Five Prime Therapeutics Inc
Q4 2015 Earnings Call Transcript

Published: 11 Mar 2016

[Operator:]

Good day, ladies and gentlemen and welcome to the Five Prime Therapeutics Incorporated Fourth Quarter and Fiscal Year 2015 Quarterly Earnings Call. At this time, all participant lines are in a listen-only mode to reduce background noise, but later we will be conducting a question-and-answer session. Instructions will follow at that time. [Operator Instructions]. As a reminder, today's conference call may be recorded. I'd now like to introduce your host for today's conference, Miss Heather Rowe, Senior Director of Investor Relations and Corporate Communications. You may begin.

[Heather Rowe:]

Good afternoon and thank you for joining us. On behalf of Five Prime, I'd like to welcome everyone to our conference call to discuss financial and operational results for the fourth quarter and full year 2015. 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; Mr. Aron Knickerbocker, Chief Business Officer; Dr. Robert Sikorski, Senior Vice President, Global Clinical Development; 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. Additional 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:]

Good afternoon, everyone and thanks for joining us today. I'm excited about the significant progress we've made over the last 12 months, because we've achieved a number of important milestones and I'll summarize these in just a minute. First, I'd like to set the stage with our approach in immuno-oncology. We're focused on reprogramming the various types of immune cells in the tumor microenvironment to unleash the immune system to kill cancer cells. To achieve this, we're undertaking a large scale and systematic effort using our proprietary drug discovery platform as well as our comprehensive protein library which contains essentially all of the extracellular immune regulatory protein that might be targets or therapeutic proteins themselves. These pills uniquely positioned us in the industry to explore new pathways and targets in immuno-oncology that you might not find using other approaches, and it gives us the potential to expand and improve patient lives in ways never before possible. In terms of the therapies that we're currently advancing at Five Prime, I'd like to quickly highlight some of the accomplishments in our clinical programs over the past year and Bob will provide you more details on the status of the clinical pipeline in just a few minutes. First, I'd like to highlight FPA008, our CSF1 receptor antibody. We and BMS believe that combining CSF1 receptor blockade with PD-1 inhibition represents potentially complementary mechanisms of action. In September, we're excited to initiate patient dosing in a Phase 1a, 1b clinical trial evaluating the safety, tolerability and preliminary efficacy of the immunotherapy combination of FPA008 with OPDIVO, BMS's PD-1 checkpoint inhibitor. We and BMS are really pleased with the progress that we're making on this program. In November, we also began dosing patients in our Phase 1, 2 clinical trial of FPA008 the orphan disease Pigmented Villonodular Synovitis or PVNS. It's a tumor driven by the CSF1 pathway. In addition, we announced further safety, and biomarker data from a Phase 1 clinical trial of FPA008 in healthy volunteers and rheumatoid arthritis patients. These results provided insight for the design of our current trials. In October, we're really pleased to establish our licensed collaboration and collaboration with BMS for the development and commercialization of FPA008. BMS is a recognized leader in immuno-oncology, and we believe this collaboration will optimize the potential of FPA008. Importantly, we're running the current upheaval OPDIVO FPA008 combination trial and we have preserved the right to combine FPA008 with compounds in our pipeline. We'll cover the attractive financial terms of this agreement later in the call. Now, beyond FPA008, we also made great clinical progress on FPA144, the humanized monoclonal antibody as a targeted immune therapy for tumors that overexpress FGF receptor 2b. We continued dose escalation in the Phase 1 study to evaluate the safety and pharmacokinetics of FPA144 in patients with solid tumors, including importantly some patients with gastric cancer. At ASCO GI in January of this year, we announced encouraging early responses in patients whose tumors overexpressed FGF receptor 2b. Bob will review these clinical data in just a minute. We're now in a dose expansion part of Phase 1 in the same selected population and we're excited about the potential for bringing a new therapeutic to these patients who have a poor prognosis and a significant unmet need. If the data continues to be positive, we intend to explore the accelerated approval path for FPA144 as a single agent in the setting of refractory gastric cancer. We've also made significant progress in our immuno-oncology discovery programs throughout this year. We're advancing multiple preclinical programs and we expect to have two of these entering IND enabling studies by the end of the year. Importantly, with more than $500 million in cash, we're well-resourced to execute our objectives and to advance our immuno-oncology clinical and preclinical programs. Now, let me say a few words about changes in our FP-1039 relationship with GSK. As we disclosed in our earnings release this afternoon, GSK notified us that they'll return their FP-1039 rights to Five Prime and the license agreement will terminate in 180 days. That'll be around September 5, 2016. We plan to work with GSK to ensure completion of the ongoing mesothelioma arm of the Phase 1b trial and make a smooth transition of this program back to Five Prime. The terms of this transition will be described further by Aron, but they allow us to obtain at GSK's expense, sufficient clinical data to make decisions on future trials of FP-1039 in mesothelioma. It's a reasonable outcome for Five Prime and patients. We're pleased to consolidate the worldwide development rights that will give us control over the development of FP-1039 and importantly, give us clarity on the path forward. We look forward to the completion of the trial in patients who have mesothelioma, again, a tumor with high unmet need and high mortality rate. With that, I'd like to turn the call over to Bob, to give a more detailed update on the clinical programs.

[Robert Sikorski:]

Thank you, Rusty. We provided a schematic of our current trials in Slide 3. FPA008 is our antibody that inhibits the CSF1 receptor. In preclinical models, CSF1 receptor, in addition, has been shown to block critical activation and survival signals from macrophages. Our clinical trials are designed to test the causal role of macrophages in multiple tumor settings. In September 2015, we initiated dosing in cancer patients in the Phase 1a, 1b clinical trial. In Phase 1a, we're focusing on the safety and tolerability of FPA008 as a monotherapy and as a combination with OPDIVO. In Phase 1b, we will focus on the potential efficacy of the combination in multiple tumor types. Let me note that this is a biomarker rich trial. We perform biomarkers of each -- we perform biopsies of each patient's tumor before and after treatment to assess the effects of blocking the CSF1 receptor in the local tumor microenvironment. Clues from actual tumor analysis may help us understand who may respond to FPA008 and inform discovery and development of our future pipeline of immunotherapy. Because we are adding additional patients to refine our dose in Part 1a, this will add about a quarter to our overall timeline. We now anticipate completion of the Phase 1a dose escalation portion in the second half of the year and will expand the study to approximately 240 patients in Phase 1b. Phase 1b comprises of 8 cohorts across multiple solid tumor settings. Each cohort will begin enrolment at roughly the same time. Given the variety of tumor settings, results from the cohorts are likely to emerge at different times. If we see significant activity in any one of these cohorts, a follow-up study in that setting can be initiated before the rest of the trials finished. Additionally, we'll work with BMS on the appropriate venues in which to report data from this trial. Turning to another disease setting. We're also studying FPA008 in a rare disease called PVNS. This is a tumor in which the joint macrophages and monocytes proliferate due to high levels of CSF1 production in the joint. FPA008 blocks the receptor for CSF1, so the mechanistic logic in this setting is strong. There's significant morbidity associated with this tumor setting, with pain and loss of joint function that is debilitating the patients. We recently submitted and received orphan drug designation for FPA008 in PVNS. Additionally, we collaborated with an academic group to design and implement an epidemiology study to assess the incidence and prevalence of this rare disease. The results have been submitted for presentation at the 2016 ASCO annual meeting. In the third quarter of 2015, we initiated patient dosing in our Phase 1, 2 PVNS clinical trial. We expect to initiate the Phase 2 expansion in mid-2016. Part of the trial will -- this part of the trial will focus on obtaining tumor response rate and duration, measures of pain and joint function and additional safety data. Now turning to FPA144. This is our humanized monoclonal antibody in clinical development as a targeted immunotherapy for tumors that overexpress the FGFR2b protein. FPA144 is designed to block tumor growth by two distinct mechanisms. First, we engineered modifications into FPA144 to recruit natural killer cells into the tumor microenvironment and drive immune-based killing of tumor cells. Second, FPA144 selectively binds to only the FGFR2b isoform and prevents the binding of certain fibroblast growth factors that promote tumor growth. During the fourth quarter of 2015, we completed dose escalation in the ongoing Phase 1 trial of FPA144. We then began expansion at a 15 milligram per kilogram dose in selected gastric cancer patients, whose tumors overexpress FGFR2b. As determined by a proprietary IHC diagnostic assay. FPA144 is highly selective against FGF receptor 2b, the gene for which is amplified in about 5% of gastric cancer patients. The gastric cancer population worldwide bearing this gene amplification is approximately 80,000 patients, but is an orphan disease in the U.S. In January 2016, we presented preliminary data from the dose escalation portion of the trial at the ASCO GI meeting. Some of the data are shown in slides 4 and 5. Of the six evaluable patients with IHC 3+ FGFR2b positive gastric cancer in part 1b 2 had partial responses and 3 had stable disease as assessed radiographically by RECIST criteria. A partial response was also seen in a bladder cancer patient, from Part 1a whose tumor had a moderate level of FGFR2b expression. This suggests that FPA144 may have the potential for activity in additional types with comparable levels of expression. Antitumor activity was noted in doses ranging from 3 milligrams per kilogram to 10 milligrams per kilogram. All of which were lower than the 15 milligram per kilogram dose we're now studying in the dose expansion portion of the trial. The FPA144 was well tolerated and the safety profile appears differentiated from the small molecule kinase inhibitors that are targeting the pathway. No dose limiting toxicities were observed and a maximum tolerated dose was not reached during dose escalation. Based on these encouraging results, we continue to evaluate FPA144 as a monotherapy in refractory gastric cancer as a combination therapy for gastric cancer, and as a potential treatment for other types of cancer. In January, we held an advisory board meeting with leading GI, oncology and clinical investigators. Our advisors unanimously concluded that the drug appears to be active and has a good safety profile as compared to small molecule kinase inhibitors. We submitted an abstract for presentation at ASCO and expect to present preclinical data on the immune based mechanism of action of FPA144 at the AACR annual meeting in April. I will now turn to FP-1039, an FGF ligand trap. GSK presented data from the ongoing Phase 1b trial in patients with squamous non-small cell lung cancer and mesothelioma at the World Conference on Lung Cancer in September 2015. In January 2016, GSK and Five Prime agreed to stop enrolment in the squamous non-small cell lung cancer cohorts, given the change in treatment paradigms following the approvals of KEYTRUDA and OPDIVO in this setting. In addition, the companies agreed to continue to enrol up to 30 mesothelioma patients based on encouraging preliminary data from the mesothelioma arm of the trial. Recall that FP-1039 is being added to the standard of care, frontline regimen for mesothelioma, cisplatin and pemetrexed. Enrolment continues to go well, and GSK has submitted data from the mesothelioma arm for presentation at the ASCO annual meeting in June. We look forward to determining whether the response rate with this regimen is maintained in this mesothelioma trial and that the responses are durable. In summary, we're excited about the progress we've made across our clinical programs and look forward to providing future updates. I will now turn it over to Aron to discuss our collaborations.

[Aron Knickerbocker:]

Thank you, Bob. First, I'll review our collaboration agreement with BMS for FPA008. This antibody is a product of the Five Prime platform, and our initial discovery of IL-34, a key regulator of macrophages. We brought it all the way from target to the initiation of Phase 1 study just before the collaboration was announced in October. The financial terms are exceptional both upfront as well as downstream. Recall, we received $350 million upfront and are eligible to receive up to $1.4 billion in development and regulatory milestone payments. In addition, we'll receive tiered royalties in the high teens to low 20s percentages with an additional low single digit percentage royalty on U.S. sales if we exercise our option to co-promote FPA008 in the U.S. Next, I'd like to turn to our GITR Agonist program. In the third quarter of 2015, we licensed novel, potentially best in class, multivalent GITR antibodies from inhibitors, and this is a good example of how our platform can get us insight into important targets for immuno-oncology. Through our comprehensive protein library and proprietary in vivo screening technology, we identified GITR as one of the most potent inhibitors of tumor growth. We in-licensed these particular GITR antibodies because their unique multivalent format facilitates clustering of GIRT on T-cells which should result in superior T-cell activation, compared to conventional bivalent antibodies. Finally, let me provide you some further context regarding GSK's business decision to return the rights to FP-1039 to Five Prime. As you know, GSK sold its commercial oncology assets to Novartis in March of 2015, and publicly stated that they would exclusively focus on two areas of oncology, immuno-oncology and cancer epigenetics. FP-1039 really doesn't fit in either of these two strategic areas of focus. As a result and given the modest market potential for mesothelioma, GSK's decision to end the agreement is not unexpected. However, for a Company like Five Prime, mesothelioma could represent a potentially attractive market opportunity and the fact that it's an orphan indication in the U.S. could be an advantage. Under the terms of the agreement, GSK will continue to conduct and fund the trial until September 5, 2016. We may elect to either take over management of the program after September 5th. In this case, GSK will continue to bear the expense of the trial for up to an additional 180 days, until March 4, 2017, or alternatively, we could elect that GSK wind down the trial at their expense. Overall, the arrangement allows us to obtain a robust data set from the mesothelioma arm. Our decisions on future development of FP-1039 will be based on whether the response rate of our frontline regimen in this mesothelioma trial is maintained and whether the responses are durable. I'll now turn the call over to Marc to review our financials.

[Marc Belsky:]

Thank you, Aron. I'll now briefly cover the financial highlights. The full details can be found in the press release we issued this afternoon, as well as Slide 6 and 7. As Rusty said, we have a strong balance sheet. Our cash, cash equivalents and marketable securities totalled $517.5 million on December 31, 2015. Net income for the fourth quarter of 2015 was $296.1 million or $11.37 per basic share and $10.63 per diluted share. Full-year 2015, net income was $249.6 million or $9.73 per basic share and $9.23 per diluted share. This increase in net income from the prior year was primarily related to the $350 million upfront fee received under our FPA008 collaboration with BMS. Collaboration revenue was $363.3 million for the fourth quarter of 2015 and was $379.8 million for the full year 2015. This was also an increase over the prior year, primarily due to revenue recognized under the collaborations with BMS, UCB and GSK. R&D expenses totalled $21 million for the fourth quarter 2015, and totalled $70.2 million for the full year 2015. This increase was -- over the prior year was primarily related to advancing our FPA008 program in immuno-oncology and PVNS and advancing internal immuno-oncology research and preclinical activities, including expenses related to in-licensing GITR antibodies. G&A expenses totalled $8.6 million for the fourth quarter of 2015 and totalled $22.6 million for the full year 2015. This increase over the prior year was primarily due to increases in personnel related expenses including stock-based compensation and facility recruiting costs related to expansion of our operation, and looking ahead, we expect full-year 2016 net cash used in operating activities to be less than $120 million, comprising less than $90 million used in operations and less than $30 million used for tax payments. We estimate ending 2016 with approximately $400 million in cash, cash equivalents and marketable securities. I will now turn the call back to Rusty for closing remarks.

[Rusty Williams:]

Thanks Mark. As I mentioned at the beginning of the call, we're working to change the immune landscape in tumors. We'd like to translate the scientific insight we have in the new products and especially products that others are working on. So, instead of developing antibody formats against the same set of publicly known targets, we're using our platform to find new targets, to identify new ways to manipulate the immune cells in a tumor microenvironment. You can see some of these cells on Slide 8. So, we already have a macrophage inhibitor with FPA008. We have an NK cell recruiter with FPA144, we have a T-cell agonist with our GITR agonist and we're working hard this year on additional targets for CD8 T-cells, T reg cells and we'll approach and MDSCs myeloid-derived suppressor cells in the future. Now, I'd like to draw your attention to Slide 9. It recaps our upcoming data announcements and milestones. So to summarize, we've made really good progress in our immuno-oncology programs this past year. We plan to build on this progress through continuing our clinical trials and adding to our pipeline. We believe our differentiated pipeline as well our unique approach and our strong balance sheet, all position us well to achieve success and to create stockholder value. So, finally, before opening up the call for questions, I'd like to extend my deepest gratitude to our employees. They have unwavering dedication. They worked really hard. I'd also like to thank the many patients, investigators and opinion leaders who take part in our clinical trials. So now, I'd like to open it up to questions.

[Operator:]

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

[Jonathan Chang:]

Hi, it's Jonathan Chang stepping in for Michael. Thanks for taking my questions. First, for FPA008, when can we expect to see clinical data from the OPDIVO combination study and the PVNS study?

[Rusty Williams:]

I'm going to let Bob Sikorski take that one.

[Robert Sikorski:]

Thanks, it's a good question. So, just to recap. We're in the early parts of the study as you can see, both exploring the monotherapy activity of this drug in cancer patients for the first time, and in combination with OPDIVO. So just to set the stage, we're early days and we do have a business partner, BMS, which we work extremely closely with, and quite well with. So, I think it's going to be a joint decision between us and BMS. We haven't made any commitments to it, but early on when we made this agreement with BMS, we were committed to having data released in a timely fashion, we still are, but again this is a joint decision between us and BMS.

[Jonathan Chang:]

Understand, and second, how are you thinking about plans for evaluating FPA144 in combination with immune checkpoint inhibitors given the preclinical data you'll be presenting at ACR?

[Rusty Williams:]

Yeah. So, of course, we'd like to direct you to those data at the AACR. They're really interesting. We don't want to sort of pre-forecast that too much, but suffice it to say that FDA144 does have an immune function altering activity. It really does alter the tumor microenvironment in ways that look like the tumor cells will be killed by immune cells and it suggests combination of immunotherapy. I'm going to have to sort of leave it at that at the moment, but after you see that poster, then get back to us and we'll give you some more insight. Bob, do you have any more to add on that?

[Robert Sikorski:]

Yeah, we wish we could tell you more, but obviously we're a bit embargoed here. So, take a look at the data we're going to present at AACR, and that's preclinical data. It really lays the foundation for our thinking, the immunotherapy aspect of this drug. The data we presented to date at GI ASCO which was in January, showed some really encouraging, albeit early clinical activity. We saw the partial responses in two patients confirmed in another patient with the targeted gastric cancer abnormality, FGFR2b overexpression. We also saw the activity unexpectedly in a patient with bladder cancer, who had not only a partial response that was confirmed but pep activity, which showed, decreased to almost zero metabolic activity. So, there is not only upside here for a combination as you point out with the checkpoint inhibitor, but expansion potentially outside of gastric cancer for this molecule. Now, the specifics, as Rusty pointed out, of our approach with the PD-1 checkpoint, we haven't disclosed yet, but obviously it's high on our mind. It's quite interesting.

[Jonathan Chang:]

Great. Thank you. And, if I may, just one more. For FP-1039, are you thinking about potentially re-partnering this asset?

[Rusty Williams:]

Our focus right now is getting the data on mesothelioma and so we're partly into that and that's what our current focus is, and we'll decide in the future based on the data, based on what we have on our plate, how to manage this asset.

[Operator:]

Thank you. Our next question comes from the line of Kennen MacKay from Credit Suisse. Your line is open.

[Kennen MacKay:]

Congrats on the year, it's been a great year. So, maybe just a quick one for Bob. Could you maybe just go back through the, what the change was in the FPA008 trial that's sort of leading to the delay? I think I missed that on the call.

[Robert Sikorski:]

Yes, hey Kennen. Thanks for the kind words there. Appreciate it. So, yeah I did note that. We just want to be transparent here about any changes to the program and that's all we're trying to do. This change is really driven by the fact that we really want to maximize the amount of FPA008 we can deliver in this trial. Again, these are early days in the trial and before we make such a large commitment to a 1b, which now has 240 patients in it. So, it's not a small trial. We wanted to refine our dosing paradigm in that and to do that, we had to make some changes to the trial which we felt were too limiting. So, it's really around maximizing the dosing and getting the dosing right before we expand into such a large effort, which includes eight tumor types and again, we will get to that point, but it will take a little bit of a delay here to get to the total maximum dose. We really want to deliver in those patients.

[Kennen MacKay:]

Got you. So that's really to incorporate sort of an additional dose cohort there? That's what it sounds like or a few?

[Rusty Williams:]

We need some more patients. Yeah, that's the [indiscernible] we just think we need to add a few more patients in a dose cohort. So, Bob?

[Robert Sikorski:]

Yeah, just there's a lot of upside here too. We're going to add some additional patients. These patients, we will have pre-imposed biopsies that are mandated. I can't underscore how useful that's been to us. We really, as Rusty pointed out, believe that really scientifically understanding the changes in the tumor microenvironment guides not only FPA008, but it has really guided the way we look at oncology drug development within the Company. So, there's more patients in phase 1a now, and there's going to be more translational data, but again, the price for that is a slight delay. We think about a quarter seems about reasonable for the amount of work we want to do before we expand.

[Kennen MacKay:]

Got you, okay, terrific. Then, maybe just one for maybe Marc or maybe Aaron, I'm not sure who would addresses this, but just going back to FP-1039, it sounds like all the expenses for the mesothelioma trial are covered by GSK and so there's not really any changes to the expense forecast for 2016 that we should sort of be anticipating if you do decide to continue outside of another sort of clinical trial?

[Marc Belsky:]

That's correct, Kennen, there's no change to the guidance that we've provided in our cash runway or expenses for 2016.

[Kennen MacKay:]

Got it, and then just on thinking about that drug correctly, that's at the 15 milligram per kilogram dose not the 20 milligram per kilogram dose correct?

[Robert Sikorski:]

Yeah, that's right.

[Kennen MacKay:]

Okay, terrific and then, maybe just one more for Rusty as well, if I may. Just wondering if there are any plans to hire at the CMO position to potentially replace Julie.

[Rusty Williams:]

I think we have a really -- a lot of expertise in-house, I think. We have a deep group and quite a lot of knowledge base and, I think, we're well staffed right now. So, I think we're fine.

[Operator:]

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

[Eun Yang:]

Thank you. Question on the 08, so when you combine immunotherapy product, sequence of combination could be important. So, have you shown in anymore studies that combining the 08 with anti-PD-1 together is better than giving them sequentially?

[Rusty Williams:]

So, Eun, thanks for that question. It's insightful and we do spend -- we spent a lot of time with this consideration, because I believe it's right that the order of these immunotherapies is an important consideration, not only the order, but the regimen itself. We don't have any more guidance to give you on this at this point in time, but I think you've landed on something not just for our trials but for these trials in general, but I think it is an issue that we need to think about going forward. Bob, do you want to make a comment?

[Robert Sikorski:]

Yeah, great question. In our current trial, we want to address that head on. If you look, we have two cohorts in lung cancer, right. So both are going to get FPA008 plus [indiscernible]. One will get it upfront, patients who're naive to PD1 inhibition and one will get it post PD1 factoring. So, we're trying to key some of that out actually in the trial we have right now, whether you get it upfront or whether you, FPA008 where the combination is provided after PD-1.

[Eun Yang:]

Thank you. Then question on 144. So, the 144 is very specific to FGFR2b, but you see it target 2c as well as a competitor product. What would be the potential side effect?

[Rusty Williams:]

Yeah so, the targeting 2b is an advantage. 2b and 2c are often expressed in normal tissues, co-expressed and so, if you target, like the skin, just to give you an example, and it's 2b that's overexpressed selectively in tumors, at least the tumors that we've been working on, and so, if you target 2b selectively, you're more likely to get the bias towards tumors than normal tissues. So, we think it is important to be selective. It's not easy to get an antibody that's selective for 2b, and so, we think it's a big advantage having 2b selectivity, because of the fact that both isoforms are expressed in normal tissues, but only one in tumors.

[Eun Yang:]

But if you target 2c, is there some side effects that you expect?

[Rusty Williams:]

Well, I can tell you an experiment done by one of my colleagues' years ago. If you knock out FGF receptor 2b, you get a very mild phenotype in the skin. If you knock out FGF receptor 2c, you get a similarly mild phenotype, but if you knock out both, these animals have bad skin, I mean really bad skin. So, that's just the knockout experiment that gives you some insight into that. So, we started -- the reason we went into this -- we were interested in this 2b selective antibody was because we had that background information. That's public information.

[Eun Yang:]

That's helpful. Then my last question is on bladder cancer. So, with 144, you saw a confirmed PR and metabolic response with bladder cancer, although the patient tumor had low level of FGFR2b overexpression. Do you know what percent of a bladder cancer in general have overexpression of FGFR2b, whether it's low or high?

[Rusty Williams:]

Yeah, so just to clarify, the level of expression was what we grade as 2+ in that particular part. I wouldn't necessarily call it low, but it's not as high as the highest ones we see in gastric cancer. So, just to kind of gauge that. If I had to put a label on it, I would call it moderate. The short answer to your question, how many bladder cancer patients have that expression? We don't have clarity on that yet, but we're working -- obviously working very hard on that. So, could be that this is the only bladder cancer in the universe that has it, I doubt it, but we're working hard to get an answer to that question. It's obviously -- in bladder cancer and in other tumors, so our 2b has also been found in ovarian cancer kind of carcinoma and some triple negative breast cancers. So we're working hard on all of those, but now the bladder is increasingly important to us.

[Operator:]

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

[Jim Birchenough:]

Thanks for taking the questions and congratulations on getting 1039 back. It seems like it's in the right hands now. On 144, just a question on 144 in terms of whether you have any sense of what might be the threshold for seeking accelerated approval both in terms of response rate and response duration, and if you don't know the answer, when you might secure that answer from FDA and then I have a follow-up.

[Rusty Williams:]

Yeah, thanks. Obviously FDA is the one to give a definitive answer on that, but we do have some ideas from our KOLs about the performance, what the expectation is of a therapeutic in gastric cancer. Maybe Bob can just give you a little bit of insight into that. We don't have a clear answer obviously on what's going to have accelerated approval, but Bob?

[Robert Sikorski:]

Thanks for the excellent question. Obviously, it's on top of our minds as well. As I did note, we held a relatively large gastric cancer advisory board meeting which would have all of the key investigators and what we conclude is the following. One, it was a very safe drug. That was the one thing they mentioned above even the activity. The second thing was, when we pulled what kind of activity would be meaningful, it's really quite moderate in the setting we're looking at, maybe 20%, 25% response rate and durability really is not so much an issue here. We're talking about the refractory setting with terminal cancer patients. So, you're looking at moderate response rates with some durability and our goal would be to add a few more patients where we are in our Part 2 of this study and go to the FDA quickly to address that.

[Jim Birchenough:]

Great, and just in terms of what else you might've learned from the initial cohort of patients, do you have a sense in terms of any differences between the responders and the non-responders for 144? Are there different driver mutations that may be overwhelming inhibition of FGFR2b? Just trying to get a sense of [indiscernible] population based on what you know about responders and non-responders?

[Robert Sikorski:]

Yeah. Another great question. It's multifactorial. I think you're headed towards the gnomic changes that may be different, but there's other things to think about too. Remember, this is an immune active compound. So, things like PD-1 status and immunome filtration are also important, we think and those are things we are increasingly looking at. That's the only thing I want to telegraph here. Also, the level of expression can vary quite widely. Most of these, all of the patients, certainly we've looked at have amplification, but again, your expression of FGFR2b in the [indiscernible] primary tumor can be a driver, so there's a few other factors than the genetics, I think that you're alluding to and we're looking at those right now.

[Jim Birchenough:]

And maybe just a higher level question perhaps for Rusty, when you think about what you guys are endeavouring to do in terms of interrogating the entire immunome, what's the likelihood that we should expect additional targets to emerge from that effort this year or do you think you're close to something? Just trying to get an update on how that's going in terms of identifying next-generation targets in immuno-oncology.

[Rusty Williams:]

Yeah, thanks Jim. So, we have two agents that will be in IND enabling studies by the end of the year is our expectation. And we'd like to get at least one of those into the clinic next year, by the end of next year and the other shortly behind that, and then more after that. Just to give you an idea of the pace. I will say that one of those two is something that we think, is not in anyone's pipeline is a result of our discovery efforts and what's not covered by these comments I'm making now is that we have some really interesting targets coming along behind these. They're all early, but they're quite interesting. So, we're reluctant but the numbers on those are -- they certainly are reluctant to give out the names of those fir competitive reasons, and I would love to, by the end of the year, show at least qualitatively, what are some of the things, some color on what we're finding and so that would be our goal, beyond these things that I've just described to you.

[Operator:]

Thank you. Our next question comes from the line of Chris Marai from Oppenheimer. Your line is open.

[Chris Marai:]

Congrats on the year, Rusty and team. I was wondering if you could further maybe elaborate on FPA008 and maybe what you're seeing there. I assume, based on prior data, it's not a safety concern that might be why you wanted to drive those further. Are you driving those beyond what you've seen or what you've done previously in the clinic? Then two, was there anything with respect to target engagement or the PK of the molecule or anything in the pre-and post-biopsy that's leading you to push the dose further here? I assume it's not safety. Thanks.

[Rusty Williams:]

Thanks, Chris. So we're not -- we can't give out the specifics yet of the data. The one thing I can say is that we're not seeing any new types of adverse events than we've reported in the past. We've had a poster in the past at AACR describing adverse events. So, we're not seeing anything, any types of events other than those. We do think, I mean in any kind of therapeutic program and I know this sounds like too much of a generality, but as Bob said, we like to push the dose as high as we can. We do have a dose we could move forward with, but we'd like to push a little bit higher than what we've since that dose and so, that's why we're pushing on this. And, so I have to leave it at that and we're pleased with the progress, overall of this program. We and BMS are. So, I'll just leave it with that. This is a refinement of the dose. It's not a big leap above or below where we've given you guidance before. It's a refinement.

[Chris Marai:]

Okay, and then maybe a little bit to do with 008, you previously, I guess, discussed on the call that you're looking at various targeted molecules and those would include sort of other I/O active compounds or other I/O targets such as MDSCs. It was my understanding that probably 008 also targets MDSCs. Is there any data that suggests that maybe it's not doing that? I know the preclinical work out there, the literature highlights that's doing that. So, has anything changed there or you're just looking at potentially a molecule that is even more targeted to MDSCs?

[Rusty Williams:]

I think that, there are some MDSCs that are M2 macrophages and so, there's overlap and interface of macrophage -- tumor-associated macrophages in MDSCs is kind of a grey area, but there are MDSCs that are not clearly macrophages or M2 macrophages, and those, we think provide possibly, more opportunity beyond the M2 macrophages. This is -- I don't know that for sure. It's just our guess and I think, others in the field believe that's possible too. It doesn't attract anything at all from our interest in 08 and blocking M2 macrophages. Just says that there may be other cell types too. I think, as people, we and others characterized in detail, for example, with our biopsies in this trial we're running right now, [indiscernible] as we characterize in detail, the tumor -- the types of immune cells in the microenvironment, we learned a lot, we'll know more from that. I think we'll learn more from these clinical -- analysis for clinical specimens than we will from preclinical experiments, and so, I think the best thing is stay tuned on that data from us and from other people with the respect to the role of MDSCs.

[Chris Marai:]

Got it, okay and then a real easy one Rusty. Just 1039, thinking about potential combinations with maybe some of your current partners, compounds, obviously the lung data look a little bit better. Should we assume that lung is sort of where you're going to try to push this molecule forward now that it's your own or do we just have to wait and see on the mesothelioma data as well? Thanks.

[Rusty Williams:]

I think, where we are with the FP-1039, as of today is, we're in mesothelioma. That's the ongoing trial. That's where we're getting more data, and so, I think FP-1039 has potential applications outside of mesothelioma. Remember mesothelioma is cancer that makes the highest level of FGF2 and that's why we and GSK picked that one, but there are others that are close to it in terms of producing FGF2 and so there are potential indications beyond mesothelioma. Having said that, we are where we are on this and that's in mesothelioma and so, I think that the future of this program will likely be gated on clinical success or failure in the mesothelioma trial. That's at the moment. That's what we have to say about it. I think that there are potentials beyond mesothelioma, but that's where we are right now. We have -- we're pretty far end of this and that's -- mesothelioma is kind of the [indiscernible] at the moment for us.

[Operator:]

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

[Tony Butler:]

Thanks very much. Rusty, Bob, just some clarification on 1039, if I may. In the, if you go into trials, obviously the data verified up through February continued to have GSK, but moving beyond that, the question about the net number of patients that need to be enrolled of 120 obviously included lung as well, the question that I'm trying to ask and I think you alluded to this is you needed 30 additional mesothelioma patients using 1039 with cisplatin, is that correct and I guess, the follow up to that, if I'm not mistaken, the readout was originally as specified in clin trials in October of this year, we're going to get dated ASCO on a partial subset and what I'm trying to actually get toward is will we have the full data set by the fourth quarter? Thanks very much.

[Rusty Williams:]

Okay, thanks Tony. I'll let Bob take this.

[Robert Sikorski:]

Yeah, yeah. Maybe Aaron can help me do the math here, a little bit, it's not 30 additional patients. So, remember in the Denver meeting last year, the World Lung Meeting, we presented data on 13 mesothelioma patients. This is the cohort where we're shooting for 30 total. So, obviously we had 13 at that point in time. We've advanced that trial further, and we're committed to getting to 30 patients. What we need to see in these 30 patients is not only response rate that's better than cisplatin and pemetrexed but durability of those responses that would make us to have a strong conviction for moving forward. We are guided by the data from bevacizumab, cisplatin and pemetrexed where they showed sort of about a 7.5 month progression free survival on that setting. So that kind of are the metrics we're looking for, increased progression free survival beyond that control arm, if you will.

[Tony Butler:]

And that's why it gets presented at ASCO, the 30 that you will have totally enrolled with some partial PFS?

[Robert Sikorski:]

No, no. So, what will be presented at ASCO is, it's going to be somewhere between 13 and 30. So, 13 from last year and we have a date to cut off that obviously is before ASCO and so it's enrolment driven. I can't give you the exact number, but it'll be more than you saw in the Denver meeting.

[Operator:]

Our next question comes from the line of Kennen Mackay from Credit Suisse. Your line is open.

[Kennen Mackay:]

Thanks for taking the follow up. Just actually, wanted to touch on 1039 one more time, and you sort of mentioned looking at the mesothelioma data when it's mature and sort of having the chance to make a decision then. I was wondering sort of what you saw as the bar to sort of carry that forward into potentially sort of registration or trial there in terms of sort of, I guess, response rates as well as potentially duration of response.

[Rusty Williams:]

Sure, Bob?

[Robert Sikorski:]

Yeah, I can address that. I sort of did a little bit here. So here the pemetrexed, cisplatin gives you a little over 40% response rate. So that's the response rate for the chemotherapy alone. The durability of that, we could use the data from the control arm of the bevacizumab study, which was recently conducted. That'll tell you that you get a PFS of about 7.5 months with that. So, those are the two metrics we're using, 40% response rate, 7.5 months, that's reasonable with current therapies, and we want to do better than that. The nice thing about I think the agreement we have here with GSK is that we think we can get to those metrics within this trial in a robust way to make a decision as the current trial is, so we wouldn't have to change the trial in any way to get to a robust data set, but again, it's enrolment and event driven going forward.

[Kennen Mackay:]

Okay, thank you very much, and so we're seeing three PRs at the last data set, but obviously numbers were small and four patients hadn't yet even been evaluable. So we should sort of be maybe thinking about sort of an improvement from that? You guys have sort of become much more constructive on this mesothelioma program following the lung presentation.

[Robert Sikorski:]

Yeah, you're referring exactly the data set I told you. You're referring in the right way. These are very immature data. We didn't even have first scans on a lot of those patients. So, I wouldn't infer too much from that data in terms of response. Obviously, we're moving forward to 30 patients. So, there must be some encouragement within the trial, but that's all I think we can say, beyond what you saw at Denver meeting.

[Operator:]

[Operator Instructions] I'm seeing no other questioners in the queue at this time. So I'd like to turn the call back over to management for closing remarks.

[Rusty Williams:]

Okay, well I'd like to thank you all for joining us today and for your continued interest in Five Prime and we look forward to updating you in the future. So thanks again.

[Operator:]

Ladies and gentlemen, thank you again for your participation in today's conference. This now concludes the program and you may all disconnect your telephone lines at this time. Everyone have a great day.