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Operator
Good afternoon.
We will begin the MacroGenics 2017 Fourth Quarter and Full Year Conference Call in just a moment.
(Operator Instructions) At this point, I will turn the call over to Jim Karrels, Senior Vice President and Chief Financial Officer of MacroGenics.
James Karrels - CFO, SVP and Secretary
Thank you, operator.
Good afternoon, and welcome to MacroGenics' conference call to discuss our fourth quarter financial and full year 2017 operational results.
For anyone who has 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.
Scott Koenig - CEO, President and Director
Thank you, Jim.
I'd like to welcome everyone participating via conference call and webcast today.
Thank you for joining us.
During the fourth quarter of 2017 and more recently in early 2018, we've made significant progress on several fronts.
And I'm happy to provide an update that is focused on our most advanced product candidates as well as update you on 2 previously announced collaborations.
But before I do so, let me first turn the call back to Jim, who will review our financial results for the quarter and year.
James Karrels - CFO, SVP and Secretary
Thank you, Scott.
This afternoon, we reported financial results generally in line with expectations.
As described in our release, MacroGenics had research and development expenses of $147.2 million for the year ended December 31, 2017 compared to $122.1 million for the year ended December 31, 2016.
This increase was primarily due to continued or expanded enrollment across clinical trials for multiple product candidates as well as IND-enabling activities related to MGC018 and MGD019, 2 of our preclinical product candidates.
We had general and administrative expenses of $32.7 million for the year ended December 31, 2017, compared to $29.8 million for the year ended December 31, 2016.
This increase was primarily due to labor-related costs, including stock-based compensation expense and information technology-related expenses partially offset by lower patent expenses.
We recorded total revenue consisting primarily of revenue from collaborative agreements of $157.7 million for the year ended December 31, 2017, compared to $91.9 million for the year ended December 31, 2016.
Revenue from collaborative agreements includes the recognition of deferred revenue from payments received in previous periods as well as payments received during the year.
Revenue recorded during 2017 includes the $150 million upfront payment recognized under our agreement with Incyte for MGA012, an anti-PD-1 molecule.
For the year ended December 31, 2017, we had a net loss of $19.6 million compared to a net loss of $58.5 million for the year ended December 31, 2016.
Our cash, cash equivalents and marketable securities as of December 31, 2017 were $305.1 million, which compares to $285 million as of December 31, 2016.
Based on our current operating plan, we believe that our cash, cash equivalents and marketable securities, combined with anticipated funding under our current strategic collaborations should fund the company's operations for approximately 2 years.
And now, I'll hand the call back to Scott.
Scott Koenig - CEO, President and Director
Thank you, Jim.
As we mentioned in the opening, MacroGenics has made considerable progress across multiple fronts recently.
I will limit my comments this afternoon to selected programs, which I believe represent the most significant value creation opportunities for us in 2018.
As most of you know, margetuximab is our novel immune optimizing HER2 antibody, which has an Fc domain engineered to enhance engagement and activation of the innate immune system.
Our pivotal SOPHIA study is evaluating the efficacy of margetuximab plus chemotherapy compared to trastuzumab plus chemotherapy, in approximately 530 relapse/refractory HER2-positive metastatic breast cancer patients.
This study is being enrolled at approximately 200 sites in 16 countries.
Last month, we announced the completion of a preplanned interim futility analysis with a recommendation of an independent data safety monitoring committee to continue SOPHIA as planned without modification.
This analysis was based on a prespecified assessment, a progression-free survival determined by independent central review and did not allow for early stopping due to efficacy.
We also announced that the U.S. FDA had granted Fast Track designation for the investigation of margetuximab for treatment of patients with metastatic or locally advanced HER2-positive breast cancer who had previously been treated with anti-HER2-targeted therapy.
Enrollment of the SOPHIA study is going well and we remain on track to complete enrollment by the end of 2018 with data reading out in 2019.
Recall that at ASCO 2015, we reported single agent data for a Phase I study margetuximab, but I think you'll find it interesting that among the 22 evaluable HER2 positive metastatic breast cancer patients in that study, 3 women who had progressed on previous anti-HER2 therapy are continuing on margetuximab as single agents for 3.5, 4 and almost 5 years.
In January, 2018, MacroGenics presented interim clinical data from a Phase II study of margetuximab plus the anti-PD-1 agent pembrolizumab in patients with gastric and gastroesophageal junction cancer at the ASCO GI conference.
These results included encouraging tolerability, a 32% objective response rate, or ORR, and median progression-free survival of 5.5 months with median overall survival not yet reached in a subpopulation of 25 gastric cancer patients.
Although this data is representative of only a small number of patients, let me try to put this in perspective.
The approved combination of Ramucirumab, a vascular endothelial growth factor receptor-2, or VEGFR-2-based antibody, plus a taxane, as second-line therapy for gastric and GE junction cancer, had a median PFS of 4.4 months, a median OS of 9.6 months with an overall ORR of 28%, but with significant grade 3 and above toxicities, including 41% of patients having neutropenia, 15% having hypertension and 12% having fatigue.
And while it is possible that a portion of the activity we are seeing with this chemotherapy-free regimen combining margetuximab and anti-PD-1 is due to targeting PD-1, I'll point out that nivolumab and pembrolizumab had ORRs of 11% to 13%, albeit in third and fourth line with a median PFS of approximately 2 months.
Based on these recently reported results, we are expanding the margetuximab gastric study by enrolling 25 additional gastric cancer patients and we'll continue to evaluate biomarkers to determine the patients who are most likely to benefit from margetuximab plus anti-PD-1 therapy.
We hope to be able to tell you more about these findings later this year.
In summary, with regard to margetuximab, we believe that modifications we've made to this antibody's Fc region, through our Fc Optimization technology, may confer activity beyond what you might expect with a HER2 antibody and a wild-type Fc domain.
This is precisely why we are conducting the SOPHIA study, to make this direct comparison and hopefully establish the superiority of margetuximab versus trastuzumab in combination with chemotherapy for patients with advanced breast cancer.
MacroGenics has also made important advancements with flotetuzumab, 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.
Updated data from an ongoing dose expansion study of flotetuzumab in patients with AML and MDS were presented at the annual ASH meeting in December 2017.
Consistent with previously disclosed early dose escalation data, flotetuzumab demonstrated acceptable tolerability as well as evidence of anti-leukemic activity.
As reported at the ASH meeting in December, among the initial 8 patients enrolled in the dose expansion cohort, 3 patients had achieved CR or CRI or MLF morphologically leukemia-free status.
At that time, among the 8 patients from dose escalation and dose expansion who had achieved a CR, CRI or MLF, 5 were ongoing on flotetuzumab treatment.
As an update, we are close to fully enrolling the 24-patient AML dose expansion cohort and continue to enroll the MDS cohort.
We anticipate presenting updated clinical data later this year.
At the ASH meeting we also presented data supporting the rationale for using checkpoint blockade as an approach to potentially enhance the anti-leukemic activity of flotetuzumab.
What we specifically presented was that patients who were [unprogressive] on flotetuzumab therapy had increased PD-L1 expression at Phase I compared to responders to flotetuzumab treatment.
Also our patients who responded to flotetuzumab were found to have increased PD-L1 expression on residual AML cells after 1 cycle of therapy, consistent with the mechanism of T cell-induced activation and induction by gamma interferon.
We intend to initiate a combination study of flotetuzumab and MGA012, our anti-PD-1 antibody, by mid-2018.
In December, we closed a global collaboration licensing deal with Incyte for MGA012, an antibody that targets PD-1.
Through this transaction, as Jim mentioned, we received $150 million upfront in December.
And while Incyte has exclusive worldwide rights for the development and commercialization of MGA012, MacroGenics retains the right to develop our pipeline assets in combination with this anti-PD-1 antibody.
We continue to believe that MGA012 will remain a core strategic asset, and will be the basis for a 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 recently began the first such study of MGA012 with MGD009, our B7-H3 x CD3 DART molecule.
At SITC in November, we presented results from a dose escalation study of MGA012.
Observations included an acceptable safety profile, predictable PK/PD and early evidence of antitumor activity.
The dose expansion study for MGA012 is enrolling well, and will be transitioned to Incyte per the terms of our agreement.
MGA012 is the first of 3 programs within our PD-1 directed immuno-oncology franchise.
Let me now provide an update on our other PD-1 based programs, which utilize the same specificity as MGA012 for the PD-1 variable regions.
We are developing MGD013, an Fc-bearing DART molecule, to provide co-blockade of PD-1 and LAG-3, 2 immune checkpoint molecules expressed on T-cells for the potential treatment of a range of malignancies.
You may recall that we previously showed preclinical data that demonstrated greater T cell modulation with MGD013 than with a combination of the individual PD-1 and LAG-3 antibodies.
We believe that MGD013 is the first bispecific checkpoint blockade molecule in the industry to enter the clinic.
This molecule has now actively proceeded through multiple dose escalations.
We expect to establish a dose and schedule for MGD013 administration, as well as initiate dose expansion cohorts, in 2018.
MGD019 is a preclinical DART molecule candidate we introduced late last year.
This product candidate is also designed to provide co-blockade of 2 immune checkpoint molecules expressed on T-cells, mainly PD-1 and CTLA-4.
At SITC 2017 we presented data showing that MGD019 binds to and blocks its targets with increased activity on dual PD-1/CTLA-expressing cells.
Additionally, MGD019 enhanced T-cell responses in vitro to a level achieved by a combination of copies of nivolumab and ipilimumab.
Finally, MGD019 was well-tolerated in cynomolgus monkeys, having an improved safety profile as compared to published reports on molecules targeting the same receptors.
We are completing IND-enabling studies and anticipate submitting the IND application for MGD019 this year.
Let me quickly provide an update on our B7-H3 franchise, another opportunity for potential value creation in 2018.
Our most advanced candidate, enoblituzumab, is an Fc-optimized monoclonal antibody that targets B7-H3.
We have enrolled over 100 patients in the study of enoblituzumab in combination with an anti-PD-1 antibody in 4 different indications.
We expect to provide a clinical update on this program in 2018.
The second clinical candidate in our B7-H3 franchise is MGD009, a DART molecule targeting B7-H3 and CD3, that is being evaluated in a Phase I study across multiple solid tumor types.
We expect to establish the dose and schedule for MGD009 administration, as well as initiate monotherapy dose expansion cohorts, in 2018.
In addition, as I mentioned earlier, we've recently initiated a combination study of MGD009 and MGA012.
The dose expansion portion of this study will enroll patients with non-small cell lung cancer, renal cell carcinoma, sarcoma, mesothelioma, prostate cancer and high-mutational load tumors.
The third candidate in our B7-H3 franchise is MGC018, an anti-B7-H3 antibody drug conjugate that has shown potent antitumor activity in preclinical models.
We are completing IND-enabling activities to support submission of an IND application for MGC018 in 2018.
And now before I conclude, let me quickly describe a collaboration we entered with Roche in late 2017.
Both parties have an interest in a particular set of targets, so we structured an agreement in which we will jointly discover and develop novel bispecific molecules to these undisclosed targets.
MacroGenics received an upfront payment of $10 million from Roche in January 2018, and we are eligible to receive potential milestone payments and royalties on future sales, regardless of whether the molecule they ultimately move forward uses our DART technology or their CrossMAb or DutaFab bispecific technologies.
By any metric, we ended 2017 in a much stronger position than we began the year.
We at MacroGenics are excited about multiple value creation opportunities in our portfolio in 2018, and look forward to advancing our entire pipeline beyond the programs that were discussed today.
We also look forward to sharing meaningful data sets with you throughout the year.
This concludes my prepared comments.
We are glad to address any questions that callers may have.
Operator?
Operator
(Operator Instructions) And our first questions will come from the line of Michael Schmidt with Leerink.
Michael Werner Schmidt - MD of Biotechnology & Senior Research Analyst
I had a follow-up on -- regarding the SOPHIA interim analysis.
It sounds like there was a PFS component as part of the futility analysis, and I was just wondering if you could share some additional details with regards to the hurdle for continuing the study.
Scott Koenig - CEO, President and Director
Thank you, Michael.
As noted previously, we had a set number of PSF events that needed to be achieved before that data was then transferred to the data safety monitoring group.
They obviously looked over both the safety as well as the activity of both arms of the study.
With a review of that based on a futility analysis, they told us to proceed with the study and we are completing enrollment this year.
We have not disclosed any specific number of events that were achieved at the time of the analysis.
Michael Werner Schmidt - MD of Biotechnology & Senior Research Analyst
Okay.
And then just thinking about the HER2-positive breast cancer space more broadly, there are a few other agents and similar line treatment in Phase III trials, including TKI.
And I was just wondering, if you think about potential market positioning, if there are any biomarker analyses included in the SOPHIA trial for example, looking at the Fc-receptor mutations where the drug could have increased activity?
Scott Koenig - CEO, President and Director
Thanks for that question, Michael.
So as you pointed out, there are number of other agents, particularly small molecules that are using a TKI mechanism to control tumor growth.
There is nothing for us completing the study, having success with our molecule, and then at some future date combining such agents, including TKI agents, with margetuximab for future analysis.
Obviously, these are complementary mechanisms of action to control the growth of tumors.
With regard to the Fc modification, we did not prospectively select the patient based on the Fc differences, Fc-receptor differences, but this will be part of a retrospective analysis.
As we've shown previously in our Phase 1 study, we did see some preferential effects of the low-binding allele populations with regard to responsiveness, and it'll be very interesting to see if such a trend occurred with the SOPHIA study.
But given that the low-binding alleles represent approximately 80% of the overall population, it's not surprising that if the trial is successful, that large group would respond well to the drug.
Michael Werner Schmidt - MD of Biotechnology & Senior Research Analyst
Okay, it makes sense.
Then one last question, just a conceptual question around the dual checkpoint inhibitors.
For example, the LAG-3, PD-1 targeting molecule.
And I was just wondering if you could remind us of potential advantages of doing this within one and the same molecule as opposed to combining 2 separate antibodies, where you could potentially adjust dose in an easier way.
How do you think about the ability to dose-titrate, potentially with a dual checkpoint inhibitor?
Scott Koenig - CEO, President and Director
Absolutely.
So we've seen some potential advantages of a DART molecule expressing the 2 specificities.
First of all, as many of these cells may express different levels of the respective LAG-3 or PD-1 receptors, the way this molecule has been designed is it has been a tetravalent bispecific.
So there are 2 binding domains for PD-1 and 2 binding domains for LAG-3.
If in fact a cell expresses both but expresses, for example, a lower level of LAG-3, the enhanced avidity that will occur by initially bonding to PD-1 will allow for a natural engagement of the LAG-3 specificities on those cells.
So this gives us a potential advantage because of this avidity effect.
Furthermore, in our preclinical studies, we demonstrated quite nicely that when a cell does express both receptors, the DART molecule will bind to both receptors, and in fact will cross-link those receptors.
When you use 2 separate antibodies to those specificities, that co-binding, cross-linking does not occur.
And our preliminary studies suggest that this may lead to downstream enhanced activation of cells.
And in fact, we showed quite nicely that a DART configuration compared to 2 separate antibodies, the PD-1 and LAG-3, were much better at restoring the T-cell function.
So we think that this has intrinsic advantages over 2 separate antibodies, and obviously we'd like to see the results in clinical testing.
Operator
And our next question will come from the line of Christopher Marai with Nomura.
Christopher N. Marai - MD and Senior Analyst
I was wondering, let's just touch upon 013 for a second, just to follow up on the last question.
But would you expect the dose escalation for this bispecific to occur more quickly than that for, say, flotetuzumab?
And then a quick follow-up on flotetuzumab and 007.
Scott Koenig - CEO, President and Director
So I didn't hear your second question, but let me we answer your first one and I'll ask you to repeat it.
So with regard to the 013, the PD-1 x LAG-3, given that we are not inducing activation directly through a CD3 engagement, we are -- it has been seen to promote a certain degree of cytokine release.
And obviously took us a longer time to identify a proper dosing schedule for the patients.
We do not anticipate by the co-engagement of PD-1 and LAG-3 to see that side effect.
Obviously, we'll have to find out in complete dosing, but to date we're in the middle of dosing the study and it has been proceeding quite well from a safety perspective.
So our expectation is, is that we'll complete the dose escalation later this year.
And then we will move into a large number of individual cohorts with MGD013.
Christopher N. Marai - MD and Senior Analyst
Okay, great.
And then with respect to flotetuzumab, I was just wondering -- I know obviously there were some ongoing responses at ASH.
I was wondering if you can comment on any of those responses, are they still ongoing in patients in that trial?
And then -- you know (inaudible)...
Scott Koenig - CEO, President and Director
Okay, well let me respond to that and then I'll let Jim cover the follow-up question.
So as you recall and as stated here, as of ASH, the expansion cohort in which we were targeting 24 additional patients in AML and 24 additional patients in MDS.
At the time of ASH, we had dosed 8 patients and presented the results of those patients.
We are -- as noted today, we're getting close to finish enrollment of the additional patients in the 24-patient cohort of AML subjects, and we're still continuing to dose and enroll patients for MDS.
So we anticipate quite soon to have the results of that 24 additional patients in AML, and hope to see consistent data that we had previously demonstrated for the activity of flotetuzumab.
Christopher N. Marai - MD and Senior Analyst
Okay.
And will you have PD-L1 expression levels in those patients as well?
Scott Koenig - CEO, President and Director
Yes.
So as we've noted today, and as we presented in a poster session at ASH, we had shown that in the initial patients who were refractory during the first 2 weeks of dosing with flotetuzumab compared to those who had a response, they had baseline levels of PD-L1 that were elevated on the AML blast.
And as I noted today, after one course after the first cycle, in patients who responded, you could see an induction of PD-L1 on the residual AML blast.
We intend to continue that examination of the additional subjects for [with] these and other markers, and hope to update you at a future meeting.
I would also make the point that we are -- even without that data, the results were so striking that we are on track by the middle of the year to start the combination study of MGA012 or anti-PD-1 as well as flotetuzumab.
So we intend to start that even without the additional analysis of future subjects.
Christopher N. Marai - MD and Senior Analyst
Okay.
And then just with respect to our registration path here, do you think that it's necessary to have the combination of the PD-1 and flotetuzumab for a registration trial of this drug?
Scott Koenig - CEO, President and Director
So we think that the responses we're seeing are quite robust.
Obviously, the reason why we want the additional patients is to see how strong that -- the responsiveness and how long the responses persist.
So we have to obviously analyze that data before we make a final conclusion.
But if we remain on track here with the responses that we've already seen, we do believe that it merits a consideration of a single drug flotetuzumab therapy for the relapsed/refractory population.
Obviously we will engage the FDA and the other regulatory agencies with the data, and get their opinion on a pathway forward as a single agent.
In the meantime, we will then also do the combination studies to look if we can further enhance the responsiveness of those patients.
But at this point, we don't believe that the addition of anti-PD-1 will be necessary for a pathway towards registration.
Operator
And our next question will come from the line of Stephen Willey with Stifel.
Philomena Kamya - Associate II Equity Research for Biotechnology
Hello, this is Philomena Kamya in for Steven Willey.
So it's just one conceptual question surrounding the rationale for expanding the Phase II gastric cancer study to include more GC patients.
So in the data that you recently disclosed earlier in the year, we noted the direction of the superior outcomes associated with the tumor site of origin in gastric cancer versus GEJ patients.
And we were just sort of wondering, are there differences in PD-L1 expression based upon tumor primary site of origin that you've noticed?
Scott Koenig - CEO, President and Director
Philomena, thanks so much.
Great question.
We're very excited about the results we saw from the study of margetuximab plus anti-PD-1 pembrolizumab.
As you point out, we saw a very significant response rate as we pointed out in today's conference.
And we believe that the results that were reflected in the responses to gastric may be unique, but we are obviously continuing to follow GE junction patients as well, the ones that are already treated.
And so we'll provide further update on the analysis of both the gastric and GE junction cancer patients.
As you know, for many of the immune based therapies, sometimes there is delayed responses in terms of responsiveness.
There are a number of factors that could contribute to differences and different histologies.
You pointed out one is, is that the inflammatory responses might be different, the level of PD-L1 expression may be different on the tumor and the checkpoints on immune cells that are in the local environment.
There's also a well-known differential in the maintenance of HER2 expression after treatment with chemotherapy and Herceptin.
And that also may contribute to a differential effect there.
We will be analyzing these and other markers and expect to present that data in an upcoming meeting for our insights on patients that have already been studied.
But of course, we are very excited about the opportunity to now test this combination in a larger cohort.
And therefore we are testing 25 additional gastric patients, and hope to enroll all these patients quickly.
I'm happy to say we have a number of sites up enrolling already for this expansion of the study.
Operator
And our next question will come from the line of Yigal Nochomovitz with Citi.
Yigal Dov Nochomovitz - Director
On SOPHIA, can you tell us what you're able to with respect to the statistics assumptions on the primary endpoint, meaning (inaudible) [effects] for the control arm, the hazard ratio that you're powered for, as well as the number of events that you -- will trigger the final analysis?
Scott Koenig - CEO, President and Director
Yes.
We have reported this previously.
This will be a sequential primary endpoint analysis of PFS and OS.
We've been looking for 257 PFS events with a hazard ratio of 0.67 powered at 90%.
And we're looking then subsequently for OS 385 events, a hazard ratio of 0.75 powered at 80%.
Yigal Dov Nochomovitz - Director
Okay.
And then on the manufacturing plans that you have, could you talk a little bit more about what amount of capacity you have at that facility for both clinical and commercial work?
How broad a manufacturing initiative is that?
Scott Koenig - CEO, President and Director
This was an undertaking we started last year, planned earlier in the year.
I'm happy to say, sitting here in Rockville, Maryland, we are close to completing the construction of the site.
We expect -- all the rooms are finished.
They're fine-finishing some aspects of the ceilings, all the equipment is in, we obviously have to validate the equipment.
Our expectation is, is that, by the end of the second quarter we'll be up and running and making product.
With regard to capacity, we have five 2,000-liter reactors that we believe will provide sufficient supply for our ongoing clinical needs as well as commercial needs for many of the products that we are developing.
And of course, as you know, through the Incyte relationship we are guaranteed an option to supply enough -- a portion of the material for their clinical needs as well as commercial needs.
So we're very excited about the opening of the facility.
Yigal Dov Nochomovitz - Director
And these five by 2,000-liter reactors, are you -- is that going to be a parallel process where you can manufacture multiple drugs at once or is it a serial process?
Scott Koenig - CEO, President and Director
You have the capacity to do more than one product, because these are self-contained units.
So at our choice of how many we do at an individual time and obviously, the particular quantity needs for the molecule.
Operator
And our next question will come from the line of Ren Benjamin with Raymond James.
Reni John Benjamin - Senior Biotechnology Analyst
Scott, maybe just -- I know that this is a data-rich year, but can you help us maybe hone in on what conferences are most likely to have the data?
For example, should I be thinking more AACR/ASCO?
Or is this really a second half type of data release in terms of SITC and ASH?
Scott Koenig - CEO, President and Director
So, thanks, Ren.
As you know, we've been very active in the past at all these meetings.
And as you know, we have both a very robust preclinical as well as a clinical pipeline.
I would say that at the upcoming AACR meeting we usually tend to put in abstracts for new molecules that were in development, preclinical molecules that will be future molecules in the clinic.
So I think that's something you can anticipate coming up at AACR.
We expect to -- we've submitted abstracts for ASCO.
And there are many meetings both in Europe and the -- and in the U.S. that we anticipate that we will submit abstracts for, both European as well as U.S. meetings.
These could include multiple meetings, for instance, to discuss flotetuzumab in the context of the various hematology meetings both in the U.S., as well as in Europe.
So it should be a good year.
Reni John Benjamin - Senior Biotechnology Analyst
Got it.
And just related to a question Michael had asked early on.
As we're thinking about sort of the changing landscape -- or you guys are thinking about the changing landscape in breast cancer, and the use of potential HER2 compounds at earlier stages, how do you guys think about the potential for the tumor to mutate, for the HER2 protein to mutate and its impact on a compound such as margetuximab in the later lines of therapy?
Scott Koenig - CEO, President and Director
Thank you for that question.
Obviously, it's a complex one.
And we can be speaking of this initially in breast cancer, but as you know, we're exploring gastric cancer and there are opportunities in other HER2-bearing tumors.
And as -- Ren, as you know quite well, in the case of patients that become resistant to Herceptin, there are several things that can occur.
The most frequent occurrence is, is that signaling molecules downstream have altered P-10 and others without affecting the expression of the HER2 molecule on the surface of the tumor.
So that is why we believe margetuximab has added benefits, given that the recognition still occurs but you are dramatically modulating the immune system, both from the innate side, as well as potentially sensitizing the T-cell population.
Getting, though, back to Michael's question, for some of these patients, they may become resistant to TKI in addition.
So that's why recognition [in an] immune-based process we think may have superiority.
And as you know quite well, beyond the concept of any checkpoint blockade for PD-1, we have actually presented previous data, for instance at AACR 2 years ago, with a CD137 by HER2 molecule that worked exceptionally well at taking preactivated T-cells and expanding that population in an antigen-specific manner.
So as we think going forward on how we can address the HER2 population by augmenting various parts of the immune system, I think will be a great advantage over current therapies.
Reni John Benjamin - Senior Biotechnology Analyst
Okay.
And then just -- as we start to think about biomarker analysis and as you guys start evaluating all these different combinations, can you talk to us about -- I know people like to focus on PD-L1 status.
But can you talk about what other type of biomarkers you guys are focusing on?
And do you or anyone else in the field look at NK cell status and the impact of that status on efficacy or safety?
Scott Koenig - CEO, President and Director
So of course we are looking at much more than just PD-L1 on tumors or PD-1 on cells.
Our goal is obviously, to look first at the expression of the particular antigen, the activation of -- state of the cell, we look for cytokine distribution in the patients pre- and post-therapy, as both a marker of activation, but also as a consequence of side effects that might occur in those patients.
As you know, we have a very large initiative at looking at blockade of many of these other checkpoints that are inhibitory as well as utilizing agonistic checkpoints to enhance the effect of these populations.
And so as we start slicing and dicing and evaluating our patients in these studies, I think we'll be able to get a better sense as opposed to the [temporal relation] of the expression of these particular molecules, and where we can augment those responses either by creating better checkpoint blockade or providing an agonistic signal to both -- some of these activating markers.
So this is a continual effort on our part, and I'm sure we will expand over the course of the next few years.
Reni John Benjamin - Senior Biotechnology Analyst
Got it.
And then just one final question from me.
With 007, I think you stated in the prepared remarks that you're completing monotherapy -- the monotherapy study and anticipating a combination with the PD-1 inhibitor.
And can you just talk a little bit about -- is the combination something that you had planned from the get-go or is it because maybe the monotherapy is not necessarily showing you the efficacy that you want to see?
How should we be interpreting the combination that you're moving forward with?
Scott Koenig - CEO, President and Director
Sure.
And -- so as we pointed out in the past, the limitation that we confronted with 007 was on target effects [but] based on the expression of GPA33 in a normal colon, the small intestine and the stomach.
And -- so for a good part of the last year and a half, we've been trying to identify both supportive care as well as the proper dosing regimen that would mitigate the side effect profiles.
In particular, as I have pointed out, after the first and second dose particularly, we would see severe nausea, vomiting and diarrhea in these patients, again, as a result of binding the GPA33 molecule.
We believe we have now a dose that has dramatically reduced that side effect profile.
Hasn't totally eliminated it, but it's clearly much more tolerable than we observed earlier.
As we pointed out very early in all these efforts, we think that the combination with a checkpoint blockade, particularly anti-PD-1 and maybe with other checkpoints as well, should continue to augment the T-cell activity and the cumulative effect that we observed.
And we have presented preclinical data that these combinations work both in vitro and in vivo.
So this was, from the get-go, a planned development effort on our part.
But stay tuned and we expect that combination study to begin in the second half of this year.
Operator
And our next question will come from the line of Peter Lawson with SunTrust Robinson.
Unidentified Analyst
[Max Lunen] for Peter Lawson.
I was just wondering if you could tell us again about the enoblituzumab PD-1 combo readout that we're going to see later this year.
How many patients is that going to be, what endpoints are we going to see, is that more of a mid '18 or a late '18 event, and if there is any biomarkers that we should be looking out for?
Scott Koenig - CEO, President and Director
Thanks, Max.
Yes, as I pointed out that study is coming to completion on enrollment.
We have 4 tumor types that we focus on, patients with bladder, non-small cell lung cancer, head and neck cancer and melanoma.
Included in these are patients that are both PD-L1 -- PD-1 experienced and also those that are expressing PD-L1 and also have absence of PD-L1.
So we have lots of opportunities to look at subpopulations that may benefit by both Enoblituzumab and the anti-PD-1 blockade.
In total, we have over 100 patients among the 4 cohorts.
We expect to present this in the second half of this year.
And again, we have anticipated response rates that we would like to achieve that will then dictate further clinical development.
And right now, it's just too early, given that many of these patients are still on treatment.
Operator
And our next question will come from the line of David Lebowitz with Morgan Stanley.
Vikram Purohit - Research Associate
This is Vikram on for David.
We just had a quick question on MGD010.
Just wanted to see if that program is still under development, and if so, what's the current plans there?
Scott Koenig - CEO, President and Director
Thanks, Vikram.
As I noted on previous calls, after we completed the Phase I study in dose escalation in known volunteers and treatment of individual volunteers with a vaccination.
Given the large cancer focus of the company, we decided to not continue our personal development of the MGD010 program.
And we are currently discussing the opportunity to further develop this in various auto-immune diseases, both with commercial organizations as well as academic (inaudible) organizations.
But nothing has been set up to date.
Operator
And our next question will come from the line of Dane Leone with BTIG.
Unidentified Analyst
This is [Advonne] for Dane.
I just had a quick question basically following up on Philomena's question regarding large efficacy and gastric -- and gastric disease -- cancers.
What do you think the regular path could be, especially since you said it could possibly be more complex than simply separating out the patient population by PD-L1 expression?
Scott Koenig - CEO, President and Director
Oh.
So at this point, we obviously are looking at the response rate in this population as the primary goal here.
And as we reported on those first 25 patients, we've seen a very favorable response compared to approved standard therapies.
With regard to the PD-L1 expression, that certainly could be entering into a marker for a subpopulation that may be more responsive.
And we anticipate completing that analysis and providing an update of that data for PD-L1 expression, for HER2 expression at a future meeting as well as other markers.
So stay tuned.
Operator
(Operator Instructions) And I'm showing no further additional or follow-up questions at this time.
So now it's my pleasure to hand the conference back over to Dr. Koenig, for some closing comments or remarks.
Scott Koenig - CEO, President and Director
Thank you.
I'd like to thank everyone for joining us, and let you know that we look forward to updating you on each of these programs that we discussed today as we continue to make progress.
Have a great day.
Operator
Ladies and gentlemen, thank you for your participation on today's conference.
This does conclude our program, and we may all disconnect.
Everybody, have a wonderful day.