Seagen Inc.
Q4 2014 Earnings Call Transcript

Published: 11 Feb 2015

[Operator:]

Good day and welcome to the Seattle Genetics’ Fourth Quarter and Year 2014 Financial Results Conference Call. [Operator Instructions] As a reminder today's conference is being recorded. At this time, I would like to turn the conference over to Peggy Pinkston, Executive Director of Corporate Communications. Please go ahead.

[Peggy Pinkston:]

Thank you operator, and good afternoon, everyone. I'd like to welcome all of you to Seattle Genetics’ fourth quarter 2014 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 & Development; and Darren Cline, Senior 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 based on current expectations. Such statements are only predictions and actual results may vary materially from those projected. Please refer to the documents that we file from time to time with the SEC and which are available on our website for information concerning the factors that could affect the results. At this point, I'll turn the call over to Clay.

[Clay Siegall:]

Thanks, Peg, and good afternoon, everyone. Thank you for joining us today. In 2014 we continued to make substantial progress on all fronts including commercial, clinical and research. We reported strong year-over-year ADCETRIS net sales growth and generated data for multiple trials investigating the use of ADCETRIS in a range of CD30-positive malignances. We also advanced and expanded our product pipeline and continued to develop novel technologies to a power antibodies for the treatment of cancer. ADCETRIS net sales in the U.S and Canada were $178.2 million during 2014. This represents a 23% increase compared to 2013. Looking forward, we expect 2015 ADCETRIS net sales in the U.S. and Canada to be in the range of $200 million to $210 million. Our expectations reflect modest growth of the brand while we pursue future label expansions in other CD30-positive malignances and earlier lines of therapy supported by data from our 4 Phase 3 trials. Globally ADCETRIS net sales in 2014 approached $400 million. Our partner Takeda continues to make progress in securing additional approvals for ADCETRIS in its territory. ADCETRIS is now approved in 50 countries worldwide including many major markets that have been added in the past year, such as Japan and Brazil. This is an increase from 39 countries a year ago. Through our broad ADCETRIS clinical development program we have continued to generate data reflecting its potential both as model therapy and in combination with other agents. We have substantial efforts in Hodgkin lymphoma, T-cell non-Hodgkin lymphoma and B-cell non-Hodgkin lymphoma. I’ll now review each of these three areas. In Hodgkin lymphoma, our goal is to move ADCETRIS into earlier lines of therapy. To this end we reported positive data from our Phase 3 AETHERA Clinical trial evaluating the use of its ADCETRIS as consolidation for Hodgkin lymphoma patients at high risk of relapse post autologous transplant. The trial met its primary endpoint of improving progression free survival with a hazard ratio of 0.57 and a P value of 0.001. The safety profile of ADCETRIS was generally consistent with existing prescribing information. Based on a recent meeting with the FDA, we intend to submit a supplemental BLA this quarter to seek approval for ADCETRIS in this setting. In frontline Hodgkin lymphoma our phase 3 ECHELON-1 trial is ongoing. Our goal with the ECHELON-1 trial is to redefine the way frontline Hodgkin lymphoma patients are treated by adding ADCETRIS into the standard regimen while dropping bleomycin a drug associated with significant pulmonary toxicity. As reported at ASH, data from our lead in phase 1 trial for patients who received ADCETRIS plus AVD showed a three year failure free survival rate of 92% and an overall survival rate of 100%. We believe these data underscore the opportunity for ADCETRIS to potentially change the frontline treatment regimen for the first time in 40 years. In addition to our efforts with AETHERA and ECHELON-1 there are numerous other corporate and investigator sponsored trials of ADCETRIS underway in Hodgkin lymphoma. Encouraging data were reported at ASH from trials in frontline older, Hodgkin lymphoma patients and in Hodgkin lymphoma patient in the salvage setting where we reported an 83% complete remission rate for the novel combination of ADCETRIS and bendamustine. We recently announced a clinical collaboration with Bristol-Myers Squibb under which we will evaluate the combination of ADCETRIS and OPDIVO or nivolumab. There are two initial trials planned to start later this year. One in salvage Hodgkin lymphoma and one in relapsed non-Hodgkin lymphoma. Both trials will explore whether ADCETRIS combined with a checkpoint inhibitor can result in approved outcome locations. Turning now to T-cell lymphomas. Our ongoing phase 3 ECHELON-2 trial is designed to redefine the way newly diagnosed patients with CD30-positive mature T-cell lymphoma are treated. In this trial we are comparing ADCETRIS plus CHP to chart the standard of care for the last few decades. In CD30-positive cutaneous T-cell lymphoma we are conducting the phase 3 ALCANZA trial. This study is building upon strong data reported from two separate investigator sponsored trials. Our goal is to report data in 2016. Finally we have substantial efforts ongoing with ADCETRIS in B-cell non-Hodgkin lymphoma, in particular the diffuse large B-cell lymphoma or DLBCL. We reported data at ASH illustrating that the activity of ADCETRIS in relapse refractory DLBCL was higher among patients who tumors tested positive for CD30 compared to patients with undetectable CD30 by standard techniques. These data provide the rational for a planned phase 2 randomized trial in CD30-positive DLBCL patients who have failed autologous transplant and for patients who failed frontline therapy and are ineligible for transplant. The trial will evaluate the combination of Rituxan and bendamustine plus or minus ADCETRIS. We intend to initiate the trial this year. At ASH we reported encouraging data for frontline DLBCL patients with advanced disease when combined with ADCETRIS with the standard RCHOP regimen, the Cr8 for all patients with more than 75%. Interestingly, for patients with CD30-positive DLBCL its Cr8 was 91%. We are expanding the trial to evaluate ADCETRIS plus or CHP which excludes vincristine from the standard regimen. We look forward to data from this novel combination which will inform our next steps with ADCETRIS in front line DLBCL. The data generated to date have resulted in the addition of ADCETRIS to NCCN treatment guidelines and compendia listings. ADCETRIS was recently added to listings for CTCL and for relapsed CD30-positive DLBCL. This is in addition to CD30-positive PTCL which was previously included. Regarding ECHELON-1 and ECHELON-2. As previously mentioned we are in discussions with regulatory agencies about potential modifications to these phase 3 studies based on a merging data from other trials. We have had discussions with the FDA and EMA and anticipate aligning with the agencies by mid-2015 on both trials. Beyond ADCETRIS we made substantial progress in 2014 with a product pipeline which now has seven clinical state programs targeting a range of hematologic malignancies and solid tumors. Jonathan will cover our pipeline programs in his remark. At this point, I’d like to discuss our ADCETRIS commercial efforts. Our former head of commercial, Chris Boerner recently took a position leading the U.S. commercial efforts at Bristol-Myers Squibb. We are fortunate to have strong commercial leadership with Darren Cline, Senior Vice President, Commercial who succeeds Chris Boerner and Chip Romp, Senior Vice President, Sales and Managed markets. Darren and Chip are leading a talented commercial organization that will continue to execute on our goals and ensure a smooth transition. Both have significant commercial leadership experience at a variety of biotech companies including Amgen, Alexion and Genentech and were keys to our success in launching ADCETRIS and building a high performing commercial feat. Darren will discuss commercial results of the quarter. After Darren’s remarks Todd Simpson will discuss our fourth quarter and 2014 financial results. Then Jonathan Drachman will provide updates on our pipeline. Afterwards we’ll open the line for questions. Darren?

[Darren Cline:]

Thanks, Clay. ADCETRIS’s fourth quarter net sales were $46.5 million, a 21% increase over the fourth quarter 2013. These results reflect both effective commercial execution and continued physician identification of patients who may benefit from ADCETRIS treatment. 2014 marked the third year of ADCETRIS commercial availability. Our commercial efforts have established ADCETRIS as a standard of care with a market share roughly 70% across on label segments including relapse, post transplant Hodgkin lymphoma, transplant ineligible Hodgkin lymphoma and relapse systemic anaplastic large cell lymphoma. ADCETRIS restoration of therapy in our onlabel settings remains consistent with prior periods at an average of roughly six cycles per patient. While we do not promote outside of our label, a growing proportion of ADCETRIS sales in 2014 came from spontaneous adoption by physicians in earlier lines of Hodgkin lymphoma and other CD30-positive lymphomas. Spontaneous use makes it challenging to forecast near term sales growth of ADCETRIS and we rely on trend lines supplemented by market research to provide our financial guidance. In the longer term we expect new labels from AETHERA, ALCANZA, ECHELON-1 and ECHELON-2 to generate significant additional growth of ADCETRIS. Looking ahead to 2015 our commercial efforts will continue to focus on assisting physicians with identifying appropriate on label patients for ADCETRIS and increasing duration of therapy. Additionally, commercial preparations are now well underway for potential label expansion upon approval for the post autologous stem cell transplant consolidation setting based on the results of the AETHERA phase 3 trial. Now I’d like to turn the call over to Todd.

[Todd Simpson:]

Great, thanks Darren and thanks to everyone for joining us on the call this afternoon. We ended 2014 in a strong financial position with more than $313 million in cash and investments. Today, I’ll highlight our financial results for the fourth quarter and year-end 2014 and then I’ll provide a financial outlook for 2015. Total revenues in the fourth quarter of 2014 were $74.3 million, which included ADCETRIS net sales of $46.5 million. Total revenues for the year in 2014 were $286.8 million including ADCETRIS net sales of $178.2 million. ADCETRIS sales in 2014 increased 23% over 2013 in line with our growth vision for the ADCENTRIS franchisee as we drive to expand the label. Revenues in 2014 included royalties of $11.9 million in the fourth quarter and $40 million for the year, primarily reflecting royalties on ADCETRIS sales by Takeda in its territory. As a reminder royalties in the first quarter of 2014 included a $5 million sales milestone triggered by Takeda surpassing $100 million in annual ADCETRIS net sales in 2013. Takeda sales surpassed $100 million once again in 204 which increases the royalty rate we receive above that level from the mid teens to the high teens. Collaboration revenues were $16 million in the fourth quarter and $68.6 million for the year in 2014. During 2014, we generated cash inflows in excess of $250 million which came primarily from ADCETRIS sales collaboration and royalties. This enables us to continue investing in activities intended to broaden the ADCETRIS label and in advancing our growing product pipeline. R&D expenses were $64 million in the fourth quarter and $230.7 million for the year in 2014, both increases over the same periods in 2013 reflecting ADCETRIS development activities and increased investment in our pipeline. SG&A expenses were up modestly year-over-year and within our expectations. Non-cash share-based compensation cost for the year in 2014 was $40.6 million compared to $31.4 million for the year in 2013. Regarding financial guidance for 2015 we anticipate ADCETRIS net sales in the U.S. and Canada will be in the range of $200 million to $210 million. We expect 2015 revenues from collaboration and license agreements to be in the range of $60 million to $70 million driven by amounts earned under our existing ADC collaborations and the ADCETRIS collaboration with Takeda. We expect R&D expenses to be in the range of $250 million to $275 million and SG&A expenses to be in the range of $105 million to $115 million. ADCETRIS related activities will continue to be the primary driver of our expenses, including clinical trials and commercial initiatives. The plan to increase R&D expenses also reflects investment in our clinical pipeline as well as two new programs entering [ph] the clinic this year. We expect the cost of sales as a percentage of sales during 2015 will be in the range of 10% to 12%. Expenses include non-cash amounts projected to be in the range of $55 million to $60 million approximately $40 million of which relates to share based compensation expense. We ended 2014 in a strong financial position with ADCETRIS sales and royalties as well as payments under our ADC collaborations we expect to end 2015 with more than $180 million in cash and investments. We continue to be well positioned to execute on our growth plans. With that, I’ll now turn the call over to Jonathan.

[Jonathan Drachman:]

Thanks, Todd. Our clinical, regulatory and research teams have been productive and focused on conducting a broad clinical development program for ADCETRIS and our product pipeline. Clay highlighted our ongoing and planned activities with ADCETRIS, now I will focus on our pipeline progress. We are advancing seven clinical stage programs, six ADCs and one novel immuno oncology agent. Our two lead proprietary clinical stage ADCs are SGN-CD33A and SGN-CD19A. SGN-CD33A is an ADC targeting to CD33, a validated target that is expressed across acute myeloid leukemia regardless of subtype, cytogenetic abnormality or underlying mutational heterogeneity. Our Phase 1 clinical program with SGN-CD33A is design to evaluate both fit and unfit AML patients. First we are conducting a Phase 1 trial of SGN-CD33A as both monotherapy and in combination with hypomethylating agents. This trial includes relapse patients and frontline patients who are unfit for intensive chemotherapy. In addition, we recently initiated a second trial to evaluate SGN-CD33A in combination with the standard frontline regimen of daunorubicin and cytarabine know as seven plus three for fit patients. This trial will evaluate SGN-CD33A in the consolidation and maintenance settings for AML. At ASH we presented the first clinical data from our Phase 1 trial with SGN-CD33A. The data were encouraging and showed that single agent SGN-CD33A induced bone marrow blast clearance in 44% of valuable patients treated across all dose levels including 21% with the CR or CR with incomplete hematopoietic recovery. Adverse events were generally manageable and associated with underline leukemia, importantly the 30-day mortality was quite low and there was no pattern of concerning off target adverse events. AML patient outcomes have not meaningful changed in more than 30 years. We are excited about the potential for SGN-CD33A to provide an important new therapeutic option. We’ve expanded our development program and look forward to presenting additional data during 2015 that may support future registration enabling trials. Data from our two trials with SGN-CD33A were also presented at ASH. In relapse and refractory, non-Hodgkin lymphoma, specifically DLBCL, we reported marked single agent activity across multiple dose levels. The objective response rate was 35% with 20% complete remissions. In relapse patients the monotherapy response rate was 55%. The manageable safety profile including lack of significantly hematologic toxicity or neuropathy enabled us to test this ADC with standard combination regimens. During 2015 we plan to initiate our randomized Phase 2 trial in second line salvage DLBCL patients. The study will evaluate the standard second line regimen of Rituxan-ICE plus or minus SGN-CD33A. Our goal in this trial is to increase the CR rate enabling patients to receive potential curative hematopoietic stem cell transplant. Beyond these two programs, our robust product pipeline continues to mature. SGN-LIV1A is an ADC targeted LIV1 which is expressed on more than 80% of breast cancer. Our ongoing Phase 1 trial is in several subtypes of metastatic breast cancer including triple negative disease. We anticipate data from this program late in 2015. SGN-CD7A is an anti-CD70 ADC using our newest ADC technology. This program is in the Phase 1 trial for CD70 positive non-Hodgkin lymphoma and renal cell cancer. We initiated Phase 1 trial with SGN-CD70A in the second half of 2014. ASG-22ME and ASG-15ME are in Phase 1 trials for solid tumors under our collaboration with Astellas. And SEA-CD40 is a new immuno oncology program that we recently advanced into the clinic. This agent utilizes our novel SEA technology to produce a non-fucosylated engineered antibody targeting CD40. Our preclinical studies show the SEA-CD40 is a potent stimulator of immune cells that maybe able to harness the power of a patient’s own immune system to fight their cancer. We plan to present our preclinical findings with SEA-CD40 at the upcoming American Association for Cancer Research Meeting in April. The Phase 1 trial for SEA-CD40 is for solid tumors. The breadth of these programs showcases one of our corporate priorities which is to advance and expand our pipeline. We anticipate submitting two more INDs during the 2015, one from an ADC and the other for additionally immuno oncology program. At this point, I’ll turn the call back to over to Clay.

[Clay Siegall:]

Thanks, Jonathan. Before we open to questions, I’d like to summarize our key near term milestones to expand ADCETRIS and advance our pipeline. They include summiting the AETHERA supplemental BLA this quarter. Finalizing negotiations with regulatory agencies for modifications the ECHELON-1 and ECHELON-2 Phase 3 trials, broadening the clinical investigation of ADCETRIS in frontline and relapse DLBCL. Initiating two combination trials of ADCETRIS and nivolumab under our collaboration with Bristol-Myers Squib, reporting emerging data on SGN-CD33A in AML and discussing registration strategies, initiating a Phase 2 trial of SGN-CD19A in second line DLBCL initiating a Phase 1 trial of SEA-CD40 for solid tumors. Reporting data from our pipeline programs and submitting INDs for two additional programs. We look forward to keeping you update on our progress. At this point, we’ll open the line for the Q&A. Operator, please open the call for questions.

[Operator:]

Thank you. [Operator Instructions] And we’ll take our first question from Adnan Butt with RBC Capital Markets.

[Adnan Butt:]

Hey, everybody. Thanks for taking the question. Two questions, please. First on compendia listing, Clay or perhaps someone there, could you help us understand how compendia listing could help in the reimbursement process especially for any use for patients that might not be responding to therapy even for off-label indications? And then secondly, the company has mentioned a number of Phase II studies, particularly our focus here is on DLBCL But the classification is Phase II, but could any of these end up being registration focused, that is registrations enabling? Thanks.

[Clay Siegall:]

Thanks Adnan for the two questions. First of all, let’s talk a little bit about compendia, and you ask about the reimbursement process. But compendia is as we said it’s from – it gives us spontaneous use and it makes it challenging to look at the sales figures. And so – but as far as helping us on reimbursement, Darren, would you like to make any comments on that?

[Darren Cline:]

Yes. Sure Clay. Compendia are experts in a specific diseases state that evaluate the evolving data in our case at ADCETRIS and DLBCL, CTCL and they look at that level of evidence. Payers, Medicare and private payers use that as a proxy to provide physicians and opportunity to use in that particular setting. So it’s hard for us to predict in the marketplace. How it will ultimately out other than the different payer having their policies which is really driven by Medicare. And again, it’s best for patients and provides a potential opportunity to get the best treatment available.

[Clay Siegall:]

And then your second question, Adnan, our Phase II focused on DLBCL that we’ve discussed and whether any of these trials could potentially be registrational type trials and Jonathan would you like to comment on that.

[Jonathan Drachman:]

So first of all I want to say that in both of the Phase II DLBCL trials, I think we’re asking very important and good scientific questions. In the case of ADCETRIS, we’re looking in a situation where we have shown that monotherapy CD30 positive DLBCL does better than CD30 negative patients. So the monotherapy is good. We’re also looking in a situation where we know that bendamustine combines very nicely with ADCETRIS. So the opportunity to combine with Rituxan, bendamustine and ADCETRIS is very exciting. We’ll be doing a Phase II trial and based on the results we’ll decide on the next step, and really the same for SGN-CD19A. We’re impressed by the monotherapy data in relapse patients, 55% monotherapy objective response rate across all lymphoma, across all DLBCL regardless of subtype. So it’s an opportunity here because it doesn’t cause marrow suppression for neuropathy to combined with pretty intense therapy with Rice [ph] to see if we can these relapsed patients who have failed frontline RCHOP into a really good CR to go to transplant. So, I think we’ve doing the right studies, answer the questions of how important these therapies are and then we’ll use that to determine the next step.

[Adnan Butt:]

Okay. Thank you.

[Operator:]

And we’ll take our next question from Jason Kantor with Credit Suisse.

[Jason Kantor:]

Hi. Good morning, Todd.

[Todd Simpson:]

Yes. Okay. Great. Couple of questions, what is your expected regulatory timeline for AETHERA? Would you six months type of review or longer, how should be think about that. And then just you build out the guidance. I guess, I am just wondering how have incorporated the compendia listing in that analysis. Is all of that build into your guidance or is there upside around that? And then if you could just give us any anecdotal information as to what your sales force is the field since the compendia listing, if usage is changing in real time.

[Clay Siegall:]

Okay. As far as AETHERA goes and regulatory timelines, I can’t really comment on the specifics of the interactions we are with the FDA, EMA. As you know the trial met its primary end point with the strong statistically significant advantage of PFS on the ADCETRIS ARM. And we plan to submit the supplemental BLA this quarter. We believe that magnitude of PFS advantage on the ADCETRIS ARM is meaningful for these patients. But regarding the review type that you ask it’s really up to the FDA and we’ll keep you posted as we have more information. Now, as far as your question on guidance for Compendia and what part. I would say that a small portion of our 2015 financial guidance assumes the use that you ADCETRIS outside of Hodgkin lymphoma ALCL. And it is challenging to forecast near term sales growth with spontaneous use, so we really on trend lines supplemented by market research to provide the best financial guidance that we can. But in the longer we expect that we could labels from AETHERA and other trials like ALCANZA and ECHELON-1 and ECHELON-2 and those labels will generate significant additional growth of ADCETRIS. As far anecdotes on compendia and use and anything, Darren, you have any comments from the field as to any anecdotes for things that are really hard to track.

[Darren Cline:]

Yes. Clay, we really don’t we focus on the on label business and we just focus on that area. When we get questions they go to our medical affairs and clinical colleagues. Those hard to track at this point, something we are not tracking.

[Jason Kantor:]

Okay. Thank you.

[Operator:]

And we’ll take our next question from Thomas Wei with Jefferies.

[Thomas Wei:]

Thanks. Maybe just – I’ll tried and ask on this recent meeting that you had with the FDA on AETHERA. Is that the sort of meeting where you can ask regulators question like the lack of maturity in the overall survival data or is that always going to be a question that’s left for review. I guess I’m just curious if you know, can you actually engage – the FDA dialogue on this sort of topics during a pre-submission meeting?

[Clay Siegall:]

As I said to Jason’s question I can’t and it’s not really appropriate to comment on the specifics of interaction with whether it’s a FDA or the EMA. What I could say is we have an open dialogue with them. We feel strongly about our data. And we plan to submit as SBLA this quarter. And that we’re saying that we plan to submit an SPL this quarter following a meeting with regulators. I think it’s a strong statement.

[Thomas Wei:]

And I had questions on the AETHERA presentation; I forgot to ask at ASH. There is a slide on subsequent anti-tumor therapy after progression and there were eight patients in the ADCETRIS arm who actually got ADCETRIS again. Do you have any information on what was seen in those patients on retreatment?

[Clay Siegall:]

I do remember something like that Jonathan do you have any specifics on that?

[Jonathan Drachman:]

No we haven’t data on that, Tomas. It such a smaller number that it would be essentially anecdotal along with on the base. That was specifically on the patients to that previously received ADCETRIS, because the majority of the patient who progress after receiving placebo did get et cetera?

[Thomas Wei:]

Thanks. And just on the first line trial, if I’m remembering correctly, did you have anybody relapse after that two year marketing in your pilot trial and can you remind me of that, that seem sort of pattern or what sort of pattern it seem there with ABVD is the front line regimen ?

[Clay Siegall:]

Well, with the front line Hodgkin lymphoma trial what we reported was a 92% failure free survival rate had three years, not a two years. And then were reported 100% OS at three years. And Jonathan do you have comments or color on this?

[Jonathan Drachman:]

I don’t remember, I think you’re asking exactly what the timing was of the progression events and I don’t remember there were only two, I believe. And in general with the types of advance patients that go on to the ECHELON-1 trial progression which generally occur early, so within the first to year is when you see the majority of our events.

[Clay Siegall:]

And that would be with the standard ABVD type therapy

[Thomas Wei:]

That’s very helpful. Thank you.

[Operator:]

And we’ll take our next question from Matt Roden with UBS. I’m so sorry Cory Kasimov with JPMorgan.

[Cory Kasimov:]

Hey, sorry Matt. Thanks guys. Good afternoon. First of all, sorry about the Super bowl although I’m it’s not lost and you that it seems like it hasn’t stopped snowing New England since that came so maybe if one think admit with the other. I guess I have two early stage questions for you. first of all, with the PD1 combo, can you provide any inside we will be able to talk it all about the trial design you expect to use here for the two studies after presumably testing for proper doses, are there going to any sort of randomization used in these initial studies and then I have one other?

[Clay Siegall:]

Okay. First of all, to comment on your initial comment about the Super Bowl, if I need to give a question to anyone in the room, I’ll certainly hand it off and I’ll pass it to them. Second of all, we’ll talk about the PD1 combo. And let me to make a couple of comments. First of all, we’re really excited to work and perform combination trials with nivolumab or Opdivo as it called. Right now, as you know nivolumab or any PD1s are not approved in HL, but we’re excited to be doing some combinations. And the trial designs we have not laid out yet between the two companies and we’re working on that and we intent to start both of the trials this year. But our focus with PB1 is making sure and with PD1, with ADCETRIS and these trials is really helping patients, but ADCETRIS is we’re focusing on front line and the foundation of care for CD30 malignancies and moving ADCETRIS into earlier lines redefining frontline therapy for the first time 40 years and we expect that our data in front line therapy with Hodgkin lymphoma ultimately with ADCETRIS and AVD will establish a very high bar .But that said, we’re excited to be working with Bristol on Opdivo combinations with ADCETRIS.

[Cory Kasimov:]

Okay. And then to follow-up on that I was interested in your new immuno oncology agent that you plan to move into the clinic this year. Is that right, that you can say with the regard to type of solid tumors you’re after or is it pretty broad based to begin with and where there particularly noteworthy synergies you may have seen in your preclinical work? Thanks.

[Clay Siegall:]

I’m glad you ask about our new immuno-oncology agent SEA-CD40, Jonathan could you tell Cory a little bit about the agent and how we’re initially thinking of testing it?

[Jonathan Drachman:]

Sure. Let’s me just quickly comment on your questions. One is we haven’t said exactly solid tumors we’ll be looking at, but these would be solid tumors that you might expect to respond to immune therapies. And we haven’t presented our preclinical data yet, but we will be presenting preclinical data later this year. So we have thought about the opportunity for this novel agent both as a monotherapy and in combination where it might show synergy potentially with other immuno oncology agents or other therapies. So this does act primarily on antigen presenting cell which is a different arm of the immune system than the checkpoint inhibitors which are T-cells. Those could be interesting combinations down the road if this agent looks active and we’re excited about getting in into patients and seeing how it works as a single agent.

[Cory Kasimov:]

All right, great. Thanks guys.

[Operator:]

And we’ll take our next question from Matt Roden with UBS.

[Matthew Roden:]

Great, thanks very much for taking the questions. And Cory [ph] I’ll get you next time. Two and I also would like to had, I hope you guys don’t fail to deflate it following the Super Bowl. So I have a question on maybe diminishing returns for asking this question, but I’m going to give a shot anyway on if there are filing. You mentioned that it is based on FDA feedback I’m assuming that they saw the same data that we saw at ASH and just trying to get a sense for whether or not you feel that there is any ambiguity whatsoever as to whether or not the right thing to do is to file and whether or not you have actual minutes from that FDA meeting. And then related is there anything you can say on behalf of your partner with respect to a U.S. filings on AETHERA?

[Clay Siegall:]

So first of all not to sound like I’m just repeating an answer but it’s really not appropriate to comment on the specifics as far as the exact data that we submitted I think you are asking whether we submitted data that we presented at ASH versus other data but it’s not appropriate to comment on those. You can assume that the FDA is seeing all of the important data that we have. And as far as the ambiguity of whether or not it makes sense to submit an SBLA we feel that – we feel very strongly that it makes sense to submit an SBLA in this quarter and that’s why we are really hustling and our team is working very hard to do that. Initially I think that the team said they were going to – we could get it together in the first half of the year and as a company we have pulled out all the stops to get it done this quarter, so we’re moving very fast. And as far as what’s in the minutes with the FDA that’s also confidential with us in the FDA and really is not appropriate for me to comment on the specific minutes between us and the FDA. And then as far as the outside U.S. filing that our partner Takeda can do and I think that’s really something that is best answered by Takeda and I don’t think it’s appropriate also for me to comment on those specifics. Even when they file and all that we’ll be certain able to talk about it at that point.

[Matthew Roden:]

Okay, that makes sense. I do appreciate the additional color. And then lastly from me just a question on the ECHELON-1 and frontline Hodgkin, is it realistic for us to think that with a protocol amendment that a protocol amendment can be arranged such that you can maintain or improve the robustness of the analysis and keep it on the same timelines as you previously communicated.

[Clay Siegall:]

The short answer is yes. We definitely it’s important to keep integrity of the study and make sure that this is a game changer of a trial. I mean this is the first time in four years someone is trying to change frontline therapy for these patients that have Hodgkin lymphoma that also as part of their four drug cocktail get bleomycin with all the pulmonary toxicity and what we are trying to do is get rid of bleomycin, add ADCETRIS in there and not only increase the efficacy but decrease the pulmonary toxicity, so we are really excited about that.

[Matthew Roden:]

Okay, great. Thanks very much for taking the questions.

[Operator:]

And we’ll take our next question from Howard Liang with Leerink.

[Howard Liang:]

Thanks very much. On the regarding CD33A can you talk about what options that are on the table for the pivotal study. Do you see the Mylortarg's regulatory status whether it comes back from the market or not, whether that affects the design.

[Clay Siegall:]

Sure. I think I could start and address some things and then I could turn it over to Jonathan for some more comments on this. But one of the things that we are really excited about with 33A and I’m glad you asked question and brought this up, but the target is expressed CD33 that is an ALL sub type AML, and MBS for that matter. So that really differentiates this product from almost all AML products that are out being tested for the different sub populations. And I think those products are very exciting as well and but there needs to be a central molecule for all AML and maybe our workforce for treating AML and maybe in the future you could see something targets ALL AML and then if you have a subtype you combine that drug with it to help these patients that are afflicted with a horrible disease. Jonathan, you want to comment some more on Howards question.

[Jonathan Drachman:]

Sure. So I guess I’ll just start by saying that I think that our data on the anti leukemic activity and tolerability thus far are impressive. And I will also say that most of our data so far are in unfit patients which also represents a area of tremendous unmet need. So if you are looking for some of the potential areas that we’re looking at for registration unfit patients have a very poor prognosis and need. So we are also focusing on the fit patients and you may recall that by combining with standard seven plus three that’s where Mylortarg showed a benefit in randomized trials. And we believe that we have a tremendous drug and that that’s another area that we should look closely at and we are with our phase 1d combination trial. So we’re pursuing multiple avenues for AML and we really believe as Clay said that all of AML and potentially myelodysplasia are areas where this drug may be an important to your therapy.

[Howard Liang:]

And do you have visibility when the combination of combination of AVD plus ADCETRIS in Hodgkin’s lymphoma of when that AM might become available?

[Clay Siegall:]

That is being done as part of an investigator IND and so it’s not really our data, so it’s really hard for us to do that. We know that it’s an active program and accruding patients, but I don’t want to make a specific comment on when the investigator will present the data. Jonathan, do you have any more information.

[Jonathan Drachman:]

Yes I think as Clay mentioned that trial was not under our control, its being run by ECOG Investigators. And we are also excited to see the data of combining checkpoint inhibitors with ADCETRIS.

[Howard Liang:]

Thank you.

[Operator:]

And we’ll take our next question from Steve Byrne with Bank of America.

[Steve Byrne:]

Hey Darren, I was wondering if you had a view on what do you think the penetration rates are right now for ADCETRIS in the salvage setting in HL and ALCL. And do you see more room to penetrate those further, or is the primary driver of revenue growth from here more in earlier lines of therapy or in the compendia listings?

[Darren Cline:]

Thanks for the question, Steve. In the salvage setting that’s not on our label and nothing we promote too. We do from time to time the market research and look at the different settings within Hodgkin lymphoma and a plastic large cell. We do see what the emerging data that more and more physicians are interested in using and we’re seeing a little bit more use according to the market research. We are focused as a commercial group still on the on-label business identifying patients, increasing duration of therapy and then we’re well underway for the AETHERA preparation for the latter half of 2015.

[Steve Byrne:]

Okay. And Jonathan, can you give me your view on what you see as the biological rationale behind combining ADCETRIS with a PD1 inhibitor?

[Jonathan Drachman:]

Well I guess I’ll go to also talk a little bit about the fact that these tremendous monotherapy agents in the same disease and in Hodgkin lymphoma where ADCETRIS is becoming a cornerstone of therapy and it looks like the PD1 inhibitors also work, it makes a lot of sense to look at them together. We’ve looked at combinations of ADCETRIS with lots of things. With CHP, AVD, Rituxan containing regimens, bendamustine and everywhere we’ve looked we’ve been really impressed with what those combinations look like. So it’s an obvious combination that makes a lot of sense to pursue.

[Steve Byrne:]

Okay. Thank you.

[Operator:]

[Operator Instructions] And we’ll take our next question from Mara Goldstein with Cantor Fitzgerald.

[Mara Goldstein:]

Oh thanks very much. I had a housekeeping question and then a question on LIV1. On the housekeeping item, the guidance, the revenue guidance for 2015, the $200 million to $210 million for ADCETRIS, that's exclusive of royalties, correct?

[Todd Simpson:]

Yes correct.

[Mara Goldstein:]

Okay. Great. And I was hoping just to get a little bit more color on the development program for LIV1 and the approach around if it's around hormone resistant cancers or through all-comes and given the distribution of the transporter protein that's associated with that and breast tissue versus the rest of the body.

[Clay Siegall:]

Yes LIV1 is a very interesting target it’s on the vast majority of breast cancer patient samples and so that’s one of the reasons why we are interested in that, it gives us the opportunity to potentially help patients. Jonathan, do you want to talk about what we can at this early stage of our development of LIV1.

[Jonathan Drachman:]

I had to say we are looking at multiple type of metastatic [ph] cancer including the ERPR positive and the triple negative breast cancer patients I don’t think that’s a limitation of where LIV1 is expressed or where it might be used in the future. And like our other early stage phase 1 program we haven’t presented any further data on that at this time.

[Mara Goldstein:]

Okay. Thank you.

[Operator:]

At this time there are no further questions over the phone lines.

[Peggy Pinkston:]

Okay, thank you operator. And thanks everybody, for joining us this afternoon. Have a great evening.

[Operator:]

That concludes the presentation. Thank you for your participation.