Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message| ()  

Executives

Carol Hausner - Executive Director, Investor Relations and Corporate Communications

Dan Junius - Chief Executive Officer

Greg Perry - Chief Financial Officer

Dr. Charlie Morris - Chief Development Officer

Analysts

Adnan Butt - RBC Capital Markets

Yigal Nochomovitz - Morgan Stanley

Joel Sendek - Stifel

Mara Goldstein - Cantor Fitzgerald

Thomas Wei - Jefferies

Yale Jen - Roth Capital

Jason Kantor - Credit Suisse

Matt Lowe - JPMorgan

Boris Peaker - Oppenheimer

Bret Holley - Guggenheim Securities

John Sonnier - William Blair

ImmunoGen, Inc. (IMGN) F3Q 2013 Earnings Conference Call April 26, 2013 8:00 AM ET

Operator

Good day, and welcome to the ImmunoGen Third Quarter Fiscal Year 2013 Financial Results Conference Call. Today’s call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Executive Director, Investor Relations and Corporate Communications, Carol Hausner. Please go ahead.

Carol Hausner - Executive Director, Investor Relations and Corporate Communications

Thank you. Good morning. At 6:30 this morning, we issued a press release that summarizes our financial results for our third quarter ended March 31. I hope you have all had a chance to review it, if not it’s available on our website.

During today’s call, we will make forward-looking statements. Our actual results may differ materially from such statements. Descriptions of the risks and uncertainties associated with an investment in ImmunoGen are included in our SEC filings, which also can be accessed through our website.

In our call today, our Chief Executive Officer, Dan Junius, will provide an update on ImmunoGen, and our Chief Financial Officer, Greg Perry, will discuss our financial results and guidance. We will then open the call to questions. Our Chief Development Officer, Dr. Charlie Morris is here for the Q&A section of the call. Dan?

Dan Junius - Chief Executive Officer

Thank you, Carol, and good morning to everyone. Thank you for joining us. This past quarter was a very significant one for ImmunoGen. We had the approval and launch of Kadcyla, the first product with our TAP technology. We also saw meaningful progress with our own pipeline. We are seeing good enrollment in the trials that we have underway with our three proprietary compounds and we reported preclinical findings on our fourth compound, which is on track to enter the clinic later this year. We are also seeing continued progress by our partners with the first clinical data reported by Bayer and the license taken by our partner, Novartis. All of this was done in the context of us continuing to maintain the strong financial position, as I will hear later from Greg.

Let me first mention talk about Kadcyla. The Kadcyla received FDA approval on the 22nd of February and launched immediately thereafter. All the indications are that it’s off to a very good start. There are reports of physicians contacting Genentech for product once it was first approved. There is also reports of reordering taking place within the first month. Roche indicated that Kadycla was incorporated into NCC and guidelines 19 days post approval, which is an extremely fast-paced. They also indicated that the Kadcyla sales for a month period or barely a month after it was approved were CHF18 million roughly $19 million. It’s too little data to extrapolate, but certainly it’s indicative of a strong start for the compound. This is the first ADC that received full FDA approval. We have certainly had clinical validation earlier, but we now can add to that regulatory validation. And it’s also the first ADC approved for a solid tumor indication.

Roche continues to make progress with its additional markets and indications. They have an application under review in Europe for the same indication as the U.S. approval off the EMILIA data. We would be looking for approval later this year, later 2013. I have also submitted in Japan again for the same indication. That application went in, in late January. Based on the MARIANNE data, which would be for first line treatment of HER-2 positive metastatic breast cancer, they would expect to apply in 2014 for approval in both the U.S. and Europe. Beyond this, they have a trial underway the trial is named GATSBY in advanced HER-2 positive gastric cancer. It would expect to apply for this use in 2015. In Friday, they have started the first Phase III trial in early breast cancer. This study is named KATHERINE. This is one of three early breast cancer studies planned to start in the first half of this year.

Let me now turn to our wholly owned compounds, and we discussed these programs extensively at our analyst event two weeks ago. So, my remarks today will be limited to highlights and updates. First, let me start with IMGN901, recall this is in Phase II testing for first line treatment of small cell lung cancer. It’s dosed in combination with etoposide and carboplatin in a randomized study. Our starting dose is now 30 milligrams per meter squared as discussed at our analyst event. This modified dose has been well received by study investigators. One clear indication of that is that the pace of patient enrollment remains very strong.

Based on the current pace, we would expect to complete patient enrollment by the end of 2013, this would include an additional 15 patients that we are adding to this study associated with the change in the starting dose. Our first look at efficacy will come in mid-2014 from the full now 135 patient study. IMGN853 as a folate receptor alpha targeting TAP compound for ovarian, lung and other solid tumors that over express this target. This trial is also enrolling well. We will report our first clinical data at ASCO, and this will be from the dose escalation phase of the trial. Once maximum tolerated dose is defined, we will be evaluating IMGN853 in patients with ovarian cancer or adenocarcinoma, non-small cell lung cancer in the expansion cohorts. IMGN529 is in Phase I testing for non-Hodgkin lymphoma. Recall this is a TAP compound, this is an active antibody. When the dose escalation phase which is open to most prevalent subgroups within NHL, we expect to report our first data at a medical conference in late 2013. Finally IMGN289, here we reported preclinical data at AACR just a couple of weeks ago. We had multiple posters which attracted considerable attention.

What we have here is an EGF-targeting ADC, and EGFR is a validated and well known target. Like IMGN529 and Kadcyla had two separate mechanisms of action, EGFR inhibition by the antibody plus direct killing by the DM1 payload. In preclinical models it showed efficacy superior to Erbitux on EGFR over-expressing cancers. This was seen in cancers that are dependant on EGFR, those that are not dependant on EGFR, as well as in ones resistant to tyrosine kinase inhibitors. Here we are on track to submit an IND in midyear and we are looking to begin clinical testing shortly after we receive acceptance of the IND. This will be our fourth wholly owned clinical stage compound.

Beyond our own proprietary compounds and Kadcyla, there are other progress with our partners is our seven other compounds in the clinic drug collaborations with companies such as Amgen, Bayer, Biotest and Sanofi. The first clinical data was reported to AACR with BAY 94-9343 which is a compound being advanced by Bayer Healthcare. This TAP compound targets mesothelin, and it uses our linker and payload. The data reported in the study indicated with a dose escalation phase of previously treated - patients previously treated with mesothelioma. In the study they indicated they had one confirmed PR, one unconfirmed PR and three patients with durable stable disease. This compound is now being evaluated in two expansion cohorts, one in mesothelioma, the other in ovarian cancer. Recall, the economics of this lysin has milestone payments totaling $170 million with royalties that go into the upper-single digits. We expect data from most if not all of the rest of the partner clinical compounds over the rest of this year, with the potential for one partner compound to enter pivotal testing in 2013. The other partner item of note is the Novartis took a license in the quarter just ended.

With that let me turn it over to Greg to review our financials.

Greg Perry - Chief Financial Officer

Thanks Dan. Our net loss for the third quarter of fiscal year 2013 was $1.4 million or $0.02 per share compared to a net loss of $18.7 million or $0.24 per share for the same quarter last year. Revenues for our third quarter were $25 million as compared to $3.3 million in the same quarter last year. And revenues in the third quarter of fiscal year 2013 included the $10.5 million milestone payment we earn with the approval of Kadcyla in the U.S. We also contain $11.1 million in amortization of upfront license fees from Novartis. This $11.1 million in revenue includes a portion of the original $45 million upfront fee and of the recent $3.5 million license amendment and other fees. These revenues were recognized in our third quarter because Novartis took a license under our agreement in this quarter.

Our third quarter revenues also included $2.3 million from research and development support compared to $1.3 million for the same quarter last year, and $700,000 in clinical material reimbursement compared to $900,000 for the same quarter last year. These revenue items vary by quarter depending on the work we are doing to support our partner programs. Our operating expenses for the third quarter of our fiscal year 2013 were $26.3 million compared to $22 million for the same quarter last year. Current quarter operating expenses included $21.3 million of research and development expenses compared to $16.9 million in the same quarter last year. This difference is primarily due to the increase investment we are making to advance and build our pipeline of wholly owned product candidates including increased costs for third-party production of antibody, for use in clinical materials and increased personnel expenses. We currently have three high potential wholly owned compounds in the clinic and are preparing to advance our fourth into the clinic later this year.

Operating expenses in the third quarter of our current fiscal year also included general and administrative expenses totaling $5 million which is comparable to the same quarter of last year. Our cash used in operations in the first three quarters of fiscal year 2013 was $48.7 million as we’ve stated in today’s release we’re updating our guidance for our fiscal year 2013 and expect to use less cash for operations than previously projected due to reductions in our anticipated expenses and working capital needs. We now project our net cash used in operations for fiscal 2013 will be between $65 million and $69 million compared to our previous projection of between $78 million and $82 million. Currently we will also anticipate ending this fiscal year with more cash than previously projected. We now expect to end our fiscal year between $186 million and $190 million in cash and cash equivalents up from our previous projection of between $172 million and $176 million.

We’re projecting a net loss of between $76 million and $80 million compared to our previous projection of a net loss between $70 million and $74 million. This change reflects that some license associated non-cash revenue that we had expected to recognize in this fiscal year we now expect we will shift into our next fiscal year. We believe our current cash position along with the revenues we expect to receive from Kadcyla and our partnerships will be sufficient to advance our lead wholly owned compounds to proof of concept and important value inflection point. Dan?

Dan Junius - Chief Executive Officer

Thanks Greg. I got to note that I may not I have been clear on the starting dose in the NORTH study, the starting dose now in the NORTH study is 90 milligrams per meter square as I noted that’s been well received by the investigators and we continue to see very good enrollment there. Let me just go through some anticipated events and then we can take your questions and I’ll start with Kadcyla. We do expect to begin recording our first royalty revenues in the current quarter and that being the fourth quarter of the current fiscal year and over the course of the quarter with Roche’s announcement coming around midyear we’ll get clear insight into the rate of adoption in the U.S. We look for approval in Europe later this year and with the first launches to begin shortly thereafter.

The data from them MARIANNE study which will be using Kadcyla in first line metastatic disease will come in early 2014 followed by submission for this use and then approval for Japan sometime over the course of 2014. We look for submission for treatment of HER2 positive gastric cancer in 2015 and then the series of submissions for early breast cancer to follow thereafter. With IMGN853 we will see the first clinical data at ASCO, this will be for dose escalation. For IMGN289 the IND will be submitted in mid 2015 and once after we would look to begin in clinical testing in the second half of this year. For IMGN901 will complete patient enrollment we would expect sometime in the fourth quarter of this year and we look to provided an update around dosing once we have enough patient data to have a clear view of that. So, once we have the information we will be – we want to pass that along. And then have the first results from the full study in mid 2014. And finally for IMGN529 with enrollment we should see the first clinical data coming in late 2013 this would be from the dose escalation phase.

Carol, let me turn it back to you for questions.

Carol Hausner - Executive Director, Investor Relations and Corporate Communications

Great, thanks Dan. We are about to open the call to questions. We ask you to please be limited to one to two questions per person until each person has had a chance to ask question. Operator we’re now ready to open the line to questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) We’ll go first to Adnan Butt from RBC Capital Markets.

Adnan Butt - RBC Capital Markets

Good morning everyone and thanks for taking my question. I’ll start with 853 previously the company is mentioned on potential path that could accelerate the development of 853. Can you take us through what you’re thinking along those lines please?

Dr. Charlie Morris

Yeah, it’s Charlie here. I mean obviously the first thing that we need to do is to begin to gather data from the ongoing study though with the expression of folate receptor being seen in high proportion of patients with ovarian carcinomas also in adenocarcinoma of the lung. We are of course looking at the opportunities if we see high activity in otherwise treatment resistant patients who would certainly be interested in trying to accelerate that program quite quickly. We think one of the best opportunities that maybe ovarian carcinoma based both on the preclinical data, as well as the lack of new therapies which have been seen in that area for too long quite honestly. So, I think it got to be data dependant, we are pleased with the progress of the Phase I, we are recruiting well. We hope to – well we will be presenting some of the initial data from that at ASCO. And then as we are moving to those dose expansion phases, if we see clear signal, we would certainly be looking to advance that based on the strength of the preclinical data we remain very optimistic that there may be a path forward.

Adnan Butt - RBC Capital Markets

So, just one quick follow-up, can you say at ASCO how many ovarian cancer patients you have and then I will get back in queue please? Thanks.

Dr. Charlie Morris

In the study so far, it’s – as I say we are in a dose escalation phase as you know that started up with single patient cohort and escalating through standard 3 plus 3. It’s approximately half the patients in that study today have been ovarian cancer patients. So, obviously we are not looking at high numbers of total patients in the study yet.

Adnan Butt - RBC Capital Markets

Thanks.

Operator

We will go next Marshall Urist from Morgan Stanley.

Yigal Nochomovitz - Morgan Stanley

Hi, good morning. This is Yigal Nochomovitz standing in for Marshall. Thanks for taking the question, just one on 853, I was just curious with the data released at ASCO, is it going to be available for additional analysis of the IHC status related to the folate receptor or will that come later down the road?

Dan Junius

I think the most important thing I think for ASCO is to really be talking about and showing the data from the dose escalation, and the – what we know to-date about potential dose limiting toxicities and potentially maximum tolerated dose. As we move into expansion phase as we will certainly be beginning to restrict those patients more in terms of their expression of folate receptor. And so I think we will have a great understanding of the relationship between folate receptor and efficacy as we move further into the study.

Yigal Nochomovitz - Morgan Stanley

Okay, thanks and just one quick follow up on the 901. You mentioned at the Analyst Day that of the nine patients at 90 milligrams per meter square in the Phase I escalation you didn’t see any grade III peripheral neuropathy, I am just curious if you had a number or percentage of the patients that had grade I, II peripheral neuropathy in those nine patients?

Dan Junius

I apologize, I don’t have those numbers in front of me, but that’s something that we could follow up with after the call.

Yigal Nochomovitz - Morgan Stanley

Okay, thank you.

Operator

We will go next to Joel Sendek from Stifel.

Joel Sendek - Stifel

Hi, thanks. My question has to do with financial guidance Greg, I am wondering with regard to the delay in the new licences, is there anything we should read into that or is it just a matter of one week versus the other and how it fits into the calendar? Thanks.

Greg Perry

Thank you, Joel. No I think as we have described in the past our revenues can be lumpy and that’s even when we are talking about reimbursement for clinical material or even some of the research work that we do. But certainly when it get to licenses because of the accounting dynamic that the upfronts are basically hung up on the balance sheet and then when we take a license or when a partner takes the license and there is a big chunk of that that gets basically amortized into the P&L. So, in this quarter here, we saw the license taken by Novartis actually at the end of the quarter, which is a bit early that we expected. And then we are seeing some licenses and milestones push out, but there is I think this is part of the normal ebb and flow and the unpredictability of some of the partner activities.

Joel Sendek - Stifel

Now, when you said you see some milestones pushed out, is that I guess your – it’s how quickly the partners move their products along and then you will get the milestones as they make progress, but I guess the press release only mentioned new licenses is it maybe some of the revenue recognition that has to do with milestone payments under the in place agreements, is that also part of the change?

Dan Junius

Yeah that’s a smaller element of it, but there is some of that as well. Yeah, exactly.

Joel Sendek - Stifel

Okay. Alright, thanks a lot.

Operator

We’ll go next to Simos Simeonidis from Cowen & Company.

Unidentified Analyst

Hi, this is (indiscernible) calling in for Simos. Could you provide us an update on the Sanofi compound SAR3419, I think it was in three Phase III trials, and when can we expect data from that compound and what’s the expectation there?

Dan Junius

Yes, this is Dan. 3419 it’s actually in three Phase II trials, not Phase III trials. And they continue to advance it, some of those are monotherapy, they have some space in combination with Rituxan. And I would expect that we will hear data on, I believe, all three of those studies over the course of the year. I think Sanofi feels that they are generating good data. They are pleased with the progress. But one have to see what the data is, but they are advancing it, it’s shown the data that’s been disclosed thus far suggest activity in later stage non-Hodgkin’s lymphoma patients. The studies that they are conducting right now are both in follicular and DLBCL. So, but again over the course of the year I think that they will be disclosing that data.

Unidentified Analyst

Thank you.

Operator

We will go next to Mara Goldstein from Cantor Fitzgerald.

Mara Goldstein - Cantor Fitzgerald

Thank you very much. Just two questions, one is could you remind us of any remaining milestone payments for Kadcyla that you would expect to receive in the next year. And then second is that compound that we don’t talk much about and it’s the biotech compound, but I believe you have opt-in rights for development on that and maybe if you could remind us when you might think about doing that?

Dan Junius

Mara, this is Dan on the…

Mara Goldstein - Cantor Fitzgerald

Hi Dan.

Dan Junius

On the Kadcyla milestones, we have indicated that we have $5 million milestone due on approval in Europe and another $5 million would be due on approval in Japan. So, depending on the timing of that, those would be the next milestones we would expect. With the other compound, you have asked about BT-062?

Mara Goldstein - Cantor Fitzgerald

Yes.

Dan Junius

Yeah, as we do have opt-in rights on BT-062, we are monitoring development of that compound. There are certain points in time when we would need to exercise those rights that windows still exists, and it would provide us the opportunity to develop that compound in the U.S. So, we’ll just have to – we’ll continue to monitor that and see how that’s developing.

Mara Goldstein - Cantor Fitzgerald

Okay. But is that a obviously post Phase I, but is that a opt-in for Phase II or Phase III, I know there are different, I guess, hurdles?

Dan Junius

Yeah, there are different ones. There is a post Phase I and a post Phase II.

Mara Goldstein - Cantor Fitzgerald

Okay.

Dan Junius

And so we are waiting and we will look and see how the Phase II, they are in a Phase IIa monotherapy study, I think it’s a Phase I combination study, and so we’ll just see how that evolves. There is some time before we would have to make a decision there, there will be some dollars involve for us to exercise, not an exorbitant amount, but a meaningful amount of money, but we are some ways away from having to make that decision.

Mara Goldstein - Cantor Fitzgerald

Okay, thanks so much.

Dan Junius

Sure.

Operator

We’ll go next to Thomas Wei from Jefferies.

Thomas Wei - Jefferies

Thanks. Just a couple of questions on 901, I know at the Analyst Meeting, you didn’t have handy the number of patients in the first cohort who have actually discontinued treatment, do you happen to have that number today?

Dan Junius

We are looking each other. So, I think the answer to that is no, Thomas, sorry.

Thomas Wei - Jefferies

And I know that you had talked about taking a look at the data at the end of the year on maybe the first cohort, that from the comments that you made today, have you actually decided that no – there will be no efficacy data. And so the whole trial has matured to the six months of follow-up in mid 2014. So, even if you will look at the safety data from the first cohort, you have decided not to look at efficacy?

Dan Junius

No, we haven’t made that that decision. I think where we look at it at this point is that we want to – we don’t want to have necessarily a fixed time which we are going to commit to have efficacy data, because it’s dependent on enrollment and maturation of the data once we have some clear view on the efficacy data. We’ll find the way to convey that given that it is received the attention that it has to-date. But I just don’t want to be as locked into a fixed point in time when we’ll have that data. So, we’ll just see how that evolves.

Thomas Wei - Jefferies

Thanks.

Operator

We’ll go next to Yale Jen from Roth Capital.

Yale Jen - Roth Capital

Thanks for taking the questions. Just a quick follow-up little bit well, follow-up question that is so in terms of the safety data is may or may not be in the end of the this year to be released or is that a case.

Dan Junius

Yeah, we’ll find the way to communicated once it’s available and has mature to the point that we – it is clear to us, so that – it may be this year or may be next year, I just it’s too early to get locked in on when that might be available.

Yale Jen - Roth Capital

Okay, great, thanks. And just a quick follow-up in areas that in terms of the data to be financially to be presented in ASCO given that this could approaching that the meeting time and abstract time so, it get some sense of other progress also could be have data presented at ASCO besides…?

Dan Junius

The only one that what we see clearly at ASCO at the moment will be some additional Kadcyla data for various studies that are underway. I don’t have information on other partner products that may have data at ASCO.

Yale Jen - Roth Capital

Okay, great, thanks a lot. I appreciated.

Dan Junius

Yep.

Operator

We’ll go next to Jason Kantor from Credit Suisse.

Jason Kantor - Credit Suisse

Great, thanks for taking my question. I think previously you said that your guidance didn’t include royalties from Kadcyla, I’m wondering if the new guidance includes the expected Q4 royalty and then also can you just walk – walk us through in a little bit more detail how the revenue for the quarter breaks out in terms of what’s cash and non-cash and what was triggered by this Novartis decision and how you get to sort of more bigger net loss, but less cash use if you could just walk us through some of that calculation that will be helpful.

Greg Perry

Sure, Jason, it’s Greg. So, in terms of our guidance, technically it would include the royalty revenue expected in this that were recorded in the fourth quarter as Dan mentioned roughly CHF18 million, $19 million we can do the math so, that’s going to be a huge driver of the financials in the fourth quarter. But nonetheless it’s really exciting for the company and we are very anxious to get that in the books in this fourth quarter. I think the simplest way to kind of look at the drivers in the change in the guidance on the net loss side, there is an interesting dynamic because on the revenue side you got non-cash revenue that is triggered so for instance in the current quarter where we saw a significant revenue from the $10.5 million milestone that’s going to be basically turned into cash and certain receivables at the end of the quarter, but the $11.1 million Novartis license, the majority of that is a non-cash number effectively.

So, when you look at the change in guidance with the net losses increasing, it’s primarily because we are going to be pushing into next fiscal year recognition of a license which is primarily non-cash recognition deferred income. In those there are each licenses anywhere from could be between $7 million and $8 million so, that’s really to reconcile the dynamics between the P&L guidance and the cash guidance on the cash side. We saw lower prepaid working capital and actually bit lower expense run rate, which is a run item. So, that’s improving the cash balance forecast and then on the P&L side, we see a push out of license which is basically going to be a non-cash item and some other items that offset the lower run rate that helped Jason?

Jason Kantor - Credit Suisse

It does, but could you explain how why you are booking non-cash revenue for Novartis in the quarter that they paid to a milestone.

Greg Perry

Yes, know – so when we book the multi target agreement and there is a significant upfront and say we booked $45 million of front on the license basically that goes into – on the balance sheet of differed revenue and then from the accounting perspective there is a quite complicated mechanism you go through to then determine when you are going to be able to actually recognize the revenue from that upfront in what accounting period. And one of the big triggers is when the partner takes a license. And then in this case here when Novartis took a license actually at the end of the quarter that triggers the recognition of between $7 million to $8 million of deferred revenue, so that’s the non-cash item. And then we have the additional license amendment which was another $3.5 million or so.

Jason Kantor - Credit Suisse

Alright thanks.

Operator

We’ll go next to Cory Kasimov from JPMorgan.

Matt Lowe - JPMorgan

Hi there it’s actually Matt Lowe in for Cory today. Just a quick question on 853 the abstract for ASCO for that compound, will this have meaningful data in it when its released or will it just be more of a place holder? Thanks.

Dan Junius

The abstract itself has not – will not mention detail because obviously whether it’s being dose escalation study what we made quite a lot of progress in intervening time between then and now. So, I think you will see some tit bits of information, but obviously the most complete data will be able to post for itself.

Matt Lowe - JPMorgan

Okay. Thank you.

Operator

We’ll go next to Moris Peaker from Oppenheimer.

Boris Peaker - Oppenheimer

Hi this is Boris Peaker. Quick question maybe for Greg you mentioned a decrease in operating expenses for the rest of the year, could you just give us some more details of which departments, what areas those reduced operating expenses coming from?

Greg Perry

Yeah, this is really first this Boris versus previous forecast. And again we’re seeing that across the number of different areas but also in the preclinical, clinical area also associated with some of the manufacturing supplies, etcetera. So, we’re seeing it in those two areas.

Boris Peaker - Oppenheimer

I see and my second question is regarding Kadcyla and with the drug gaining traction and 10 year limited royalty window just wondering if you considered monetizing Kadcyla growth is either fully or at least partially at some point?

Greg Perry

Yeah, Boris, okay I mentioned at the Analyst Meeting we certainly are aware that its very valuable asset to the company and it’s a type of asset that we – it’s a very valuable asset for the company and it’s something that we think of in the context of financing the company. So, we know that there are variety of ways to monetize that asset should we feel so that the appropriate lever to pull in terms of capitalizing the company. At the moment we feel very good about the capital position that the company has with the cash balance of $206 million, but it’s certainly something that we’re – there are a number of parties that are interested in helping us to do that if we were felt so that was the right thing or the right time to do.

Boris Peaker - Oppenheimer

Thanks for taking my question.

Dan Junius

And Boris this is Dan you mentioned 10 years we view that to be a 12 year royalty we think while it’s IP dependent we think that the IP portfolio will cover us in the major markets to receive royalties over a 12 year opportunity they exist within the license.

Boris Peaker - Oppenheimer

Thank you for that clarification.

Operator

We’ll go next to Bret Holley from Guggenheim Securities.

Bret Holley - Guggenheim Securities

Yeah, thanks for taking the question. I’m wondering, I’m looking at the preclinical results for 289, it’s a little bit surprise in the efficacy and the preclinical models is comparable with the compound versus over TAPs obviously you would expect with that compound to be more potent and I guess how do you think about what the bar – the clinical bar for success is in early development of that compound?

Dan Junius

I mean I think there is a broad range of information in the preclinical data. Certainly if we look at the naked antibody have similar potency to Erbitux. But generally speaking in the models where we tested it in EGFR driven or dependent cell lines we saw high levels of activity than we saw with Erbitux. I think the – the critical thing here is I think it gives us a broader opportunity than we have been managed to be realized with both targeting Kinase inhibitors and with the Monoclonal antibodies in terms of the fact that we’re dependent upon expression of the target necessarily the active tough way. And I think in that sense that would be we are excited that we are seeing data for example in TKI resistance populations excited that we are seeing monotherapy activity in the squamous cell patients with non-small cell lung cancer well it extends us, sorry, I’m going to say models as well head and neck modules. So, I think there is multiple opportunities wherever the target is expressed, which I think it takes us broader than is managed to be realized with the TKIs and with the monoclonal antibody. So, I think for all of those particularly on the head and neck side and the non-small cell lung cancer side where we see the highest levels of expression and that all would be opportunity to deliver maximum amounts of payload gives us the great clinical opportunity in each of those two diseases is our first areas done for investigation.

Bret Holley - Guggenheim Securities

Great, thanks.

Operator

We’ll go next to John Sonnier from William Blair.

John Sonnier - William Blair

Hi, thanks for taking the questions. With 901, a lot of the dose reduction commentary, questions have centered around safety I guess just understand we are going to ask us a little bit about efficacy, can you talk about may be some of the earlier clinical experience and then just remind us in terms of where you saw clinical activity at the lowest dose? Other words…

Dan Junius

We are seeing kind of clinical activity and doses down as low as 40 mg to make the spread in the monotherapy studies and we’ve seen in the patients we’ve treated in combination with etoposide/carboplatin in the Phase I portion of the ongoing study, we saw more than one response in the patient, where the combination dose is 90 mg/m2. I think the other thing to remember is in addition that is that we are comfortably within the sort of PK exposure limit, so that the apps 90 that we would have expected to require based on the preclinical information. I think in addition, although it’s a different disease, we were very encouraged by the data that we saw in the combination study with myeloma.

Overall, in myeloma although that was 35 mg/m2 dose, so the lower – sort of grams per dose if you like, but that was on the three out of four weeks schedule, so the dose intensity is very similar to took the 90 mg/m2 on the schedule that we are using in small cell lung cancer. We are very encouraged by the activity there. So, I think broadly speaking, we stopped that at 112 as a sort of traffic that was the maximum tolerated dose. We now have had sort of revised view about what the optimal dose for Phase II investigation is, and we’ve gone with 90 fairly uncomfortable that we have both preclinical and clinical support for that data as well as and bring it back to the safety concept from the initial data at least and that we should be able to find that to be a manageable dose to the patients as well.

John Sonnier - William Blair

That’s actually real helpful. And then with the etoposide/carbo adjustment is that modification pre-specified in the north protocol, is it a range, is it a sets modification what’s happening there?

Dan Junius

There are it sort of depends on what we call at the lead is for dose modification obviously the certain adoptions that you may make according to myelosuppression. When it comes to the neuropathy what we suggested is that the first step should to be an adjustment to 901. It’s the requirement for a second dose change because the persistent worsening at neuropathy despite dose reduction we’ve done have recommended a dose reduction, a further dose reduction of both 901 and the dose reduction of carboplatin at that point.

John Sonnier - William Blair

Got it, thanks so much.

Operator

At this time, we have no further questions. I would like to turn the call back over to Carol Hausner for closing comments.

Carol Hausner - Executive Director, Investor Relations and Corporate Communications

Hey, thank you very much. I’d like to thank you all for your interest in ImmunoGen and of course if you have additional questions don’t hesitate to call. Have a nice day.

Operator

That does conclude today’s conference. We thank you for your participation.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: ImmunoGen's CEO Discusses F3Q 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts