Nektar Therapeutics
Q2 2015 Earnings Call Transcript

Published: 6 Aug 2015

[Operator:]

Good day, ladies and gentlemen, and welcome to the Nektar Therapeutics Second Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference may be recorded. I will now turn the call over to your host, Jennifer Ruddock, Vice President of Investor Relations. Please go ahead.

[Jennifer Ruddock:]

Thank you, Stephanie. Good afternoon and thank you for joining us today. With us are Howard Robin, our President and CEO, John Nicholson, our Chief Financial Officer, Dr. Ivan Gergel, our Chief Medical Officer and Dr. Steve Doberstein, our Chief Scientific Officer. On today’s call, we do expect to make forward-looking statements regarding our business including potential regulatory approval decisions and commercial launch timings, the timing of future clinical results, clinical development plans, the economic potential of our collaboration partnerships, the therapeutic and market potential of certain drugs and drug candidates and those of our partners, our financial guidance for 2015 and certain other statements regarding the future of our business. Because these forward-looking statements relate to the future they are subject to inherent uncertainties and risks that are difficult to predict and many of which are outside of our control. Important risks and uncertainties are set forth in our Form 10-Q filed on May 1, 2015 and are available at sec.gov. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future developments, or otherwise. A webcast of this call will be available on the IR Page at Nektar’s website at nektar.com. With that, I would now like to hand the call over to Howard. Howard?

[Howard Robin:]

Thank you, Jennifer. And thanks to everyone for joining us today for our second quarter 2015 financial results call. I would like to spend today's call reviewing the significant progress we've made in the second quarter and highlight upcoming milestones for Nektar over the next 12 months to 18 months. I would like the first focus on the recent successful launch of MOVANTIK and the near-term potential approval of BAX 855. And then I will hand the call over to Ivan, who will talk more about the Phase III program for NKTR-181, a wholly-owned pipeline program of Nektar’s which could address the major problem in our society opioid abuse. We’ll also cover NKTR-214 our new cancer immunostimulatory agent, which is entering Phase I/II with MD Anderson. NKTR-214 has the potential to bring a new mechanism directing selective stimulation of the patient's cancer fighting T-cells for the next generation of cancer immunotherapies. We’re very pleased that AstraZeneca has reported that the launch of MOVANTIK in the U.S. is off to an encouraging start. AstraZeneca launched MOVANTIK at the beginning of April and their U.S. partner Daiichi Sankyo begin contributing to the launch in early May. In the second quarter AstraZeneca reported a rapid uptake of MOVANTIK with over 3000 users. AstraZeneca indicated that more than 50% of the businesses from new therapy starts and there are significant number of patients now take MOVANTIK were previously on OTC laxatives. As many of you have seen AstraZeneca recently initiated an unbranded direct-to-consumer TV campaign which has been running since the end of June. In the first three weeks of July as most of you have observed from the available published IMS figures we are seeing double-digit weekly growth in MOVANTIK prescriptions. Although we are still early in the U.S. launch AstraZeneca and Nektar are very pleased with the growth of both users of MOVANTIK and prescriptions and more importantly the favorable reception that the drug has received so far from both physicians and patients. Also during the second quarter MOVANTIK received approval in Canada and AstraZeneca is planning to launch there in the second half of this year. As you know MOVANTIK is the first and only oral Peripherally-Acting Mu-Opioid Receptor Antagonist or PAMORA to be approved to treat OIC. We believe there is a significant market potential for MOVANTIK in the United States and Europe. In the U.S. there are approximately 38 million patients who take daily opioids to manage their chronic pain. These chronic pain patients have an approximate therapy duration of about 5 months and up to 80% of these patients experience OIC. With this magnitude of patients experiencing OIC and a cost of $260 per month we believe it is not difficult to imagine that MOVANTIK sales could easily reach over a $1 billion annually. In Europe, MOVANTIK is already available in the Nordic markets upon launch in a major European market. Nektar is entitled to another $40 million milestone payment. NICE in the UK recently issued favorable guidance for MOVANTIK and it is now recommended as an option for treating OIC in adults whose symptoms have not adequately responded to laxatives. The first plan launches in major European markets are the UK and Germany, which are expected to occur in the second half of this year. To remind you, there are an additional 12 million patients taking opioids for chronic pain in Europe. So it is also a sizable market opportunity. Nektar will receive escalating royalties on net sales, which in the U.S. start at 20% and in Europe and the rest of the world start at 18%. In addition to these royalties, we also have the potential to receive up to $375 million in sales milestones based on achieving certain annual sales targets. Following the recent accomplishments for the launch of MOVANTIK and the significant level of commitment from AstraZeneca and Daiichi Sankyo to the success of the drug, we remain very positive about the prospects for MOVANTIK as an important new medicine for patients with OIC and its potential ability to provide Nektar with substantial revenue. Now, let’s talk about the next important medicine that we expect to contribute to our near-term path to cash flow positive. Baxalta's BAX 855, Baxalta recently announced the publication in the journal Blood of the pivotal data for BAX 855 and announced that it will be marketed under the brand name ADYNOVATE upon approval in the U.S. The positive data from the pivotal study were originally reported in August of 2014, and supported the BLA filing with the FDA. Based on these highly successful Phase III clinical results for ADYNOVATE, Baxalta anticipates approval and launched by the end of this year. Additionally, Baxalta has submitted a new drug application to Japan's Ministry of Health for the approval of ADYNOVATE. Baxalta has also completed enrollment in the Phase III pediatric trial of ADYNOVATE, which is being conducted in previously treated patients under the age of 12 with severe hemophilia A. Upon completion of this study they expect to file for marketing authorization in Europe in 2016. The study will also support post-approval, label expansion in the U.S. for previously treated pediatric patients. ADYNOVATE is also being evaluated in a PK specific dosing study to support both U.S. and European label expansion and regulatory approvals. As you know ADYNOVATE is the next generation ADVATE, a medicine which has global sales of over $2.5 billion. As an important continuation of the ADVATE brand we are excited about the potential approval and launch of ADYNOVATE later this year. Nektar is entitled to receive mid single-digit royalties on sales up to $1.2 billion and royalties in the low teens on sales greater than $1.2 billion as well as an additional $73 million in development and sales announcements. Again the economic potential of MOVANTIK and ADYNOVATE alone can contribute substantial revenues to Nektar and move us towards becoming a cash flow positive company. Now, I’d like to briefly mention NKTR-102. As we stated on last quarter's call, we continue to work diligently to find a regulatory path forward for NKTR-102 in the U.S. and Europe based upon the BEACON data alone. We expect to complete our regulatory discussions for NKTR-102 before the end of this year. In the area of anti-infectives, Amikacin Inhale and Cipro Inhale being developed by Bayer are also poised to become important new potential medicines. These programs represents significant potential revenue streams for Nektar. Cipro DPI and Amikacin Inhale are both novel drug device anti-infective products that have been granted qualified infectious disease product or QIDP designation by the FDA. Both products are designed to deliver antibiotic deep in the lungs in order to achieve both higher concentrations at the site of infection and lower systemic exposure, thereby significantly reducing the toxicities associated with these agents when administered systemically. Cipro DPI is targeting non-cystic fibrosis bronchiectasis or NCFB. The Phase-III RESPIRE program featured two 48-week multinational, randomized, placebo-controlled studies. One of these studies has already completed enrollment in April of this year and Bayer expects the trial to complete in the first half of 2016. The second study is still enrolling and Bayer expects this study to complete in the second half of 2016. The market for Cipro DPI is estimated to be about $750 million and Nektar will receive an average 10% royalty on net sales. Amikacin Inhale targets gram-negative pneumonia in ventilated patients in the ICU. Bayer is expecting completion of the Amikacin Inhale Phase III program in late 2016 or early 2017. The global market for Amikacin Inhale was estimated to be approximately $700 million which would translate into highly significant revenues for Nektar. We will receive a flat 30% royalty on U.S. sales and an average 22% royalty on ex-U.S. sales. This level of royalty is the equivalent of owning half of the drug. Our strategy has always been to balance our development risk across multiple drug candidates and therapeutic areas. The strategy has served us well and resulted in the deep and valuable pipeline we built at Nektar which includes four Phase III programs, one file BLA and a recently approved and launched medicine. Our clinical late stage partnered programs combined with the revenue streams from MOVANTIK and ADYNOVATE could potentially lead to peak royalty revenue of $750 million annually. With that, I would like to hand the call over to Ivan to provide a clinical update on our internal programs.

[Ivan Gergel:]

Thanks Howard. As Howard mentioned NKTR-181 could emerge as an important drug in addressing the major societal problem of opioid abuse. NKTR-181 is particularly interesting, because it’s designed to be a revolutionary new opioid not a reformulation of an existing opioid and because of this it could represent a significant advance in pain medicine. Importantly it's also been granted Fast Track by FDA. NKTR-181 acts as a full agonist of the mu-opioid receptor and it has unique absorption and distribution kinetics that are related to the actual structure of the NKTR-181 API. NKTR-181 is specifically designed to cross the blood-brain-barrier at a slow rate compared to traditional opioid therapies thereby reducing its potential for euphoria and abuse. Enrollments well underway and is ahead of schedule in the Phase III SUMMIT-07 which began in February of this year. The trial compares NKTR-181 to placebo in opioid-naive patients with chronic low back pain with approximately 200 patients to be randomized into each arm. Patients from this efficacy trial will also be eligible to roll into the long term safety study of NKTR-181 which was also initiated earlier this year. The SUMMIT-07 efficacy trial includes an interim analysis that will allow for adjustments to the sample size in order to maintain appropriate study power to detect a statistically significant difference between NKTR-181 and placebo. Such an analysis is designed to increase the probability of a successful outcome and we expect the SUMMIT-07 trial to be completed in approximately 18 months. In addition, we are currently finalizing the design with the FDA for the second Phase III efficacy study for NKTR-181, which will be conducted in opioid experienced patients. Now, I would want to move on to what we are doing in cancer immunotherapy and in particular what we are doing with NKTR-214, a program that many of you who have been asking about. If we are successful with NKTR-214, we believe it showcases how our technology platform could play an important and unique role in the development of next-generation immuno-oncology therapies. NKTR-214 is a CD122-biased immunostimulatory cytokine which targets the key signaling receptor on the CD8 positive effect to T-cells. These effect to T-cells are the body's most effective tumor killing cells. Activation of CD122 increases the proliferation of these effect to T-cells and this action is what differentiates NKTR-214 from the range of regulatory checkpoint inhibitors in development or approve today. So our objective with NKTR-214 is to increase these tumour killing cells specifically within the tumour without stimulating production of T regulatory cells, which would suppress an anti-tumor response. In preclinical studies using a subcutaneous B16-F10 mouse melanoma model NKTR-214 resulted in a 400 to 1 ratio of CD8 positive effect to T-cells as compared to T regulatory cells within the tumor itself. And to give you an idea of how meaningful this ratio is, in this same model treatment with vehicle resulted in a ratio of 1

[Howard Robin:]

Thanks, Ivan for the clinical update. We are very pleased that the launch of MOVANTIK is off to a strong start that Baxter is looking forward to approval and launch of ADYNOVATE later this year. We’re proud of the pipeline we built at Nektar, which includes as I’ve said four Phase III programs, one filed BLA and a recently approved and launched drug. As I said earlier our clinical stage partnered programs combined with the revenue streams from MOVANTIK and ADYNOVATE to potentially lead to peak royalty revenue of $750 million annually. As we said last quarter we will continue to balance our near-term development priorities and spend with the goal of advancing our pipeline becoming cash flow positive and avoiding dilutive finance. With that said, I’ll turn the call over to John for discussion on our financial results. John.

[John Nicholson:]

Thank you, Howard and good afternoon everyone. I will start with the review of our second quarter 2015 financials and then I’ll go through our annual financial guidance. Total revenue in Q2 2015 was $22.7 million versus $28.5 million in the second quarter of 2014. The decrease in revenue was due to lower milestones from our collaboration partners, partially offset by higher product sales. Total operating costs and expenses for the second quarter 2015 were $66.1 million versus $51.4 million in the same quarter a year ago. The increase is primarily driven by increased R&D expenses as a result of our NKTR-181 Phase-III program as well as increased cost of goods sold. R&D expense in Q2 2015 included the ongoing NKTR-181 Phase III program, including SUMMIT-07 the 12-week efficacy study and SUMMIT-08 the long-term safety study. The commercial scale up for device production for Amikacin Inhale program, ongoing monitoring expense for patients still in the NKTR-102 Phase III BEACON study, IND enabling manufacturing and final preclinical activities for NKTR-214. Research and development expenses also included $3.6 million of non-cash stock-based compensation and depreciation expense. For the second quarter 2015, G&A expense was $10.2 million, which included approximately $2.4 million in non-cash expenses. Cash and investments at June 30, 2015 were $279.7 million as compared to $325.8 million at March 31, 2015. Our year-end cash guidance for 2015 remains unchanged and we still plan to end the year with approximately $200 million in cash and investments and does not include any royalties from MOVANTIK. This represents a net use of cash of approximately $63 million in 2015. As Howard stated, the launch of MOVANTIK by AstraZeneca occurred at the end of the first quarter. However, our cash and revenue guidance does not include projections for royalties from net sales of MOVANTIK in the U.S. and Europe. We believe it'll be more appropriate to provide guidance once there is an established sales history for the product. As a reminder, we recognized all royalties on net sales one quarter in arrears. Revenue for 2015 is still expected to be between $215 million and $225 million including $19 million of non-cash royalty revenue. We expect to recognize a $40 million milestone payment in the fourth quarter of 2015 following the first commercial sale in either Germany or the UK Additionally, we expect to recognize a $10 million milestone from Baxter in the fourth quarter upon approval of BAX 855. Other than the milestones discussed, we expect the remaining revenue for the year will be approximately evenly split between the last two quarters. Again, our revenue guidance does not include MOVANTIK royalties. Our R&D expense guidance is unchanged at a $185 million to $195 million, with approximately $60 million of this as non-cash items, such as stock-based compensation and depreciation expense. 2015 G&A is also unchanged it is anticipated to be between $42 million to $44 million, which includes a $11 million of non-cash expense. And let me remind you again, our cash guidance for the end of the year is unchanged and we still expect to end 2015 with $200 million. With that I’ll now open the call to questions. Operator?

[Operator:]

Thank you. [Operator Instructions] Our first question comes from Jonathan Aschoff with Brean Capital. Your line is open.

[Jonathan Aschoff:]

Thanks. Hi, guys. I was wondering could you tell us if any additional promotional initiatives will come in the near future from Astra or Daiichi Sankyo. And I guess another thing on MOVANTIK would be – when the sales force does receive pushback from docs how would you characterize that pushback?

[Howard Robin:]

Okay. Hi, Jonathan, good question. Look I certainly can't be specific and I don’t want to be specific, but I know that AstraZeneca certainly has a direct-to-consumer branded program, advertising program and television program planned as physicians become more comfortable and more aware of MOVANTIK. So right now, they're running unbranded ads and I think at some point in the future they will be running branded television ads. But I'm really not a liberty or it’s probably inappropriate for me to speculate on when that might be, but it’ll certainly be coming. In terms of pushback that sales reps get from physicians I think overall it's what you would expect when you're launching a new therapy into a much underserved market. You go to physicians they’re not necessarily willing to admit that their patients have OIC. The pain specialist probably a little bit more than the primary care docs are willing to admit it, but generally speaking our physicians have no way to treat OIC because let's be realistic laxatives don't work and even other therapies that are not PAMORA’s don't work that well. So physicians don't have many options and they sort of ignore the fact that patients have OIC. Now you come along with a drug that specifically targets this condition to be a very targeted mechanism and it takes a little bit of time to get physicians to acknowledge that their patients have it to ask their patients about it et cetera. I would say this though as the physicians learn how many of their patients have OIC and they'll tell you that’s the vast majority of their patients that are taking chronic opioid therapy. They also readily understand how the mechanism works however it PAMORA works, it’s a very, very logical construct and because of that the adoption is pretty rapid. As I said we are very pleased with the reception we are getting from physicians and patients, but you got to get through that initial barrier because you're launching a drug and you are building a market that doesn't exist. And I think they're off to a great start.

[Jonathan Aschoff:]

Thanks for that. I was wondering for NKTR-181, what is your sense of the maximum number of patients you might have to add and how much time would that add today really it’s like have you thought about where you actually could have to wind up and like what is that upper end of the range?

[Howard Robin:]

I’ll turn that call over to Ivan to take a stab at that.

[Ivan Gergel:]

Hey, Jonathan. So clearly at the outset we are putting about 400 patient into the study, oh 208 actually for a total of 416 randomized 1

[Jonathan Aschoff:]

That was helpful, thanks. I was wondering could you be a little more specific about what trials you are running with 214 and what you intend to spend on it next year at least?

[Ivan Gergel:]

Well, certainly as you know we intend to initiate 214 at the end of this year, we have to have the first patient in it; we are running with MD Anderson and at Yale. The first part of the study will be a dose escalation in multiple tumor types and then once we have seen the early results of that we intend to go into those expansion cohorts.

[Howard Robin:]

Yes, we don’t generally discuss the specific cause of trial Jonathan, but I would tell you that what we’re doing these Phase I/II trials at MD Anderson and certainly this is potentially a very, very important cancer immunotherapy agent and if works while no one could be certain, we are hopeful that these Phase I/II trials could function as pivotal trials. There is no guarantee that we will get there, but I think that's certainly something that we’re hoping for and if we see the kind of results in humans that we’ve seen in our preclinical models it should be very impressive. So at least conceptually we’re thinking about these Phase I/II programs is potentially pivotal we would say.

[Jonathan Aschoff:]

Okay, I mean lastly really briefly some $11.7 million in product sales and royalty, is that just a bump, a temporary bump because that numbers been kind of bumping around or is just something from which you intend to grow?

[John Nicholson:]

To be honest with you Jonathan from a gross standpoint we don’t see much growth there based upon what's on the market today because most of that comes from sales for Cimzia, it really going to depend upon whether or not other things that are in Phase II, Phase III are successful going forward. So like if [Alfatec] has a positive Phase III obviously there will be an increase in revenue for us there, but you know that’s all dependent upon their Phase III readout.

[Jonathan Aschoff:]

Okay thank you very much guys.

[Operator:]

Your next question comes from Jessica Lee with JPMorgan. Your line is open.

[Unidentified Analyst:]

Hey, guys this Ryan on for Jess. I appreciate you guys taking our questions. Are there any metrics or comments you can give us on the DTC effort and what you learning from that program. And also can you give us any more color on Tier 2 access. Thanks.

[Howard Robin:]

Well, I think first of all remember the direct-to-consumer program that’s running now is unbranded. The deals with OIC it doesn't deal with MOVANTIK that said there's clearly a benefit to that program and there's certainly if you look at over the last few weeks, double-digit growth of MOVANTIK prescriptions I think it's very impressive. And I think of course it's very important to make sure that that the marketplace understand there is a medical condition here. So, lot of these patients remember a lot of these patients don't talk about it with their physicians because they are embarrassed to talk about the fact that they are severely constipated. And the physicians don't want to discuss with the patients because quite frankly before MOVANTIK was launched there really wasn't any reasonable way to treat these patients other than give them some version of laxative whether it's prescription or over-the-counter. So I think you got allow the patients to understand that there's a viable reason for going to the physician and talking about your OIC. Once the physicians are very comfortable that they understand how MOVANTIK works what it can do the profile of MOVANTIK then I think you will see direct-to-consumer branded advertising start and its up to AstraZeneca when they feel they’re ready to do that. But I would expect it to not be in the - I wouldn't expect to be too far out. But I think overall the feedback that you know that AstraZeneca gets from physicians and patients as they like the drug very much and I think we are very happy with the growth rate. And double-digit growth has really taken off since the unbranded ads have started. So there is no doubt that those television ads are having the desired effect and I would expect the branded television ads that have even more profound effect. I’ll let John talk about the Tier 2 part.

[John Nicholson:]

So as far as the Tier 2 goes basically what AstraZeneca was able to accomplish in the beginning was before the product was even launched they had an agreement with three of the major payers to basically make the product to Tier 2 and they are continuing to work through additional payers as time goes forward. Obviously, for competitive reasons they do not make that information public as who they are.

[Unidentified Analyst:]

Okay and a follow-up question if I may changing to 214, I know that it's early but you know how are you guys thinking about potentially going at it alone with this or potentially bringing on a partner.

[Howard Robin:]

Oh I think look if 214 works the way we expected to work and of course we have to complete our Phase I studies and Phase II studies to get that. I think that's a drug Nektar keeps for itself. I mean if you think about I mean NKTR-214 understand is very, very different from every other cancer immunotherapy being developed. We’re not focused on affecting the regulatory side of the immune system we are directly stimulating the immune system and not allowing the regulatory side of the immune system to down regulate the immune system. So a very, very unique approach is no other molecule that I know that works in that fashion and I think it's absolutely appropriate and doable for Nektar to develop that drug and bring it to market.

[Unidentified Analyst:]

Great.

[John Nicholson:]

Yes, I think just to add to Howard's point that's why MD Anderson was soaking, they were very excited, they remain very excited about working with this, and then one of the reasons we’ve reached out to them and they came back to us. I mean it’s going to be a great collaboration I believe.

[Unidentified Analyst:]

Great guys. I appreciate. Thank you for taking our questions.

[Howard Robin:]

Thank you.

[Operator:]

[Operator Instructions] Our next question comes from Bert Hazlett with Ladenburg. Your line is open.

[Bert Hazlett:]

Thanks. Congratulations on all the progress. Just on the I guess on the 181 program in the second Phase III, you’ve said at this point it’s 18 months to – I think the data readout was what I heard. If that’s not correct, could you correct it? And is that roughly what we should be modeling in for the second Phase III in opioid-experienced patients as well?

[Howard Robin:]

Yes, I think good question. I think you are correct that you shared the first readouts on the first Phase III study in about 18 months. And the study runs about 18 months. And the second study would also be approximately 18 months, but we haven't – obviously we haven’t started that yet and we’re having the discussions with the FDA as to what that study should look like in opioid-experienced patients. I would hope that a positive first 181 Phase III study is bodes well for success in the second Phase III 181 study. But they are not fully running in parallel at this point obviously.

[Bert Hazlett:]

Okay, thank you. Two other questions, just my favorite one on the MOVANTIK line extension/combinations with the underlying opioid. Where does that stand and when do might we hear anything?

[Howard Robin:]

Yes. Look I can't speak for AstraZeneca I think they have an obligation to develop – that’s NKTR-119, they have an obligation under the contract to develop that drug and I can't speak for them as to how they are approaching that and what they're doing. I think they have to be the ones to answer that question for the contract I’m not really allowed to comment on that. But they do have an obligation to develop that drug and you can imagine a number of different opioids that you could combine with MOVANTIK, it's a fairly straightforward process. So at this point I can’t comment any more than that.

[Bert Hazlett:]

Okay, thank you. And then just on NKTR-214, if any of the group was [indiscernible] just the Phase I/II moving to potentially being a pivotal. I know you’ve discussed that in general terms before. Could you put a little bit more of finer point on that and I know it's early days in terms of the collaboration, but any sense in terms of timing when we might get our first look at any kind of data from that study?

[Howard Robin:]

Well, look I’ll turn it over to Ivan. Let me just clarify based on what you said. I think clearly you have to define in the study what kind of response rates you are expecting and if the response rate is very, very profound and robust and combined with an excellent safety profile you can potentially go to the FDA with that kind of data set. But I don't think we’ve fully defined that yet so I’ll let Ivan to talk about timing with you.

[Ivan Gergel:]

Yes. Hi Bert. So look, obviously we’re going to do the initial phase of the study is dose escalation and we envisage that will probably take nine months-ish once we started before we get into dose escalation. Obviously, we are going to hopefully get some nice signals potentially out of that and we’ll be looking at biomarkers will then go into dose expansion cohorts where in that area we are likely be looking at renal cell carcinoma, melanoma potentially non-small cell lung. And if we start to see strong signal there obviously we’ll expand, our expansion cohorts will be looking for signals. Clearly the pathway is when where we’d be looking potentially for – if you look at where other agents have gone - they’ve gone for overall response rates and where they’ve seen meaningful signals in patients that remain for [fraction] to other therapies is clearly a regulatory pathway that way. So if our molecule is robust, if we get good results clearly that's the sort of pathway we’d be considering on taking.

[Bert Hazlett:]

Okay. And just a quick follow-up in terms of biomarkers. Can you illustrate any further what you might be looking for in the early days with the study?

[Steve Doberstein:]

Yes, hi Bert. This is Steve. Yes, look there's a whole array of biomarkers as we know in the immune field and those range from pharmacodynamic markers looking for effects on lymphocytes both in the tumor and in the periphery to the kind of markers that you think might be predictive. And I think the things that have borne out well so far for the checkpoint inhibitors have been things like excellent sequencing for total mutational load, looking histologically for tumor infiltrating lymphocytes and things like that. We would certainly be looking at a number of things here because our goal here is to not only of course be able to better define the population that might respond really well the 214, but of course as a whole emerging set of data about the checkpoint inhibitors that tell us what populations are not well served by the checkpoint inhibitors. For example if you think about the anti-PD-1 and looking at PD-L1 status in those patients. I think there are some emerging evidence there that’s pretty interesting that says if your PD-L1 negative that the anti-PD-1 is not work very well there. Of course CD122 the target of NKTR-214 is present on all T-cells and so that might be a very interesting kind of subgroup to look at it some day. I think so we’re going to have to integrate the data that we collect and look at here in Phase I and early Phase II with the outside data that comes in from the outside world as we understand better the tumor immune response. We’re going to talk a lot more detail about this at our upcoming Analyst Day in October and so I differ the rest of it to there, but that’s kind of our general thinking

[Bert Hazlett:]

Thank you. Exciting stuff, we look forward to additional conversations. Thank you. End of Q&A

[Operator:]

And that does conclude the Q&A session. I'll now turn the call back over to Howard Robin, President and CEO for closing remarks.

[Howard Robin:]

Okay. Well, first I would like to as usual thank all of our employees for doing such a great job to develop such an impressive pipeline and I know they all work very, very hard and they deserve a lot of credit. And thank you all for joining us this afternoon and by now you received and heard that we will have our R&D Day on October 8 in New York. And we will be hosting a panel of immuno-oncology experts and other key opinion leaders in order to showcase our internal pipeline programs. So we look forward to seeing you there and we also look forward to seeing many of you at the FBR in the Ladenburg Conferences in September. So thank you very much and have a great evening. Thank you. Bye-bye.

[Operator:]

Thank you, ladies and gentlemen. That does concludes today's conference. You may all disconnect. And everyone have a great day.