Seagen Inc (SGEN) 2015 Q2 法說會逐字稿

Good day, and welcome to the Seattle Genetics second-quarter 2015 financial results.

(Operator Instructions)

Today's conference is being recorded.

At this time, I would like to turn the conference over to Peggy Pinkston, Executive Director Corporate Communications. Please go ahead ma'am.

Thank you, operator, and good afternoon, everyone. I'd like to welcome all of you to Seattle Genetics second quarter 2015 conference call.

With me today are Clay Siegall, President and Chief Executive Officer, Todd Simpson, Chief Financial Officer, Eric Dobmeier, Chief Operating Officer, Jonathan Drachman, Chief Medical Officer and Executive Vice President Research and Development, and Darren Cline, Senior Vice President Commercial. Following our prepared remarks today, we will open the line for questions. If we are unable to get to all of your questions, we will be available after the conclusion of the call.

Today's conference call will include forward-looking statements regarding future events or the future financial and operating performance of the Company. Such forward-looking statements are only predictions based on current expectations, and actual results may vary materially from those projected.

Please refer to the documents that we file from time to time with the SEC. Specifically, the Company's quarterly report on Form 10Q for quarter ended June 30, 2015 which is available on our website. For information concerning the risk factors that could cause actual results to differ materially from those contained in our forward-looking statements.

At this point, I will turn the call over to Clay.

Thanks, Peg, and good afternoon, everyone. Thank you for joining us today.

The second quarter of 2015 was productive on many fronts. We head into the second half of the year with several anticipated milestones. ADCETRIS achieved record net sales in the US and Canada for the second quarter and year to date, up more than 20% compared to the same periods as last year. Based on year-to-date results, we are increasing our total 2015 guidance for ADCETRIS net sales in the US and Canada to a range of $210 million to $220 million, an increase of $10 million from our prior range of $200 million to $210 million.

Looking ahead, in the near term, we anticipate an approval decision from the FDA on our AETHERA supplemental BLA by the PDUFA date of August 18. A positive outcome would result in a third indication for ADCETRIS, and represent a key step in our goal of expanding ADCETRIS beyond relapsed Hodgkin's lymphoma and systemic anaplastic large cell lymphoma. We have also submitted a supplemental NDS for the AETHERA indication to Health Canada.

Our market research suggests that there has already been some use of ADCETRIS in the AETHERA setting, following the addition to treatment guidelines and Compendia earlier this year. We have factored this market research and potential label into our updated ADCETRIS net sales guidance.

We and our Partner Takeda, remain on track to complete enrollment this year in our phase 3 ECHELON-1 trial in Frontline Hodgkin's Lymphoma and our phase 3 ALCANZA trial in CTCL. And we expect to complete enrollment in our phase 3 ECHELON-2 trial in Frontline MTCL next year. Data from ALCANZA are planned in 2016, and data from ECHELON-1 and ECHELON-2 are expected in the 2017 to 2018 timeframe. With these phase 3 trials, combined with more than 30 other ongoing trials. We remain strongly positioned to deliver on our goal of establishing ADCETRIS as the foundation of care for CD30 positive malignancies.

I am also excited that the investment in our product pipeline is generating results, with data anticipated from several programs over the next six to nine months. This includes data expected this year from SGN-CD33A in acute myeloid Leukemia, where we have expanded our clinical program both as a single agent, and in combination with other drugs used in the treatment of AML.

We are particularly interested in the potential role of 33A in combination with hypomethylating agents such as Vidaza and Dacogen, based on encouraging phase 1 data that we plan to present later this year. More than 20,000 people are diagnosed with AML annually in the United States. Most are over the age of 60, and the vast majority have CD33 expression on their leukemic cells. This differentiates SGN-CD33A from other agents that target subsets of AML patients based on cytogenetic abnormality or underlying mutational heterogeneity.

The prognosis for AML is grim, particularly among unfit patients, and outcomes have not meaningfully changed in decades. We plan to have an end of phase 1 meeting with the FDA. And to seek scientific advice in Europe before the end of the year to determine next steps toward a global registration strategy for this program. We are also conducting a phase 1 trial of 33A combined with standard of care in Frontline AML patients who can receive intensive therapy. And we are evaluating other opportunities, including as a bridge to transplant for relapsed AML patients, and in myelodysplastic syndrome or MDS. Another pipeline program with expanding clinical activities is SGN-CD19A. We are building upon our phase 1 data in non Hodgkin's lymphoma by initiating a randomized trial in second line DLBCL later this year. The phase 2 study will evaluate the standard second line regimen of Rituxan-ICE plus or minus SGN-CD19A.

Our goal is twofold, to increase the pre-transplant complete remission rate in this setting. Thereby enhancing the number of patients eligible for autolic transplant, and to improve outcomes after transplant. I am proud of the progress we are making with ADCETRIS. Our product pipeline and our innovative and powered approaches to the treatment of cancer. At this point, I will turn the call over to Darren Cline to discuss commercial activities. Then, Todd Simpson will discuss our financial results, after which, Jonathan Drachman will highlight research and clinical activities.

At the end of our prepared remarks, we will open the line for questions. Darren?

Thanks, Clay.

During the second quarter of 2015, we saw continued growth of our ADCETRIS franchise. ADCETRIS revenue for the second quarter was $55.1 million, a 13% increase over Q1 2015. Year-to-date ADCETRIS revenue through the end of Q2 was $104 million, a 25% increase over the first half of 2014.

During the quarter, ADCETRIS maintained its position of standard of care in the relapsed Hodgkin's lymphoma and systemic anaplastic large cell lymphoma settings. Duration remains approximately six cycles. Although we do not promote outside our label indications, physicians continue to identify increasing numbers of patients with CD expressing lymphomas who may benefit from ADCETRIS therapy.

Looking ahead, we were prepared for potential of AETHERA label expansion, and the commercial team has identified four strategic imperatives upon approval. First, patient identification: helping physicians to identify eligible patients will be important in driving patient starts on therapy. Second, transition of care: patients are typically referred to an academic institution for their transplant. Some patients will transition back to their referring community physician. Ensuring that ADCETRIS dosing continues through this transition of care will be critically important.

Third, ensuring payer coverage and reimbursement: a quantitative analysis presented at ASH in December 2014, showed that ADCETRIS reached key cost effectiveness measures as consolidation therapy. Upon approval, our managed markets team will work with payers to ensure appropriate coverage and reimbursement of ADCETRIS in the AETHERA setting. And lastly, educating on duration of therapy: it will be important to provide information on the AETHERA trial design and treatment duration to physicians and patients. As you recall, the study was designed for up to one year of treatment, or 16 cycles, and the average duration on study in the ADCETRIS arm was 12 cycles. Upon approval, our goal is to make ADCETRIS the standard of care for high-risk patients in the post ASCT consolidation setting. We look forward to updating you on our progress in future calls.

Now I would like to turn call over to Todd to discuss our financial results.

Thanks, Darren. And thanks, everyone, for joining us on the call this afternoon.

Our financial performance in the second quarter of 2015 was driven by record ADCETRIS sales. The business is strong, and we ended the first quarter with approximately $250 million in cash and investments. Total revenues in the second quarter of 2015 were $77.1 million, which had included ADCETRIS net sales of $55.1 million. This represents significant growth over the previous quarter, and over the second quarter of last year.

For the first half of 2015, total revenues were $159.3 million, including $104 million in ADCETRIS net sales. As Clay mentioned, based on strong sales to date, we are increasing 2015 ADCETRIS guidance to a new range of $210 million to $220 million.

Royalty revenues were $7.6 million in the second quarter, and $18.7 million for this first six months of 2015, primarily related to international sales of ADCETRIS by Takeda in its territory. While Takeda's sales of ADCETRIS have increased in 2015, year-to-date royalties are lower than 2014, due to a $5 million sales milestone in the first quarter of last year.

With approval now in 56 countries, ADCETRIS has become a global brand. Collaboration revenues were $14.4 million in the second quarter, and $36.6 million for the year to date in 2015. These revenues are driven by amounts earned under our ADCETRIS collaboration with Takeda, and our ADC deals.

R&D expenses were $85.7 million in the second quarter of 2015, an increase from $53.7 million for the same period in 2014. This increase primarily reflects the up front payment of $25 million under the Unum collaboration, as well as increased investment in our pipeline programs. For the year to date in 2015, R&D expenses were $149.1 million compared to $108.2 million for the first half of 2014.

Given the new Unum collaboration announced last month, we now expect that 2015 R&D expenses will be in the range of $275 million to $300 million. This is an increase of $25 million over our previous guidance.

SG&A expenses increased for year to date in 2015 to $62.5 million from $49.5 million in the first half of 2014. This is consistent with our guidance.

Non cash share-based compensation costs for the first six months of 2015 was $17.6 million. Compared to $18.7 million for the first half of 2014.

And with that, I will now turn the call over to Jonathan.

Thanks, Todd.

The ADCETRIS program continues to be a major focus of clinical effort as we seek to establish ADCETRIS as the foundation of therapy for CD-30 positive lymphomas. Clay discussed our going phase 3 trials, which are all doing well in terms of recruitment and investigator enthusiasm.

Now I would like to spend a few moments discussing the potential role of ADCETRIS in the treatment of DLBCL, the most common type of aggressive non Hodgkin's type lymphoma. Our data presented in the second quarter at ASCO and ICML, highlight opportunities both in the relapse, refractory and Frontline settings to develop important new therapeutic options for the subset of DLBCL patients who express CD30.

Our single agent data showed that ADCETRIS is active in both relapsed and refractory patients. And in the patients who express CD30, there was a promising objective response rate of 44% and complete remission rate of 17% as mono therapy. Earlier this year, ADCETRIS was added to NCCN guidelines for relapsed CD30 positive DLBCL.

Building on these data and our previously reported results for ADCETRIS combined with bendamustine in relapsed Hodgkin's lymphoma we are now initiating a randomized phase 2 trial of bendamustine and Rituxin with or without ADCETRIS in CD30 positive relapsed and refractory DLBCL. And in the Frontline setting, our data for ADCETRIS combined with RCHOP in patients with high risk and intermediate high risk DLBCL are encouraging, especially in the CD30 positive population, in which we reported a CR rate of 76% and estimated 12 month PFS of 86%.

We have expanded the trial to evaluate ADCETRIS plus RCHP, dropping Vincristine from the standard regimen. And we are considering a possible registrational trial to demonstrate the value of integrating ADCETRIS as a potential new standard of care for CD30 positive DLBCL, regardless of cell of origin or other molecular subsets.

We also recently announced the initiation of a clinical trial for ADCETRIS in patients with lupus. Our first corporate trial in autoimmune disease. In part, this trial is based on retrospective data, demonstrating that some patients who are treated with ADCETRIS for lymphoma reported improvement in concomitant inflammatory conditions. This is consistent with published data showing that CD30 is up regulated in certain subsets of activated lymphocytes, and may play a pathological role in autoimmune diseases. While the lupus trial is a relatively small exploratory initiative, as compared to our efforts in oncology, inflammation could represent a significant future opportunity.

As Clay described, our proprietary SGN-CD33A and SGN-CD19A pipeline programs are continuing to generate exciting data. And we are expanding into later stage clinical trials, and exploring new indications and novel combination regimens. In particular, we are encouraged by emerging data with 33A, and look forward to presenting additional data later this year.

In addition, we anticipate upcoming data presentations from several of our other clinical stage programs. SGN-LIV1A is an ADC targeted to LIV1, which is expressed on more than 90% of breast cancers.

Our ongoing phase 1 trial is in several types of meta static breast cancer, including triple negative disease. We anticipate data from this program later this year.

ASG-22ME and ASG-15ME are ADCs in phase 1 trials for bladder cancer and other solid tumors under our collaboration with Astellas. We are accumulating a significant amount of data from these programs, particularly in bladder cancer. We are looking forward to presenting data from both of these programs in 2016.

Our ADC collaborators are also making continued progress with programs employing our technology. Most recently, AbbVie initiated a phase 1 trial for an ADC in hematologic malignancies, which triggered a milestone payment to us. And several collaborators, including Genetech Roche, AbbVie, Genmab, Progenics and Astellas all reported clinical data at ASCO on ADCs using Seattle Genetics technology.

To build upon our expertise in ADCs, we have begun evaluating complimentary antibody-based approaches in the immuno oncology space. This includes SEA-CD40, which utilizes our proprietary sugar-engineered antibody technology. We started a phase 1 trial with SEA-CD40 for solid tumors earlier this year. Pre-clinical data show that this agent stimulates antigen presenting cells, and may work well in combination with check point inhibitors. We are focused initially on evaluating SEA-CD40 as a single agent, and look forward to developing novel combination regimens, including with ADCs and other immuno oncology agents.

In addition, during the second quarter, we entered into an early stage collaboration with Unum. Giving us another opportunity to explore a novel mechanism for treating cancer. This partnership leverages our expertise in antibodies and targets, and serves to broaden and diversify our research pipeline. We and Unum will initially develop two antibody-coupled T cell receptor products incorporating our antibodies. Seattle Genetics has an option to expand the collaboration to include a third product. With this collaboration, our pipeline now includes three approaches to empower antibodies, ADC, SEA, and AKTOR technologies.

In the future, we believe these mechanisms of action will be combined to significantly improve outcomes for cancer patients. Along these lines, we have presented pre-clinical data providing strong rationale for combining ADCETRIS with check point inhibitors. Such as nivolumab to maximize cancer cell death, and increase immune activation within the tumor micro environment. Under our collaboration with Bristol-Myers Squibb, two clinical trials are planned to begin in 2015. To evaluate ADCETRIS in combination with nivolumab in relapsed Hodgkin's lymphoma, and relapsed CD30 positive non Hodgkin's lymphoma. We look forward to continuing our strong momentum into the second half of 2015 across our portfolio.

At this point, I will turn the call back over to Clay.

Thanks, Jonathan.

Before we open the call to questions, I'd like to summarize our key upcoming goals to expand ADCETRIS and advance our pipeline. They include, first, obtaining FDA approval for ADCETRIS in the AETHERA setting. Second, completing enrollment in the ECHELON-1 and ALCANZA trials later this year, and in the ECHELON-2 trial next year. Third, broadening the clinical investigation of ADCETRIS in Frontline and relapsed DLBCL.

Fourth, initiating clinical trials in combination with nivolumab under our collaboration with Bristol-Myers Squibb. Fifth, reporting emerging data on 33A and AML, and meeting with FDA in seeking scientific advice in Europe on a potential global registration strategy. Sixth, reporting additional data, and initiating a phase 2 trial of SGM-CD19A in second line DLBCL. And lastly, reporting data from other pipeline programs, including SGN, LIV1A, ASG-15ME and ASG-22ME.

At this point, we will open the line for Q&A. Operator, please open the call to questions.

Certainly.

(Operator Instructions)

We'll take our first question from Matt Roden with UBS. Please go ahead. Your line is open.

Great. Thanks very much for taking the question. Congratulations on a nice quarter here. Nice step up in sales. I assume it's related to the Compendia listings as a driver here. And if that's the case should we assume there isn't much more room for a step up once you formally get the AETHERA label? To what extent do you think that you have the ability to promote the label will actually help you commercially once you do have the approval in that setting, in the post transplant setting?

Matt, thanks for the comments and the question. First of all, take a step back and just say that our new guidance of $210 million to $220 million projects an 18% to 23% increase over last year. So what it says is our business is strong. Now within that, our on label business is strong. We have said literally almost every quarter, that our market penetration for on label is very strong and high. Now as you said and as we know, we do have four guideline listings now. And these four guideline listings are market assessments, and research say that there is some use in those areas. So we include that. But when we look at our guidance, we have done the best we can to look at all of the information. And take everything into account. And we'll certainly keep you updated in the future.

Okay. Thanks very much. And then a quick one on the pipeline. You mentioned the SGN-CD33A end of phase 1 meetings with regulators. Usually, you were talking about end of phase 2 meetings. But just understanding that the path here in AML and the unmet medical need. Would it be too aggressive to assume that you might be in a position to disclose a global registration pathway by ASH? It sounds like if these meetings are here in the second half? Just trying to understand what the gating factors are to getting that program up and running, and when investors may have a better understanding of what the plans are there. Thanks very much.

Sure. Thanks again for the question, Matt. So first of all, AML is a really big unmet medical need. So that's something that we have been working on for sometime now, and we are really trying to do what we can for patients with this terrible disease. The second thing I'd say is 33A is an active drug. We presented data already at ASH 2014, single-agent data, showing -- with waterfall plots, showing the rate of response, showing a lot of regression of the tumor blasts in the bone marrow. So this is an active drug. We have already demonstrated that, and presented it at conference.

And one of the goals is really to look at how the drug is used in AML patients. And there is really two sets of AML patients. There's fit patients and there's unfit. The fit ones are generally younger. Not always, but generally younger. And the unfit ones are generally older. And the fit patients get something called 7+3, which is standard of care, it's two cytotoxic drugs. It's very toxic to give. You have to go in the hospital for a week to get it. And then the patients that are unfit, they get hypomethylating agents. And these are Vidaza, Dacogen, and they're standard of care. They're used widely. And we think that there is a really good opportunity to go ahead and combine this drug, 33A, which we have shown already is active as single agent. With the standard of care in both of the indications.

Now you asked specifically a little bit about what our goal is at the end of phase 1 to having a meeting with the FDA. And certainly, our goal would be to try to see if we could get this drug into a global registration strategy as soon as possible. I don't want to commit that it would be before ASH or after ASH. I could just tell you that our goal is to do it as soon as possible, but we really are still collecting data. We're still in phase 1. But we're encouraged by what we see to date.

Great. Thanks very much, and congrats on the progress.

We'll go ahead and take our next question from Adnan Butt with RBC Capital Markets. Please go ahead, your line is open.

Thanks, and nice uptick on the ADCETRIS as well. Following up on the question that Matt just asked on SGN-CD33, Clay, is it too soon to determine if the approach would be a mono therapy approach, combination approach? Or is it going to be multiple modalities for AML?

We are looking at all of this right now. What we have said is there is a lot of different indications. There is the Frontline fit patients, there is the Frontline unfit. There is mono therapy. There is bridge to transplant. There is myelodysplastic syndrome. There is a lot of opportunities for us with this. The thing -- pointing out a little bit about the combination with hypomethylators. One of the things that's of interest in that, is that is probably the place where the most unmet medical need is. Those patients, the standard of care hypomethylators, the response rate there is something between 15% and 20% that you get CRs or CRIs. The duration of response is short, relatively. The overall survival in those patients, I have seen reports most of them in eight or nine months, maybe one report in ten months.

So we are talking eight to ten months as a max for survival, OS. And so this is a really bad diagnosis for an unfit patient to get AML. So that's an area where it's something that we are encouraged with our data. We are testing 33A there. And it's an area that we're looking forward to sharing information and presenting at further clinical trials. Jonathan, do you want to comment at all on CD33 or anything like that?

I think Clay did a really good summary there of the opportunities, Adnan. And we continue to enroll in the phase 1 trial of mono therapy in relapsed or untreated patients, and we're looking at combination with hypomethylators, as we talked about. We have a separate trial looking at combination with patients receiving intensive care, and there's other opportunities to explore in the future. So I think that there is multiple opportunities to move forward with 33A.

And one of the things that we like about it, is 33A, the target is expressed very broadly on almost every patient that has AML. And it is not focused on any different cytogenetic or subunit or mutational unit. So it's something where you look at the development of AML products that are coming out there in the world now. And a lot of them are focused on very narrow swaths of patients, 10%, 15% of patients, where we think this could treat the vast majority of patients because they express the target. So it's something that is of strong interest to us.

Okay. Thanks, I will get in line.

Thank you. We'll go ahead and take our next question from Cory Kasimov with JPMorgan. Please go ahead. Your line is open.

This is actually Brittany on for Cory. Thanks for taking the questions. I just wanted to ask you about your latest thoughts on how we should be thinking about CD30 testing going forward and DLBCL, based on some of the discussions that took place at ASCO? And I just wanted to confirm, does the updated ADCETRIS guidance include AETHERA? Thank you.

Sure. Let's start with the first question on DLBCL. And then we'll get to the AETHERA and guidance question. So for DLBCL, first of all, we are excited when we saw our single-agent data in relapsed refractory patients that we have now presented. And the data were strong. And in fact, the guidelines committee noticed our data and put it into guidelines. So that's something where we feel that whenever you have a third party looking at your data and seeing that it is strong, it makes you feel good that you have done something that's important. So we're glad for that. We have also presented data showing strong data in combination in DLBCL with chemotherapy regimens. So those are where we are initially working on.

Now you are asking about testing there. Maybe I will turn it over to Jonathan. And you can talk about what we know about CD30 expression, and how it relates to DLBCL treatment.

Sure, Brittany. We haven't talked about exactly what our strategy would be in future studies. In our trials, we looked at multiple ways of measuring CD30 including mRNA, of course immunohystochemistry, computer enhanced immunohystochemistry, and other methods. The data that we used to collect when we were talking about CD30 positive verses negative was traditional immunohystochemistry. And that would probably make the most sense as sort of a standard easy to apply technology moving forward. We haven't commented on exact cut offs that we would use. Although in the data presented, it was any positive cells verses no positive cells. So I hope that's helpful.

So, Brittany, your second question is about AETHERA and guidance. First of all, I'd like to say that we're very much looking forward to the FDA decision. This would represent our third label. It's really our goal to expand ADCETRIS use into more patients that can benefit from this drug. But I do want to point out that AETHERA specifically is a new area of treatment. There has never been a drug approved in Hodgkin's lymphoma in this setting, which is consolidation after transplant. It's just been watchful waiting. So it's hard to know exactly.

Now as far as our guidance, we incorporated and factored in some assumptions about AETHERA into that. The market research we have done shows that there already has been a modest use toward the AETHERA regimen in patients. But we'll really know more in the future in this brand new area of treatment. So it's a hard thing to be exact with guidance.

Okay. Great. Thank you.

(Operator Instructions)

We'll go ahead and take our next question from Howard Liang with Leerink. Please go ahead. Your line is open.

This is Rich Goss calling in for Howard. Thanks for taking my question. I was just wondering if you'd give us some more insight into the Unum deal? Such as what targets or tumor types you might expect to focus on initially, and what sort of timelines we should expect?

Sure. I am going to turn this over to Eric Dobmeier, our Chief Operating Officer, who will tell you a little bit about the deal, what we are thinking about with the deal. Eric, do you want to comment on it?

Yes, sure. So let me give a quick overview of the deal. We made a $25 million up front payment, and a $5 million equity investment in Unum. I think it was about a month ago or so. This collaboration leverages our strength in cancer targets and antibody-based therapies, and their novel ACTR technology. So we think it's a really interesting approach for certain of the targets that we have. We haven't disclosed the specific targets in the collaboration, other than to say that it encompasses both solid tumors and hematologic malignancies. The way the deal works is we'll develop two initial products.

Unum will do the pre-clinical and phase 1 work, and we'll fund that work. And then at that point, either party can decide to opt out or we would continue together co-developing. We would have 50/50 in the US, and then Seattle Genetics would have full rights outside the US. So as Jonathan said in the script, we think this is a great addition to our pipeline. It gives three approaches to empowering antibodies through ADC technologies, [SCA] technologies and ACTR. So we are excited about it. It is an early stage collaboration, so we haven't given out any timelines. But we have started working with them on the pre-clinical work necessary to move these two programs forward.

Great. Thank you.

We'll go ahead and take our next question from Mara Goldstein with Cantor Fitzgerald. Please go ahead. Your line is open.

Thanks very much for taking the question. I just wanted to get back to the SGN-33 in AML around the concept of an accelerated registration strategy. And what I guess I am curious about is given this is a landscape that has seen so many clinical failures. The risk/reward, if you will, of taking accelerated strategy and not maybe being able to fully characterize all of the data you need going forward into larger registration study. And how you triangulate around that.

Sure. Well first of all, I think you are making a few statements beyond what we made about doing an accelerated strategy, where you can't characterize certain end points or things like that. I think that we're encouraged by our data in total.

Okay.

We presented today data that shows that 33A is active, absolutely. And some of the patients that we used in that first trial that we presented at ASH, these are patients that had a lot of prior drugs and failed, and had estimated life spans that were in less than six months predicted. And we got responses out of these patients. So our data set that we presented was I think strong. So those data are out there. So now going into these combinations, and you look at the unfit patients. They used to be treated with cytarabine. And that's an older drug, and it's used in 7+3 at high dose, but at the low dose they were using it in these [unfit] patients and getting five to six months survival. And that's the way it was for a long time. And then with hypomethylators, they initially figured out it was like 7.5 months, then 8 months, 9 months, there's one report of 10 months. So we would get a little longer with hypomethylators.

So one of the thoughts we had was -- hey, can we take what's the best now, the hypomethylators, and can we do better than that? Could we get higher response rate, the longer duration of therapy, patients staying on drug, better overall survival? So that's really our goal. And we are encouraged by our data. And you are right, AML is a tough disease. It is a tough unmet medical need right now. Mara, it kind of reminds me about 10 years ago of multiple myeloma. And I sat in meetings and I heard everybody say to companies that were going after myeloma -- gee, everything fails there. It's tough. It's a tough registrational pathway. Nothing works there. And now we have some phenomenal drugs in Revlimid and Velcade and others that have changed patients' lives.

I think AML is ripe for that. I think the technology has caught up with it. CD-33 is a great target. We are encouraged by our early data here, and we're going to be meeting with FDA to have discussions. So I think this is well worth our effort.

Thank you for the clarification. I appreciate that.

We'll take our next question, our last question from Tony Butler with Guggenheim Partners. Please go ahead. Your line is open.

Yes. Thanks very much. Clay, I just wanted to go back yet again to the same theme that Mara and others have brought up, and it's with 33A. The combination with HMA and the unfit patients, is that 225 number of patients fully enrolled in that trial? And as clintrials designates it, reads out in January. So I guess I am back to Matt's original question, do we see that data earlier than January or will that be later? And is that the subject of the discussion with the FDA? That data itself, or is it what you already have presented on both unfit and fit patients? And I have two more follow ups, please.

So first of all, what you are quoting on 225 patients with this trial, is something that I am not completely familiar with. So we didn't state that, nor is that something that we were talking about on this call. So right now, we're in a phase 1 trial, and I could tell you that we look forward to presenting this later this year. Now the kind of conference where this is appropriate for is a conference like ASH. The abstracts for ASH are not due until next week. So I think it's August 4 or 5. So Seattle Genetics normally, for the last number of years, has had a pretty big -- a pretty large number of presentations at ASH, and so I expect this year to be no different. And I also expect there to be some strong presentations on 33A, as we've said we are encouraged by the data. So I think that that's what we are looking at. You quoted 225 patients in a January timeframe, and both of those are something that I am not familiar with.

I apologize. It is in clintrials, certainly at the beginning.

One comment, Jonathan?

So, Tony, I think that you may be quoting the maximum number of patients on the phase 1 trial on clintrials.gov. Is that correct?

No, it doesn't say max. It says estimated enrollment. And if you actually go and punch in what you would normally do, CD33A AML, and come up with two trials. One, with hypomethylating agents, and one not. There are two. And the first one at the top is the one I am referring to. So I clearly -- and candidly was updated in June of 2015 by Seattle Genetics, so I must be very confused then.

Let me just clarify. There's two ongoing trials now. One is the original phase 1, which includes both the mono therapy, multiple dose levels, multiple patient subsets, as well as the HMA combination cohort. So we're not talking about -- so that's everyone in phase 1, including the patients that were presented last ASH. And then there is a second trial, which is a phase 1B combination in the unfit patients. Which includes patients who are eligible for intensive therapy, and that includes combinations with the induction regimen, or the consolidation, or maintenance for patients in remission.

Thank you. So the former is with the azacytidine and/or decitibine plus CD33A. Is that correct?

Correct. That's a subset of that phase 1 trial.

Okay. Thank you for the clarity. I am grateful.

Sure.

Two additional questions if I may. One is, is Bristol helping you fund the nivolumab studies which will go into clinical trials? And then one follow up again.

The nivolumab combination trials are jointly funded. Todd, do you want to add anything to that?

Clay is right. They're jointly funded. We haven't gotten into the specifics, but there are two trials that are envisioned. One in Hodgkin's lymphoma, and another in non Hodgkin's lymphoma. And we are just working together on those trials and co-funding the costs associated with them.

That's great. It's just an exciting theme around the tumor micro environment. The last question, really is around [anaplasab], but the notion of it since its growth has been very good, and you have done a great job. But expenses have been going up at, at least through our calculations, a little greater clip. So, Clay, how do you balance that R&D effort with this very strong pipeline that you have? And a lot of really neat things moving into clinical trials, and new stuff including the ACTR opportunity set with your overall cash balance? Thanks very much.

Thanks, Tony, for the question. That's something we talk about a lot at the Executive Management level and with our Board. Now it goes back to really what our goal and strategy is for the Company, and where we are going as a Company. The goal that we have in the Company is to build a big strong profitable biotech company. And we think that to do that, what we want to do is there's a couple things that are key to that. First of all, develop ADCETRIS in a very broad way to get it to as many patients as we need, and we believe ADCETRIS will become a blockbuster product. And so that's one thing that we're doing. Another thing we're doing is we're going forward in a very strong clip on our pipeline. We have I think it's seven products in clinical trials, and I think a total of a dozen products that we are developing that some are on the way to clinic that we don't even talk about yet. But are exciting from a pre-clinical standpoint. So we are developing a series of products that are coming forward, which includes some of the ones we talked about like 33A and 19A but others.

The reason we are doing a series of product there is our pre-clinical data is strong and our packaging is strong, so we want to bring to patients in need. Also we understand that there is a lot of attrition in the biotech business that we are in, and it is hard to treat cancer patients. So developing a full and robust pipeline will be the best way that we know how to get drug two and drug three that we believe will be commercial successes and really help patients going forward. And to do that, you have to invest in it. I have been around for a long time now, and I have seen companies like Celgene and Regenera and other ones when they were small. And saw how they invested in their drugs and their pipeline, and became big successful companies. That's really our goal what to do going forward, and that's how we discuss the balance between the dollars and the expenditures.

Clay, thanks very much.

We'll go ahead and take our last question from Christopher Marai with Oppenheimer. Please go ahead. Your line is open.

Hey, guys. This is actually Michelle in for Chris Marai. And we're wondering if you could help us understand your strategy for growth going forward with respect to potential new collaborations? And more specifically, will you look at some things more defensive to say augment your approach in Hodgkin's lymphoma? Or are you looking at something more innovative like your Unum deal? Finally, how do you look at the size of these collaborations? Do you anticipate raising additional capital? I guess this is sort of a follow up to the last question to fund either the Unum deal or the next collaboration?

So I will answer the first question and then I'm going to turn the -- or I will answer the second question on the size and dollars. And then I am going to turn over the strategy of our business development and what we look at to Eric Dobmeier who leads those efforts. But as far as these collaborations and the size of them, it depends on the collaboration. I will let Eric really refer to that. You ask about the dollars that was needed for that. We have a very good cash position in $250 million in cash. We have no debt. We have, as a Company, always been and will continue to be opportunistic to do the right thing for the Company. And whether that is raising capital, not raising capital, doing partnering deals, doing ADC technology deals. We have always done the right thing, and we think have been very good stewards of our capital.

And whenever we have chosen to raise capital, we have a great use of proceeds story. So we've been very clear, and I think we have been clear to Wall Street on what we have done there and how we are being opportunistic and we'll continue to be that for financial reasons. Eric, do you want to comment on the strategy behind business development deals?

Sure. So our BD strategy is an extension of our overall corporate strategy. And our priorities, which have been consistent for a number of years, are to build ADCETRIS into a major global brand, to advance our product pipeline, and to enhance our leadership position in ADCs. So while we'll be opportunistic about looking for in licensing or acquisition opportunities that can help what we are doing, especially around the pipeline. Unum, as I said earlier, leverages our experience with novel oncology targets and antibodies, and utilizes a different technology to exploit some of these targets.

So we think that certainly helps with that second goal of rounding and diversifying our pipeline. We are also doing work with Bristol-Myers combining with nivolumab, which is again, another way to expand our first priority of making ADCETRIS into a major global brand. So there is a number of different types of licensing deals or acquisitions that could fit into those buckets, but we are really not looking to do something transformational. What we are looking to do is supplement what we are already doing. We are very optimistic about our strategy and our priorities as they are, so BD can help us achieve those goals.

We'll go ahead and take our last question from Nathan Sadeghi. Please go ahead. Your line is open.

Hello, Clay. Could you just remind me please of any price hike history for ADCETRIS or -- (technical difficulty)? Thanks.

What history for ADCETRIS?

Just if there have been any price hikes. Thanks.

Oh price hikes. Sorry. Yes, so in fact, Todd, could you take this question?

Yes, so in the last 12 months, we have done two price increases. They were about 3.94% each. One was just recently at the end of June, and then before that, right at the beginning of the year.

Okay. Great. Thank you.

That does conclude the portion of our question and answer session. I will now hand it back over to Peggy for any additional or closing remarks.

Thank you, operator. And thanks, everybody, for joining us this afternoon. Have a good evening.

That does conclude today's program. We would like to thank you for your participation. Have a wonderful day, and you may disconnect at any time.