Epizyme, Inc.
Q4 2018 Earnings Call Transcript

Published: 26 Feb 2019

[Operator:]

Hello and welcome to Epizyme's Fourth Quarter and Full Year 2018 Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session after the prepared remarks. Please be advised that this call is being recorded at Epizyme's request. I would now like to turn the call over to Alicia Davis. You may begin.

[Alicia Davis:]

Thank you, Kevin, and good morning. On the call with me today is our CEO, Rob Bazemore; Dr. Shefali Agarwal, Chief Medical Officer, and Matt Ross, our Chief Strategy and Business Officer. Today's discussion will include forward-looking statements related to Epizyme's current plans and expectations, which are subject to risks and uncertainties. Actual results may differ materially due to various important factors, including those described in the Risk Factor section of our most recent Form 10-K and other SEC filings. These forward-looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent dates. We undertake no obligation to publicly update these statements. Now, let me turn the call over to Rob. Rob?

[Rob Bazemore:]

Thank you, Alicia and good morning everyone. Across all aspects of our business at Epizyme, we have made great progress toward our mission of rewriting the treatment of cancer and other serious diseases through the development of novel, epigenetic medicines. We are pioneers in this area exemplified by our progress with Tazemetostat, our first-in-class oral EZH2 inhibitor and we are excited to highlight for you today some of the exciting developments that we’ve made in the last year. 2018 was a year of many important milestones and we continue to successfully execute on our vision 2020 comprised of four ambitious goals. Those are to launch Tazemetostat in both solid tumors and non-Hodgkin lymphoma; expand Tazemetostat’s benefits into earlier lines of treatment combinations and additional tumor types; build a robust clinical pipeline with at least three new product candidates in development; and further establish our leadership in epigenetics. As we look ahead, 2019 is poised to be the most transformational year for the company yet. We stand well positioned to deliver on our vision 2020 and to enhance the value of Epizyme in the short, mid, and long-term. The most near-term opportunities are through the initial launches of Tazemetostat for epithelioid sarcoma and follicular lymphoma if approved. Mid-term growth will come through significant expansion of our Tazemetostat program into earlier lines of treatment in FL and new indications as a combination agent. Longer-term, we are planning for additional value creation through the advancement of new assets including EZMA266, and our earlier partnered programs with Boehringer Ingelheim. With tremendous progress made across all aspects of our business, I am confident in the future of Epizyme. Our team is hard at work preparing for the submission of two successive NDAs in 2019 an opportunity that few companies get, but one for which we are well prepared. We are on track to submit our first NDA for accelerated approval of Tazemetostat for ES in the second quarter which, if successful, would mark the first ever commercial availability of an ECH2 inhibitor. Then, based on a positive FDA meeting late last year, we plan to submit an NDA for accelerated approval of Tazemetostat for an all comer, third-line or later FL patient population in the fourth quarter of the year. Once approved, this would lead to access the Tazemetostat in a large patient population with high unmet medical needs. We are executing our plans to expand the investigation of Tazemetostat into earlier lines of therapy for FL with combination studies to be initiated this year. We are also preparing to initiate studies exploring Tazemetostat’s combination potential in additional indications including, castration-resistant prostate cancer and solid tumors that are resistant to platinum-based therapies. We are underway with plans to begin clinical development with EZMA266, our novel G9a inhibitor in the second half of the year for the potential treatment of another important indication, sickle cell disease, where today there are no disease modifying therapies. And finally, we are continuing to advance our earlier pipeline through our own research and established collaborations which have contributed meaningfully to Epizyme’s value. The first of our targeted indications for Tazemetostat is an indication that is strategically very important for Epizyme. Epithelioid sarcoma is a rare sarcoma with no specifically indicated treatments. If approved, Tazemetostat will be the first ever treatment specifically indicated for ES patients. We believe that Tazemetostat could dramatically change the care of people with ES who have limited treatment options, which are also associated with challenging side-effects. This aligns closely with our mission of rewriting the treatment of cancer in patients who have high medical need today. In ES, our plans to make Tazemetostat commercially available to physicians can be accomplished through an efficient and scaled commercial infrastructure. This approval would provide a platform from which to expand our medical and commercial presence to support the potential subsequent approval for FL. It could also make the preparation and review of subsequent regulatory submissions more efficient as many of the NDA modules would be common to both submissions. The opportunity to make a difference in the lives of patients with relapsed refractory FL is also a very meaningful one to Epizyme. FL is an indolent cancer that incurable today. People with FL are primarily treated with chemotherapies, which becomes challenging to use in later lines of treatment as patients become more heavily relapsed making long-term chemo very difficult. Over the course of their disease, patients with FL will typically relapse and unfortunately cycle through numerous therapies. In the third-line and later setting, the only currently approved therapies all work through the same mechanism of PIPK inhibition. These therapies are frequently associated with challenging toxicities and as the results are used less frequently. Today, about 75% of the patients in the third-line setting are actually treated with recycled chemotherapy combinations, investigational or off-label medications. This further emphasizes the unmet need in this population and where we see significant potential for a new treatment like Tazemetostat. We know that the largest proportion of patients with FL are treated by community oncologists. These physicians want a medication that will provide long-lasting remissions and help stabilize patients. They also want treatments that are well-tolerated and easy to take and do not create new problems that they have to manage in their patients. These are the factors which enable FL patients to benefit from therapy over an extended period of time. This is why we are so encouraged by the data we’ve generated today with Tazemetostat showing that the majority of FL patients treated have tumor reductions regardless of their EZH2 mutation status and have demonstrated durable responses. It’s why we believe this oral, small molecule treatment has the potential to play an important new role in how these patients are treated in the future. Based on the outcome of our meeting with the FDA late last year and the strength of our data across all FL patients in our Phase 2 study, we plan to submit an NDA for accelerated approval in the fourth quarter. With the FDA minutes enhanced, we feel confident in our submission for patients both with and without EZH2 mutations. Let me ask Shefali to review key highlights of our Tazemetostat clinical program. Shefali?

[Shefali Agarwal:]

Thanks, Rob. As mentioned, we are quickly approaching the submission of our first NDA for Tazemetostat for the treatment of adults with ES. ES is a very aggressive cancer that often affects younger individuals and for which there is no specifically indicated treatments. In our Phase 2 trial in this patient population, Tazemetostat treatment resulted in a 15% objective response rates in the total population of both treatment-naïve and relapsed-refractory patients. Notably, in the subset of patients who had no prior treatment, we saw a 24% ORR and durable responses of at least eight months. The median overall survival has not yet been reached. In the subset of refractory patients, we also saw prolonged duration response out to 11 months and a very encouraging median overall survival of 20 months. Tazemetostat has continued to be generally well-tolerated in ES patients with no patient discontinuing therapy due to treatment-related adverse events. Based on the strength of this data, which represent the largest assessment of any treatment, specifically in ES, we are well underway with our NDA preparations and are on track to submit for accelerated approval in the second quarter of this year with the request for prior day review. Turning to FL. We are also very pleased with the data from our ongoing Phase 2 study and with the productive discussion we had with the FDA late last year. We have aligned on a path for an all comer submission for Tazemetostat for patients with FL both with and without EZH2 mutations who have been previously treated by two or more prior therapies. This was reiterated in the minutes we received from the agency. As agreed with FDA, our NDA package will be based on the fully enrolled phase 2 cohort which includes 54 patients with wildtype EZH2, and 45 patients with EZH2 activating mutations. At EHA last year, we presented interim data showing that Tazemetostat led to durable clinical responses in both patients with EZH2 activating mutations and wildtype EZH2 with favorable safety and a very low rate of treatment discontinuations due to adverse events. In 28 EZH2 mutation patients, off of the May 2018 data cut-off, we saw confirmed ORR of 71% with the median progression-free survival rate of 48.6 weeks and a median duration response of 32.3 weeks. Notably, no patient had progressive disease as best response. The ORR in EZH2 mutation patients has remained consistently high and we don’t expect this to change appreciably. We do note that the durability of data is patients with EZH2 mutations are still maturing since many of our patients were still relatively early in the treatment as of our last presentation at EHA. As of the same data cut-off in 54 wildtype EZH2 patients, we saw confirmed ORR of 33% with the median PFS of 29.9 weeks and a median duration response of 76 weeks meaning patients were able to stay on therapy for well over a year, something not seen frequently with today’s therapies. Nearly 80% of wildtype patients demonstrated a reduction in tumor volume even if they never reached a confirmed objective response and some of these patients continued on therapy even after trial-defined progression. With enrollment completed for wildtype EZH2 patients back in 2017, data from these patients are mature and we do not expect them to change in any meaningful way. Notably, 100% of patients with EZH2 mutations and 78% of patients with wildtype EZH2 experienced a reduction in tumor burden, an effect we believe will be incredibly meaningful in the clinical utilization of Tazemetostat if approved. As we shared earlier this year, we are conducting the largest Natural History Study of its kind in patients with FL which is two-thirds complete. The data from those patients was provided to FDA in our end of Phase 2 meeting in December and thus far have confirmed that patients with EZH2 activating mutations do not achieve a better treatment outcome in any line of therapy compared with patients with wildtype EZH2. As such, we reached agreement with FDA with the responses we are seeing in our trials are used specifically to Tazemetostat. In addition, the frequency of EZH2 mutations recorded in a natural history study is the same as of previous understanding at 20% to 24% regardless of the line of treatment. We plan to present updated data from all FL patients at a medical meeting mid-year and that data would ultimately be included in a planned NDA submission. At the time of our NDA submission, approximately 90% of the patients in our studies will have had at least 12 months of response follow-ups with all wildtype patients up to two years or more. As a reminder, we are planning to conduct a confirmatory program for full approval of Tazemetostat for FL that could expand its label into second-line treatment population. We plan to continue to engage with the FDA in the first half of the year to a line of this progress and initiate it ahead of our NDA submission. While we prepare for the ES and FL NDA submissions, we will also be initiating new studies of Tazemetostat to expand its use into earlier settings for FL to additional combinations. We are finalizing plans for a trial of Tazemetostat in combination with Rituxan for the treatment of patients with relapsed refractory FL. We believe this combination could be an accurate reflection of potential clinical factors for this patient population and we will disclose final details upon study initiation. And we are on track to start a triple combination study of Tazemetostat with Revlimid plus Rituxan, a treatment regimen referred to as R2 in the second-line setting. R2 is expected to emerge as a chemotherapy-free option in the management of second-line FL. Data presented at ASH in December of last year showed that treatment with R2 resulted in positive clinical responses in patients with the relapsed refractory lymphoma, which was superior when compared with Rituxan alone. We plan to begin a study with this combination in mid-2019. We are excited about the potential of both these combinations which could greatly enhance our treatment opportunity in FL patients. In addition, based on promising data on the combination path Tazemetostat and R-CHOP presented by a partner the Lymphoma Study Association at ASH last year we are evaluating the opportunity to expand the combination into front-line high risk FL patients providing with the opportunity to treat all patients with FL in the future. The data presented showed that in high risk, previously untreated patients that is huge, large B-cell lymphoma, the combination was generally well-tolerated and resulted in encouraging activities. Beyond FL, we are advancing the development of Tazemetostat in additional combinations for certain solid tumors based on scientific rationale and promising treatmental data. We plan to initiate the combination study with the current standard of care for castration-resistant prostate cancer in mid-2019. Also, following impressive data obtained from a cohort of patients in our clinical trials with pre and post-treatment biopsies, we plan to initiate a combination study with a PARP inhibitor for the treatment of platinum-resistant tumors such as, small cell lung cancer, triple negative breast cancer, and ovarian cancer in the second half of 2019. This is very attracting time for the company and I am proud of what the team has accomplished to get to this pivotal moment. I’ll also like thank the study investigators across our many different trials for the dedication to helping with Tazemetostat to patients. I look forward to seeing this hard work come to fruition in 2019. Now I’ll turn the call over to Matt to review the FL and EL’s market opportunities and our financial results.

[Matt Ross:]

Thanks, Shefali. We strongly believe that Tazemetostat had a significant opportunity to reach follicular lymphoma patients irrespective of their EZH2 mutational status, starting first with those who have been treated with at least two or more prior therapies. As we have learned from our market research efforts to address our target population in FL, we believe there are a significant number of eligible patients in the third-line and later setting that could benefit from treatment with Tazemetostat. A research tells us that there are approximately 12,000 treatment-eligible patients in the third-line or later setting in the United States and about 8,000 in EU5. With a treatment-eligible population of approximately 20,000 patients in that setting, if approved, Tazemetostat would be poised to gain rapid adoption given the lack of a truly defined standard of care that exists for these patients today. We are also turning our attention to the broader FL market opportunity with the potential for Tazemetostat to be used in earlier lines of therapy. In the U.S. and the EU5, there are approximately 45,000 patients eligible for systemic therapy in the first and second-line treatment settings representing a substantial label expansion opportunity with this novel agent. Based on data generated today and its mechanism of action, we believe Tazemetostat is well positioned to be developed for both a front and second-line treatment option by becoming a combination agent of choice with current or emerging treatments such as Rituxan, or R2 and R-CHOP. As we advance our clinical development program with this new studies Shefali outlined, we expect Tazemetostat’s market potential will expand with it. Moving to epithelial sarcoma, the most near-term of our commercial opportunities. There have not been any meaningful advancements in the treatment for this rare tumor type. The only currently available options for systemic treatment includes chemotherapies like Adriamycin, Ethosuximide, Docetaxel and Gemcitabine or the multi-tyrosine kinase inhibitor pazopanib. The best literature suggests there are approximately 800 patients living with ES in the United States, of which, roughly 300 have metastatic disease and will be eligible for treatment. We believe this figure underestimates the truth prevalence of the disease given the lack of available treatments specifically indicated for ES patients and that it is often misdiagnosed with a survival rate of less than one year once the disease is metastasized, the need for a new treatment for patients living with ES is real. As we’ve mentioned before, our plan is to commercialize Tazemetostat for ES in the United States by ourselves. I am confident that we can do so with an efficient and scaled commercial infrastructure of about 25 professionals given that these patients almost always end up in a specialized cancer treatment center once diagnosed. As we prepare for this, educating physicians on this rare sarcoma, so that they can make the correct diagnosis is a top priority today. We believe Tazemetostat would be a well positioned option for patients with ES if approved and that the adoption by physicians would be substantial. We look forward to advancing this program to turn our hopes into a reality. Turning now to our financials. We ended 2018 with approximately $240 million in cash and cash equivalents, which includes $21.7 million in revenues over the course of the year recognized through upfront and milestone payments from our partners Boehringer Ingelheim and GlaxoSmithKline and approximately $80 million in net proceeds from our follow-on financing in October. As we shared back in January, we had extended our operating runway into the second quarter of 2020. We were able to achieve this by enhancing our operating efficiencies and focusing on executing our strategic priorities relating to Tazemetostat, EZMA266 and our partnered programs. This runway takes us through multiple important clinical and regulatory milestones including both of our ES and FL NDA submissions, the first expected approval of Tazemetostat for ES and the associated milestone payments to Eisai upon each of these achievements. We stand financially strong as we head into our most important year as a company with multiple options available to us to continue to fund the growth and evolution of Epizyme. I’ll now turn the call back over to Rob to wrap us up.

[Rob Bazemore:]

Thanks, Matt. As you’ve heard, 2019 is set to be a very important year as we prepare for two back-to-back NDA submissions and if successful for our product launch. While we recognize that we still have a lot of work ahead of us, we are more prepared than ever to execute. I am enormously proud of the team and the dedication to advancing our pipeline and business. Lastly, we extend our deepest appreciation to the patients, physicians and care givers who have participated in our studies and championed Tazemetostat along the way. Without their contributions, we would not be where we are today. We are looking forward to a very exciting year ahead and to updating you on our progress along the way. With that, we will open up the line to take your questions.

[Operator:]

[Operator Instructions] Our first question comes from Michael Yee with Jefferies.

[Michael Yee:]

Hey guys. Thanks. Good morning. Thanks for the update. Two questions. First was, as you prepare for a filing in ES, maybe you could help frame what you think the approvability or regulatory question would be for that indication and what the precedent would be and how we should think about handicapping that approval? And the second question is, when you give your update in follicular lymphoma for wildtype in EZH2 how much that data change from the last prior update. Is it just greater durability, in the EZH2 patient population was pretty much mostly enrolled, so the denominator shouldn’t change that much. So, just framing response rates, that shouldn’t change much. Is that correct we should feel good about that major update? Thanks.

[Rob Bazemore:]

So, let me start with that question, Mike. I think it’s a easier one to answer about the wildtype. We don’t expect that the data will change substantially. Keep in mind the wildtype patient population was fully enrolled as of the first part of 2017. So we have about two years of follow-up. I think as of the last time the data reported at EHA last year, there was only one patient left who had stable disease and still on drug. And so, we don’t expect those data to change and in fact, what we presented to the FDA when we spoke with them back in the fourth quarter is likely to be very close to the filing package that we have when we submit the NDA for approval. With regards to ES, your question on the approvability in ES, so this is – this ES cohort in our Phase 2 study represents the largest prospective study of ES that’s ever been done either retrospective or prospective. As you know, when we talked about this, there are no treatments that are specifically indicated in epithelioid sarcoma today. So there is really isn’t an established benchmark for success. Most of the drugs that are used to treat these patients are drugs that are approved more broadly in soft tissue sarcomas but they have little to any published data in ES, specifically. We did as we did with FL back in the fourth quarter of last year. In 2017, we had a positive interaction with the FDA. We had a similar in the Phase 2 meeting where we were able to identify a path to submission for accelerated approval based on this 60 patient cohort. We expect the safety database for this will be rather substantial. We have over 800 patients that have been treated today with Tazemetostat that will be a part of the safety package that goes along with that. And we expect that the FDA’s review will focus on the totality of the evidence not only objective response rate, but also some of the other data that we presented back at ESMO in September of last year including overall survival durability response, durability and long-term sustained stable disease is actually very important in these patients. So, based on the strength of those data, we feel confident in our planned NDA submission for epithelial sarcoma.

[Michael Yee:]

Okay. So just to clarify on the follicular lymphoma, again going back to the first question, in the EZH2 population which was vastly majority enrolled, there were still some stuff happening before you had the hold. How much that data change if at all when you get to that mid-year update to frame expectations there?

[Rob Bazemore:]

Well, I think the thing that you should expect when we present data mid-year of this year is, first, we’ll have all the patients now. So, all 45 patients with EZH2 mutations as well as all the wildtype patients will be included in the assessment. Last year when we presented at EHA, we were still enrolling EZH2 mutant cohort as you point out. The response rate has been consistently high, no matter when we reported these data. So I don’t expect that we will see any major changes in the objective response rate. The last time reported, it was at 71%, but it’s been consistently high. I think that thing you should start to see improvement on when we report data this summer is, duration of response, because each time we’ve done interim data cuts, we had new patients that have just been enrolled. They’ve been new responders and those pull down your median duration of response. Now that the study is fully enrolled, we don’t have those new patients coming in and so, I would expect to see that begin to mature and just from a mechanism of action point of view, we don’t expect that the duration of response ultimately would look different in the mutant and the wildtype patient populations.

[Michael Yee:]

Got it. Thanks.

[Operator:]

Our next question comes from Yaron Werber with Cowen.

[Unidentified Analyst:]

Hi, this is Leo on for Yaron. My first question is on the combination for Taze in FL, what’s the timeline we should be thinking about for the eligible length at least? Do you have any expectation on the timing of the data? And my second question is, the clinical holds in Europe, has it all been lifted in Europe?

[Rob Bazemore:]

So, I’ll start with the question that you asked on the timing of the follicular lymphoma combination studies. We have two, I think three important combinations that we plan to look at this year. There is a combination with R2 that we are planning to conduct in the second-line setting. We expect that that study would initiate in the middle of the year. We are also expecting to begin a study that’s investigator initiated study setting Tazemetostat with Rituxan alone. We again expect that study would start around mid-year. And then, the third study is, there is a trial that we’ve been conducting with R-CHOP in frontline DLBCL. These are in high-risk patients, elderly patients with DLBCL. We are working with the Lymphoma Study Association to extend this study to also include frontline high-risk FL patients and our hope would be that that would also beginning around mid-year. We’ve not guided as to when we would expect data from those trials. Those are just the initiations of the studies. And then I’ll ask Shefali to comments on where we are with regards to the partial hold.

[Shefali Agarwal:]

Yes. So, in terms of partial hold for Europe, we are off hold in Germany and in France, we have answered all the questions. So they are just looking at their last review process. We expect to be off hold very quickly in very short time. Leo are you still there?

[Unidentified Analyst:]

Yes. Thank you that’s helpful. Thank you.

[Shefali Agarwal:]

You bet.

[Rob Bazemore:]

Thank you.

[Operator:]

Our next question comes from David Lebovitz with Morgan Stanley.

[David Lebovitz:]

Thank you very much for taking my questions. First, could you elaborate on the upcoming Tazemetostat studies in prostate cancer and platinum-resistant tumors? Specifically, what’s the rationale behind targeting those specific tumors? And one step further, how might you expect synergy with PARP?

[Rob Bazemore:]

Certainly. I’ll ask Shefali, if you were to answer those questions?

[Shefali Agarwal:]

Sure. I am going to start with prostate. Basically, for prostate, there is a lot of pre-clinical as well as clinical validation in castration-resistant prostate cancer. So, EZH2 protein expression is correlated with advanced disease progression and we believe that – and we also have some pre-clinical data to say that if the EZH2 inhibitor in cell lines have shown to improve the responsiveness to patients who are resistant to, standard of care therapy in prostate cancer. So, basically, based on that factor and the pre-clinical data we believe that we can do a study in castration-resistant prostate cancer in patients who are resistant to standard of care therapy. In terms of PARP, we did a clinical study in our solid tumor, where we did pre and post-biopsies and looked at synergy in each EZH2 pathway and the HRD pathway and we saw there were lot of enzymes like ATM where there were synergy in the pathway. There is a lot of pre-clinical data that shows that PARP inhibitors actually inhibit action in EZH2 which increases the EZH2 activity. And so, in cell lines, what we have seen is, EZH2 inhibitor and PARP inhibitor improve the PARP inhibitor responsiveness and so we believe based on that preclinical synergy in patients who have platinum-resistant to PARP inhibitors and as we have seen that PARP inhibitors have shown modest activity in platinum-resistant patients. We will be able to combine and improve the efficacy.

[David Lebovitz:]

Thank you very much for that. One additional question. Are there any current plans to begin looking at Taz and checkpoint inhibitors once again after the Tecentriq trial was halted last year?

[Shefali Agarwal:]

Absolutely, we always are very encouraged. We have lot of data in terms of PCM modulation in pre-clinical to talk about synergy between checkpoint inhibitors and Tazemetostat. And I think we are very excited about that. We definitely would plan to look at non-small cell. Just to remind you with this – within that trial we actually did DLBCL checkpoint combination as well. And so, we will be releasing that data with our partners at the end of the year.

[David Lebovitz:]

Thanks for taking the questions.

[Operator:]

Our next question comes from Leland Gershell with Oppenheimer and Company.

[Leland Gershell:]

Hey, good morning. Thanks for taking my questions. I just wanted to ask in terms of milestone payments required for progress, if you could just review those for us over the next one to two years with filing and approval? Thank you.

[Rob Bazemore:]

Yes, certainly. I’ll ask Matt to review that.

[Matt Ross:]

Morning, Leland. So, with regard to the milestones under the Eisai agreement, so there is $10 million that’s expected with regard to our ES filing. So as Rob pointed out earlier in the call, this morning that would occur at the filing which is in the second quarter and then, as we think about the FL filing in the fourth quarter of this year that would another $10 million. And then upon approval in ES, we would have an expectation of the commitment of fulfilling $25 million.

[Leland Gershell:]

Okay. Good. That’s all I had. Thanks very much.

[Matt Ross:]

You are very welcome.

[Operator:]

Our next question comes from Robyn Karnauskas with Citi.

[Robyn Karnauskas:]

Thanks for taking my question and congrats on all the progress. So, I am just thinking about like your cash runway seems get a little bit over a year of cash and then you are talking about starting all these trials, so which sound expenses to me. Can you just help us think real, how much these trials will cost especially given that they are combos and how you are thinking about cash flows and how to maximize – how much you are maximized capacity you have and you are running these trials?

[Rob Bazemore:]

Certainly, Robyn. Thank you for the question. Let me start and then I’ll ask Matt to add if I missed anything. I think generally, in terms of how to think about our cash needs for the year, they are not substantially different compared to 2018 part of the reason for that is that some of the large Phase 2 studies that we’ve been running in follicular lymphoma, epithelioid sarcoma, DLBCL and so forth are all sort of wrapping up and the costs are coming down on those. At the same time that we are initiating some of these new combination studies and the way we are looking at them is, we are going into them as early proof-of-concept before we demonstrate definitive activity and then move into larger trials. And so the cost of those is relatively small this year. And then if you look at the commercial cost as Matt has explained before, we think we can launch in the United States with a relatively small efficient medical affairs and sales organization and so we don’t expect to make a significant investment in the commercialization of ES. We don’t think it’s necessary just based on the number of patients and where those patients reside. So, just at a very high level, I would look at our cash needs for 2019 to be roughly similar to what we used in 2018, because of those offsets. Matt, I don’t know if I missed and you want to add?

[Matt Ross:]

No, it’s perfect. No. Thank you, Rob. Again, just from an R&D point of view we expect to be relatively flat year-over-year again in large part due to what Rob has articulated and the fact that these early studies are just as we’ve shared early proof-of-concept where we are starting out to see how effective we can combine Tazemetostat with these established agents and then, as those data evolve, then we’ll move into the more broader development component.

[Robyn Karnauskas:]

And just a follow-up. So, are you assuming you’ll have to go to the market to get cash for beyond a year? Are you looking at any other avenues, any additional partnerships or different types of deals that might bring in any additional cash?

[Rob Bazemore:]

So, we are certainly looking at all the different options that we have in front of us with regard to our efforts as an organization and how we are pursuing that, it will be something that we will always continue to evaluate. With regard to the partnership considerations, as you might imagine, given the fact that we have two near-term NDAs. There is certainly a level of strategic interest in how Tazemetostat has been performing and as we think about the partnership considerations, we believe that it has to have a lot of incremental value to how we are developing Tazemetostat. So that we can get there faster and equally how we can get greater lift on the commercial side. So, we are active in thinking about those considerations as well.

[Matt Ross:]

The work that we have done on partnering are early-stage pipeline as well, Rob and has been very helpful to us. It’s helped to provide additional revenues. You saw that we’ve earned milestone revenues both from GSK as well as from Boehringer Ingelheim. We also expect additional revenues from achieving significant milestones this year. Those are not baked into our cash runway. We don’t count them until we recognize the revenue. So that’s moving additional source of capital for us for this year.

[Robyn Karnauskas:]

Great. Thank you for the color.

[Rob Bazemore:]

You are welcome.

[Operator:]

[Operator Instructions] The next question comes from Peter Lawson with SunTrust Robinson.

[Unidentified Analyst:]

Hi everyone. Thank you for taking our questions. This is [Indiscernible] on for Peter Lawson. I guess, just a quick question about the confirmatory program that you guys done, sort of after that NDA submission. And your – of the Natural History Study, is that more towards like anything that includes exclusive criteria or would that be used like some number of patients you guys would have to enroll and I guess, little more color on what the FDA talk more about the trial design in those programs?

[Rob Bazemore:]

Thanks for the question. When you are talking about the confirmatory program and the natural history study, I am assuming you are asking about how we plan to use the natural history study in epithelioid sarcoma or confirmatory evidence?

[Unidentified Analyst:]

Yes.

[Rob Bazemore:]

I turn it over to Shefali in terms of our thinking on the natural history study might be used.

[Shefali Agarwal:]

Sure. So, the natural history study that we did was retrospective with retrospective charge review. We have completed the study. As you know that ES, as Rob mentioned earlier, ES is a ultra-rare tumor type in order for us to large confirmatory studies will be highly difficult. So what we plan to do is use natural history study as a part of our confirmatory evidence and submit that to FDA. We have a fast track with ES and we would be engaging with the FDA in the form of pre-NDA meetings and just ask them align on using this natural history study as a confirmatory evidence instead of a confirmatory trial.

[Unidentified Analyst:]

I see. So in terms of like any doing any trial cost, trial comparison it’s going to be pretty straight-forward and we believe we can use the data from the natural history was on your Phase 2 take like compare data populations and response and survival between the two studies?

[Shefali Agarwal:]

Yes, that’s a great question and absolutely, this was something that the FDA is really opening up and talking about it in different aspects of rare tumor types, how you can use natural history studies, I hope this to align with the FDA and discuss how we can look at the data in natural history study because it's the largest of its kind and on the study which is not the prospective study and use this data to compare that our study and use it in the clinical context as well. Of course, we have to talk to FDA and align that in the Pre-NDA meeting, but our hope would be to use this study as a confirmatory evidence instead of the trial.

[Unidentified Analyst:]

Great. Thank you I guess, just last one really quick on, do you have any updates on when you are planning on presenting the natural history data this year?

[Shefali Agarwal:]

We haven’t guided on the presentation for the natural history study. But hopefully, mid of the year.

[Unidentified Analyst:]

Okay. Great. Thank you so much for taking our questions.

[Operator:]

And I am not showing any further questions at this time.

[Rob Bazemore:]

Okay, well, thank you Kevin and thank you all for joining us today. I think it’s clear we have a very exciting year ahead of us. We have a lot of work to do. But we are well prepared to execute on these and all of our efforts and excited to be in this place as a company and we look forward to keeping you updated on our progress. Thank you everyone. Have a good day.

[Operator:]

Ladies and gentlemen, that concludes today's presentation. You may now disconnect and have a wonderful day.