Seagen Inc.
Q1 2017 Earnings Call Transcript

Published: 28 Apr 2017

[Operator:]

Please stand by. We're about to begin. Good day and welcome to the Seattle Genetics First Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Peggy Pinkston Vice President, Investor Relations. Please go ahead.

[Peggy Pinkston:]

Thank you operator and good afternoon everyone. I'd like to welcome all of you to Seattle Genetics First quarter 2017 conference call. With me today are Clay Siegall, President and Chief Executive Officer; Todd Simpson, Chief Financial Officer; Eric Dobmeier, Chief Operating Officer; Jonathan Drachman, Chief Medical Officer and Executive Vice President, Research and Development and Darren Cline, Executive Vice President, Commercial. Following our prepared remarks today, we will open the line for questions. If we are unable to get to all of your questions, we will be available after the conclusion of the call. Today's conference call will include forward-looking statements regarding future events or the future financial and operating performance of the company. Such forward-looking statements are only predictions based on current expectations, and actual results may vary materially from those projected. Please refer to the documents that we file from time to time with the SEC, including the company's Form 10-K for the year ended December 31, 2016 for information concerning the risk factors that could cause actual results to differ materially from those contained in any forward-looking statements. Now I'll turn the call over to Clay.

[Clay B. Siegall:]

Thanks, Peg, and good afternoon, everyone. Thank you for joining us. Today, we'll discuss upcoming activities and review recent progress towards our goal of becoming a multi-product oncology company. I'll start with the summary of our three main areas of focus. First, building ADCETRIS into a major global brand. Second, advancing our late stage clinical programs, notably vadastuximab talirine or 33A and enfortumab vedotin or 22ME. And third, investing in a robust pipeline of earlier stage programs, including SGN-LIV1A and others across both hematologic malignancies and solid tumors. Our first quarter sales of ADCETRIS in the U.S. and Canada were $70.3 million, a 20% increase over the first quarter of 2016. We remain on track with our 2017 guidance for ADCETRIS product sales in our territory of $280 million to $300 million. We are executing well commercially with our current labels. We are also preparing for several significant clinical and regulatory milestones intended to drive future growth of the ADCETRIS franchise. These are based on three phase 3 trials, ALCANZA, ECHELON-1 and ECHELON-2. Starting with ALCANZA. We plan to submit a supplemental BLA to the FDA in mid 2017. As a reminder, our phase 3 ALCANZA trial was conducted in CD30-expressing cutaneous T-cell lymphoma. The results showed a highly statistically significant benefit in favor of ADCETRIS across the primary and all secondary endpoints. We received Breakthrough Therapy Designation for ADCETRIS in CD30-expressing mycosis fungoides and primary cutaneous anaplastic large cell lymphoma, the most common subtypes of CTCL. We plan to submit the ALCANZA data to the FDA along with data from two investigator-sponsored trials in other subtypes of CTCL with the goal of obtaining a broad label in CTCL. The submission is on track for mid-year. Another significant upcoming activity for the ADCETRIS program is the release of top line data this year from our phase 3 ECHELON-1 trial in frontline Hodgkin lymphoma. The ECHELON-1 trial is assessing modified progression-free survival in newly diagnosed advanced Hodgkin lymphoma patients. Patients were randomized to receive either an ADCETRIS-containing regimen called A+AVD or the standard of care known as ABVD. This trial represents a substantial opportunity for ADCETRIS to redefine and improve the treatment paradigm for newly diagnosed Hodgkin lymphoma patients, which has not changed in decades. Looking ahead to 2018, we expect to report data from ECHELON-2, our phase 3 trial of ADCETRIS in frontline mature T-cell lymphoma, often referred to by clinicians as peripheral T-cell lymphoma. We are evaluating progression-free survival of ADCETRIS plus CHP compared to standard of care CHOP, or CHOP chemotherapy, in newly diagnosed patients. This is a second opportunity to redefine and improve outcomes in a frontline non-Hodgkin lymphoma patient setting that has not changed in many years. I'll now turn to vadastuximab talirine, or SGN-CD33A. We are conducting trials of 33A in AML and myelodysplastic syndrome, both of which broadly express CD33. Our first registration pathway with 33A is the ongoing CASCADE phase 3 trial in older patients with AML. CASCADE is a global randomized study comparing 33A plus decitabine or azacitidine to either of these hypomethylating agents alone. The primary endpoint is overall survival. Enrollment has been strong towards our target of over 500 patients. We are also advancing 33A in frontline younger patients with AML. We plan to initiate a randomized phase 2 trial later this year, adding 33A to the standard regimen of cytarabine and daunorubicin or 7+3. This trial is designed to assess whether adding 33A to the standard frontline regimen can improve MRD-negative TR rate and event-free survival in frontline fit AML patient. Our rationale for advancing 33A into two late stage AML trials is based on data from separate phase 1 trials. One of 33A plus HMAs in older AML patients and another of 33A plus 7+3 in younger AML patients. As reported at ASH in December, in both trials, the composite complete remission rate was more than 70%. And notably, in both studies, we observed a high percent of responders who were negative for minimal residual disease. In these single-arm trials, interim survival measures were superior among responding patients who achieved MRD-negative remissions compared to responding patients who are not MRD-negative. Based on these data, we believe that adding 33A to standard regimens for AML could potentially be well-tolerated and yield superior outcomes to standard treatment alone. In addition to AML, we are evaluating 33A in myelodysplastic syndrome through an ongoing phase 1/2 trial. In this trial, we are pursuing a similar strategy, combining 33A with azacitidine in newly diagnosed patients with high risk MDS and comparing tolerability and activity with azacitidine alone. Next, I'll provide an update on enfortumab vedotin, or 22ME, our lead ADC for solid tumors. 22ME is in clinical development for metastatic urothelial cancer under our co-development collaboration with Astellas. Based on positive feedback from the FDA, we intend to initiate a pivotal monotherapy phase 2 trial in patients previously treated with a checkpoint inhibitor, with the intent of providing the data for potential registration under the FDA's accelerated approval regulations. We plan to initiate this study in the second half of 2017. We believe that 22ME could play an important role in this setting. This is an unmet medical need, given that the majority of patients treated with checkpoint inhibitors fail to respond and require further treatment options. We are also planning to combine 22ME with checkpoint inhibitors in a trial that we expect to begin late this year as part of our broad clinical development program. We are positioned for several key milestones in 2017 that have the potential to significantly advance Seattle Genetics towards our goal of improving the lives of people with cancer and further establish the company as a leader in the field of oncology. We are expanding globally and are in a strong financial position to continue executing on our priorities. Now, I will turn the call over to Darren to discuss our commercial activities. After that, Todd will discuss our first quarter financial results, and then Jonathan will highlight our research and development progress. Darren?

[Darren S. Cline:]

Thanks, Clay. In the first quarter, ADCETRIS sales were $70.3 million, an increase of 20% over the first quarter of last year. ADCETRIS continues to be the standard of care in its original approved indications of relapsed HL and relapsed ALCL. As the brand approaches its 6th year on the market strong long-term follow-up data from our initial pivotal trials have further enhanced the clinical value proposition in these settings today. Despite the recent FDA approval of a second PD-1 inhibitor in relapsed Hodgkin lymphoma setting, we have seen no erosion in share in our existing relapsed HL business. Most prescribers have indicated they view the checkpoint inhibitor agents as interchangeable and would use both in post ADCETRIS later lines of therapy or palliative setting if necessary. Beyond our current business, we're continuing to prepare ADCETRIS to become a major global brand. Our commercial resources are focused on launch preparedness for upcoming CTCL indication and most importantly our frontline Hodgkin lymphoma indication. In the near term, the CTCL approval will represent another important commercial milestone for ADCETRIS. Physicians and market research have been impressed with the strength of the ALCANZA data, and we believe it supports our goal for ADCETRIS to be the foundation of treatment for CD30-expressing lymphomas. Leading up to ECHELON-1 results, we've invested resources to better understand how ADCETRIS plus AVD will be integrated into current practice in both community and academic setting, and how we can ensure rapid adoption of this novel regimen in the event of FDA approval. In parallel, we are also continuing education efforts to raise awareness and highlight the unmet need that exist specifically for advanced stage Hodgkin lymphoma patients, who currently receive ABVD. Lastly, our ECHELON-2 trial will potentially provide patients and providers a new targeted therapy option beyond traditional chemotherapy that will address the high unmet need in newly diagnosed T-cell lymphoma. Although, we are in the early stages of commercial planning for the E-2 launch, we have been ensuring our education efforts in CTCL and ALCL will be complementary to our frontline MTCL approval education efforts in the future. I look forward to updating you on our progress in preparing for these important growth opportunities for ADCETRIS. Now I'd like to turn the call over to Todd to discuss our financial results.

[Todd E. Simpson:]

Great. Thanks, Darren, and thanks to everyone for joining us on the call this afternoon. We ended the first quarter with $536 million in cash and investments. This along with our strong ADCETRIS sales and our collaborations enables us to continue executing on our strategy of expanding the ADCETRIS label advancing our 33A and 22ME programs and investing in the rest of our oncology pipeline. Today, I'll summarize our financial results for the first quarter of 2017. Total revenues in the first quarter were $109 million, including ADCETRIS net sales of $70 million. As Clay mentioned, we continue to expect that total ADCETRIS sales for 2017 will be in the range of $280 million to $300 million. Royalty revenues in the first quarter were $17 million compared to $32 million in the first quarter of 2016. Recall that in the first quarter of last year; royalties included a one-time $20 million sales milestone from Takeda. Excluding that milestone, first quarter 2017 royalties increased 38% compared to last year. This was driven by higher Takeda sales and by those sales reaching a higher royalty rates here in the fourth quarter of last year. As a reminder, the royalty rate paid by Takeda begins in the mid-teens increases to the high-teens at $100 million in sales into the low 20%s at $200 million and ultimately to the mid 20%s. Since the rates reset annually and because we report royalties one quarter in arrears, royalty revenues will decrease in the second quarter, although we continue to expect them to be in the range of $50 million to $55 million for the full year. Collaboration revenues were $22 million in the first quarter, driven by amounts earned under our ADCETRIS collaboration with Takeda and our ADC deals. R&D expenses were $118 million in the first quarter; ADCETRIS continues to be the primary driver of R&D expense and the increase over the first quarter of 2016 reflects investments in 22ME, 33A and our broad pipeline. SG&A expenses were $38 million in the first quarter, also in line with our expectations. Now I'd like to turn the call over to Jonathan.

[Jonathan Drachman, M.D.:]

Thanks Todd. We are positioned for several very important activities this year with ADCETRIS 33A and enfortumab vedotin. We're also advancing and expanding our pipeline and conducting innovative research to remain the industry leader in ADC technology. With ADCETRIS, we're preparing the supplemental BLA submission for labeling CTCL. Our ALCANZA data were remarkable, and we believe ADCETRIS can make a meaningful difference for CTCL patients who requires systemic therapy to treat this debilitating disease. In collaboration with Takeda, we're also preparing for top line data from our phase 3 ECHELON-1 trial in frontline Hodgkin lymphoma. This large global trial has the potential to redefine the way newly diagnosed patients, mostly young adults are treated by adding ADCETRIS and removing bleomycin from the standard regimen. It is exciting that this year we expect data that could drive improved outcomes for patients with advanced Hodgkin lymphoma. With 33A, our development focus is on myeloid malignancies, including AML and MDS. We are encouraged by the significant percentage of MRD or minimal residual disease negative remissions achieved by patients in our phase 1 AML trials. MRD-negative remissions are more stringent and deeper than traditional response criteria and have been associated with better patient outcome. As we reported at ASH from our phase 1 trial, interim data suggest that patients who achieve MRD-negative status live longer than those who did not, regardless of whether they achieve a CR or a CRI. We will be evaluating MRD status in our CASCADE trial for older unfit patients and in our planned phase 2 randomized trial in frontline younger AML patients. With enfortumab vedotin, we're working with regulators on refining our development plan for this program in metastatic urothelial cancer and look forward to initiating a registrational trial later this year. In addition, at the upcoming ASCO Annual Meeting in Chicago follow-up data in patients with metastatic urothelial cancer from the phase 1 trail of 22ME will be featured in an oral presentation. We're also evaluating additional tumor types in the ongoing phase 1 trial, including ovarian and non-small cell lung cancer. And lastly, we and Astellas recently initiated a phase 1 trial of 22ME in Japan. This trial will enable future studies and regulatory submission in Japan. We and Astellas believe that enfortumab vedotin has the potential to become an important therapy around the globe for patients with urothelial cancer. In addition to our lead programs, we are advancing several other clinical stage programs, notably SGN-LIV1A and ADC in development for metastatic breast cancer, including triple negative disease. We are continuing to optimize the dosing schedule in phase 1 and expect to report additional data from SGN-LIV1A later this year. We are enthusiastic about the opportunity for SGN-LIV1A in triple negative breast cancer and we are evaluating next steps for this program, including potential registrational approaches and combination regimens. At AACR earlier this month, we showcased our advances in research and preclinical development. Some notable presentations included reporting preclinical data demonstrating that ADCETRIS induces immunogenic cell death resulting in an inflammatory tumor microenvironment and added activity when combined with inhibitors of the PD-1, PD-L1 pathway. Under our collaboration with Bristol-Myers Squibb we're conducting clinical trials with ADCETRIS and nivolumab in multiple Hodgkin and non-Hodgkin lymphoma setting. In support of our own immuno-oncology portfolio, we reported preclinical data on SEA-CD40 that demonstrate activation of an antitumor immune response and potential for combination with checkpoint inhibitors. SEA-CD40 is an immuno-oncology agent that is in a phase 1 trial for the treatment of both solid tumors and hematologic malignancies. In addition, preclinical data were presented supporting the ongoing phase 1 study of SGN-2FF for patients with advanced solid tumors, including non-small cell lung cancer. SGN-2FF is an oral, small molecule immuno-oncology agent that has been shown to inhibit fucosylation of protein, and thereby stimulate the immune system to slow the growth and spread of cancer. There were also several presentations that highlighted advancements in linker technologies for payloads which enable development of novel ADCs, including the planned clinical program SGN-CD48A for multiple myeloma. And finally, Unum Therapeutics reported preclinical data with our sugar-engineered antibodies in combination with engineered antibody-coupled T cell receptor, or ACTR cells. Under our collaboration, Unum plans to initiate a phase 1 trial for patients with multiple myeloma targeting BCMA. Seattle Genetics is built on innovation and scientific excellence. I'm proud that, even as we are advancing multiple exciting programs into registrational studies, we continue to focus on maintaining our leadership in the ADC field and broadening our pipeline by advancing multiple immuno-oncology programs into clinic. Now I'll turn the call back over to Clay.

[Clay B. Siegall:]

Thanks Jonathan. Before we open the line for questions, I'll summarize our key upcoming activities. For ADCETRIS, these include submitting a supplemental BLA to the FDA for CTCL in mid 2017, reporting data from the phase 3 ECHELON-1 trial in frontline Hodgkin lymphoma this year, and reporting data from the phase 3 ECHELON-2 trial in frontline MTCL in 2018. For 33A, we are advancing the phase 3 CASCADE trial in frontline older AML, and a phase 1/2 trial in frontline MDS. In addition, we plan to initiate a randomized phase 2 trial in the second half of the year in frontline younger AML patients. Lastly, for 22ME, together with Astellas, we plan to initiate a pivotal phase 2 monotherapy trial in the second half of 2017 for metastatic urothelial cancer patients, who had previously been treated with a checkpoint inhibitor. We are also planning a trial in combination with a checkpoint inhibitor to begin later this year. And we will report additional phase 1 data at ASCO. We will keep you updated on our progress, as well as activities across our earlier stage pipeline programs. At this point, we will open the line for Q&A. Operator, please open the call for questions.

[Operator:]

Thank you. We will take our first question from Michael Schmidt with Leerink Partners.

[Michael Schmidt:]

Thanks for taking my questions, and congrats on a good first quarter. I had a follow-up question on your ASG-22ME discussions with the FDA. And just wondering if you could provide some more color there in terms of the feedback that you received, for example, number of patients, what is the potential size of the phase 2 study, which endpoints could be used here, and what is the approval hurdle potentially?

[Clay B. Siegall:]

Okay, Michael, thank you very much for the questions. So, what I would say is, it was a positive meeting with the FDA. The trial you asked about, and at this point, what we're saying is that the modestized (23

[Michael Schmidt:]

Okay, great, thanks. And then I had a follow up regarding Hodgkin lymphoma in particular around your activities and in second line Hodgkin lymphoma potentially, I was just wondering if you could just provide some more color there on your activities and sort of what your strategy and next steps are regarding the second line Hodgkin lymphoma setting? Thank you.

[Clay B. Siegall:]

Sure. So we've previously presented quite a lot of data in second line. As you know in frontline, we're trying to really redefine frontline with ADCETRIS every day and that's the E-1 trial. But in second line, I think when you look at what we've done historically, I think we've taken two approaches, we had ADCETRIS plus bendamustine. We had quite a lot of data there with a CR rate over 80%. So that is a one way to consider, although bendamustine does have some toxicities that are well known. The other approach which we've done of late and perhaps I'm even more interested in is ADCETRIS plus checkpoint inhibitors, and we've put data out on ADCETRIS plus OPDIVO at the appropriate cancer conferences and the data looks really good. At this point, we haven't said anything specific on how we're going to follow it up. I mean those trials also were done with in partnership with Bristol-Myers Squibb. So they were done together with them. We've had a good relationship. We started out with two trials. We added a third trial in our relationship, so I think that's good. And I would say stay tuned for more information as soon as we can provide it in that area, but something that we're very keen to look at.

[Michael Schmidt:]

Okay. Great. Thanks, Clay. Thanks for that.

[Operator:]

We'll take our next question from Geoff Meacham with Barclays.

[Paul Choi:]

Hi, everyone. It's Paul Choi. Thanks for taking our questions. Could you maybe provide a little bit of color on your perhaps pre-CTCL activities in terms of physician awareness and how they're thinking about current standard of care versus what you could do with ADCETRIS?

[Clay B. Siegall:]

Sure. I'd be delighted to talk about that, but probably better for Darren to talk about what our commercial team is doing to prep for CTCL based on this fantastic data, remarkable data that we had with ALCANZA.

[Darren S. Cline:]

Yeah. Thanks. And as I alluded to in the prepared remarks that we've been doing a lot of market research around the ALCANZA data and physicians are quite frankly stunned at the results. And if you think about the CTCL patient population, there're about 2,000 that get systemic therapy annually in the U.S. about a 1,000 that express CD30, but as we think about the label, the implications, we're focused on identifying who the appropriate treaters are. Again, because this is somewhat of a rare disease and it's really been segmented with a few key physicians and treatment sites throughout the United States, so we're focusing on that. Our marketing team is preparing and doing message testing, et cetera to quickly upon approval get the datasets in front of the patient – or excuse me, the physicians. So we'll have the rapid uptake with these physicians. So we're excited, the physician community is excited. They're most excited for a new option that if you think about cutaneous T-cell lymphoma, it's a very visible disease to both obviously the patients and the physicians, and I think with data like ADCETRIS in the setting, we're going to see – I think patients are going to see remarkable results. And so, we're excited about it, physicians are and so our patient.

[Clay B. Siegall:]

And I want to add one thing about CTCL. So we have Breakthrough Designation from our ALCANZA trial. And so, we have had a good opportunity to collaborate and discuss with FDA all of our data. And you may recall from earlier conference calls that we initially had guided that we would be submitting earlier in this year. And then we changed our guidance at our last conference call to mid-year. And that was because of our discussions with the FDA based on other data that we've had from investigator-sponsored trials, specifically two of them which showed strong activity in CTCL with patients that were below the histology cut off that we used in our ALCANZA trial and with patients that were in other subtypes of CTCL. So our goal in presenting our data, ultimately submitting a supplemental BLA is to try to get the – it will help the most patient that we can and that might be with helping all patients with CTCL. It's not clear that based on histology is the right way to select the patients, and that in fact our data says otherwise. And when you look at the listing in compendia, that does not have a CD30 cut off. So we think that we're in a good position to submit all our data, ALCANZA and from two other trials to try to get the broadest label that we can and help the most patients we can. But that's been our goal and we've been talking about that.

[Paul Choi:]

Great. Thank you very much.

[Operator:]

We'll go next to Cory Kasimov with JPMorgan.

[Shawn Fu:]

Hi guys. This is Shawn Fu on for Cory Kasimov. I want to add my congratulations for the great quarter and thanks for taking my question. Maybe if I could just ask one about the long-term side effects of the regimen on ECHELON-1. Obviously one of the big value-add is being able to take away the bleomycin and so avoid the long-term lung scarring and fatigue. So I am wondering if I could ask what do we know about the long-term side effects of ADCETRIS plus AVD? Specifically something I'm thinking about is the fact that in the frontline you have the vinblastine also so, now you have two microtubule-disrupting agents in the same regimen. Is there a concern that this might lead to some long-term peripheral neuropathy?

[Clay B. Siegall:]

Thanks for the question very much. Let me start by just saying that with E-1, we are trying to accomplish three things. You mentioned one of them. First of all with E-1, we're trying to get to a higher cure rate with 40 years since ABVD has come out and based on our lead-in trial we think that we are in a great shape to potentially see a much higher cure rate. That's the goal of the trial. And when we have the data, we'll be able to talk about that and we're excited that it's this year. So the first thing is higher cure rate. The second thing is getting rid of bleomycin, which you mentioned. There's this incredible lung scarring and some patients it's fatal in a short timeframe and there's also late effect with bleomycin on patients. So that's something we're really looking to get rid of, and certainly ADCETRIS plus AVD does that. And lastly what we want to do and important is to try to really minimize the use of radiation in these patients. And you could do that if you get a much higher CR and cure rate. And radiation on the heels of chemotherapy results in Hodgkin lymphoma having one of the highest secondary malignancy rates of all cancer. And so, we're trying to do those three things here. And as far as the long-term effect, I am going to turn this over to Jonathan to talk about it. But so far we've been very pleased with the profile of ADCETRIS in Hodgkin patients. Jonathan?

[Jonathan Drachman, M.D.:]

Yeah. Thanks. So Shawn, it's a good question. I'll start off by saying that with vinca alkaloids, including vinblastine and vincristine as well as with ADCETRIS, the peripheral neuropathy is reversible. And so, we haven't seen permanent neuropathy as a significant issue with any of this class of HL. Secondly, vinblastine has much less peripheral neuropathy than vincristine. So in this regiment that's less of an issue. And thirdly, we did a lead-in study where 26 patients got this regimen, and we followed and reported their amount of peripheral neuropathy and their recovery, and it was quite reasonable and well tolerated. So I think we're in pretty good shape with that.

[Shawn Fu:]

Okay. Perfect. And if I may just add a brief follow-up. So, just to confirm the patient population in ECHELON-1, so looking at that phase 1 study you just talked about with the 26 patients. It looks like there was some small amount, about 16%, of stage 2 patients in there. Now for ECHELON-1 is this true as well, or is it just purely confined to stage 3 and stage 4 patients?

[Clay B. Siegall:]

It's stage 3 and stage 4...

[Jonathan Drachman, M.D.:]

...for ECHELON-1.

[Shawn Fu:]

Okay. Great. Thank you.

[Operator:]

We'll go next to Salveen Richter with Goldman Sachs.

[Salveen Richter:]

Thanks for taking my question. So regarding your earlier commentary on, seeing the PD-1s being used in later liner (33

[Clay B. Siegall:]

We study very closely the doctors using ADCETRIS, we've been on the market now for over five years. So, Darren, can you talk a little bit about what we see in the marketplace now that there are two checkpoint inhibitors, OPDIVO and KEYTRUDA, approved to treat Hodgkin lymphoma in certain settings?

[Darren S. Cline:]

Yeah, sure. Yeah, regarding the academic and community setting, there is a difference, and we do monitor, obviously, both those settings. But I will say, (34

[Salveen Richter:]

Great. And just a follow-up. Clay, I know you've mentioned that regulators are – with regard to ECHELON-1 – that regulators are focused on the survival curves and the plateau (35

[Clay B. Siegall:]

Thanks for the question. So let me restate that, what we've stated before. It's progression-free survival, it's not survival. So let's just make sure that we're on the same page. And in fact, moreover, it's modified progression-free survival is our endpoint, and that was agreed upon with all the regulators, and there's only a slight difference between PFS and modified PFS and basically, if someone goes on to another therapy, they're an event. So we've not provided the number of events that we're going after here, but we are very pleased that this year, we're going to be unblinding E-1. This, for the company, this has been a long path. For me personally, this has been one of my missions, to try to really redefine frontline Hodgkin lymphoma. And I started on this mission at probably 18 years ago. So it's a big year for me, a big year for the company, as we go after this. And I think – we look forward to working with regulators on our primary endpoint of PFS – modified PFS.

[Salveen Richter:]

Thanks. Got it. Thank you.

[Operator:]

We'll go next to Yatin Suneja with SunTrust.

[Yatin Suneja:]

Hey, guys. Thank you for taking my question. Question is on SGN-CD33A. Could you comment on Pfizer Mylotarg? I think they have filed for it. What happens once it gets approved? Do you think it could impact the market opportunity for your candidate, and any particular population where your drug might be differentiated, or you expect it to have superior profile relative to that drug?

[Clay B. Siegall:]

Yeah. So, thank you for the question. I love talking about 33A. So Mylotarg was a pioneering molecule. I mean this is decades old technology that really with one of the leading edges of the field, a long time ago in making antibody drug conjugate. And so Mylotarg uses like in the vial, it's about half of it is pre antibody (38

[Yatin Suneja:]

Thank you. That's very helpful. And then maybe could you give us an update on the Immunomedics deal, what are the next step there? What is the typical duration for a litigation case like that? Thank you.

[Clay B. Siegall:]

Yeah. Sure. The Immuno deal, right now it's a legal issue and so we're not providing any specific updates. As you know the facts are that there was a temporary restraining order or TRO, and the fact is that there is a trial listed in late June. But please keep in mind that when we think about it IMMU-132, this was something that we thought fit in and we thought would be nice to have with the rest of our very extensive pipeline. But it is certainly not something that is needed. We have many programs that we're focused on and pushing forward hard on, but otherwise to answer to your question, it's a legal issue and it's not appropriate to make comment.

[Yatin Suneja:]

Thank you very much.

[Operator:]

We'll take our next question from (41

[Unknown Speaker:]

Hi this is (41

[Clay B. Siegall:]

Yeah. Thanks very much for the question. And we've actually thought about this a lot. And I think we have a great plan. Jonathan, would like to expand a little bit?

[Jonathan Drachman, M.D.:]

Sure. Yeah. So we haven't talked about the exact design for our trials in younger patients and you can look forward, you'll be hearing more about that later this year. It's true that for most patients who have poor-risk cytogenetics or even intermediate-risk cytogenetics, the goal in frontline treatment is to get them to a minimal residual disease negative status and then often to take them to a transplant for cure. And that is something that would likely happen in any setting. For example, that's what happened in Mylotarg study where they're moving forward in towards a potential approval. What we did and worked closely with the FDA on in reviewing all the data from our patients of which we've had many patients who have gone on to transplants, I think we reported over 50 is that we have not seen a significant increase risk of any toxicity, including VOD in those patients that have gone on to transplant over what has been historically reported. And obviously in a future randomized phase 2 study, there would be a control arm and that'll be very helpful. And we've also talked about having committees of external experts who are able to look at emerging toxicity. So I think we're well-positioned and we're going into this fully understanding, what the risks are, but also the potential for 33A to really make a difference in these patients.

[Unknown Speaker:]

Thank you.

[Operator:]

With no further questions in the queue, I would like to turn the call back over to Peggy Pinkston for any additional or closing remarks.

[Peggy Pinkston:]

Thank you, operator, and thanks everybody for joining us this afternoon. Have a good evening. Good night.

[Operator:]

This does conclude today's conference. We thank you for your participation. You may now disconnect.