Celyad Oncology SA
Q4 2018 Earnings Call Transcript

Published: 29 Mar 2019

[Operator:]

Ladies and gentlemen thank you for standing by and welcome to Celyad’s Full Year 2018 Financial and Operational Update. At this time, all participants are in a listen-only mode. There will be a presentation by Celyad followed by a question-and-answer session. I must advise you all that the conference today is being recorded. And with that, I'd like to turn the call over to Anne Moore, Celyad’s Vice President for Corporate Strategy Please go ahead.

[Anne Moore:]

Thank you, Operator. And thank you for everyone for joining us for our full year 2018 results call today. Joining me today is Christian Homsy, our current Chief Executive Officer, Filippo Petti, our incoming Chief Executive Officer and Interim Chief Financial Officer and David Gilham, Vice President of Research & Development. So we will start the call with an operational and clinical update, followed by an overview of the financials and then we'll open up the line for your questions. And with, I’d like to turn over the call to Christian Homsy. Please go ahead, Christian.

[Christian Homsy:]

Thank you, Anne and thank you everyone for joining us today. We announced yesterday that the Board of Directors has selected Filippo to succeed [ph] me as Chief Executive Officer, as I step into retirement. The Board has been impressed by Filippo performance and vision since he joined the company as our CFO. I look forward to continuing to work with Filippo and the Board as a Non-Executive Board Member in charge of the Strategy Committee in order to support the company and deliver value to our stockholders. In my 15 years of working in Celyad field I have to say that the last three years have - are some of the most satisfying, as I lead Celyad transition from a cardio stem cell company into a CAR-T [ph] company. I'm truly humbled by the talented people I've had the pleasure of working with since Celyad inception. Today the company is an incredibly talented organization with an exceptional team, vision and operational excellence. I'm pleased with the current state of the company and all that we have accomplished over the past several years by leveraging our CAR-T cell autologous allogeneic platforms to reach a broad range of solid and hematological tumors. This has resulted in a pipeline that continues to expand with promising clinical and preclinical stage therapies. And I look forward to seeing this progress advanced in the next few months. With this portfolio of groundbreaking technologies combined with the talented people that make up the company, I believe Celyad will undoubtedly be placed at the forefront of the CAR-T field. I'm also very proud of having Filippo taking over this company and leading it to the next stage of its development. I'm very grateful to Celyad employee and to all the other stakeholders for making this journey possible. With that, let me hand the call over to Filippo to provide you with a complete update on the business. Filippo, the floor is yours.

[Filippo Petti:]

Thank you, Christian and thank you and welcome everyone for joining us today. I'd like to thank you Christian and the rest of the Board of Directors for appointing me CEO of Celyad. I am honored to succeed you in this role as we have shared a vision for the company and I look forward to advancing the development of the company's robust pipeline of Car-T cell therapies. Now let me shift into a brief update for our business and clinical trials. Celyad had made significant progress in 2018 demonstrating safety and promising signs of efficacy across a number of programs. CYAD-01 our lead product candidate continues to demonstrate encouraging clinical activity in the Phase 1 THINK trial, hematological malignancies. At the 60th ASH meeting in December of 2019 we reported encouraging objective response rate and relapsed refractory AML patients up 38% from the trial, which is evaluating CYAD-01 without precondition chemotherapy. This was followed up in January of 2019 when we announce updated data which showed an additional complete response in the study, leading to a 40% of patients with AML or myelodysplastic syndrome treated in the THINK Phase 1 trial we achieved a complete response. We look forward to announcing additional data from the THINK study throughout 2019. In October 2018 we also announced a exclusive agreement with Horizon Discovery Group for the use of its shRNA technology. This agreement has already started to develop into a number of opportunities for Celyad. As discussed just last week at our R&D day, we have leveraged our shRNA platform to develop a pipeline of next-generation NKG2D-based and proprietary off the shelf non-gene edited CAR-T candidates. We believe this platform complements are all in one vector approach in the design, discovery and development of next-generation CAR-T candidates. In preclinical assays these allogeneic T cells show distinctive profiles compared to CRISPR- Cas9 gene edited T cells and we believe this advantage could perhaps allow us to push novel next-generation CAR-Ts off the shelf into the clinic. We believe our shRNA-based [ph] platform should allow us to leapfrog the competition in the allogeneic CAR-T landscape. In addition CYAD-02 has encouraging clinical - preclinical data of increased CAR-T cell expansion persistence in anti-tumor activity. The next step for us with these programs is to generate additional preclinical proof of concept data throughout 2019 in order to submit Investigational New Drug application for these product candidates in the first half of 2020. There are just a couple of exciting - these are just a couple of exciting programs we are working on at the moment, solely as platform technologies have provided us with a number of opportunities to drive long term value to our shareholders. In order to support this growing pipeline, we have made strategic hires over the last quarters as well. We recently announced the appointment of Anne Moore – Dr. Anne Moore, as Vice President Corporate Strategy. Dr. Moore will be responsible for leading corporate strategy, including communications and will be a key member of the business development team, bringing her scientific financial background and broad industry experience to provide valuable strategic insight to help guide Celyad’s future success and growth. I will now turn the call over to Dr. David Gilham, our V.P. of Research & Development to provide an in-depth review of each of our clinical programs. David?

[David Gilham:]

Thank you, Filippo. So building off the overview that Filippo has provided, we are pleased with the data to date from the THINK study. This trial contains two segments. The first segment a Phase 1 dose escalation study design includes three dose levels, dose level of three times since the 8, one time since the 9 and three times since 9 CYAD-01 cells per injection using a three plus three designed to determine the recommended dose of the CYAD-01 treatment for further development based on dose limiting toxicities. We amended the study in late 2018 to add multiple cohorts to assess a more frequent dosing schedule of CYAD-01 without preconditioning chemotherapy for the treatment of relapsed or refractory acute myeloid leukaemia. The first cycle would include three injections of CYAD-01 separated by one week intervals, while the second cycle would include three injections of CYAD-01 separated by two week intervals. We also have implemented the strategy to accelerate the development of CYAD-01 for the treatment of patients with relapsed/refractory acute myeloid leukemia or myelodysplastic syndrome, including a Phase 2 clinical trial that is expected to be initiated during the second half of 2019. Turning to the DEPLETHINK Phase 1 trial, which is our open-label, dose-escalation trial evaluating a single injection of CYAD-01 following treatment with the standard preconditioning regimen of cyclophosphamide at 300 migs or meter squared and flu that have been [ph] at 30 migs of meter squared in patients with relapsed/refractory acute myeloid leukaemia.’ We reported initial data from Cohort 1 of the trial in October in which the administration of CYAD-01 following CyFlu was well tolerated with no dose limiting toxicity or treatment related grades 3 or above adverse events observed. CYAD-01 continues to demonstrate encouraging clinical activity and we look forward to announcing additional data this year from the Phase 1 THINK and DEPLETHINK trials by mid 2019. Regarding our solid tumor program for CYAD-01, we announced that concurrent treatment of CYAD-01 with FOLFOX chemotherapy in the first cohort of the trial was well tolerated, with no occurrence of serious adverse events, no increase in treatment-related adverse event rate. In addition, initial data from the amended cohort known as THINK CyFlu evaluating a single injection of CYAD-01 following treatment with CyFlu showed that the treatment is well tolerated with no occurrence of SAEs, nor an increase in the treatment-related adverse event rates. In addition, preliminary translational data suggest an improvement in the cell expansion of CYAD-01 induced by the CyFlu preconditioning regimen. We initiated the open-label, dose escalation alloSHRINK trial evaluating the non-gene edited allogeneic CAR-T cell therapy, CYAD-101, administered concurrently with FOLFOX chemotherapy in the treatment of patients with unresectable metastatic colorectal cancer. Now central to our clinical development efforts is our in-house manufacturing facility. Leading into 2018, we worked on amending our CYAD-01 manufacturing process which was implemented at the start of 2018. This process enabled our facility to produce a 600 billion CAR-T cells during 2018 with a manufacturing success rate at 94%. Combined with our logistics and support, we feel that our manufacturing capability is really second to none, supporting our clinical activities in the US and Europe. Well, this is an overview of our clinical pipeline. Let me now turn the call back to Filippo to provide an overview of our financials? Filippo.

[Filippo Petti:]

Thank you, David. Turning to the financials, I'd like to just remind you that all our financial details are available on Celyad website in both French and English languages. We plan to publish the audited - audited annual report for the year ended 2018 next week. In 2018 research & development expenses totaled twenty €23.6 million compared with €22.9 million for the previous year. The increase in 2018 reflects the organic growth of the company's operations for both preclinical and clinical activities. The key projects driving our R&D expenses in 2018 included the clinical studies conducted on the company's most advanced CAR-T products CYAD-01 as well CYAD-101, as preclinical studies conducted on the company's CAR-T pipeline candidates. General and administrative expenses amounted to €10.4 million in 2018 compared to $9.3 million in 2017. The increase was primarily driven by non-cash expenses associated with the full year vesting of warrants issued in 2017. For the year 2018 the group's other expenses amounted to $8.4 million and included non-cash expenses of €6.6 million related to liability reassessment required by International Financial Reporting Standards known as IFRS related to the advancement in the company’s NKG2D-based CAR-T candidates. Overall, non-cash expenses for 2018 totaled €10.2 million, an increase of €8.2 million compared to 2017. Therefore the company's operating losses for reoccurring operations increased to €38.2 million compared to €26.6 million for the year 2017. Net operational cash burn which excludes non-cash effects, was €27.2 million in 2018 compared to €31.2 million in 2017. Overall loss for the year amounts to €37.4 million versus a net loss of €56.4 million for 2017. And now looking at the cash balance. In May 2018 we successfully completed a global equity offering with gross proceeds of approximately €46.1 million. As of December 31 2018 cash, cash equivalents and short-term investments totaled €49.7 million compared to €34.0 million on December 31, 2017. Celyad confirms its previous guidance that existing cash, cash equivalents and short-term investments should be sufficient to fund operating expenses and capital expenditure requirements, based on the current scope of activities, until mid-2020. In closing, there are a number of exciting developments going on at Celyad and our clinical pipeline is flush with near-term, as well as long-term milestones. The results of CYAD-01 are making us more confident in the opportunities for our lead product candidate and significant potential of our allogeneic IP programs, as well as clinical candidates create value and address important unmet medical needs. We look forward to providing clinical updates from our ongoing CYAD-01, as well as the CYAD-101 trials throughout 2019. And with that, I'll now turn it the call over to you for any questions. Operator?

[Operator:]

Thank you. [Operator Instructions] The first question comes from the line of Peter Lawson [Wells Fargo]. Please go ahead. Your line is now open.

[Peter Lawson:]

Filippo, congrats on the promotion and Christian, so it's been a pleasure working with you, so could we continue to talk. Just as we - as we think about the change in CEO. Is there any change in strategy of thinking through?

[Filippo Petti:]

Peter, thank you for the kind words. No, I think look for us it is certainly handing over the baton. I think a big part of the transition here is that we are fundamentally aligned with regards to the vision of the organization and for us it's Christian has done a fantastic job of building the team and the company over the last several years and the direction that we're focused on remains the same, it is business as usual and we will continue to bring the operational excellence part of our story as we think about our clinical programs and the future of the organization.

[Operator:]

Thank you for your question. The next question is from the line of Gary Waanders [Bryan Garnier] Please ask your question Gary. Your line is open.

[Gary Waanders:]

Hi, there again guys and from my side as well congratulations Filippo on the move to CEO and look forward to carrying on the collaborations with you. I have a couple of questions if I may. And one of those relates to the upcoming Phase 2 that you've got planned to CYAD-01. And I wonder if there's any color you can give on how that trial is looking in terms of the protocol. What sort of structure will you be doing further dose finding in that - will it be further dose optimal schedule optimization and so on. So that's on CYAD-01 and the plans there. And just if I may as well ask about the cash, you say you've got cash to mid 2020, roughly how - do you think you're going to spend that with your R&D is - could you give us some sense of what proportion of that R&D budget might be ending up on clinical programs and what on preclinical research? I'll stop there. Thank.

[Filippo Petti:]

Sure. Thanks for the questions Gary, again appreciate the thoughts and the well wishes. Certainly an exciting opportunity here. And look I think from our perspective on the 01 program as we think about the Phase 2 plans that we've discussed with investors and publicly, again we're going to be led by the data that we come out of with the THINK Cohort 10 and 11 from THINKS trial, as well as the DEPLETHINK program which is looking at CYAD-01 following preconditioning and we're going to be led by where that steers. As I think we've talked about getting into a relapsed refractory AML patient population and initiating a Phase 2 and the studies both THINK as well as DEPLETHINK could be seamless designs where it's a phase 1/2 and we can quickly move over to that. What we're trying to do I think is optimize as we've talked about the response, the duration of response that we've seen to date, following three injections of CYAD-01 and we're allowing us to take a multiple prong approach and going to follow the data. Is it going to be additional injections of CYAD-01, will it be following CYAD-01 preconditioning? I think it's too early for us to determine exactly which protocol and how we would go about that. There could be a chance to - it could be both and we look forward to additional clinical updates, big year this year, as well as by year end to really fully assess what the best approach is for us to tackle that indication.

[Gary Waanders:]

Okay. Can I just jump in there on that study, would you expect it will be a randomized or blinded in some way that any progression to that study?

[Filippo Petti:]

I think you've been - where it's going to be a Phase 2 the relapsed/refractory AML patient population that we've be looking at, I think would be tough to find a randomized study approach there. It's most likely going to be a single cohort. Now the study - the Phase 2 study could be a - as we talked about a single cohort for each - each approach to try to optimize our chances. But I think at this point given the unmet medical need and no real standard of care for that patient population likely to be a single cohort study.

[Gary Waanders:]

Okay. Thanks.

[Filippo Petti:]

With regards to your question around expenses and the cash runway, everything we've talked about at the R&D day that we've been talking to investors and the Wall Street community and publicly is fully funded with the programs and our current cash reserves. And so we feel very comfortable. The majority of the cash as you can imagine is primarily spent on the clinical side. There is cost associated with the preclinical programs as we move them to an IND filing. But given the current clinical trials for both CYAD-01, as well as 101 the majority of spend on the R&D side is primarily turned from a clinical perspective.

[Gary Waanders:]

Okay. Thanks very much.

[Filippo Petti:]

Thanks, Gary.

[Operator:]

Thank you for your question. We have another question request from Peter Lawson [Wells Fargo]. Please go ahead. Your line is open.

[Peter Lawson:]

Hi. Sorry. Thanks for the follow up. Just as you think about building out the company in the US [indiscernible] what's the - what's the right mix you think over the next five years, is that something you kind of think through?

[Filippo Petti:]

That's a great question, Pete. I don't think you know, we've sat down and actually worked out what the numbers are in terms of mix. I think it's important for us to think about the future success of this organization is going to be built upon our ability to have a footprint on both sides of the Atlantic. We do think that is - and it's inherent for us to continue our roots here in Belgium. That is a part of the DNA of the organization. But as we think longer term, we'll certainly need to build out our U.S. footprint and presence. And I think we've talked about this it'll start off small. We'll have an opportunity here to perhaps add some additional senior leadership team members on the state side thinking longer term. You know, if we look towards commercialization opportunity inherently bring us down the path of looking about - looking for manufacturing as well. So it will be certainly driven by our clinical programs and how we think about those developing over the next several years. But it is certainly important for us to think about more of a global approach to Celyad and the vision. And that's one that we've had already and I think it's just going to continue to move in that direction.

[Peter Lawson:]

Thank you. And then just on - as think about incremental dollars for AML versus CRC, which kind of wins out?

[Filippo Petti:]

Yeah. We've talked about this in the strategy we had today that tomorrow and beyond, you know, the majority of the folks here in the company given the data we've seen so far with CYAD-01 and relapsed/refractory AML is top of mind. CRC solid tumors with regards to the modality, as well as a receptor are very important for us. We think we can certainly drive a longer term value to the organization and our shareholders by looking at solid tumors. But given the data that we've seen so far with regards to relapsed/refractory, acute myeloid leukemia it makes a ton of sense for us to focus the majority of our resources there for now and continue to work on approaches on the solid tumor side. And the majority of that I think we'll look to 01 with regards to the SHRINK study, as well as the sister study alloSHRINK for CYAD-101 to gain additional knowledge and understanding around the NKG2D receptor in the context of solid tumor, use that as a base has really tried to drive an understanding as we think about how we need to improve that - improve that candidate, think about next-generation candidates for the treatment of solid tumors. But it is certainly top of mind and we – you know, David and his team are already working on approaches there and I think we've shared this in terms of how do we armour [ph] the T-cell, how do we give our selves the best shot to crack the code within solid tumors. But near term really AML provides a tremendous opportunity for us to be leaders in the space and using a novel modality and receptor that we think we need to really focus our attention to.

[Peter Lawson:]

Great. Thanks so much and congratulations, Filippo.

[Filippo Petti:]

Thank you, Peter.

[Operator:]

Thank you. The next question comes from the line of Raju Prasad [William Blair]. Please ask your question.

[Raju Prasad:]

Thanks for taking the question and congrats Filippo and congrats Christian on the transition. I had a follow-up question on a couple of things that earlier. So when I think about the data we get this year, I'm thinking about three levers you know, in the dose schedule, the dose level and the preconditioning. I guess, strategically what's the kind of go no go decision on some of those. And as you look into a potential Phase 2 trial is the persistence, is there additional clinical data. If so how many patients would you get comfortable with? Just trying to figure out how you're thinking about the ideal CYAD-01 delivery methodology? And then just if you could just comment on how you look at that as it relates to CYAD-02 and CYAD-101?

[Filippo Petti:]

Thank you, Raju. Appreciate the questions and certainly the kind words. Thinking about CYAD-01 in the context of relapsed/refactory acute myeloid leukaemia, I think coming out of the ASH presentation, the update earlier this year in January, I think we certainly have conviction and confidence with regards to the approach in the indication. Now as we spoke about it at the Congress in December, we are looking at optimizing the approach from a scheduling perspective. We initiated a Cohort 10 which is looking at six injections of one billion cells of CYAD-01. We spoke about last week around the idea at the R&D day that we've added a another cohort to the schedule optimization approach, Cohort 11 which is going to be looking at three billion cells inject in that Reflex II [ph] the dose level three of our THINK study. And so we've given ourselves multiple shots on that. Now as we think about where we are in the DEPLETHINK study the first couple of cohorts you know, we’re half a log lower. And so we're in - we're looking at 100 million cells there injected once following preconditioning, but we also are planning to assess the 300 million cell dose once, as well as we talked about last week at the R&D day, we've added a fourth cohort that will look at one billion cells of CYAD-01 injected once following preconditioning. So overall you know, multiple approaches, schedule optimization, different dose levels, different approaches, both the monotherapy and preconditioning, the long - I'm sorry that was a little long winded, but the idea of being talking to our advisors, the goal we're trying to get to is a 30% complete response rate and a three month duration of response. We believe that if that profile can come out of one of those two approaches, either schedule them optimization or a more traditional preconditioning approach to the development of CYAD-01 that we would have a go no go decision based on that and as we think about the Phase 2 initiation by year end. And it is a little bit you know, in terms of the idea around persistence and being able to improve that we've talked about the ability to look for expansion following the injection of the doses, following preconditioning. So it's multiple opportunities for us to crack that that bar and reach that 30% complete response rate or along with a three month duration of response. And it's only going to come with time. We'll have an incremental update coming up mid-year this year. As we point to doing then we'll have a more robust dataset to really make that assessment by year end with regards to CYAD-01 and relapsed/refractory acute myeloid leukaemia. As we think about Phase 2, yeah, just quickly on 02, I know you asked about that. Look this is a next-generation approach for us and how we think about improving 01. The idea is we would - you know, where do we go with 02 in general will be dependent upon the data that comes out of the current DEPLETHINK and THINK studies and the idea could that be more hematological focused or solid tumor focused still remains to be seen. But we do we do think there is a distinct profile to CYAD-01 that behoves us to continue to pursue that.

[David Gilham:]

And Raj, this is David. If I can just add onto that answer, the other point is one around the numbers is also driven by the heterogeneity of the disease is classified as acute myeloid leukemia. So we'll be continuing to learn and obviously seeing the first - the first question is really trying to really address is persistence and the area under the curve basically is how the cells been graft and we're doing this in our manual way. But as we build our numbers of patients and understand more about the patient background the [indiscernible] information that would really color future Phase 2 trial design. So as we move on we will continue learning all the time and each day we're learning more about this to move on to the next stage.

[Raju Prasad:]

Great. And as you think about the trial design for a potential Phase 2, is it possible the way that THINK is designed right now that you could – it be the easiest kind of regulatory way to add a another “cohort” and call that the Phase 2 and kind of enroll or would you have to submit an entirely new trial design to regulatory agencies?

[David Gilham:]

Hey, Raj. Its David again. So our trials are primarily written, so they can seamlessly - as seamlessly as possible convert into a Phase 2 trial that involves a discussion with the regulatory authorities, but is basically then a continuation of that trial and for the most part that's what we would expect. Now of course, if we make some observations that make us think that there may be another we should pursue, a particular combination then we'd have to look at the regulatory pathway there. But our underlying premise at the moment is that the way our trials are written is that they should be able to move relatively quickly with no major regulatory boundaries to get into a Phase 2, moving on from the Phase 1 trials we have at the moment. But they would also likely be an intermediate step of an internal expansion as well which we have - within each of these Phase 1 trials. So we can actually proceed stepwise through that process we think.

[Raju Prasad:]

Great. And then maybe just one last one. As you think about relapsed/refractory AML and you've spoken to the physician community. Any thoughts on how you think MRD negativity could impact the indication in particular, I mean, obviously in other indications, you know physicians are talking about that potentially being an approved regulatory endpoint in the future. Is that something that you think could happen and now that you kind of looking at CR rate as your as your bar for potential approval or kind of down the line?

[David Gilham:]

I mean, at the moment we have to work within the framework, there is - and that's a CR rate Raj. And we've talked about this before of course is that an idea and I think analysis in AML is a truly complicated area because of the heterogeneity and fusions and really still with a complete lack of this well, a fairly significant lack of understanding of the disease. So I think all of us would like to see improved diagnostics and that's certainly on the way. But I strongly suspect that this sort of MRD analysis is unlikely to be in routine clinical use throughout the world in the near future. And as and when the tests are being developed at the moment to go through the validation and the standardization is not - it will take quite some time. So for us we have to work under the current regulatory and approved rates which at the moment remain CR. Of course, we'll carry out our own MRD analysis, but they actually wouldn't be accepted by the whole international community, so we would use this is really an experimental readout, much the same way as others are using MRD at the moment.

[Filippo Petti:]

And as far as we know the description, as far as we know emerging negativity in AML doesn't seem to correlate with better survival or better long term prognosis anyway through stressful treatment. So that's maybe a bit of a stretch to take that as an approval in end point.

[David Gilham:]

I guess you talked CR [ph] we will always follow what is the standard - the best practice at the moment that CR and of course there might be a negativity of MRD analysis that moves into that arena then of course we would follow that as well. But we feel we have to stay with the accepted broad principles rather than experimental methodologies at the moment.

[Raju Prasad:]

Great. Thanks for the questions and congrats again. But I think Filippo will have to work on his European accent for the next earnings call.

[Filippo Petti:]

Thank you, Raj.

[David Gilham:]

Good point, Raj.

[Operator:]

Thank you. Your next question is from the line of Soumit Roy [Jones Trading]. Please ask your question.

[Soumit Roy:]

Hi, everyone. Congrats Filippo on the good new role and great job on the smooth transition. And congrats, Christian also on steering the company thus far and wish you the best. Just a quick question on...

[Filippo Petti:]

Thanks…

[Soumit Roy:]

Absolutely. Just a quick question on the manufacturing, I remember on the last R&D day you mentioned you have approximately 94% manufacturing success rate. How - so what's the denominator there, is it the IGT population or is it the first [ph] number of patients? And second is just going on the safety profile we have seen from the THINK Flu side cohort. So they are a low dose cohort and trying to understand where do you think is a function of- is it just because of the low dose you're still seeing cleaner safety profile and as dose goes up there could be trouble or if you have dug deeper into it and seeing despite the full dose of preconditioning regiment certain isotopes, certain ISO [ph] forms of stress leakens [ph] are expressed that it is not binding that efficiently to in [indiscernible] duty, just trying to understand how you are thinking through tackling the problem if there is a side effect profile coming up?

[David Gilham:]

Hi, Soumit. Its David. I'll take on those questions and I'm sure Filippo will like to add. In terms of the manufacturing success rate, that success rate is based on Luca Fracassi's [ph] samples coming into our manufacturing unit, attention the tree is based on a whole number of other factors in terms of how the patients are treated. I don't think we've reported on that and we wouldn't be able to report that until we have until - we report all of the clinical data which will be coming out mid this year and such. So that will comes out as part of the clinical package and you'll see all the details. And so this is - that the denominator that is Luca Fracassi's [ph] traveling into our units and then successful production is moving out of the unit.

[Soumit Roy:]

Got it.

[David Gilham:]

Okay. And so then the question - the question was around the dose of cyclophosphamide, plus fludarabine we're using and potential induction of ligand expression and adverse events potentially associated with that that. So at the moment there's no - there's no I have to say, obviously to be able to measure these outside of the experiment in the patient, I hate to say because of the ligand profile there's not recapitulated in mouse models and in fact that dose is - the effect of chemotherapy is somewhat different in mice for instance as compared to humans. So the main readout of course is safety and tolerability in the observation of adverse events. And we haven't seen - that we haven't seen really any really significant toxicity over the first dose cohorts. Now in terms of looking forward of course, the main readout from that trial is safety, is a Phase 1 dose escalation study. And the main aim is to identify is there a dose limiting toxicity which limits number of cells that can be given. So we continue to work through this. We've not seen any evidence in our relatively limited preclinical studies to suggest it could be a challenge. And yes just simply from what we've seen so far there hasn't really - there hasn't been any observations of what we would classes in on targets of tissue activity. So I'm afraid I can't actually ask you a question. So we just need to go through the clinical side to really understand whether there would be issues, but we don't have any preclinical data and the latter we've done in limited assays that suggest that there is an issue. In fact, well, while it seems to be the case is that the ability of healthy non- tumorigenic cells to down regulate these stress makers does seem to be fairly robust which was the underlying hypothesis. But of course, the reason for our conservative trial approach is that a hypothesis is one thing and this is currently testing that to ensure the safety of our approach. So we're very encouraged by what we've seen so far. And we haven't seen anything to really suggest that we're anywhere near a dose limiting toxicity to date.

[Soumit Roy:]

Got it. Thank you so much for taking the questions.

[Filippo Petti:]

Thank you, Soumit.

[Operator:]

Thank you. Your next question is from the line of Ed White [H.C. Wainwright & Co.] Please go ahead.

[Ed White:]

Hi. Thanks for taking my call. I just want to add my congratulations again Filippo to your appointment and Christian, thank you for your work with the company and in working with me to understand the company and I look forward to seeing you at our conference next week. So just a couple of questions. First on the DEPLETHINK, will you be looking at the 3 billion cell cohort as well?

[Filippo Petti:]

So we provided an update last week at the R&D day and thank you very much for your comments and thoughts as well. And we provided an update last week that we've added a fourth cohort to the DEPLETHINK study that will look at 1 billion cells injected once. I think as we dose escalate, we're not going to - I don't think we have a guide or an assessment as to how we think about that right. And we just want to get through the initial cohorts, collect the data as we get some additional potential comfort around safety that there may be something we look at. But I think at this point we're in the midst of enrolling our third cohort of DEPLETHINK which is looking at 300 million cells injected once, will look to capture the clinical data there and it's a three plus three designed for the study. So we could have some additional flexibility as we think about dosing. But I think right now we're going to work our way through Cohorts 3 and 4 and make an assessment in terms of how safety and an activity look like.

[Ed White:]

Okay. Yeah, I just figured with looking at you know Cohort 11 for the THINK that you might want to continue to move ahead with the 3 billion as that cohort looks fine with the with the THINK study. And just you know, David had mentioned that you know you probably would expect minimal regulatory boundaries moving from Phase 1 to a Phase 2 trial. Could that Phase 2 trial you know, again with those minimal boundaries be a temporal pivotal Phase 2 trial or do you think that would be you know - require greater interactions with the regulatory authorities then you're currently planning?

[David Gilham:]

Hi, Ed. Its David. Yeah, I guess I should carry on the answer to own answer there really. We would certainly need to have more interaction with the regulation authorities concerning a pivotal right trial design because they would have to be agreement that the end points that we would be setting would be realistic and acceptable to the agencies. So our underlying idea really is following others in the county space is to look to move into Phase 2, build the numbers that we have, build the data. And then during that period of time start having interactions with the regulatory authorities, so they can see our data, understand where we are and have that - and have that discussions and try and establish what a pivotal trial could look like and then hopefully move the Phase 2 trial that we have ongoing into a pivotal status. And I must say that the regulatory agencies are - you know I really commend them because they are very keen to interact and hear and really help support in novel therapies through clinical development. So this we shouldn't really be seeing this as a barrier. We really be looking at this as a as a discussion, we're looking forward to having as we build the clinical data and to have that interaction with the regulatory authorities are really take their advice as well in terms of how they see our particular therapy set it negates the same.

[Ed White:]

Great. Thanks, Dave. And then Filippo, you answered most of my questions in response to your previous question on solid tumor. And just wondering you keep mentioning you know more data and updates in the middle of this year. Does that include solid tumors or should we be thinking more around you know is it back half of the year at conferences you hear more about here in the solid tumor studies?

[Filippo Petti:]

Thanks, Ed. No I do think we hope to provide an update mid-year this year with regards to first our THINK CyFlu cohort. We had provided some initial data last years 2018 City conference, hope to provide an update with regards to that 3 patient cohort, as well as some initial data - some follow on data I should say from additional cohorts in our SHRINK study evaluating CYAD-01 concurrently treated with FOLFOX. Additional data, you know, we kicked off the alloSHRINK study as David pointed to earlier late last year. I think that update is most likely going to occur from a clinical perspective later in the second half of this year. So midyear we do plan to have an update around THINK CyFlu, as well as the SHRINK study for CYAD-01.

[Ed White:]

Okay, great. Thanks, Filippo.

[Filippo Petti:]

Thank you, Ed.

[Operator:]

Thank you for you questions. [Operator Instructions] We have not received any further requests. Please continue.

[Filippo Petti:]

Great. Thank you, operator. So with that we'll bring this call - close to the call. Thank you everyone for their participation. To briefly recap, we are very satisfied with the progress we've made in 2018 which you've all heard and which includes some significant advances in our clinical development programs and in particular our lead candidate CYAD-01 across a number of different trials. We've also completed a global offering in May of last year and we expect the cash position to fund this through mid 2020 and provide us to unveil some additional clinical data, as well as our advancement in our preclinical programs throughout 2019. Thank you everybody for joining the call and we look forward to speaking with you all again soon.

[Operator:]

And that concludes your conference for today. Thank you very much for participating. You may now all disconnect.