Five Prime Therapeutics Inc
Q1 2017 Earnings Call Transcript

Published: 5 May 2017

[Operator:]

Good day, ladies and gentlemen and welcome to the Five Prime Therapeutics, Inc. First Quarter 2017 Earnings Call. As a reminder, this conference maybe recorded. I’d like to introduce your host for today's conference, Ms. Heather Rowe, Senior Director-Investor Relations and Corporate Communications. You may begin.

[Heather Rowe:]

Good afternoon and thank you for joining us. I'd like to welcome everyone to our conference call to discuss results for the first quarter 2017. We issued a press release this afternoon and also posted slides to accompany this presentation. The slides can be found under the Investor Relations section of our website, under Events and Presentation. Joining me today are Dr. Rusty Williams, Chief Executive Officer; Dr. Helen Collins, Chief Medical Officer; Mr. Aron Knickerbocker, Chief Operating Officer and Mr. Marc Belsky, Chief Financial Officer. Today's conference call will include forward-looking statements under the Private Securities Litigation Reform Act of 1995, including statements regarding our research and development programs and financial outlook. Actual results may differ from those indicated by these forward-looking statements due to numerous factors, including those discussed in the Risk Factors section of our SEC filings. Our expectations and assumptions could change. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. I will now turn the call over to Rusty.

[Rusty Williams:]

Thanks, Heather. Good afternoon, everyone and thanks for joining us today. Five Prime had a productive first quarter and I’m extremely pleased with the achievements made by our clinical and preclinical teams. We continue to execute and our programs are well on track for those following along with our posted slide deck. Our programs are listed on Slide 3, which depicts our pipeline chart. For this call, I’d like to highlight the progress made on select programs during the quarter. This quarter highlights are listed on Slide 4. First I’ll discuss Cabiralizumab, our CSF1 receptor antibody that blocks macrophages. We are studying Cabira and pigmented villonodular synovitis or PVNS and an immuno-oncology. We recently announced completion of enrollment in the Phase 2 part of the ongoing trial in patients with PVNS. We were impressed with a high level of investigator and patient interest which allowed us to complete enrollment faster than expected. It's important to highlight that we believe treating PVNS is different from treating metastatic cancer, the therapeutic approach to this disease fits more of a disease management paradigm than it is about trying to block life-threatening metastatic disease. As a result, we believe the optimal treatment regimen for PVNS maybe somewhat different from the treatment paradigm for oncology or the treatment regimen you would use in oncology. From our recent market research, we know there is a significant unmet need in this patient population and we also believe that there's a commercially attractive – this is a commercially attractive opportunity as well. We will presume preliminary data from this ongoing trial at ASCO. Next I'll discuss highlights from our immuno-oncology trial. We and our partner BMS is studying Cabira and combination with PD-1 checkpoint inhibitor OPDIVO in seven different prospectively defined tumor setting as well as in open cohorts that can enroll patients with other tumor types. We're very pleased with the rate of enrollment in the trial and we've already completed enrollment in some of the Phase 1b cohort and we expect to complete enrollment in all seven currently planned Phase 1b cohorts by the end of the year. In addition to assessing safety and tolerability, we're also conducting in-depth tissue biomarker analyses to assess whether we can use biomarkers to select Cabira responsive patients. These assessments of the tumor microenvironment are guiding optimal dose selection and could potentially provide us with a biomarker-based patient selection tool, thereby maximizing the probability of success for this combination in the future. While multiple immuno-oncology combinations are being tested in cancer patients. We think that our combination of a tumor-associated macrophage or TAM inhibitor like Cabira with a checkpoint inhibitor like OPDIVO may work in settings in which other combinations may not. This could be especially true in tumors where TAMs have an immunoinhibitory effect on the tumor microenvironment. We are also advancing our FPA144 program recall that FPA144 is our isoform-selective antibody which we're developing is a targeted immunotherapy for gastric and bladder tumors that overexpress the B splice variant of FGF receptor 2 During the quarter, we received approval from the PMDA in Japan to initiate a Phase 1 monotherapy study in patients with gastric cancer and are on track to begin this study in the third quarter of 2017. While we’ve reported monotherapy activity in gastric cancer, we believe combination therapy will provide the greatest patient benefit. We plan to initiate chemotherapy combination gastric cancer trial to move into frontline setting. There's a strong rationale for combination therapy from both the patient in economic perspective. And it's a message we've heard loud and clear from our KOLs, late line therapy patients are very sick and progressed quickly. By moving to frontline therapy, we have the potential to benefit more patients for a longer period of time with higher response rates and better survival than in the late line settings. In addition, our analysis of 5,000 patient specimens suggested by adding a blood based patient selection tool. We estimate we could more than double the addressable patient population, potentially leading to a faster path to approval and a larger commercial opportunity. The reason for this is that the blood based test can detect patients who have metastatic disease. And by just looking at the initial biopsy by an IHC test you may list these patients who have metastatic disease because we know that there is a higher incidence of FGFR2 amplification in the metastasis than there is in the primary tumor. For this reason adding this blood based test may significantly enhance our ability to detect patients. It's also a test that is convenient for both patients and physicians. So the combination of moving into early line therapy, first line therapy and using a blood – adding a blood based test to our method of selecting patients. We think will both improve or allow us to identify more patients and potentially lead to a faster path to approval and a larger commercial opportunity. Helen will provide more details in why this strategy makes sense. And you’ll see more about our approach at our ASCO presentation. But beyond the gastric cancer setting, we are also setting FPA144 and patients with bladder cancer. We made notable progress in enrolling patients and adding sites to specialize in bladder cancer. We're looking forward to obtaining clinical data in this indication. Recall we had one bladder cancer patient in the dose escalation portion of the trial. And this patient achieved a complete and durable response, more about this from Helen later. Now a few highlights from our preclinical programs. We are advancing three new preclinical therapeutic candidates currently in IND-enabling studies and plan to file IND on the first two antibodies by the end of the year and to file an IND on the third in Fc fusion protein in 2018. I'll describe these three briefly. First is FPA150, an antibody the B7-H4, which is shown on Slide 5. Recall there are a number of tumors such as ovarian cancer and breast cancer that have a high level of B7-H4 expression on the surface of the cancer cells. In addition, B7-H4 has been shown to activate checkpoint suppressing CD8 T cells We engineered this antibody to block the immunosuppressive function of B7-H4 on CD8 T cells to drive ADCC and recruit NK cells to kill tumor cells that express B7-H4. Next is FPA154, our GITR agonist antibody shown on Slide 6. We think our tetravalent GITR antibody is differentiated from others because it has four GITR binding sites compared with a conventional anti-GITR antibody that have only two GITR binding sites. We've shown that our tetravalent antibody increases GITR cross-linking and result in higher activation of CD8 T cells as compared to bivalent antibodies. This was again demonstrated in our recent AACR poster which shows that anti-GITR synergizes with anti-PD-1. And finally, I’d like to mention FPT155, our soluble version of CD8 which is a natural immune regulatory molecule shown on Slide 7. In our screens, CD80 when expressed in the soluble form was quite striking and it's potent in vivo anti-tumor activity when compared to 500 other immunome proteins. We believe FPT155, has the potential to enhance T cell responses through three possible mechanisms. First it activates CD28 importantly without superagonism. Second it blocks the immunosuppressive effects of CTLA4. Third it can block the PD-1 checkpoint pathway by binding to PDL-1. We believe these mechanisms may lead to the striking anti-tumor effect we see in multiple preclinical models. In addition, our functional cell based screens continue to yield interesting targets and we've already initiated new antibody campaigns in this quarter. Now I'll turn the call over to Dr. Helen Collins, who was recently promoted to Chief Medical Officer at Five Prime. Helen brings more than 20 years of oncology expertise as well as deep clinical development experience both in early and importantly in late stage programs including in pivotal trials from her time in Amgen and Gilead Sciences. Since she first joined us in June 2016, she's been instrumental in leading the Company's clinical development programs and as continue to impress us with her expertise and her effective leadership. Helen who earned her M.D. from Johns Hopkins University School of Medicine practiced as a medical oncologist for more than 13 years. During that time, she was President of one of the largest oncology practices in the nation. Helen will now provide a more detailed update on the clinical programs.

[Helen Collins:]

Okay. Thank you, Rusty. I’m very excited to be in this role at Five Prime. I can't think of any company this size they have such a rich pipeline and strong discovery platform. And from a clinical development perspective, this is the ideal position because this pipeline provides so many potential opportunities. Obviously review where we are on our clinical program and start with Cabiralizumab IO trial in advanced cancer patients. As Rusty mentioned, we continue to make progress in this trial that is studying Cabira in combination with anti-PD-1 antibody OPDIVO. The trial design can be found on Slide 8 and recent highlights from this program can be found on Slide 9. In the Phase 1b expansion portion of the trial, we are evaluating the safety, initial efficacy and biomarker changes in multiple cohorts of patients receiving Cabira in combination with OPDIVO. There are different rationales through each chosen indication but the primary basis for selection is that all the chosen tumors have high levels of immunosuppressive TAMs which are the target for Cabira. We believe that Cabira both decreases the total number of TAMs and also convert the more immunosuppressive M2 macrophages to the proinflammatory M1 macrophages in the tumor microenvironment. And this hypothesis is supported by third-party data presented at the recent AACR conference which demonstrated the ability of CSF1R antibodies to do just this. Additional external data support our approach, an article published in Nature in June 2016 by Physics [ph] Lab at Harvard reviewed the role of myeloid cells in cancer therapies and highlighted an association between a high density of TAM like cell and co-partnered with in numerous types of cancer. Their list of cancers included several of our selective tumors such as head and neck, renal cell, pancreatic, ovarian and non-small cell lung cancer. The tumor types in which we are evaluating the combination of Cabira with OPDIVO fall into three categories. The first category includes tumors in which OPDIVO is already approved and so we want to assess whether the addition of Cabira to OPDIVO will improve outcomes such as the non-small cell lung cancer, renal cell and head and neck cancer. The second category includes tumors that are or have become resistant to checkpoint inhibitors such as previously treated non-small cell lung cancer. And the third category includes tumors where checkpoint inhibitors aren’t approved such as ovarian, pancreatic and glioblastoma. Any evidence of efficacy in these tumors could be meaningful. While other companies are also studying CSF1 inhibitors in cancer, in general our study includes tumor types that are not overlapping. We have however designed our trial to add additional tumor types its new internal or external data are supported. As Rusty mentioned, this is a biomarker-rich study. We and BMS are conducting in depth tissue biomarker analysis in this trial to support dose selection. For example, we're conducting pre and on treatment tumor biopsy to evaluate the number of TAMs the potential changes is the result of therapy. Additionally, we're looking at the ratio shift in M1 versus M2 macrophages and we are also measuring shift in CD8 T cells as our goal is to increase these T cells in the tumor microenvironment. And finally, we are expecting PDL-1 status to see if we can add to OPDIVO’s activity in low or non-expressive. We expect to complete the Phase 1b enrollment in the second half of this year and we're working with BMS on the release of initial clinical trial data also in the second half of this year. As Rusty mentioned, patients in the oncology setting are different from those in the PVNS setting. Metastatic cancer is life-threatening whereas PVNS is a chronic debilitating disease. Therefore in the IO trial, we're testing Cabira doses that are both similar and higher than in the doses we are testing in PVNS. I will discuss our PVNS trial in more detail now. PVNS is often a life long disease that associated with significant pain and debilitation. We believe a chronic disease management paradigm is most appropriate and optimal dosing maybe different between metastatic cancer and PVNS. Slide 10, illustrates our ongoing trial design in PVNS. Importantly while we are assessing objective response rates patients report that their top priority is control the symptoms namely pain and also functional status. We want to provide meaningful clinical benefit with an acceptable tolerability for this chronic non-life threatening disease. On Slide 11, you can see program highlights. We recently completed enrollment and initially planned 30 patient cohort of the Phase 2 expansion of this ongoing clinical trial. In U.S. patient prevalence for the disease form of PVNS is estimated to be 25,000 and due to its chronic nature, we think it could represent an attractive market for us. At ASCO, we will have a poster presentation featuring initial trial data. In addition, we are seeking regulatory guidance to initiate a pivotal trial studying Cabira and PVNS to begin in 2018. Next I will discuss our progress with FPA144. As shown in Slide 12, we are currently in expansion part of the trial where we are dosing gastric and bladder cancer patients with 15 milligrams per kilogram of 144 every two weeks. Slide 13 shows highlights on the ongoing Phase 1 trial in which we are studying the 144 for gastric and bladder cancer. 144 is an antibody that specifically targets the FGFR2b splice variant which is overexpressed in some tumors. We think the specificity of 144 can avoid the toxicity seeing with less selected FGFR2 small molecule antibody therapeutics. At ASCO this year, we will present an update on the monotherapy 144 trial in patients with late stage gastric cancer. We also plan to study 144 in the gastric cancer setting in Japan where gastric cancer is one of the most common type tumor types. We recently received approval from the PMDA in Japan to initiate a Phase 1 monotherapy study and we are on track to begin this study in the third quarter of 2017. We believe the greatest benefit to patients will be in the frontline setting if we combine 144 with standard chemotherapy. Also in our view this approach provides opportunity for a faster path to potential approval. Rationale is multi-fold, first we know that from the time of initial diagnosis, patients with advanced gastric cancer have a poor prognosis with an overall survival of only 10 to 12 months. Approximately 50% of patients don’t even make it to second line therapy and approximately 75% of patients don’t make it to third or later line therapy because they've either already succumbs their disease because they are too sick to continue a seating [ph] systemic therapy. The patients that do make it to third and later line therapy tend to progress very quickly. In Slide 14 describes the number of estimated treatable patients according to line of therapy. Second, we know that FGFR2b is associated with poor prognosis and more survival. So patients with FGFR2b positive gastric cancer are even less likely than the typical gastric cancer patient to survive long enough to receive that third line therapy. Finally, only a portion of the patient population have tumors which are FGFR2b positive. So overall, there are fewer treatable patients in this late line setting. We have to make that at least three times the number of patients in the frontline setting. So completion of a frontline study could be achieved faster than the late line study and more importantly aside from providing faster path to potential approval moving to the frontline offers the opportunity to benefit a greater number of patients for a longer period of time. There's also scientific rationale to support the chemotherapy combination. We know that gastric cancer is a heterogeneous disease and our preclinical data demonstrate 144 effectively targets different gastric cancer tumors than chemotherapy and a combination is synergistic in some model. These data can be seen on Slide 15. Our preclinical data is consistent with the clinical data from other targeted antibody therapy such as Herceptin, [indiscernible] Avastin which have generally been demonstrated the greatest benefit when combined with chemotherapy. Finally FPA144 has been well tolerated in ongoing trial without the off-target toxicities observed with oral FGFR tyrosine kinase inhibitors. And so we anticipate the combination of 144 with chemotherapy will likely be tolerable for patients. So for all of these reasons we think treating patients earlier in the course of their disease will provide maximum benefit. We plan to seek regulatory guidance on the registrational path for FPA144 in combination with chemotherapy as an early line gastric cancer therapy. Slide 16, depicts the potential trial design. Next, a few words about patient selection, at the targeted antibody we currently reflect patients using IHC test for the FGFR2b splice variant. This test identified patients who highly overexpressed the FGFR2b protein in the primary tumor which represents approximately 5% of patients with gastric cancer. Gastric cancer is heterogeneous and therefore single primary tumor biopsy might miss the tumor cells that overexpressed the FGFR2b. As a result, we are also assessing these in a blood based assay which could expand the potential patient population beyond 5% has been currently identified with our IHC test. You can see this concept illustrated on Slide 17. Beyond gastric cancer, we also setting 144 in patients with bladder cancer, you may recall from ASCO last year during the dose escalation portion of the trial we enrolled one patient with metastatic bladder cancer. Following treatment with FPA144 that patient achieved a complete response by PET scan and has remained in remission and its been on treatment for two years as of April 15. More information can be found on Slide 18. We recently presented data that showed approximately 14% of tumor samples from patients with metastatic bladder cancer overexpressed FGFR2b is assessed by our IHC test. You can see this on Slide 19, because of this durable patient response that we observed in our trial and because of the prevalence of FGFR2b overexpression in this disease. We opened an additional cohort to evaluate 144’s monotherapy patient in patients with bladder cancer. We are currently adding additional trial sites that specialize bladder cancer to facilitate enrollment. Finally, I’ll conclude with a few remarks about FP-1039 which shown on Slide 20. FP-1039 is a ligand trap that blocks FGF2 and other anti – other cancer promoted FGF. But its currently being combined with cisplatin, pemetrexed and a Phase 1b trial its first line therapy and patients with malignant pleural mesothelioma. GSK is conducting a study and in June 2016, they completed enrollment in 25 patients enrolled with 15 milligram per kilogram dose. GSK continues to dose and follow the remaining patients on this trial. We presented immature data from this study at last year’s ASCO meeting and plan to submit updated clinical data to this year’s Asthma meeting in Spain. The mature data will inform future development time. In summary, we are excited by this significant progress in our development efforts across all our clinical trials and we look forward to providing future updates the data become available. I will now turn the call over to Marc to review our financial.

[Marc Belsky:]

Thank you, Helen. The full details of our financial results can be found in the press release issued this afternoon, as well as Slides 21 and 22. We continue to have a strong balance sheet. Our cash, cash equivalents and marketable securities totaled $380.3 million as of March 31, 2017. Net loss for the first quarter of 2017 was $33.4 million or $21 per basic and diluted share compared to a net loss of $13 million or $0.49 per basic and diluted share for the first quarter of 2016. Collaboration revenue for the first quarter of 2017 was $10.1 million up from $6.5 million in the first quarter of 2016. This was primarily due to revenue recognized under the October 2015 Cabira license agreement with BMS. Recall BMS is reimbursing our expenses relating to our Cabira IO trial. Research and development expenses for the first quarter of 2017 were $33.8 million compared to $18.9 million in the first quarter of 2016. This increase was primarily related to advancing Cabira in both the base to clinical trial in PVNS and the Phase 1a, Phase 1b clinical trial in immuno-oncology and advancing the FPA144 Phase 1 clinical trial and further advancing our preclinical development program. General and administrative expenses for the first quarter of 2017 were $10.5 million compared to $8.1 million in the first quarter of 2016. This increase was primarily due to increases in payroll and stock-based compensation expenses. Looking ahead, we continue to expect full year 2017 net cash used in operating activities to be less than $120 million. We estimate ending 2017 with approximately $300 million in cash, cash equivalents and marketable securities. I will now turn the call back to Rusty for closing remarks.

[Rusty Williams:]

Thanks Marc. Beyond the progress made in our clinical and preclinical programs we are also excited about our discovery platform which continues to fuel our pipeline. Previously we described the functional cell based screens of our entire library of 5,700 extracellular proteins to find the best activators and suppressors of both Treg and T effector cells. This program continues to advance and is already yield an interesting target. As I mentioned in my opening remarks we initiated therapeutic antibody campaigns in this quarter. We're incredibly enthusiastic about the potential of these screens and we now have the enviable problem of prioritizing from the numerous targets to determine which further development. Our ability to find new targets and generate new protein drug candidates is a big strategic advantage for us. Especially in an era when pharma companies are having difficulty generating enough novel agents internally to fill their pipelines. We are well on track to achieve our goal of filing at least one IND application for a new molecule each year for the foreseeable future beginning this year. Next, I’ll call attention to Slide 23, which leaves our recent and anticipated milestones including our anticipated clinical data disclosures. Our clinical, preclinical and research teams continue to execute extremely well and our programs are on track. Finally, before we open up the call for questions. I’d like to express my appreciation to our Five Prime employees as well as our numerous patients and investigators participating in our clinical trials. I’ll now open it up for questions.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from the line of Michael Schmidt of Leerink Partners. Your line is open.

[Jonathan Chang:]

Hi, this is Jonathan Chang stepping in for Michael. Thanks for taking my questions. First can you talk about the upcoming PVNS data at ASCO and what you think investors should be focused on here and what the bar for success is?

[Rusty Williams:]

Thanks Jonathan. This is Rusty. The data at ASCO on PVNS are preliminary data. And as I said they'll hopefully illustrate our approach to this disease in the disease management modality. And I’ll let Helen comment further but you know the important thing is for us that disclosed at ASCO – if you look at the posters at ASCO.

[Helen Collins:]

Sure. Now I think, thank you for that question. I mean as Rusty alluded to in his opening comments. We’ve done some market research and I think the thing that really struck us is that and you heard us say that before that these are young people are in their 30s and 40s. And they see a orthopedic surgeon, they get surgery this disease comes back and they just go around and around to the surgeon and there's nothing to offer them right now. We also and what we hear from the patients loud and clear is the pain and the lack of function, essentially become disabled. But they have a long life ahead of them because this is not a life threatening disease. So when we're looking at this disease we are thinking about it more, again as Rusty said kind of a chronic illness I mean almost more akin to some of the inflammatory diseases like rheumatoid arthritis not again that is like that then metastatic cancer with somebody has a survival of 10 months. So with that as a background we know right now what's approved – well there's nothing that's approved we do know people use the tyrosine kinase inhibitors and we hear that from the patients that they'll try them. And we know that response rates about 19%, 20% so we know that if you hit that patients are going to – patients will use them again if their symptoms improve from it. We also know that other people have tried CSF1R antibodies had a much higher response rate but it wasn't tolerable. So I know that's roundabout way of answering, I'm not trying to be evasive I think it's that Rusty said it's preliminary. But what we think that we've got a drug if we can kind of fall in that range that it's at least 20% and that is tolerable and if that tolerability as we alluded to that we're really trying to get just right because this is going to be a chronic treatment.

[Jonathan Chang:]

Great. Thanks. That's very helpful. Second, a question can you speak broadly about how you see CSF1R positioned in the evolving IO landscape, there minus of how you see Cabira positioned versus other CSF1R programs?

[Rusty Williams:]

Yes, Jonathan. This is Rusty again. It’s important to keep in mind the mechanism by which CSF1R inhibition works. So I don't think it's a one size fits all if we do look at IO, IO combinations. CSF1R inhibition works by reducing M2 macrophages in the tumor microenvironment. So it's our supposition that the best place to use this is in tumors that have M2 macrophages either in the tumor or in the area surrounding the tumor. And these M2 macrophages provided immunosuppressive effect that we discussed before. So we think that, we don't divide the world into all tumors for example because again, what we look for is tumors where there's evidence that there's a M2 macrophage playing a role. We look at the world that way in terms of whether that mechanism of M2 macrophage immunosuppression is important and that's why in this trial it's not only of course the clinical responses are the key issue. But we also want to look at the change in the tumor microenvironment with Cabira to understand better how to select patients and whether there is the mechanistic proof-of-concept as well as a clinical proof-of-concept. Helen, do you want to add to that?

[Helen Collins:]

Yes, yes. I mean I think the only thing as you know, I mean I guess this will harken back to my days as a clinician. I mean, I'm thinking at a high level CSF1R inhibitors were falling into the IV in oral like I think when you're looking at combining and with a checkpoint inhibitor which is obviously what we're doing, it makes sense to do the IV-IV combination. So that's again just speaking from a practitioner point of view. It's certainly easier to sort of manage the patient when that's happening when both drugs have been given by the same modality. Again, maybe that's a little bit of a personal opinion. I think the other thing is that – I think the way I can't take credit for this, the way that study is designed and the particular tumors that we're looking at is different than what other people are doing. So I think that as you heard me saying that we're really trying to look at where the checkpoint inhibitors are approved. Can we do better, where they’ve been – unsuccessful, can we change that. And I think that's really where the strength of this program is as you know.

[Rusty Williams:]

So people often ask us about that Roche, comparison of what we're doing to what Roche is doing with their combination of CSF-1 receptor inhibitor antibody and PDL-1 antibody there's overlap only in ovarian cancer, the rest of the indications is – cancer indications are different as far as we can tell. And so we think to be not too far off in terms of timing from Roche they recently increased the number of patients according to clinicaltrials.gov from 198 to 300 patients in their trial. But other than that we can't really make a real comparison, we think mechanistically our antibody and there's probably similar. They're not exactly the same molecular mechanism but we think they're probably similar and they're up – the way they work and then their efficacy that would be our depth. But we don't have access to Roche data. So that’s the value to Flexicon [ph] molecule that's partnered with Merck that's a small molecule in KI. It is not completely selective for CSF1R inhibition it inhibits KIT and FLT as well those two tyrosine kinases. So we think that in the long run that may be advantageous to have a selective inhibitor as well as rather than a non-selective inhibitor. So those who – if we can go into more depth if want to but those are the main comparison so we make specifically to the class of drugs related to the Cabira.

[Jonathan Chang:]

Great. Thank you very much.

[Rusty Williams:]

You're welcome, John.

[Operator:]

Thank you. Our next question is from the line of Eun Yang of Jefferies. Your line is open.

[Eun Yang:]

Hi. Thanks for taking the questions. So one question on Cabira when you present initial Phase 1b data what should we do expect to see there?

[Rusty Williams:]

Thanks, Eun. This is Rusty. We're working with BMS which data presented as Helen described we completed enrollment in some of the 1b cohorts, some other cohorts we plan to complete in Rome and by the end of the year. So you can sort of guess that what we would report what we – by the end of the year is data from the 1a because we haven't reported anything from the 1a yet as well as data from selected cohorts in the 1b.

[Eun Yang:]

No, in your presented data in terms of side from safety I mean – should do we expect biomarker data or should we expect robust data.

[Rusty Williams:]

And I just spend a lot of time talking about importance of biomarker and now we’re proof-of-concept for mechanism racks and all that and that will be an important aspect or business in our anticipation. Again, we’re working BMS and which date it present but I think biomarker of data is our – I think we had BMS – those are important.

[Eun Yang:]

Are we going to see a response rate data?

[Rusty Williams:]

That’s our expectation is – then we think that our investor expected to see, response rate and biomarker data and also important immuno-oncology as you is durability. Now given the timing well you can sort of take a guess of how much durability data will have. So I don't to get ahead of myself on promising long-term durability but these are the things that we want to look at.

[Eun Yang:]

Thanks. And then 141, you seems to me that you guys are planning to go into Phase of 3 in a frontline gastric cancer in combination with the chemo from monotherapy experiencing humans. So I mean you provided pre-clinical data is showing headache activity with the chemo but is it pre-clinical data in gastric in your model, translate are well into humans?

[Rusty Williams:]

Well, that's always the question in pre-clinical models is the translation to humans and I think the way to look at this is Helen described is the model. We have tested this in models in which we do see some response of 144 we see some response of chemo and we have them together and we get a very much improved response to both of them – with both of them very impressive response. And if you look at this in the context of predictability of models of chemo combinations with other targeted therapies, you would say that the models are somewhat predictive. And that's about as far as we can go with it right now. So it's not simply the model data that compel us and the model data suggests that this is a good direction to go in. But it's also the idea of gastric cancer just the phase of the disease, as Helen mentioned. It's such a rapidly progressing disease and so many patients drop out by the time they're in third line. First of all they’re very sick, their prognosis is very poor and we also have the backdrop of knowing that there are significant data in the literature showing that FGFR2b patients in particular have about prognosis. And so we think it's important to have a control arm for that reason as well. So I think that’s move into early-line therapy has a lot of potential benefit to be better than enrollment for us, it will be faster. We think faster enrollment for us we have better probability of success. We have offer more benefit patients. And then by adding the blood test, we think we can improve the odds even better because we've increased the number of addressable patients significantly. So we add all that together we think it's a faster and better outcome for patients and for the company and the investors. And Helen do you want to add to that?

[Helen Collins:]

Yes. I mean, I think the only thing is that, again Rusty had mentioned in his opening statement is that we obviously care and talk about our data with our PIs on our study and have – board and they just keep saying looking at data, you should be in frontline.

[Rusty Williams:]

They’ve been saying that from beginning, they’ve been saying that…

[Helen Collins:]

Around that you get response like this. You should be frontline that’s where we want to give this drug. So I think – that’s what the patients need is, that’s what the number are and we think that’s where we make the biggest difference.

[Rusty Williams:]

And that’s where the enthusiasm of the investigators.

[Eun Yang:]

Thank you. And one last question to Marc. So in 1Q the collaborative revenue of about $10 million is that the run rate for the remainder of the quarters.

[Marc Belsky:]

I would assume that that would be the run rate. You can actually prove out our revenue for expectation is that from all the disclosures we had in the 10-K and the 10-Q that we’ll file tomorrow. But would be fairly accurate run rate our revenue sources are primarily from the reimbursement of the trial costs from the Cabira. IO trial and some IO research money we received from BMS in that collaboration the rest of it ratable revenue which was disclosed previously how that will amortize its revenue.

[Eun Yang:]

Thank you.

[Operator:]

Thank you. And our next question comes from the line of Chris Shibutani of Cowen. Your line is open.

[Chris Shibutani:]

Great, thanks very much. I wanted to focus on FPA144 for a couple of questions. Thank you very much for the additional detail here. It did lead us to think a couple of things, number one that preclinical data looks like an AACR slide from 2014, very helpful data. Do we – can we expect any more preclinical data perhaps at ASCO or during the balance of this year.

[Rusty Williams:]

Thanks, Chris. We think that those preclinical data that we showed are compelling and very up rational to move forward. So we didn’t actually feel the need to do anymore preclinical work on this in term of combination. Having said that we’re always continued to do preclinical research to bolster our case and so there maybe more in the future. But, we don’t – I wouldn’t expect to see any more to occur in the poster or in the presentation that we have.

[Chris Shibutani:]

Got it. That’s helpful, what we hunt down.

[Rusty Williams:]

Yes, yes.

[Chris Shibutani:]

In terms of combining, chemo with FPA144 obviously you are using on the FPA side 15 mgs per kg every two weeks. Combinations with chemotherapy I think – can you help us understand what dosing could be like and how you’ll figure that out obviously combinations of therapies we don’t always typically think of the full fledged chemo regimen, but maybe you can help us understand what you guys are thinking.

[Helen Collins:]

Yes. I think – this is Helen. I think that obviously it’s not a complete analogy but when you look at other targeted therapies and antibodies that are attacked and added to chemotherapy there hasn’t been – if there’s not overlapping toxic so there hasn’t been a reason to decrease the dose of either the component. So I think that’s what we anticipate obviously we need to do at least a minimal dose escalation. So that is what we anticipate in terms of – we have about 60 patients now that will be presenting safety data on as well at the ASCO and we don’t have any reason to believe that we have overlapping toxicity.

[Chris Shibutani:]

Great. And Slide 14 lastly provide some helpful information to help us understand about numbers of gastric first line compared to the third line and obviously you’d identify that there is more patients there. Two other ways to slice it, I was hoping you can help us understand duration of therapy in the first line has got to be longer. Can you give us some sense of magnitude there? And then also if we step back big picture you often talk about the FGFR2b positive patients 5% overall. Do we have any percentage of the first line versus third line for that particular biomarker or specific subgroup? Thanks.

[Rusty Williams:]

So thanks Chris superb, several questions. So let’s start with the Knickerbocker talk about the markets frontline and late line.

[Marc Belsky:]

Yes. Hi Chris. As you can see in this table on Slide 14, we think the ratio from front line to third line patients is probably at least 3

[Helen Collins:]

Yes, so frontline therapy as you know generally – actually mostly around the world lots of platinum [indiscernible] based regimen. And in general as we talk to our potential investigator that usually for six months again that’s usually just because that one patient start to progress. But there’s no reason that necessarily one would have to stop the FPA144 at that time. Again those are things that obviously we are up to see how the patients feel but that would be the thought that in the front line it’s at least six months is what we know the PFS within the chemotherapy, obviously we pointed to have a longer PFS with the combination of the two. Again just because you might have stop the chemotherapy for toxicity does not mean you would necessarily have to stop 144. In the late line setting and I think we were thinking it would need to be at least third line there we know the PFS is six week the time for scan. And as Rusty was saying, and as I would have been saying that these patients are very sick by the time they get to late line. And so one of the issues again with the target therapy and somebody already so heavily pretreated is there even a chance to the drug to start working and although obviously we’ve seen responses in that late line setting it’s still going to be compared to front line significantly shorter.

[Marc Belsky:]

And then Chris you asked about the percentage of productivity in the lines there is any different. We don’t actually have this that effect, however we do know that there is a worst prognosis for patients who either bear FGFR2b application or FGFR2b protein of expression. So that was an expansion of it – you’d imagine there’d be fewer surviving to the third line.

[Helen Collins:]

Yes. And I can add one more thing that – I think I can’t tell you from our ongoing study because we’re right now – you might see these patients from last year even when they’re diagnosed and so we get a question on these people when they are undergoing a first line treatment they kind of get put on – people want to go under study so they get put on the waiting list and only a proposition of them ever or around when they finish their first line therapy to get on our study. So that sort of supports what we think is that the patients tend to work with first line therapy.

[Rusty Williams:]

And the other think about prevalence of the implication that – public information that there’s a higher – higher percentage of metastases have FGFR2b implication and the primary tumors. And the second thing is we’ve been very pleased in our exploration of blood testing that it looks like we pick up significantly more patients that we’ve provided some numbers in the chart that you are seeing here one of the slides. If anything – the more we look at this the more encourage we are that the blood tests is going to pull an additional patient there by not only providing treatment of what you really want to get at is the metastatic disease but also increasing as I said before the pace of the trial and the addressable population. So that’s our hope.

[Chris Shibutani:]

Are there more patients for longer, that’s what we like to hear. Thank you Rusty.

[Rusty Williams:]

You’re welcome Chris.

[Operator:]

Thank you. And our next question comes from the line of Jim Birchenough of Wells Fargo Securities. Your line is open.

[Jim Birchenough:]

Hi guys, thanks for all the detail. Few questions on Cabira, maybe I’ll start with a question we get from clients and that is we don’t hear a lot from Bristol on their earnings calls about CSF1R in the combination. So maybe with that being what we see externally maybe you could characterize the level enthusiasm within the collaboration just to start with.

[Rusty Williams:]

Yes. Thanks, Jim. The – I came that we work with Bristol is extremely enthusiastic and so we have affinity, rainy of enthusiasm. Certainly there is – things to be the offset that team is very enthusiastic. So there is have any grassroots level in terms of operations we don’t have any indication at all that there is a diminution of enthusiasm and as I said quite the opposite. If you look at – go ahead.

[Jim Birchenough:]

Oh no, go ahead.

[Rusty Williams:]

Okay. So if you look at what they talk about on earnings call, I of course with back look at myself and they talked about agents for the most part, in the I/O combination, they talk about agents that for which we able to disclose data and upcoming either they did at ACR or will at ASCO. And they also talk about IDO. Well, the IDO programs were much ahead, the IDO combination programs were probably couple of years ahead of the Cabira combination with OPDIVO. And so at least they lead a high dose combination. And so we're not too concerned about that the fact that don’t feature that. Bottom line is we started enrolling in this Phase 1b and these cohorts in October still relatively early in the process. It doesn't surprisingly that BMS is not going out to talk about – much about Cabira at this point in time. And we look forward to – we are ready to talking about it in the future.

[Jim Birchenough:]

And this…

[Rusty Williams:]

Our combination – this is a unique combination different from the others and probably addresses different patient populations. And so I would look to that in the future as we get further into this as opposed to just addressing the same populations they cover with their other agents and their other combinations.

[Jim Birchenough:]

And Rusty, this is a question just following on that in terms of how complex this is to identify patients that would drive incremental benefit from CSF1R inhibition. And I guess if the tumor associated macrophage were critically important to suppression of an immune response to cancer. You would expect some incremental benefit in an unselected population. I just want to make sure that the emphasis on the biomarkers and the tumor biology is not because you're not seeing unselected activity, because some may speculate that.

[Rusty Williams:]

So they – we had this biomarker part of this from the beginning. And we felt that it was important the majority of the trial that’s a combination of Cabira with OPDIVO. We do have some monotherapy treatment groups in there as we've discussed before. But the majority is in this combination. We felt that and the combination when we interpret response rate, it's also important to know that our drug is contributing to that and is doing what it's supposed to do Cabira. As far as I know well, Cabira is focuses on M2 macrophages and so what we like to see is reduction in M2 macrophages increase in CD8 cells, et cetera in tumor microenvironment. So it's not that we didn't introduce this to explain or to select patients that are more active. It was there from the beginning. And so…

[Jim Birchenough:]

Okay. That’s very helpful.

[Rusty Williams:]

Just to be clear this trial is not selected. The patients are not selected using a biomarker. We're using the biomarkers as an exploratory tool to understand in the next phase of trials whether we would want to select or not. And also again some validate the mechanism of action.

[Jim Birchenough:]

And maybe just one final question Rusty on PVNS, I'm just interested in not necessarily the response rate that we should view as potentially relevant, but the magnitude of response that has clinical relevance i.e. you can have a 30% tumor shrinkage, but if you're still going to go to surgery and you're still going to have pain that may not be important. So what is the level of response that might spare surgery or result in symptom improvement? Do you know that?

[Rusty Williams:]

So you've nailed it. We just and this is kind of pressure us because we've just completed a market analysis talking to patients and treating physicians. And I tell you and this disease what patients complain of is pain and loss of function. Until it really is different from treating cancer when you're focused on response rate and we also noticed that oncologist look at things differently from the way the patients with this disease at the way they look at it. And oncologists are focused of course on response rate and that sort of thing. And while response rate is important in measuring by MRI, we think it’s a meaningful parameter somewhat, but the most important thing is pain that we've got talking to the patients that's what they care about and the reason they have surgery is pain and dysfunction, eventually they get bone destruction. And so that's the way we're looking at it, because that's the way the patients and physicians are guiding us. And investigators are guiding us that way. Helen do you have more to…

[Helen Collins:]

No. I think that – right, I mean I think we think that the change, the improvement on the scan will be supportive of improvement and quality of life.

[Jim Birchenough:]

Yes.

[Helen Collins:]

So I think you're asking the right question, I agree.

[Jim Birchenough:]

And then should be look back…

[Rusty Williams:]

That’s the thing we don’t have responses. I'm not saying that.

[Helen Collins:]

Yes, yes, but I think yes. But the patients don't care whether it’s a 20% or a 60%.

[Rusty Williams:]

Yes, we have 20% shrinkage, or yes, larger, they don’t care about that.

[Jim Birchenough:]

And should we look for that quality of life data at ASCO?

[Helen Collins:]

Preliminary, yes. Same as the MRI preliminary.

[Jim Birchenough:]

Okay, great. Thanks for taking the questions.

[Rusty Williams:]

You're welcome, Jim.

[Operator:]

Thank you. And our next question is from the line of Robyn Karnauskas of Citigroup. Your line is open.

[Unidentified Analyst:]

This is Mohit filling in for Robyn. Thanks for taking my question. And I have a question on the companion diagnostic you're using with the gastric cancer program. Can you help me understand, what gives us confidence in terms of – what we’ll see the response rates at IHC, we'll see the same response rate than we select the patient based on the blood test? And then is there anything we can learn from Phase 1 program, if you're using the same test in the Phase 1 program that would help derisk the Phase 3 bigger program? Thank you.

[Rusty Williams:]

Yes, thanks. Thanks for that question. So I'll tell you what we know and then what we hope to learn. What we know is that – we did get – in the data that we've already reported, which we had clear clinical responses in late-line therapy couple of those patients who had responses actually were first identified with a blood test. And so that we know – that blood test would have found them. We also know this information that the metastasis have more – have higher incidence of over expression of FGFR2b than the primary tumor that in initial diagnosis. We also know that this FGFR2b confers that prognosis. So it is a little bit of an extrapolation to say – and we know that the blood test gives a higher percentage of positivity than just a initial IHC test. That could be because the blood that is picking up, as Helen said, patients who you sort of nested or you get a lowest score IHC we know that if you're at a sort of moderate score by IHC, blood test can show that you have or that – we have shown that you can have amplification that would be picked up potentially by the blood test. So we put all that together, it's a little bit of an extrapolation to show that you’d see the same response in a blood test identified patients, whose blood test positive, IHC negative and we don't have those data yet. But putting everything together that doesn't seem like an unreasonable assumption. Again, going back to the – reason we started this program, we started it because these patients have – the patients who have FGFR2b or R2 gene amplification and express to B splice variant, have a poor prognosis. It's got to be a driver. This FGFR2b is a growth factor receptor and response to the local growth factors in the environment, FGF7 and FGF10 primarily and it's start to be a driver and have large degrees of application in many cases. So it's not a subtle effect when you see this simplification. And so that's what caused us to go into this indication in the first place. And so looking – finding ways to find patients with amplification, in particular for the amplification in the metastasis seems like a rational thing to do based on the data that we have.

[Helen Collins:]

Yes. And this is Helen, again. I'm going to support from the same thing and I think we included this in our last years ASCO that in our monotherapy, the peeking are being identified by being high over expression and essentially everybody was high over expressing was also amplified. And then, again, maybe I'm just repeating what Rusty said I can also tell you that our biggest enrollers are a pair of ongoing study are people who prescreen their patients who has cDNA. Again, although that our trial right now is not doing that and I think our data at ASCO that you’ll see we’ll support this approach and that’s all I can say right now.

[Rusty Williams:]

Gastric cancer vaccine particular like to using the cDNA test.

[Helen Collins:]

Right, right. Yes – some of that – that will be presenting at ASCO, so..

[Unidentified Analyst:]

Got it and then I mean, so do all those IHC tested patients they are all – they will all be identified using the blood test.

[Rusty Williams:]

So all of the IHC type patients have amplifications.

[Unidentified Analyst:]

Got it.

[Rusty Williams:]

Gene amplifications, and the test identifies patients with gene application, so we don’t have big enough numbers yet to know, that it is one to one that you are going to find every IHC positive person with a blood test.

[Helen Collins:]

You can’t biopsy every tumor that they have. Right, so if somebody has ten dystrophies, you are not going biopsy all the ten, but I think also for frontline study the idea is that the patients can come on either way, they can get the blood test and they are positive, great. If they get the biopsy and they are highly over expressed great. We will take them and locate..

[Unidentified Analyst:]

Got it this is helpful thank you.

[Operator:]

Thank you. Our next question is from the line of Tony Butler of Guggenheim Securities. Your line is open.

[Tony Butler:]

Thanks very much, two questions, really staying with 144 if I may. Certainly I like the notion of moving forward in frontline. But again if we can move to ctDNA test in the blood, is there a threshold at, which you would argue would be a metastatic patient versus one that is not, that is a threshold of ctDNA available and second when you thing about a larger enrollment, I don’t know, lets just assume you enroll a 100 patients plus or minus whatever the number is, wouldn’t you need to start with a – I don’t know something substantially more than that, but yet to the 10% you really do need that would be let’s just say amplified by FGFR2. I am just trying to think about timing, of enrollment when you do decide to move forward with the pivotal study. Thanks very much.

[Rusty Williams:]

Thanks Tony, I want to make sure we understand your question. I think Helen is probably the best person to answer this. But want to be sure we, we’ve got the gist of your question.

[Tony Butler:]

Should I repeat it Rusty.

[Rusty Williams:]

Timing of enrollment – as a threshold of ctDNA

[Tony Butler:]

Yeah correct, in other works if you detect any FGFR2 DNA, that would be sufficient to say, that must be a metastatic patient or is there an algorithm, or an amount if you will of FGFR2 ctDNA that needs to be available in order to define an appropriate patient.

[Helen Collins:]

So I can answer that first one, and then you can answer the second one. So yes, there has to be some minimal amount, I think one of the reasons we are picking ctDNA is we think that ability to be able to determine what truly is not – there is going to be some background versus not, is actually reasonably well established and again I can’t say a whole lot more about that right now, because we are working in terms of which company will be doing that. But we feel very confident about the level that we’ll hit. In terms of again, if you have – whether they have their primaries been removed or not, but they have got 10 mets along with their liver et cetera, I think part of the point that that number of threshold will be as low as we think we can justify it is because again with chemotherapy the whole point is that we think chemotherapy will hit some sub-clone. 144 alone is probably enough to hit some, and then other ones need both together, and I think, that we’ve shown you just some of our non-clinical data, but again that kind of makes sense, when you think about the disease. Right it is the same rationale, for why patients in the frontline don’t get just oxaliplatin and then when they fail, then they get quite a few, they get them together because you are trying to hit different cells like different mechanisms. Does that make sense.

[Tony Butler:]

No, I perfectly, well understand combination therapy, I think the question really was what defines a metastatic patient?

[Rusty Williams:]

A little more color on that, we don’t know actually know the threshold of responsiveness, with respect to amputation. We do know that the patients who reported responses, in have high, pretty high levels of expression on IT, had very quite high levels of expression and they had amplification. And it not a one to one co-relation of the degree of amplification with the level of over expression, so you have to take a little bit of this with a grain of salt. Atleast on that, relatively small amount of data we have, we will need a lot of patient data to be able draw these co-relations. And I think your question is what is our threshold for ctDNA, how do we, what is our threshold there for understanding, how to pick patients and which patients respond. We’ll have to wait a while to give you a good answer to that. We we’re looking closely at this, there should be no amplified FGFR2, so this is a single amplification. So you really shouldn’t have any of us here, I hope don’t have any ctDNA of FGFR2 because you shouldn’t have any of it that is amplified. On the other having said that, in general, we are doing amplification of FGFR2 it is more like HER2 in terms of the degree of amplification at least in the primary tumors. And so where we will be as we implement the ctDNA we’ll be establishing the threshold and won’t be looking at the patient data to help us with that. So we don’t really know the threshold yet. I mean the HER2 cut of ratio for example is two, what in our book is kind of a low – a lower end. Right.

[Tony Butler:]

It is.

[Rusty Williams:]

And so I don’t know that our is going to be that low, we have to look at the data as they come in and so we are and as Helen said we are talking with multiple companion diagnostic groups to look at this. There are data already about this amplification by ctDNA, so we are not starting from scratch, we are starting from data set to…

[Tony Butler:]

That is great, no, no it is actually good because…

[Rusty Williams:]

It was not there yet, I can’t give you the exact number…

[Helen Collins:]

And I hope I wasn’t insulting. I was just meaning that there was rationale probably think it could help that is all I meant.

[Tony Butler:]

No, no. There is nothing to apologize about it, it is not even related attempting to understand, from my silly mind, what ever that threshold was or would be – would actually would define how you think about how many patients you need to look at for an appropriate enrollment in a child, and you don’t know that. That is what you are saying just yet.

[Rusty Williams:]

We don’t know that just yet, we are using, we are taking patients who have either IHC positivity or ctDNA amplification but we don’t yet know the threshold for the ctDNA amplifications. We do know that our reasonable – what we think is a rational level of ctDNA amplification would give us a significant increase in the addressable patients.

[Helen Collins:]

And I should also add that we are planning on getting samples of both from everybody, so in other words, we still get the archival biopsy right, it is just that person is IHC 1 Plus and their blood is positive. We would take them on study or vice versa. So that is part of the, so we want to make sure that we are collecting that data and we have all of that.

[Tony Butler:]

That is real helpful, thanks very much.

[Rusty Williams:]

Thank you Tony.

[Operator:]

[Operator Instructions] And I am showing no further questions, I’d like to turn the call back to Rusty Williams, Chief Executive Officer for closing remarks.

[Rusty Williams:]

Sure and I’d like to thank all of you for joining us today and for our support of Five Prime and your interest in your program and we do look forward to updating you on the future calls.

[Operator:]

Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program and you may now disconnect. Everyone have a great day.