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

ImmunoGen, Inc. (NASDAQ:IMGN)

F2Q 2014 Earnings Conference Call

January 31, 2014 08:00 AM ET

Executives

Carol Hausner - Executive Director, IR and Corporate Communications

Dan Junius - CEO

Dave Johnston - CFO

Charlie Morris - Chief Development Officer

Analysts

Adnan Butt – RBC Capital Markets

Simos Simeonidis - Cowen and Company

Cory Kasimov - JPMorgan

Joel Sendek - Stifel Nicolaus

Jason Kantor - Credit Suisse

Michael Schmidt - Leerink Swann

John Sonnier - William Blair & Company

Shaunak Deepak - Jefferies & Company

Andrew Peterson - UBS

Bert Hazlett - Roth Capital Partners

Steve Byrne - Bank of America

Operator

Good day everyone and welcome to this ImmunoGen Second Quarter Fiscal Year 2014 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 the Executive Director, Investor Relations and Corporate Communications, Carol Hausner. Please go ahead ma’am.

Carol Hausner

Thank you very much. Good morning. At 6.30 this morning, we issued a press release that summarizes our financial results for our quarter ended December 31, 2013, which is the second quarter of our 2014 fiscal year. I hope you've 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, Dave Johnston will provide our financial results and guidance. We’ll discuss our financial results and guidance. We’ll then open the call to questions. Our Chief Development Officer, Dr. Charlie Morris is here with us for the Q&A session of the call. Dan?

Dan Junius

Thank you, Carol, and good morning, everybody. We come into the 2014 with quite a bit of momentum having closed out 2013 with a high level of activity. We’re making important progress in our three wholly owned compounds in clinical testing IMGN853, IMGN529 and IMGN289. We also recently made the decision to discontinue development of IMGN901, and I’ll take you through that in just a moment.

Beyond our proprietary compounds, we’ve seen a significant uptick in partner activity in 2013, particularly in the latter part of the year. Clinical data was reported on six compounds by four partners in 2013. Data on four of these was in the latter part of the year. Also, Amgen, Lilly, Novartis and Sanofi opted licenses to our ADC technology in 2013. Four of these came in the back half of the year, two from Novartis. And we also took some steps to continue to augment our technology portfolio, in particular with a cross license with CytomX.

Let me walk you through the details of these, starting with our wholly owned compounds and let me start first with IMGN901. Recall that in November we announced we were stopping our IMGN901 small-cell lung cancer study. This was due to an imbalance of deaths due to infection without sufficient proof of benefit to justify continuation. Once we took that step we wanted to assess available data before deciding on any further paths for IMGN901.

As you might expect we did quite a bit of analysis and through that there was no suggestion of an issue with the compound or with the technology. However, the analysis was challenging as we had only a handful of events to evaluate for each different dimension that we were looking at out of the study. From that we were unable to identify a clear reason for the imbalance. We do suspect the combination -- that the combination played a role in increasing the level of infection from what one would see with etoposide/carbo alone, because that is we did see a level of infection in that arm of the study that did not include 901.

But out of that we’ve decided to discontinue development of the compound. This is certainly disappointing for us, for the potential that it offered to patient suffering for small-cell lunch cancer although I expect this outcome doesn’t come as a surprise to many of you.

With this decision we’ll now focus on our newer high potential products, and let me now turn to those. I’ll start with IMGN289. This is an ADC that targets EGFR. It advanced into the clinics since our last call. We are in the dose escalation Phase I study and enrollment is proceeding well. We’re looking for patients and enrolling patients likely to have EGFR positive solid tumors. And we’ll open expansion cohorts once we’ve established the maximum tolerated dose.

There is quite a bit of interest in this compound, part of it stems from this being a target EGFR that’s well known by clinicians. It also includes an active antibody, so it has potential of dual mechanism both from the antibody itself as well as from the cytotoxin in the ADC. It also parallels with Kadcyla both concerning the target and that it’s in the HER-B family and solid tumors as is HER-2 for Kadcyla as well as the design of the product it has the same linker, the same cytotoxin as Kadcyla.

The second proprietary compound I’ll mention is IMGN529. This is an ADC that targets CD37. As just noted with 289, it has the same linker, the same payload as Kadcyla. And also similar to 289, it has an active antibody and antibody that actually was very active pre-clinically. Right now we’re in dose escalation with this compound for NHL.

We’ve noted on earlier calls that we saw biologic changes as well as evidence of activity at lower than anticipated doses. Based on analysis after we’ve seen that, we believe we know the reasons for these changes and what we’ve done is added premedication to the protocol, which allowed us to resume dose escalation. We have submitted an abstract to ASCO that will give us the opportunity to discuss the things that we’ve seen in early patients more extensively than we’ve been able to thus far.

And then the final proprietary compound is IMGN853. As we previously discussed, we’re dosing patients once every three weeks with a dose that is now based on adjusted ideal body weight. We’re enrolling very well and we expect to move into the expansion cohorts in the next few months. While the expansion cohorts will be for patients dosed once every three weeks, it will also be assessed in a weekly dosing schedule concurrently. This is based on PK analysis that suggests more frequent dosing may offer advantages to patients. So that the dosing now will be three weeks -- weekly for three weeks on a four-week schedule and as I say we’re very interested in the results that that will generate.

Based on those two approaches the every three weeks and the modified weekly, we will select the best schedule then for ongoing evaluation of the compound. We have submitted an abstract and expect to present data in AACR of the PK modeling that gets us to the adjusted idea of bodyweight. We’re also submitting an abstract to ASCO that will provide additional data. So a more expanded clinical database that will reference to PK modeling work that we’ve done. So we think you’ll find that interesting. In terms of the first meaningful amount of disease specific data, that won’t come until the back half of this year probably at ESMO or the EORTC.

Beyond the clinical programs we continue to focus on other pipeline development, looking to expand the opportunity for substantial new therapies through both our internal research as well as in-licensing. In our last call, we discussed our new DNA-acting agents as well as another of our new linkers, both of which were at a medical conference late last year. On the delivery side, we announced the collaboration with CytomX earlier this month. This will allow us to create anti-cancer compounds using our ADC technology and combining it with their anti-body masking technology. This supports the opportunity for further improvement in the therapeutic window for ADCs and potentially can expand the universe of targets such as those with less discrete expression on cancer tissues.

So let me now turn from our proprietary compounds and talk about our partners because there’s been quite a bit of activity there since our last call, and let me just cover a few of the key compounds. I will start with Kadcyla. As yesterday, Roche reported 2013 Kadcyla sales of CHF236 million or approximately $250 million. Almost all of those sales, CHF222 million out of the CHF236 came from the U.S. where Kadcyla was approved and launched in early 2013.

Kadcyla was approved in the EU in November and they were able to launch soon after, after approval in some countries such as Germany, however many of the countries require agreement on pricing or reimbursement first. We expect this will lead to gradual pan-European launch over the course of 2014 and commensurate sales with those launches.

In terms of other Kadcyla activity focusing on label expansion the results from the MARIANNE Phase III study are still expected in the back half of 2014 with filing in 2015. Roche also expect data and filing in 2015 for Kadcyla for use in HER2-positive gastric cancer, this will be second line. As well as in late 2015 they should have data on neoadjuvant use based on pathological complete response again in HER2-positive breast cancer.

They also recently announced that they have started the Phase III study in adjuvant setting, this is in a study that they termed or named KAITLIN. This would be looking at Kadcyla in combination with Perjeta versus a triple combination of Herceptin plus taxane and Perjeta for up to one year. This all would be after three to four cycles of standard anthracycline-based therapy.

Two other compounds I would like to know, with their important presentation at ASH, the first being BTO62 which is being developed by Biotest. This has their antibody along with our ADC technology. Recall here, we have the opt-in right for co-development and co-commercialisation with Biotest in the U.S. In an oral presentation at ASH, they reported initial results from a trial assessing BTO62 used in combination with Rev-Dex to treat relapsed refractory multiple myeloma. Virtually all of the patients in the studies, and this particular study had prior revlimid and velcade and 76% had prior autologous stem cells transplant. We thought the data was quite interesting, that in 100% of evaluated patients had stable disease or better. This included two patients with CRs or VGPRs and 5 PRs. So very interesting activity from this compound with the Rev-Dex combination.

Overall the objective response rate was 73%. This includes patients who are refractory to Rev-Dex. The overall response rate in patients, who were refractory to Rev-Dex, was 75% and the overall response rate was 89% among patients treated with a maximum tolerated dose. At the same time the tolerability profile looked very good, the MTD was a 100 mg/M2 which is about 2.7 mg/kg, one dose weekly for three weeks, every four weeks on top of Rev plus low-dose Dex.

The other compound that was featured at ASH and actually was another oral presentation and it was selected for Best of ASH was SAR 650984 which is a compound being advanced by Sanofi and this is the naked antibody, so a little different than most of the compounds we talk about and that it is not an ADC. The antibody targets CD 38. It was created by Immunogen during our Sanofi collaboration and that it’s a naked antibody. I think it is a very nice job of demonstrating the company’s expertise in the antibody area.

In terms of the data reported at ASH, here it was used as a single agent, again in patients with heavily pre-treated multiple myeloma. Among the population 77% of the evaluated patients had stable disease or better and there was a 36% adjective response rate among valuable patients receiving higher doses. This included two CRs, 1 PR a minimal response and a number of patients with stable disease.

Obviously it’s a small number of patients but given that this was a naked antibody with heavily treated patients, this look to be very interesting results. With 984 Sanofi we also has a trial underway assessing 984 in combination with Rev/dex.

Let me now turn it over to Dave to discuss our financial results and I’ll come back to you during the Q&A.

Dave Johnston

Thanks Dan and good morning. Since we issued a press release this morning outlining our second quarter 2014 results, let me just review the highlights and then we’ll speak to the balance sheet and updated financial guidance.

Revenue for the quarter was $30.1 million as compared to $2.6 million for the same quarter last year. This increase is principally due to greater revenues from license and milestone fees and that will be a recurring team to my review here. So, the current quarter revenue includes $18.2 million in amortization of upfront license fees from the multi-target agreement established with Novartis in fiscal 2011. We recognized these fees, this quarter when Novartis took two licenses to use our ADC technology and executed one year extension of that multi target agreement.

Additionally, the current quarter includes $2.2 million in amortization of upfront license fees from Amgen and $5 million milestone payment from Roche which was aren’t with the approval of Kadcyla in the European Union. Revenues for the quarter also include $2.3 million of royalty payments from Roche and sales of Kadcyla during the quarter ended September 30, 2013.

Our operating expenses for the quarter were $26.3 million similar to the $27.1 million in the same quarter of last year. We reported the net income of $3.8 million or $0.04 per share for the second quarter. This compares with the net loss of $24.4 million or $0.29 per share for the same quarter in our 2013 fiscal year.

The difference is primarily due to increased revenue from license and milestone fees earned in the current quarter. However, we continue to expect to have a net loss for 2014 fiscal year overall. Cash used for operations during the first six months of fiscal 2014 was $21.6 million compared to 42.7 million for the same period in fiscal 2013 with the difference primarily due to an increase in milestone payments upfront license fees and royalties.

We’ve updated our guidance for 2014 fiscal year which ends June 30, 2014. We now project that our net cash used in operations will be between $64 million and $68 million compared to our previous projection of between $69 million to $73 million and that our cash balance on June 30, 2014 will be between a 124 and 128 million compared to our previous projection between $119 million and $123 million.

These changes in projected cash used in operations and ending cash balance primarily reflect reductions in anticipated cash expenses consistent with those that we’ve seen here today. On a P&L basis however we anticipate that these productions will be offset by noncash expenses that we expect to record related to the CytomX collaboration that we entered into earlier this month. However, the current treatment of that transaction has not yet been finalized.

We believe our cash position combined with expected cash inflows from royalties and other revenue sources is enough to fund this at least to our 2015 fiscal year as we continue to invest in the development for our proprietary product pipeline. The rest of our guidance is unchanged from that which we provided in October we continue to project that revenue for our 2014 fiscal year will be between $71 million and $75 million. Operating expense for this fiscal year will be between $140 million and $144 million and our net loss for 2014 fiscal year will be between $67 million and $71 million.

So, with that let me turn the call back over to Dan.

Dan Junius

Thanks Dave. Before we get to the Q&A let me just take you through anticipated events over the course of 2014. I noted that outset that we feel we have a great deal of momentum coming into the year. I think that demonstrated as I’ll take you through the events themselves and it's not just the events but as I said the quality events. We think that over the course of the year we’re going to gain very important inside into our proprietary portfolio as we get deeper into expansion cohorts as we move to expansion cohorts with 289. But also with our partner compounds as many of them are getting to a stage where there will be next stage development decisions forthcoming we expect to see some expansion of the pipeline from our partners in terms of new compounds coming into clinic. But let me get through this specifies.

So, for IMGN853 we expect the expansion cohort to start sometime during the first half of this year but we will have data on the relationship of dose efficacy and toxicity in the second quarter and as I noted during at the earlier portion we would expect to see the first disease specific data in the second half of this year.

For IMGN529, we’ll have the first clinical data in the second quarter of this year and look to begin expansion cohorts in the back half of the year. For IMGN289 there is the potential for the first clinical data and development events sometime in the back half of 2014. For partner compounds we’ll gain increasing insight into sales in the U.S. and the rest of the world for Kadcyla as Roche reports their quarterly data, and we’ll see the MARIANNE results that anticipated right now to be in the second half of this year.

For the seven other components in the clinic, we will look to see data at ASCO, ESMO, EURTC, ASH et cetera possibly some of this smaller medical conferences that would be disease specific over the course of the year. And there will be other progress from our partnered compounds we’ll get some development insights as they report data. We will look to have to see one or more INDs (Ph) being filed by partners over the course of the year, accompanying that, we look to see some preclinical data on a number of compounds being evaluated by partners. And we would allow -- it was an active year for target licenses, in 2013 we’d expect to see more target licenses being taken over the course of 2014 as well.

So with that, let me turn it back to Carol, she can moderate the Q&A for us.

Carol Hausner

Thanks Dan. We’ll about open the call to questions. We’d like to ask you to limit your questions to one to two per person until everybody has had a chance to ask questions. You can then get back in the queue. Operator, we’re now ready to open the call to questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) We will take your first question from Adnan Butt from RBC.

Adnan Butt - RBC

Hi, good morning everybody, and thanks for taking my question. First, Dave, congrats on joining. Two questions here; first on 853, have you decided which disease specific indications to pursue, is non-small cell lung cancer one of them or isn’t one of them? And then second question for BT-062, when is the opt-in decision made, when will it be made? And what you need to see and if you can disclose the terms that’d be helpful as well as well? Thanks.

Carol Hausner

Probably, we’ll start with Charlie answering the 853 and then Dan for BT-062.

Charlie Morris

For 853, I think our primary focus at the moment I think we would be looking at ovarian and endometrial carcinomas primarily because that’s the majority of the patients that we’ve recruited, so where we have the greatest amount of information. Obviously, we remain interested in the non-small cell lung cancer opportunities within that as well as other potentials, which will come through our screen. But I think there is certainly as we start to hopefully bring more data to you over the next few months you will see that most of our information at the moment in the gynecologic area.

Dan Junius

And Adnan on the question 062, the opt-in we haven’t disclosed a specific event; we’ve noted the opt-in fee is $15 million and it’s development related. I don’t think that we’ll be facing a hard decision on that for probably a couple of years. So you can sort of figure out where that might be in terms of development. But it is one that we’re watching very closely. As I noted during the initial comments, we’re quite excited about the data that they generated and reported at ASH; the fact that they now have a couple of - will have one study looking at a couple of indications in solid tumors should generate some additional we hope interesting data. And we have a good dialogue with Biotest; we’ll monitor the progress of the compound very closely.

Operator

We’ll move next to Simos Simeonidis from Cowen and Company.

Simos Simeonidis - Cowen and Company

Good morning, guys, thank you for taking the question. Actually, I’ve two on Kadcyla. The drug had a very good year overall in terms of sales and in this first 10 months, it was used 255 million sales worldwide. But we did seem a slowdown of the growth in the last couple of quarters. Can you tell us where do you see the drug being used, I mean, where had it been used this year? And do you have any quantitative data on conversion of patients if they were on Herceptin and chemo for example since that was essentially the goal of or one of the goals for Roche to put the drug in the market? Thank you.

Dan Junius

We don’t really any insight to help you with that, that’s something that you really, you would want to go Roche to gain any information about conversion et cetera. I think, my comment would be it was a very strong start from zero to generate about $250 million in sales. I think that has with the approvals now in place in Europe and Japan, we will look to see growth with -- what right now is a relatively narrow label but still see good growth over the course of 2014 as they move to submission for meaningful label expansion in metastatic breast cancer as well as in gastric cancer moving into 2015, but that’s the best I can do for you.

Simos Simeonidis - Cowen and Company

Okay, and maybe you might not be able to answer this one either then but I’ll ask it anyways. There has been a lot of excitement at least on the investor side about another HER2 targeted drug Neratinib, do you see any change in the direction, the two adjuvant and one new adjuvant trial catering KAITLIN that is ongoing or do you not see that as a potential threat, that drug as a potential threat in the early setting? Thanks.

Dan Junius

Well, again I am not going to be much help here, I mean it’s, we are always going to see competitive markets, I guess the reference point I would have is the anecdotal comments we get from physicians who describe dosing with Kadcyla as dosing their patients with water. They find it to be astonishing that they can administer something with such a benign tox profile that has very good benefit for many of their patients. So, I think that if that’s the underlying attribute of the compound I have to think it will continue to perform reasonably well. But it’s going to be a competitive market because there are a number of people focusing on HER2.

Operator

We will move next to Cory Kasimov from JPMorgan.

Cory Kasimov - JPMorgan

Hey good morning guys. Thanks for taking the questions. First one is on partnered compound with Sanofi 1984, is there any work that’s ongoing to add a payload to the naked antibody or is this just going to be as it as and with no plans to change it?

Daniel Junius

Cory, it’s Dan. That being a partnered compound we really can’t comment on any plans that they may have for how they take that forward. Right now again they have it as a naked agent, they do have it in the combination study with Rev/Dex but anything further would have to come from the partner versus us.

Cory Kasimov - JPMorgan

Okay. And then Dan you mentioned in your prepared comments that there is quite a bit of interest in 289, is that come, are you talking investor interest or is that coming from the industry and do you have any desire strategically to partner that compound at some point in time in its development path?

Daniel Junius

I gauge the interest is coming from investigators. We have a lung cancer advisory panel and they have shown quite a bit of interest in participating in that study as we have enrolled various centers. Charlie said it could be, if we want to take them all in it will be the world’s largest dose escalation study. But it’s also coming; we have a dialogue with potential partners to always keep them aware of what’s going on in our pipeline. We think at some point as our portfolio matures that there could be productive discussions around how we would globally develop a compound recognizing all the obstacles that exist for regulatory pricing reimbursement as you move outside of the U.S. We also think that for something like 289 where you have had a target that’s expressed on the wide range of diseases that thinking about moving against a number of indications simultaneously, brining a partner and to assist with that could make sense but that’s really the extent of the discussions at this point.

Operator

(Operator Instructions) We will move next to Joel Sendek from Stifel.

Joel Sendek - Stifel Nicolaus

Thanks a lot and so two questions. Between those three drugs, the proprietary drugs which I guess are on Phase I, I mean which do you view as the lead compound, do you view any of them as a lead compound and where do you have potential to move one of them into Phase II the quickest maybe that might be a different answer? Then I have a quick question on Kadcyla after that. Thanks.

Charles Morris

Hey Joel, this is Charlie. I think just by staging amount of information we have available I think we would have the 853 first lead compound at the moment. And we are certainly confident that we will be moving into dose expansion phase of the Phase I pretty soon which is for all intensive purposes is the Phase II portion of that particular study. So, I think that’s clearly there though as you rightly say, the other two are beginning to be fairly close behind as well. So, I think we have got a wealth of opportunity but I think we will be seeing the nearest near-term opportunity to really invest more heavily in one of the compounds, I think it’s likely to be 853.

Joel Sendek - Stifel Nicolaus

Okay, thanks a lot. And then with regard to Kadcyla I guess the biggest market for herceptin is adjuvant and obviously going there you laid out the strategy that they have for gastric and things like that. I mean I am just wondering in your models where do you put in Kadcyla revenue from adjuvant, how long until we get there not only the data but the label, is there any way you can help us with that? Thanks.

Dan Junius

We do some work internally but that’s speculation on our part which probably isn’t a whole lot better than yours. I think that the fact that they now have the study open and you look at the president of adjuvant work that was done with herceptin some time certainly in the back half I mean we close up to back half anyway but deep into the back half of this decade before you would logically have mature data they would look for label expansion but that’s just based on the president of how the Herceptin assessment went to introduce into the adjuvant setting.

Operator

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

Jason Kantor - Credit Suisse

Thanks for taking my question. On the upcoming data regarding the dosing strategy I think it’s for 853. Is that going to be Phase I patient data or is that going to be animal data? What exactly are you going to be showing and how do you think that’s going to impact the way people think about the drug or the strategy?

Charlie Morris

The data will be taken from patient data from the Phase I study and then with some modeling of that data which I think will help deepen the understanding of what we have been saying about the reasons for changing the way of calculating the dose. The primary data we have submitted to AACR, we hope to have some additional follow up on that using PK data from patients in the Phase I follow through of the third ASCOs, the other thing that we’re talking about is chemical data.

Jason Kantor - Credit Suisse

And the AACR data, will that include clinical activity as well or that’s just going to be PK PD?

Charlie Morris

I think for AACR I think we should really be anticipating the pharmacokinetic piece of the story, we hope to have some additional -- may well be a small amount of clinical response data in the ASCO follow up as well.

Jason Kantor - Credit Suisse

And could you just comment on how many patients worth of data we might see at AACR and at ASCO?

Charlie Morris

I think I have given you quite a bit.

Operator

Michael Schmidt from Leerink has your next question.

Michael Schmidt - Leerink Swann

I had one on 289, how does the antibody use in that product differ from Erbituxin and how might that effect tissue selectivity. And then I have a bigger picture question. You know you highlighted earlier today how do you see the overall products strategy to evolve for the company? Are you looking to introduce more compounds going forward, looking at established targets? Are you looking at new targets that you might have discovered sort of what’s the overall strategy long term? Thank you.

Charlie Morris

I’ll take the piece little bit about the 289 antibody. I think when we originally screen for antibodies for the EGFR project the essential thing that we were looking for in fact initially was an inactive anti-body which could just deliver maytansinoid to EGFR expressing self. And during that process we came, were able to identify an antibody which had both inhibitory activities of EGFR while in skin models did not seem to have the same skin toxicity. And we believe that because it is not a complete antagonist, so Erbitux is another drug which is been developed have tended to be developed because they are complete antagonist, this is a partial antagonist so it is able to turn off EGFR signaling sufficiently in cancer cells to enable some anti-tumor activity in itself, while relieving enough signal in keratinocytes that it does not seem to have the same level of direct killing effect on keratinocytes. And also does have the same size release profile.

So obviously from our perspective from our perspective that was quite a big deal to be able to identify something which could contribute to the activity of the agents adding direct anti EGFR effect as well as carrying the maytansinoid payload with the high professes that we may be able to see some sparing of the skin toxicity. Now obviously we’re now in Phase I and we hope to be able to explore that further in the real world, but clearly that will be -- this where the escalation portion of our study. I will let Dan take.

Dan Junius

To your other question Michael I think we have demonstrated having brought three compounds into the clinic that we wholly own over the last two years and introducing through a number of different scientific conferences, press releases et cetera, with the scientific conferences talking about a new effecter molecule, a new linker that’s available for future compounds with the CytomX relationship that we announced earlier this year. We clearly have an interest and I think the wear with all to be bringing new compounds and enhanced compounds with new technology into the clinic.

There is a balance there in terms of how much we can support on the development side plus just the time it takes to get it right with a compound before we introduce it into the clinic. But we remain very interested in expanding our proprietary pipeline. I think it will come from a number of avenues, the compounds we brought into date all contain 100% if you will ImmunoGen technology from antibody through linker through cytotoxin. We have active discussions with parties who have other antibody capabilities that may bring us more interesting targets antibodies with different attributes we look at other targeting vehicles outside of antibodies so I think you’ll see the portfolio continue to expand over the next several years. In some cases with compounds that looked similar to once that we’ve introduced thus far in other cases once that are introduced that may have meaningfully different attributes.

Operator

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

John Sonnier - William Blair & Company

Thanks for taking the question and first of all welcome today that’s wonderful day to have you at ImmunoGen. My question I guess is for Dan and it’s a bit of a continuation of the last one. Your development organization has evolved meaningful since the change in the Sanofi deal. I know it’s arguably much-much more depth-ful now than it was even it’s a few years ago and I guess the question is as you look at the experience with 901, are there any blessings that you feel you can take from that into the current organization to better equip you to handle your proprietary candidates as they progress through the clinic? Thanks.

Dan Junius

Well, that’s one thing that you always look for John that as a compound develops well or not well as we saw with 901 what can be learned. I do think there are some things that we’ve learned about 901. One of the attributes that we’ve known for some time but we thought based on clinical data we’ve seen from earlier studies is that 901 has a very short half life in part due to target expression being in places other than cancer cells in particular on NK cells.

And as we digest the experience I think about what may have led to the results that we saw with 901 or what prevented it from being a successful compound short half life certainly plays prominently, half life was I think about a day maybe even little bit below one day. And therefore it says that the biologic system is processing a lot of the conjugant in very short period of time. And therefore maybe placing undue stress on some of the metabolism to be able to deal with that, so that’s one attribute that we take and as we look at other compounds that there are thresholds that we’ll evaluate.

I think there are others but that’s just maybe gives you a taste of making sure that we maximize the information we get from every study to help us develop better compounds going forward. I don’t know if Charlie you comment on the development organization I would agree with Charlie being here alone is I think manifestation of some of that. But he may have some other thoughts on lessons learned out of 901.

Charlie Morris

No, I mean, I think we all need to recall of course just that 901 was in development for a long period of time. I think rather than necessarily speculating on lessons learned, I think you already see is applying ourselves in a sort of different kind of way the taking a lot of care and diligence sort of we’re trying to getting the dosing schedule right for 853 is an example of that and less greater focus on patient selection that I think we’ve talked about previously. So I think what we’re trying to do is spread the timing of the sort of Phase I Phase IIA portion of these studies, de-risking the projects as best we can for later development and we’ll continue to do that. So that as and when we get to a point being ready to move into a development to launch phase we do that with the highest level of confidence than one could have.

John Sonnier - William Blair & Company

Well, that’s actually very helpful. I think just the question is really from a process standpoint and that’s directly to it so appreciate that Charlie and thanks for taking the question.

Operator

Shaunak Deepak from Jefferies has your next question.

Shaunak Deepak - Jefferies & Company

Good morning. Thanks for taking the questions. Just had a couple on 853, first I’m curious if you are evaluating this modified weekly dosing scheme because you’re seeing ocular toxicity with the current dosing regimen? And then second, when do you think we’d see some data from this weekly dosing schedule as asked you too earlier?

Dan Junius

Let me take the first one first. Yes, the ASCO was too early. So well a couple of things that we’ve observed and this will become I think much clearer once we present the data at AACR and ASCO this year. What we have seen is a relationship between the initial exposure and the occurrence of ocular toxicity. And we’ve also believe that there may be relationship between clinical activity and overall exposures defined by ADC. So we think that by on a modified weekly schedule we can keep that maximum exposure down and keep the overall exposure up. So based on the data that will be presented I think the intent here is to explore that question. But do anything parallel with the three weekly because we have seen clinical activity. We believe we will have a dose identified for dose expansion in the near future. And so obviously we don’t want to post that without having any knowledge of what’s going to happen when we move into that weekly schedule. But I think it’s really trying to get the -- I would say yes it comes from markets at around 60% extent but ultimately we are trying to maximize the therapeutic window and we believe that this may enable us to do that.

Dave Johnston

Just a comment, so it’s clear, I think that what we’re doing with the adjusted idea of bodyweight takes us a long way to finding a therapeutic window that addresses ITOX. This is simply an enhancement that you’d normally go through trying to optimize the dose before you commit to future studies. I think it’s just at the normal course of the event that you’re going to dose optimization.

Operator

We will move next to Matthew Roden from UBS

Andrew Peterson - UBS

Hi guys, this is actually Andrew Peterson for Matt. A couple of quick questions. I guess at first the more broad-based strategic one. When you think about your wholly-owned pipeline, is it more of a decision whether you want to kind of take it as far as you can and then partner? Or are these the programs that you see kind of taking, running the game at yourself? And then a question on 529; as you kind of look at the NHL or B-cell opportunity, are you going to focus on patients, ibrutinib PI3K failure patients, or is it going to be a little bit of a broader kind of a program?

Carol Hausner

Ok, Dan you answer and then Charlie will talk about second question.

Dan Junius

Maybe we have to just spend a second when we talk about partnering to make sure it’s clear, how we would define that. So as we look at the pipeline and generate data from it, when I think of partnering that’s different from out-licensing a compound to a third-party. We’re looking at being able to advance a compound, developing a commercial organization and supporting that ourselves although we may limit the geography on initial compound as we go through the process, as something of a risk mitigation strategy as well as I indicated earlier an opportunity to advance these compounds as broadly as possible both geographically and in terms of indication as quickly as possible. So it’s a little bit of I think in response to your question, and makes the answer, yes we intend to advance these all the way on our own, but not necessarily all the way on our own on a global basis. And that would be true for the first compound. I think, let’s not get ahead of ourselves in terms of what we might be interested in doing where we need to be successful with more than one of these compounds moving forward. And I will let Charlie answer that 529 question.

Charlie Morris

529, I think it is going to be a really important question. This is going to be a changing treatment area with the introduction of the ibrutinib [indiscernible] and other very interesting B-cell receptor signaling inhibitors. We continue to need to understand, aware about the position of cells as we think about moving that forward. I think that could may well be, it could well be -- as an initial play you could look at post some of those agents would also be interested of course and obtaining combination data with some of those agents. And obviously we also need to try to understand what are the main areas of Imatinib; which you are necessarily being served by any of these agents, while you may have the opportunity.

So those even that’s already gone to commit today to saying yes it would be in this population, and all population. I think what we’re trying to do is ensure that we are fully aware of all the patients that we treat, all of their history, all of the risk factor so that we as we say clinical activity we can understand who we think is best going to be served by the product. But I think you identified an important point which is that this will be a changing area and obviously other question may inform some of for folks around partnering on that particular compound as well.

Andrew Peterson - UBS

Okay and thanks the expansion cohorts you mentioned, expected for the second half of the year, is that going to be based on the data that we are going to see at ASCO?

Dan Junius

The dose escalation phase is still relatively early so by the time of ASCO I think what you’ll see is some of the data to explain some of the effects we talked about in the past and what changes are that we made in terms our approach to dosing, I think we’ll have more insight into expansion cohorts later in the year.

Operator

Bert Hazlett from Roth Capital has your next question

Bert Hazlett - Roth Capital Partners

Thanks I have three short ones. On 289 given that the EGFR landscape is reasonably well-trodden, well-characterized, is there any ability for you to get to proof of principal, or proof of concept with that molecule a bit more rapidly than with others, then I have two other questions.

Dan Junius

Yes we hope so. I think frankly there are, I think that’s true for 289 because of familiarity with the target. And I would also point to 853 when you’re talking about pace, you know while we think through the traditional path forward I think with 853, because the data around that particular target outside of the work that we’re doing but also a meaning unmet need, I think that the path forward there could potentially be compressed for we received data out of these expense these disease specific expansion cohorts and so I look at both of those as been opportunities to move quickly at the data supported.

Bert Hazlett - Roth Capital Partners

Okay, thanks. And just two quick ones on partner programs, back to Biotest trial 62, you said that there is a decision for you is to specifically obtain is sometime down -- several years down the road, I think you indicated. You haven’t dialogued with that company with regard to potential development areas. I mean, can you give us a sense of the dialogue kind of given your interest and your rights with that particular agreement.

Dan Junius

We maintained different dialogues with each one of our partners, I characterize the dialogue with Biotest is probably main one of the more broad ranging and constructive maybe the wrong term but we have and active dialogue there. But also I would have to couch that in saying that they control the compound and so development path is defined by Biotest, we’ve worked with them in a number of areas to explore the range of opportunity for that particular compound as you know, they’ve looked at a number of solid tumor targets where CD130 is expressed and if published some encouraging preclinical data, they’re following up on that with the study right now for Pancreatic and triple negative breast cancer.

So, we’ll just have to see, I think that they’re taking a somewhat aggressive path in developing the compound and we’ll just see where that goes but there is a good dialogue but we have no rights either now or frankly post exercising the obtained that would give us control of the compound that will still rest with Biotest.

Bert Hazlett - Roth Capital Partners

Okay. Thank you for that color. And just a brief on 984, again exciting results there has MTD have been reached for that compound as sanofi set along those lines and when we would expect more mature data with that particular trial.

Dan Junius

The only think that I’m aware of the Dave said beyond which was published today as was a comment that they made in the Q&A at JPMorgan where they talked about their enthusiasm about the compound but they disclosed no further data or status update.

Operator

We’ll move next to Steve Byrne from Bank of America.

Steve Byrne - Bank of America

In your opinion where do you think for the progress in ADC technology is going to come from perhaps you could priorities these buckets, you targets that are binding affinities, new linkers or new cytotoxin.

Dan Junius

That’s a tough one and there is as you know quite a bit going on and it’s tough to handicap it because of the scope of advances or understanding maybe is a better term than just advances that have taken place over the last three or four years. I think that if you talk to people about the ADC space including probably us maybe going back five years, we probably would have been -- we wouldn’t have seen the opportunity with targets that’s developed over the last several years. As we talk to potential partners about the scope of targets because that’s always going to be an issue for somebody who wants that to enter into our license agreement or how much real estate really is left, we’ve been surprised at the range of target availability and target opportunities that’s been there.

So, I don’t think that by any means we’ve been reached to limit of what’s available from our target standpoint. I think there is lot of opportunity coming forward with targeting vehicles that there are some innovative approaches there that may prove to be interesting, I think not to just tell cytotoxin alone I think that’s indicative of what can be done with targeting vehicles that potentially can further expand the range of useful targets.

In terms of binding or linkers, we’ll see. I think that the -- we think that the portfolio that we have today is extremely useful from a functional standpoint in terms of the properties it conveys with the cytotoxin once released within the cancer cell. So, maybe there will be innovations that will stretched out, we do often lot of chemistry and biochemistry work there but certainly there are other approach is being taken. Some things that are being advanced as significant innovations in the space I think have yet to be proven and so we’ll just let that evolve and see whether even improving whether they convey some of the advantages that are being promoted before there is any clinical data to support it.

Cytotoxins, we’ve done some additional work there, we think that there is opportunities, I don’t know that the opportunities will be replacements for what exist as much as maybe defining new niche opportunities and I don’t know how larger small niche it is but they may hoping avenues that can’t be adequately serviced by the cytotoxin that exist today. But I don’t know that they will render today’s toxins by any means obsolete. So I’m not helping you a lot Steve in terms of saying which is more important than the other. I’ve said in a number of occasions, we’re dealing with a system here that involves all of the elements that you know of and I don’t think that you can necessarily point to one or another as being the secret sauce. I think it each one bears different attribute in how they interact really is going to be define how you optimize the solution.

Steve Byrne - Bank of America

Actually, Dan, that was helpful. And just one follow-up to that, do you think there is merit to considering also modifying the constant region of these antibodies? As part of an ADC where there’d be incremental benefit to also affect effector cell interactions?

Dan Junius

Well, there you start to get into this space and will be learning more about this over the next couple of years. I think you start to get into this space with saying, is there an advantage to an ADC that has an active antibody to one that uses simply a targeting vehicle. And I think there is a bias to say the more you can do to impact cell that the better certainly and some of that can come from the antibody all the better. But I think there is going to be a limited universe of active antibodies now whether modifying antibody in some way can impact that I guess remains to be seen. Do you have any - Charlie, if any thoughts there?

Charlie Morris

No, I mean obviously, the quite success that we’ve had with our technology today’s been Kadcyla where we have an active antibody. And I think anything where there are active antibodies, but then you have, you’ve also tried to ensure that you have antibodies whose activity is there to about the same level where it is delivering adequate payload to the cell. So, I think, it’s always an interesting one, but I think to my mind that and the work that we have done with CytomX, that’s the work we’ve done around cytotoxin it’s broadly about addressing more targets and those with lower target expression through more potent payload those where perhaps there is more expression on normal cells is the concept behind the Probody deal. So I think overall we’re prioritizing all of them in a sense, but with a view to my mind at least of addressing more targets and I think that would come in with looking it effector regions on antibodies as well.

Steve Byrne - Bank of America

You’ve mentioned Kadcyla, I was actually thinking more along the lines of what is the other Roche Gazyva where it’s the interaction with effector cell that’s being pulled in, is that largely called that considered doing something like that on an ADC?

Dan Junius

Yes, we may not have the right people on the room and that particular one there you’re doing with CD20 as a target. I’m not sure again start thinking about system and really it’s a broad question but just to focus on that one CD20 when you think about targets, it’s not a particularly attractive target for an ADC because of the behavior of that particular target and not internalizing well. So you think about different things with different targets, I know you weren’t asking specifically about CD20 but we now to have people that are more knowledgeable about that particular dimension to be helpful beyond that, Steve.

Operator

That does conclude our question-and-answer session. At this time, I would like to turn the conference back over to Carol Hausner for additional or closing remarks.

Carol Hausner

Great, I’d like to thank everyone for your attention and interest in ImmunoGen. If you have any subsequent questions, don’t hesitate to call. And have a great day.

Operator

That does conclude today's teleconference. We thank you all 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 F2Q 2014 Results - Earnings Call Transcript
This Transcript
All Transcripts