MacroGenics Inc (MGNX) 2019 Q1 法說會逐字稿

(technical difficulty)

MacroGenics 2019 First Quarter Corporate Progress and Financial Results Conference Call in just a moment.

(Operator Instructions)

At this point, I will turn the call over to Anna Krassowska, Vice President, Investor Relations and Corporate Communications of MacroGenics.

Thank you, operator.

Good afternoon and welcome to MacroGenics' conference call to discuss our first quarter 2019 financial and operational results.

For anyone who has not had the chance to review our results, we issued a press release this afternoon outlining today's announcement, 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 only 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 as 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, Anna.

I'd like to welcome everyone participating via conference call and webcast today.

Thank you for joining us.

We have had an eventful start to the year, and I will be providing a review of what was accomplished on several fronts as well as some upcoming events.

But before I do so, let me first turn the call over to Jim Karrels, Senior Vice President and Chief Financial Officer, who will review our financial results for the quarter.

Thank you, Scott.

This afternoon, MacroGenics reported financial results for the quarter ended March 31, 2019, which highlight our financial position as well as the progress we have made over the quarter.

As described in our release, MacroGenics has research and development expense of $47.1 million for the quarter ended March 31, 2019, compared to $45.7 million for the quarter ended March 31, 2018.

This increase was due to increased costs across multiple clinical studies, including MGD013, MGC018 and flotetuzumab as well as increased development in manufacturing costs related to MGA012, which were largely offset by revenue from Incyte.

These increases were partially offset by decreased expenses related to SOPHIA and enoblituzumab clinical studies.

We had general and administrative expenses of $10.2 million for the quarter ended March 31, 2019, compared to $9.2 million for the quarter ended March 31, 2018.

This increase was primarily attributable to increased consulting and other professional service fees.

We recorded total revenue consisting primarily of revenue from collaborative agreements of $9.7 million for the quarter ended March 31, 2019, compared to $4.7 million for the quarter ended March 31, 2018.

Revenue from collaborative agreements included revenue received under a clinical supply agreement with Incyte as well as the recognition of deferred revenue from payments received in previous periods and payments received during the quarter.

We had a net loss of $45.0 million for the quarter ended March 31, 2019, compared to a net loss of $49.5 million for the quarter ended March 31, 2018.

And finally, our cash, cash equivalents and marketable securities as of March 31, 2019 were $320.4 million, compared to $232.9 million as of December 31, 2018.

Our March 31, 2019 balance includes the upfront payment from Zai Lab of $25 million, less foreign holding tax of $2.5 million as well as the $118.7 million net proceeds from the follow-on offering we completed in February.

And now I'll turn the call back to Scott.

Thank you, Jim.

The most important news for the company has been our recent announcement regarding the positive top line results of SOPHIA, our pivotal Phase III trial in HER2-positive metastatic breast cancer with margetuximab, our novel, investigational immune-optimized anti-HER2 antibody, which has an Fc domain engineered to enhance engagement and activation of the immune system.

To recap the top line results that we have disclosed previously, SOPHIA met the trial's first sequential primary endpoint of prolongation of progression-free survival in patients treated with a combination of margetuximab plus chemotherapy, compared to trastuzumab plus chemotherapy.

Patients in the margetuximab arm experienced a 24% risk reduction in PFS compared to patients in the trastuzumab arm with an associated p value of 0.033.

Approximately 85% of the patients in the study were carriers of the CD16A or Fc-gamma R3A 158F allele, which has been previously associated with diminished clinical response to Herceptin and other antibodies.

In this pre-specified subpopulation, patients in the margetuximab arm experienced a 32% risk reduction in PFS compared to patients in the trastuzumab arm with a p value of 0.005.

The combination of margetuximab and chemotherapy demonstrated acceptable safety and tolerability.

As we have previously noted, it is too early to evaluate the second sequential primary endpoint of overall survival as OS events continue to accrue in the study population.

An abstract describing the SOPHIA results has been accepted for an oral presentation at the annual meeting of the American Society of Clinical Oncology, or ASCO, to be held in June.

The presentation will take place during the metastatic breast cancer session in the morning on Tuesday, June 4. We look forward to presenting the detailed results then.

We have a pre-BLA meeting scheduled with FDA this quarter and anticipate submitting a biologics license application to the FDA in the second half of 2019 on the basis of the PFS results.

There are currently no FDA approved therapies in the third line and beyond settings for HER2-positive metastatic breast cancer.

If approved by regulators, margetuximab offers the potential of a new treatment option for patients living with this devastating disease.

In this regard, we continue to explore potential partnerships around margetuximab.

Regardless of whether we or another party led the commercialization of margetuximab, we have efforts ongoing to prepare for successful launch.

We are also seeking to address unmet needs of HER2-positive cancers beyond breast cancer.

As you recall, we are evaluating margetuximab in combination with an anti-PD-1 mAb in a Phase II clinical trial in patients with HER2-positive gastric or gastroesophageal junction cancer who have had prior chemotherapy and trastuzumab, but are naive to anti-PD-1 immunotherapy.

At the ASCO GI Symposium in January 2019, we presented data demonstrating encouraging anti-tumor activity and acceptable safety and tolerability.

In this trial, the objective response rate for this population for the HER2-positive IHC 3+ gastric cancer population was 32.7% with a disease control rate, which includes partial responses and stable disease, of 69.1%.

Median progression-free survival was 4.7 months.

These results benchmark favorably in comparison to prior studies of standard of care treatment in the second-line setting.

In the second half of 2019, we intend to initiate a Phase II/III registration-directed study of margetuximab in patients with gastric or gastroesophageal cancer in the frontline setting.

The study is planned to be in 2 parts.

The first part is designed as a single arm study of margetuximab in combination with MGA012, an anti-PD-1 mAb.

This combination approach is designed to coordinately engage both innate and adaptive immunity in a chemotherapy-free regimen.

The second part is designed as a randomized controlled trial to evaluate the combination of margetuximab with chemotherapy plus MGA012, our anti-PD-1, or MGD013, our PD-1 x LAG-3 DART molecule.

We plan to coordinate these global efforts with our partner in Greater China, Zai Lab.

To wrap up my comments on margetuximab, we believe that the Phase III results in metastatic HER2-positive breast cancer and the Phase II results in HER2-positive gastric cancer provide clinical validation of our Fc-optimization platform.

Preclinically, further mechanistic validation of our Fc-optimization technology and the SOPHIA results was presented at AACR in April.

In vitro data comparing margetuximab and trastuzumab showed that while margetuximab retained the same Fc independent activity as trastuzumab in inhibiting tumor growth, margetuximab exhibited more potent antibody-dependent cellular mediated cytotoxicity, or ADCC, and induced greater proliferation of NK cells compared to trastuzumab.

Furthermore, the combination of margetuximab and pertuzumab mediated more potent ADCC in vitro than the combination of trastuzumab and pertuzumab.

Finally, we will also have a poster at ASCO describing HER2-specific immunity observed in patients with HER2-positive cancers treated with margetuximab in our Phase I study.

Together, these data are consistent with margetuximab's mechanism of action as a catalyst for facilitating the cooperation of both innate and adaptive immune responses.

Beyond margetuximab for targeting HER2-driven tumors, we believe that our Fc-optimization technology may have the potential to help patients with other types of cancer.

We are seeking to achieve this by advancing enoblituzumab, our investigational mAb targeting B7-H3, in which we have incorporated the same Fc mutations as margetuximab.

Enoblituzumab is the lead program in our franchise of B7-H3-directed product candidates and is currently in development in combination with anti-PD-1.

With this approach, we are again seeking to engage both innate and adaptive immunity in a coordinated manner for cancer immunotherapy.

Recall data we presented at SITC in November 2018 showing that cohorts of patients with either squamous cell carcinoma of the head and neck or non-small cell lung cancer who are naive to anti-PD-1 therapy had objective responses at rates that benchmark favorably with data reported in prior studies in which patients were treated with anti-PD-1 monotherapy.

Encouraged by these results, we are planning a Phase II study of enoblituzumab in combination with MGA012 in patients with head and neck cancer to begin in the second half of 2019.

We look forward to discussing the design of the planned trial in more detail in the future.

Our second drug candidate in our B7-H3 franchise is MGD009, a bispecific DART molecule that is designed to target both B7-H3 expressed on tumor cell as well as CD3 which is expressed on normal T cells.

We are enrolling patients in 2 Phase I clinical trials of MGD009; one as monotherapy and another in combination with MGA012.

MGC018, our third B7-H3-directed molecule, is an antibody drug conjugate that targets solid tumors expressing B7-H3.

MGC018 is being evaluated in a Phase I dose escalation trial, which was initiated in the fourth quarter of 2018.

Turning to our PD-1-directed franchise.

We have 3 PD-1-directed programs in the clinic: MGA012, MGD013 and MGD019.

The first and most advanced, MGA012, is licensed to Incyte Corporation, although we retain the rights to develop it in combination with our pipeline programs.

Incyte is initially pursuing development of MGA012 monotherapy through 3 potentially registration-directed clinical trials, one in MSI-high endometrial cancer and one in Merkel cell carcinoma, with initial data anticipated in 2020, and a study in anal cancer with initial data expected in 2021.

In addition, both Incyte and MacroGenics are each studying MGA012 in multiple combination trials.

I'll remind listeners that under the terms of our agreement with Incyte, MacroGenics is eligible to receive up to $420 million in potential development and regulatory milestones and up to $330 million in potential commercial milestones.

If MGA012 is approved and commercialized, MacroGenics will be eligible to receive royalties tiered from 15% to 24% on future sales of MGA012 by Incyte.

Our second checkpoint molecule is MGD013, a first-in-class DART molecule that provides co-blockade of 2 immune checkpoint molecules expressed on T cells, PD-1 and LAG-3, for the potential treatment of a range of solid tumors and hematological malignancies.

Our Phase I dose expansion study in up to 9 tumor types is ongoing, and we expect to present data from the study in 2019.

MGD019, another dual checkpoint DART molecule, is designed to provide co-blockade of PD-1 and CTLA-4 on T cells.

Our Phase I dose escalation study of MGD019 is currently enrolling patients.

The next program I will discuss is flotetuzumab, a bispecific DART molecule that recognizes both CD123 and CD3.

In December 2018, MacroGenics presented both updated clinical data as well as gene signature data from its completed acute myeloid leukemia, or AML, dose expansion cohort in 2 oral presentations at the American Society of Hematology Annual Meeting.

In this study, flotetuzumab demonstrated anti-leukemic activity and acceptable tolerability in patients with relapsed/refractory AML, with a higher response rate observed in primary refractory patients, an extremely challenging population to treat.

We are currently enrolling additional patients in a dose expansion cohort enriched for primary refractory patients and expect to announce data in 2019.

MacroGenics is collaborating with Servier on this program, and under the terms of this agreement, Servier has development and commercialization rights outside of North America, Japan, Korea and India for flotetuzumab.

Finally, MGD007, our bispecific DART molecule designed to redirect T cells to target gpA33 expressed on colon cancer, is being evaluated in combination with MGA012.

We anticipate completing enrollment of our expansion cohort this year and determining next steps for the program.

To date, we have made tremendous progress with our immuno-oncology pipeline of nonclinical product candidates with multiple molecules, demonstrating clinical proof of concept to support ongoing and planned registration studies.

This has been an exciting start to the year for MacroGenics, and we look forward to continued progress.

We would now be happy to address any questions that callers may have.

Operator?

(Operator Instructions) Our first question comes from Jonathan Chang from C -- SVB Leerink.

This is John Barrett on for Jonathan.

Can you please help set investor expectations ahead of the ASCO update, and specifically what sort of data will be presented, and will you have survival data in the ASCO presentation?

Thank you, John, for that question.

Obviously we're very excited about being able to disclose additional data from the SOPHIA trial.

There will be obviously an abstract coming out in mid-May, and this will be followed up obviously with a presentation on the morning of June 4. Our expectation is obviously to provide a recapping of the data we presented on the intent-to-treat population, on various subset populations, particularly looking at the F allele 158 population where we've seen the significant response rate.

And we will likely present the OS data at that point, which was disclosed or examined at the time of February 5 when we had our initial data.

There will be analysis of different subsets that were defined as secondary endpoints.

And I presume that -- that data presentation has not obviously been put together yet, but it should be very revealing in terms of where we think the promise of this drug is.

Got it.

One more question.

For the gastric cancer trials expected to start in the second half, what sort of biomarker cutoffs do you expect to have for those patients in terms of IHC expression?

So we intend to look at predominately the 3+ top expressed IHC-positive population, but the final program for this has not been fully baked out.

But I would say the majority will be gastric patients with IHC 3+.

Our next question comes from Jonathan Miller from Evercore.

I want to ask about your discussions on margetuximab and the SOPHIA data with EU regulators.

Is your expectation that you'll be able to file with them on PFS data alone as well, or will they require OS data?

So from the historical views on these type of studies in cancer, the EU has had greater need for reviewing the OS data, and we anticipate to provide that at the time of submission.

So as we have noted, the OS data is accumulating, and our anticipation is that will occur sometime next year.

And we anticipate to file at that time when we achieve the 385 death events for the analysis.

Great.

That makes sense.

One more.

You have spoken in the past about possibly being interested in moving earlier in breast cancer with margetuximab.

Do you have any update on your plans for a potential neoadjuvant study or what timing might look like on that or if there's still interest in that program?

There is certainly a lot of interest in next steps for treating patients with breast cancer, including early line therapy.

We've had outreach from a number of parties with regard to conducting a neoadjuvant study, and those conversations are ongoing.

I think we should be able to provide some further insights on those plans for neoadjuvant studies sometime after ASCO.

Our next question comes from Christopher Marai from Nomura.

First just with respect to margetuximab and perhaps a companion diagnostic, could you elaborate on any potential plans you might have to look at that I guess with respect to identifying patients with this specific allele?

And then I have a follow up.

The intention -- our intention is to file with the complete data set, which included both the F alleles and the Bb allele, and look forward to feedback from the FDA on that.

Having said that, we are working on being prepared with a diagnostic.

We have engaged in a number of different diagnostic groups.

There is a number of groups that have actually done testing for the various CD16 alleles.

So I don't think that this is going to be very problematic for us to put a diagnostic test in place, even in the case of when this is desired to be used on a research basis.

Okay.

Would you consider using it at all for inclusion/exclusion criteria or stratification, I guess, around the gastric cancer study?

No, we have no intent to do that in the gastric cancer study, but we will continue to analyze those patients retrospectively.

It is possible though, and again, this has not been set in stone, of considering looking at the F alleles in a neoadjuvant population, for example.

So we are looking at the usefulness of pre-defining populations that will have the greatest benefit from treatment.

Okay, great.

Then with respect to flotetuzumab, just thinking about the data coming out later this year, this is all from the expansion cohort, I believe, and I was just wondering what type of n we should expect?

How many patients will you be providing from that expansion update?

And then secondarily, with respect to combinations with maybe MGA012, I recall PD-L1 was upregulated in response to flotetuzumab.

So I was just wondering if you had any further thoughts on a potential combination with an anti-PD-1.

Yes.

So Chris, with regard to the expansion data, we've been very encouraged with the data we've seen to date since the ASH meeting in December.

As we have noted previously, we made some minor modifications in the first week of dosing.

And in the patients we've treated so far, we're seeing reduced severity of CRS in those patients, we're achieving the targeted doses in most of those patients, and they're very encouraged by the continued response rates that are similar to what we had reported in December.

Our plan is to continue with this expansion.

Our hope is to soon have up to 25 patients being treated with this alternative regimen.

This should occur very soon.

We will then analyze that data.

And again, if we achieve the safety profile and the targeted response rate, it will allow for us to engage the regulators to talk about next steps and even defining hopefully a pathway towards registration as monotherapy.

Having said that, we are not stopping at a monotherapy to enhance the therapy for these patients.

So as you alluded to, we had reported an upregulation of PD-L1 on patients after a single cycle of flotetuzumab and had seen in refractory patients an increase in PD-L1 on AML blasts.

We have preclinical data, the combinations of that with our anti-PD-1 increase the anti-tumor response.

We are in a great position now to actually start that trial.

We have gotten regulatory approval in several countries for conducting that combination study.

And we will initiate that once we have finished this 25 patient expansion cohort, and that's expected to start in the second half of this year.

Our next question comes from Debjit Chattopadhyay from H.C. Wainwright.

So maybe I didn't catch this correctly, but the planned Phase III study in gastric cancer, the second arm -- the second part, is that going to be a 3 arm study or did I miss that totally?

It is a complex study as laid out here.

The first part, as we said, we would start in frontline patients.

We would treat them with margetuximab plus MGA012, our anti-PD-1.

We would then take another cohort and add the PD-1 LAG-3 bispecific, the MGD013.

And then the next step is layering over chemotherapy.

We will then look at response rates in that population compared to a control group, which would be the ToGA regimen for those patients.

We will then collapse those results, picking the best responding population whether it be MGA012 plus chemo or MGD013 plus chemo, and then those patients would be randomized in the Phase III study.

Okay, got it.

Then for the PD-1 LAG-3 program, I assume that -- you had disclosed before, the dosing schedule has been established.

So have you narrowed down the tumor types in the expansion cohort, or is this still an all comer study at this point?

Still an all comer study.

9 tumor types.

Increased number of groups because we're including patients that are both anti-PD-1 or anti-PD-L1 experienced as well as several groups that are naive to those treatments.

Our expectation is that, as I stated before, that we should have at least additional 100 patients enrolled in that study this year.

We'll present that data where they are in the course of therapy of patients that are evaluable.

But we hope around that time or soon thereafter then to focus in on a given population that we think will have the best response rate.

So stay tuned for that data later this year.

Our next question comes from Michael Morabito from Credit Suisse.

I just had a quick question on MGD009, if there was any updates that you had since the clinical hold was lifted and how the modified dosing has been impacting the trial.

So it's too early to the dosing.

The monotherapy study has been initiated, patients have been enrolled, and we're soon to enroll the combination with the anti-PD-1.

But the study isn't far enough along to be able to give you any significant updates on that program.

Okay.

And I noticed you mentioned that there'd be updates in the second half of this year on flotetuzumab and 013.

Are there any other data updates that we could expect coming in 2019?

At this point, we haven't highlighted any additional programs.

Clearly, there's a number of studies that are dose escalating: the MGC018, the MGD019.

We don't think those would be far enough along in time for us to submit an abstract to make it to any of the major meetings, but if something accelerates, sure, we'll be able to provide some updates.

There'll probably be some interim update of the second-line gastric data at a later conference.

A number of those patients are still on study.

The OS continues to mature and getting longer and longer.

We're very excited about that data, and that was obviously part of the reason why we moved that up to frontline study with margetuximab.

But that's what we anticipate at least in the near term.

Our next question comes from Stephen Willey from Stifel.

Not sure if you mentioned it before, Scott, or if you can, but do you know if the abstract will include the median progression-free survival benefit, the absolute benefit inferred by the hazard ratio?

I believe it does, yes.

Okay.

And then just going back to the question regarding EMA and the need for OS data for regulatory purposes.

Does -- presumably there's a number of different structures that a partnership can assume, but is it kind of safe to say that I guess any kind of partnership that would include some kind of ex-U.

S. commercialization piece would be dependent upon that overall survival data?

So thanks for the question, Steve.

We're talking to a number of different parties that are structured in different ways and with different interests.

So there may be, in the context of these conversations, there are some parties where that data would be important in terms of ex-U.

S. deals, but in others it actually hasn't entered the conversation.

So it's still too early to determine which way we're going to go on this.

Okay.

And then just lastly, I know that you talked a little bit about the use of a diagnostic for the gastric study.

Is there going to be a need there to assay either PD-L1 baseline expression and/or even LAG-3 in the context of the bispecific?

Yes.

So when we go to the diagnostic, we're talking about HER2 expression, we will obviously look at PD-L1 expression as well.

I think the plan right now with regard to LAG-3 would be to do this retrospectively rather than prospectively going forward.

The issue as you know with LAG-3 is that the temporal expression of that marker can occur at varying times and may not be coordinated with PD-L1 expression.

So I don't know how variable a set analysis of that's going to be prospectively.

Our next question comes from Yigal Nochomovitz from Citigroup.

I just wanted to get a better understanding with respect to the dose selection for the MGD013 in the pivotal study of frontline gastric.

Because you already have the dose escalation data and you're doing dose expansion for 013, so I'm assuming there's valuable information there in that dose escalation study that could help inform the combo with margetuximab.

So if you could just expand a bit on your thinking as to how you would use that dose escalation data to pick a dose for the combo.

Yigal, thanks for the question.

So yes, we've done a dose escalation.

We've actually looked at the PK as well as occupancy of circulating cells on that.

So we have picked a dose that's in expansion right now in, as I said earlier, in 9 different tumor types, and that's the dose that would be included in this gastric study.

Our plan is to provide updates on the dosing of MGD013 later this year at one of the scientific conferences.

And probably later this year we'll also be a little more disclosive about the specifics around the design of the gastric study, including dosing would fall under that plan.

And can you talk at least in broad terms around what percent contribution Zai will make to this study in terms of sites and patients relative to what your contribution will be?

Good question.

So we have ongoing discussions with Zai right now.

They are planning in the near term to engage the regulators in China.

We clearly have to understand how they view the study situation.

We obviously had interactions with the U.S. FDA.

If everything is aligned, they can contribute significant percentage of the Phase II and Phase III study going forward, but the absolute numbers have not been worked out yet.

As you recall, I've noted that they have ongoing gastric studies in about 30 sites in China currently with another program.

And so we'll have to determine which number of -- what percentage of those sites will participate in our study to then come out with an estimate of their actual patient contribution.

But I do think that this could be a significant percentage of the enrolled patients.

Our next question comes from Waleed Naby from SunTrust.

Mr. Naby, if you have your phone on mute, please unmute your line.

Okay.

Moving on to the next question which comes from Michael Schmidt from Guggenheim Securities.

This is Charles Zhu on for Michael Schmidt.

Congratulations on the quarter.

As you referenced earlier -- I had a quick question on the gastric cancer.

As you referenced earlier, the trial is going to get quite complicated, especially with margetuximab with potentially the PD-1 LAG-3 bispecific and chemotherapy layered on top.

In this context, how do you think about not only the active comparator arm, but other arms that you may need in the fully randomized study?

That's an excellent question, Charles, and we've had discussion with the FDA.

So as I've sort of laid this out on the layering of the various arms here, that data will also not only provide the safety for the individual components, it'll also give us some insight into contribution of parts going forward.

And so we had this discussion with the FDA, who have been very helpful in looking at what we think is a very novel adaptive design of combining a novel biologics in one study.

So this has been planned out going forward and hope to be able to reveal some more details later this year.

Got it.

And we probably haven't heard as much on MGD007, the gpA33 C3 bispecific.

Just kind of wondering, if I remember correctly, you guys mentioned that there was going to be some data coming out later this year.

I was wondering if you could provide some additional incremental color along what kind of data, what our expectation should be, and if that might include combo data with the MGA012.

Charles, thanks for that question.

As I noted on the -- very shortly on the script earlier, we had made nice progress with the 007 program.

As you know, our biggest challenges around that program was the side effects we were seeing on target on normal tissues, particularly nausea, vomiting and diarrhea.

And I'm very pleased to say that in the dose escalation of the molecule, now in combination with anti-PD-1, we have achieved what I believe to be a good profile in terms of tolerability in this population.

And so what our plans are this year for this program is to complete out an expansion cohort of the combination of MGD007 and MGA012, our anti-PD-1, in approximately 25 patients.

And we would anticipate that that enrollment would be completed during this year.

And hopefully, by the end of the year or maybe early next, possibly at ASCO GI -- I don't want to put a particular site yet until we have the patients enrolled and analyzed -- we'll be able to make a decision about the merits of that program.

I think we're in a good shape now that given the tolerability is going well, if that continues as we have seen it recently, and we now start seeing evidence of clinical benefit, then that would give us the go to expand that program in further studies.

Got it.

And just one last question, if you don't mind.

On flotetuzumab, not sure if I just missed this one earlier as well, but are you able to go forward with the full dose on flotetuzumab when it's used in combination with the MGA012?

And if not, then what kind of dosing adjustments have you had to do?

So we have not started the combo study yet with MGA012.

The study has been designed.

As when you combine 2 active agents like this, there is a sort of leading dosing where you have a small numbers of cohorts to get the maximum dosing.

We expect, as I said, the study to start probably midyear or just after the middle of the year once we have the data on those 25 patients from the monotherapy dosing regimen.

So the expectation is to dose up over a couple of small cohorts and then go into full dosing thereafter.

Our next question comes from Peter Lawson from SunTrust Robinson.

Just on the updated flotetuzumab data, sounds like you've got a lot of data in hand.

So could we see that potentially ahead of ASH, and what should we expect to see?

So Peter, from the submissions, the appropriate forum for these meetings, given its hematological malignancy, was to assume for [Ehab] to go into that meeting, and we would then question whether we have the full data set ready for ESMO, and we decided to let's proceed with additional dosing.

And so it's most likely the data will be presented at ASH.

We always -- we like to present at that meeting and it's obviously a good forum for that.

Having said that, if there is any change with regard to speeding up the development plan with regard to A, for instance, the initiation of combination study or interactions with regulators in terms of registration, that's something that we would press release and discuss before the ASH meeting.

Got you.

And then just as we think about the launch prep for margetuximab, where are you for that?

And just kind of the thoughts about ex-U.

S. partners, how you'd kind of think about dividing that.

Yes.

So again, it's all going to be dependent on who the partner is and whether it's, A, someone with a global footprint versus a U.S. or just ex-U.

S. experience and sales force.

It's just too early to discuss that.

We're making nice headway in our own preparation ahead of any partnership.

We've hired a head of medical affairs.

We're interviewing folks for various MSL positions.

We're engaging on access and getting estimates on the particular populations that will benefit from the drug.

So we're doing the work ourselves, but until we have a partner in place, I can't give you any more definition on those other activities.

(Operator Instructions) I show a next question comes from Yigal Nochomovitz from Citigroup.

I just had one scientific question.

Do you have any data to support the view that LAG-3 plays a role in gastric and that that would be the preferable molecule to combine with the margetuximab and PD-1 mechanism?

Or is this really a need to run the clinical test and then you'll know?

So let me put it this way.

There is clearly a significant proportion of gastric cancer patients from the histology we have done showing significant LAG-3 expression.

So that's number one.

We know on a sizeable portion of the population LAG-3 is there.

Let me say that we have some early insights that targeting LAG-3 could be beneficial in combination with targeting other checkpoints as well.

So we will clearly accumulate additional data on patients with gastric cancer being treated with a PD-1 LAG-3 bispecific going forward that's separate from the combination study with a HER2-positive population, but the initial insights on this is encouraging.

I show a next question comes from Debjit Chattopadhyay from H.C. Wainwright.

Hello.

Can you hear me?

Now I can hear you.

You were cut off for a second.

Sorry.

So just a follow up on Yigal's question then.

In your experience, is the LAG-3 expression already present at baseline, or does it happen as a result of prior treatment for checkpoint inhibition?

It's there at baseline.

So for instance, if we take samples from patients who have not been treated with checkpoints and just random samples that we've looked at, we've seen both PD-L1 expression and LAG-3 expression in a significant percentage of those tumors.

So in your PD-1 LAG-3 monotherapy expansion cohort, are you enrolling gastric cancer patient as well to have a handle on what you might expect down the road?

Yes.

This concludes our Q&A session.

I'd now like to turn the call back to Dr. Koenig for closing remarks.

Please go ahead.

I'd like to thank everyone again for joining us this afternoon, and to let you all know that we look forward to continuing to advance our programs in the coming months and providing updates on our progress.

Hope to see you all at ASCO.

Thank you, ladies and gentlemen, for attending today's conference.

This concludes the program.

You may all disconnect.

Good day.