significant enhanced T-cell effects and anti-tumor responses. And given that, our very recent data at ESMO, that Bristol-Myers has disclosed with regard to the PD-1 and PDL-1refracotry melanoma populations in which they are seeing first clinical benefit in patients who have a LAG-3 expression rate at 1% or greater. And in the absence of any real significant uptick in their toxicology profiles, we think that this will be very attractive, first obviously in going in very solid tumors that express PD-L1 and PD-1, that are refractory to standard PD-1 or PD-L1 blockade. And that will open up great opportunities and I think a very good pathway for regulatory approval, assume obviously the success and safety is consistent with what Bristol has seen with the two individual molecules. Of course, we will look at this as an opportunity to also treat patients who have been naive to either PD-1 and PD-L1 therapy. And then finally, the ability of now combining this DART molecule bispecific in combination with other molecules in our portfolio, specifically the redirected T-cell DART molecules, as well as our Fc-enhanced molecules, is possible as we further advance this molecule. Now with regard to MGD019, the PD-1 x CTLA-4, we've been very encouraged by the toxicology study that were conducted in primates. And we've been able to dose this molecule, which is designed as a tetravalent bispecific molecule with two binding sites specifically for PD-1 and two binding sites for CTLA-4. And we are seeing biological effects with expansion of T-cells quite significantly. And with a safety profile that seems to be better than what had been previously published by Bristol-Myers when they did Yervoy and PD-1 studies in primate. So obviously we will see how that pans out as we move this forward into clinical development. But right now, we're excited about the potential prospects of this molecule as well.

Okay, thanks. On B7-H3, do you have any updated thoughts on how you're positioning this portfolio? Are you advancing all 3 with the hope or potential of taking them all to market, or is the goal here a strategy to find one that's the best one and that's the one you're going to advance into late stage studies?

Thanks for that question about B7-H3. We are very optimistic about the prospects of our whole B7-H3 franchise. Obviously the one that's furthest along is enoblituzumab, which is currently completing studies in combination with anti-PD-1 in 4 different tumor types: head and neck, lung, melanoma, and bladder cancer. And we expect to be able to provide updates of that data early next year. In addition, we are finishing off an investigator sponsored trial using enoblituzumab as a single agent in prostate cancer in patients with newly diagnosed prostate cancer with high grade scores, Gleason scores of 7 or greater. We are closing in on finishing enrollment in that study, and expect to be able to provide updates next year on the use of that in that indication as well.

With regard to the MGD009, which is our CD3 x B7-H3 DART molecule, we're completing out the dosing right now of monotherapy. As we had pointed out last year, we were beginning to see anti-tumor effects, but this was associated in some of the patients with cytokines release. And as a result, we wanted to modify the dosing schedule, taking some of the lessons learned from the flotetuzumab story, including the lead-in dosing, and a variation of the dosing regimen. And we expect that to be completed sometime earlier in 2018, and then we will bifurcate the development of that in as monotherapy in 6 different tumor types, approximately 16 patients each. And then in combination with MGA012, our anti-PD-1 molecule. And then finally, we recently completed the toxicology studies of MGC018, which is antibody with a linker toxin conjugate. Now the epitope that's recognized by MGC018 differs from that of MGD009 and differs from that of enoblituzumab. And in fact, they are non-competitive and can be used in combination, at least in theory. So back to your original question is is do we see this as being developed as a winner of 1 of the 3 or 2 of the 3, or do we see this as separate molecule? As we pointed out quite extensively in the past, we're fairly agnostic. We want to find the right treatments and the right conditions, depending on the tumor type and stage of diseases. So I can't imagine that if the responses look quite favorable in particular tumors, we could in fact advance all 3 molecules. But this will be determined by future studies, which we expect to complete during 2018.

All right. That was great. And then on flotetuzumab, is my understanding correct that you're happy with what you've achieved in the dose escalation, given the data presented at ESMO? Or do you think that you still can get better target engagement with yet a higher dose.

Thanks for that question about flotetuzumab. Obviously we were very excited about the prospects of actually taking patients that had very poor cytogenetic profiles and that were particularly refractory to previous chemotherapy regimens, that were now responding with both objective responses in some of these patients with CRs. Of course we have to expand the data set to show the consistency of the data. We felt that the safety and efficacy profile, as currently designed right now, in which patients initially get 30 nanograms the first 4 days, and then switch for a few days on 100 nanograms, and then geared up to 500 nanograms per kg over the course of the next 3 weeks for the first month. And then a 4 day on, 3 day off regimen if they show evidence of anti-tumor effects at time of the completion of the first cycle of treatment. Now we'll see what the data shows us on the additional expansion cohorts. Currently we're enrolling 24 additional patients with the same relapse, refractory AML. 24 patients with the (technical difficulty) regimen. And then we have the opportunity to fine tune that dosing regimen, as you point out, if we think that we can achieve even better therapeutic benefits. I should also point out at the ASH meeting, in addition to the update around the current study with some additional patients added in the interim, which will be discussed in an oral presentation, we have 2 poster sessions at ASH, and I will point you out, which I think will be quite relevant, the rationale of coming in this with MGA012 or our anti-PD-1 molecule, based on data that we gleaned from the current study. There are great opportunities to add on additional responses, at least in theory, using the combination drugs.

Our next question comes from Dane Vincent Leone with BTIG.

I want to ask on, still sticking with flotetuzumab, when we see the update at ASH, how do you think the data set, as it's maturing, can provide a couple different routes to you regulatory development, and kind of what clinicians want to see. And I guess if I could nuance that a little bit, how are you thinking about the algorithm of the actual dosing and treatment of flotetuzumab as patients stay on the drug for longer periods of time? Do you see longer intervals or something like that? And then maybe just kind of remind us of that plan. Thanks.

Thanks, Dane. Again, we expect that given there is very few options for patients with particularly with refractory disease, and relapse refractory disease, that if the data set looks promising with the additional patients that we're enrolling now, that that would provide an opportunity for us to have a discussion with the regulatory agencies for designing a pivotal study. And whether this can be a single arm study or a control study, one can make the argument based on the data from Agios on the IDH2 where they saw a CRh rate of 22% with obviously some reasonably persistent therapeutic benefits. And that was designed as a one arm study that that design may be an option for us. But of course, it'll all be dependent on what the additional data shows and the feedback from the regulatory agencies. With regard to what clinicians want to see, what I can tell you is is that we are hearing very positive feedback from the KOLs and the physicians are using the drug who have reviewed the data. We are actually expanding the number of sites. We currently have 11 sites that are enrolling patients. We are expanding the number of sites in the near future. and we have been encouraged by a number of these investigators to expand the use of this drug beyond the relapse and refractory AML population to look at earlier stage AML patients, both fit and unfit populations, and then other diseases in which CD123 is overexpressed. So we're in discussions on pathways forward with that, and we expect we'll be able to update you sometime in the near future.

Thank you. And if I could just ask one more on MGD009. Can you provide a timeline that you're thinking about? I guess maybe I could just ask how enrollment is going, in your view. How the dose escalations are going, and kind of timeline for some data on that one, heading into 2018.

I would say that it is a little slower than I wanted it to achieve. As a CEO, you're always finding that you want things going faster. I was hoping that we would have had the dose defined by this time. I think that we should have it defined early in 2018. And then we will quickly then expand into those expansion cohorts that I described before. The 6 expansion cohorts and 16 patients each. And then the combination study with the MGA012. My expectation is both those studies were likely to start in the first half of 2018. And as I alluded to before, we'd probably be able to provide an update on the dose escalation part and the defining of the dose at one of the scientific conferences in the first half of 2018.

Our next question comes from Michael Schmidt with Leerink Partners.

Just a couple, number one, on the margetuximab interim analysis. Remind me how many events is it triggering that analysis in the study?

Michael, we have not disclosed that, and we're not right now planning to discuss that. We have obviously a preset plan empowering that what we have decided upon where we're close to achieving those number of events, but we have not reached them yet. We still believe that this will occur by December, and as was indicated earlier, depending on obviously the data safety monitoring board's timing, we would be able to get the analysis and feedback either late December or into January. So that's the plan right now.

All right, great. And then on the, I think you said the gastric cancer, Keytruda combination study will wrap up in the first half of next year. and I'm just wondering, just to help us gauge how the profile fits in the current treatment paradigm I guess in gastric, what is the bar here for efficacy? What's a good enough signal to move this forward into additional studies in gastric?

Great question. We have -- just remember, to refresh your memory, this is an open label study in second-line gastric cancers. These patients have seen Herceptin and chemo, and we're looking at providing -- this is an open label study, so these are patients that are HER2-positive, either gene amplified or IHC positive 3-plus. And we finish the enrollment of the 30 patients in the U.S., and we're about the complete the enrollment of the full 30 patients in Asia. Where we expect to provide update is, just to give you a little more granularity, is likely at the ASCO GI meeting at the end of January. So just to give you a historical perspective, if you look back at our Phase 1 data, this type of patient with gastric cancer treated with margetuximab alone as monotherapy. Small number of patients. We were seeing responses approximately in the mid-teens in this population. And if you look at the data that Merck received approval on for Keytruda, and this was a third-line as a single agent, their objective response rate was about 13% in that population. So all told, if you think that you're having additional benefit, my assumption is is that you'd like to see something at least in a 20-something range of objectives responses or higher to make a rational decision to move ahead there.

And then just for context, second-line gastric, is the current standard of care, is that chemotherapy in HER2-positive patients? Or ramucirumab?

I didn't hear your question. Can you say that one more time?

What is the current standard of care in those types of patients? Is it chemotherapy?

It's ramucirumab plus chemotherapy as second line right now.

And the efficacy level for the combination, what's that?

I don't have the specific numbers from the trial, so I don't want to misquote it, but it -- so I'd rather not state the actual numbers there, but I think that in the numbers I'm driving at with regard to a chemo-free regimen, these would be very competitive. And certainly obviously it will also depend on the persistence of the response. As I recall the length of time to those patients, advanced their disease was not very long. But I don't have the specific numbers yet.

And then just to clarify the data after GI, would that be on both of the extension cords, or will it be on all the patients, or will it be a cut of the data?

My assumption is, as I said to you, we're not finished fully dosing the patients likely until December, so I would say it would be the majority of the patients, and it will be an interim look. But I think that there should be sufficient amount of data to be able to draw some conclusions there.

Thanks for the added information.

Our next question comes from Stephen Willey with Stifel.

This is Philomena Kamya in for Stephen Willey. Thanks for taking our questions. If you wouldn't mind reminding us again, which DART molecules do you have in mind for combination trials with the MGA012 PD-1 molecule? And I have a follow up question.

We are planning a study that would combine MGA012 with flotetuzumab. And as I said, take a look at the ASH data for the rationale there. MGD009, which is the B7-H3 x CD3. And then given the data that Roche has shown with regard to the combination of their CD8 x CD3 plus their anti-PD-L1 in providing a prolonged response in patients with advanced colorectal cancer, we think that's a good rationale to combine it with the MGD007.

The 007 as well. Okay. So with respect to the flotetuzumab and 009, would you expect this combination event with 012 to work better in cancers where there's enhanced differential expression of B7-H3 like in the prostate cancers?

So you said flotetuzumab and 009? I'm sorry, can you repeat the question one more time? Sorry.

No worries. in DART molecules that contain the target B7-H3, would you expect the combination of these DART molecules with anti-PD-1 to work better in cancers where there is that better differential in the target expression, like in --

Oh, I see what you're saying. So I think that the expression pattern on B7-H3 with regard to the performance of the DART molecule, we don't have data on that. We know that even at very low expression of B7-H3 on the tumors, there is recognition and kill there. Now with regard to combine that with an anit-PD-1, as long as we're able to recruit T-cells there to mediate the effect, we had shown, if you'll recall, in preclinical data that that combination was very synergistic. So we expect that irrespective of the density of B7-H3 on the tumor, that the combination with an anti-PD-1 is likely to show improved response. But we'll have to see.

Our next question comes from David Lebowitz with Morgan Stanley.

I just had a question on B7-H3 molecules. Given your experience so far with enoblituzumab, and a wide array of cancers, are you starting to think of narrowing in on specific cancers for some of the trials going forward, especially for MGD009 and MGC018?

Thanks, David. As you know from enoblituzumab, we did that in the combination studies where in the dose escalation and the expansion studies, we had a very wide range of tumors that we were pursuing. And then we decided to narrow it down to 4 tumor types, as I noted before of lung, head and neck, melanoma, and bladder cancer. We expect that depending on the individual tumors and the mechanisms that we're employing here that are quite differential, certain tumors maybe respond better than others. And of course, for instance, with a molecule that has a linker toxin technology in which you have to have an uptake of the receptor and the complex into the cell, certain tumor types tend to do that better than others. So we may see a stratification ultimately, which would include a narrowing of specific tumor types we would pursue for each one of those B7-H3 targeted molecules.

Thank you for that. And one more question. On MGD014, you're going to start a trial early next year. Could you just run us through what that trial will look like, and then what you're looking to find out?

Yes. Thank you very much for the introduction of that molecule, which we've been pretty quiet about. Obviously we got the clearance from the FDA to proceed with that study. This is a study of patients who are on antiretroviral therapy for HIV in which we can measure a residual latent pool of virus in cells. And so first of all, obviously in a dose escalation study, we're looking at the tolerability of the molecule. This study is being conducted at the University of North Carolina. Once we establish obviously the safety, we will also be monitoring viral persistent and viral load in those subjects, in those assays will be tested, and obviously other immune parameters will be followed. Ultimately, once that is completed, there is a plan to combine it with other molecules that can induce the virus acutely that might make this DART molecule more effective of eliminating that talent pool of infected cells. But that is a follow up study in the future.

Our next question comes from Reni Benjamin with Raymond James.

Congratulations on a nice deal, nice validation of the platform. Maybe just as a follow up to a couple of the other questions asked before regarding flotetuzumab. Scott, can you provide maybe a little bit more color in terms of those patients that are responding? Maybe what the duration of response was? What kind of duration of response you're looking for? And these patients, have they -- are you thinking about potentially bridging to transplant? Have any of them bridged to transplant, or are these patients just too far gone that they're not transplant eligible?

Reni, thanks very much for the question. We'll be providing some update on the durability of responses as ASH, so I won't comment on it now. Obviously a lot of the patients that were treated at the time of ESMO, and even still now, are very short windows of opportunity. And many of these patients are still being followed or still on therapy. So we don't have a full analysis of how persistent the responses are being provided in a real-time basis at the time of ASH. So far, no patients have been bridged to transplant. Most of these patients are fairly sick, and most of them had not been candidates for transplant, given their circumstances. But certainly, that is one opportunity for the use of this drug, particularly as we get into patients that are eligible with transplant to be able to provide that as an alternative for them. Of course, we like to see the durability of these responses without treatment for long periods of time. As you know, people have looked at time intervals of 30, 60, 90 and 6-month data, depending on studies. And certainly we'd like to achieve it, hope to achieve the 6-month or longer data in these subjects.

Got it. And then just to clarify, will we be seeing any of the AML or MDS cohorts at AHS, or is that something that we could expect AHS of next year?

Of the new patients that we're currently treating? The 20 --

Yes.

So several of those -- we started the expansion in August, so several of those patients will be added at the time of ASH, but only small numbers, given the short timeframe. And then the plan would be then once completed in the first part of next year, to provide update at a significant scientific conference.

Got it. And then just maybe a high-level question regarding anti-PD-1. Will you be targeting indications for which anti-PD-1s were already approved, or is there, from a strategic perspective, a push to maybe look at indications for what checkpoints have not been approved?

As you know from the way the deal is now structured, we have 4 tumor types that we are presuming right now as monotherapy as a proof of principle. I will let you wait until the end of the week for that disclosure to occur. With regard to the actual approval strategy as a monotherapy, that will fall to Incyte to make that decision. So stay tuned for that feedback.

And then I guess just one final question regarding the DART molecules. As we think about the DARTs and their side effect profile, should we be thinking that all DARTs -- any DART with a CD3 sort of all created equal and have very similar profiles, or really, the variable region that's targeting, call it a new target, really brings different side effect profiles to each molecule?

That's an excellent question, and a complex one. Obviously now, the distribution of the particular tumor antigen with respect to its expression pattern, both on tumor tissue, but also on normal tissue, in a large part will dictate part of the side effect profile. So if you in fact can get a tumor target, and that's one of the reasons why we like B7-H3 for its fairly restricted pattern on tumors versus normal tissues, we think that most of the side effect profile would be relegated to cytokine release as a monotherapy. Of course, you can expect other toxicities, if there is a binding to a normal tissues, but so far, the biggest issue has been at a certain dosage, we do see cytokine release, which we have shown can be managed very well. We see that the magnitude of the cytokine release doesn't approach the level that has been seen, for instance, with CAR T therapy. Now with regard to the CD3 component, obviously there are different affinities and also different epitopes of CD3, which can mediate and induce cytolytic activity. And each of those specificities or affinities may give you a different degree of cytokine release. So there can be some differences among molecules and the particular CD3 component that you select for your bispecific molecule.

(Operator Instructions) Our next question comes from David Nierengarten with Wedbush Securities.

I just wanted to maybe follow up with that on some of the details on enoblituzumab and 009. I was just curious, first off, how many, if you could tell us how many dose cohorts you've gone through for dosing for 009. And you mentioned of course a bit of CRS. Are there any other side effects that you saw, especially given some of the expression on vasculature? If there's anything else popping up. Thanks.

David, your questions start off with both enoblituzumab and 009, but I think most of the question is related to 009.

It is.

Let me just reiterate the enoblituzumab. We are dosing enoblituzumab currently at 15 mgs per kg on a weekly basis. And in fact, we have tremendous occupancy and we have increasing concentrations in the serum of enoblituzumab in some of the patients we looked at. And some of the feature studies with enoblituzumab may be looking at alternative dosing regimens that are less frequent. So let me set the stage for that. With regard to MGD009, there have been several that have been looked at. I think it's 3, but don't hold me to it if there's a fourth one that has been started in terms of different dosing regimens. And a lot of this is variations on a theme, which is a fixed dose or then a lead-in dose that would be to the previous dose, or to a higher dose. So there's variations on a theme here. But I would say in general, about 3 different dosing regimens were pursued once we hit the 10 microgram per kg dosing regimen. With respect to other toxicities, I haven't reviewed recently the safety data, but I have not been informed of anything else of particular concern besides cytokine release, but I'll leave that to our clinical group to further update you if they have additional information.

This concludes the question-and-answer session. I'll now turn the call back to Dr. Koenig for closing remarks.

I'd just like to thank everyone again for joining us, and let you know that we look forward to updating you on each of the programs that we discussed today as we continue to make progress. Have a great rest of the day.

Ladies and gentlemen, this concludes today's conference. Thanks for your participation and have a wonderful day.