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NewLink Genetics Corp. (NASDAQ:NLNK)

Q4 2013 Earnings Conference Call

March 11, 2014 04:30 PM ET

Executives

Charles Link - CEO and CSO

Nick Vahanian - President and CMO

Gordon Link - CFO

Analysts

Mara Goldstein -Fitzgerald

Biren Amin - Jefferies

Stephen Willey - Stifel

Operator

Good day ladies and gentlemen, and welcome to the NewLink Genetics Fourth Quarter and Full Year 2013 Earnings Conference call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder this conference call is being recorded.

I will now read the forward-looking statements. We would like to remind participants that the matters discussed on this call contain forward-looking statements of NewLink Genetics Corporation. I will now read the forward looking statements disclaimer. We would like to remind participants that the matters discussed on this call contain forward-looking statements of NewLink Genetics Corporation that involve substantial risk and uncertainties. All statements other than the statements of historical facts discussed in this call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include amongst others, statements about NewLink’s financial guidance for 2014, enrollment in its clinical trials for product candidates based on NewLink’s HyperAcute and IDO platform technologies, the timing of release of clinical data from ongoing clinical studies, its plans related to moving additional indications include clinical development, its plans for commercialization activities if any other product candidates are approved for marketing. NewLink’s future financial performance results, operations, cash positions and sufficiency of capital resources to fund its operating requirements and any other statements other than statements of historical fact.

Actual results or events could differ materially from the plans, intentions, and expectations disclosed in forward-looking statements that NewLink makes due to a number of important factors, including those risks discussed in Risk Factors and elsewhere in NewLink’s quarterly report on Form 10-Q for the period ended September 30, 2013, Form S-3 registration statement filed December 28, 2012 and its other filings with the Securities and Exchange Commission. The forward looking statements made during this earnings call represent NewLink’s views as of the date of this earnings call. NewLink specifically disclaims any obligation to update or revise any forward-looking statements made on this call as a result of new information or future developments.

I would now like to hand the call over to your host, Dr. Charles Link. You may begin.

Charles Link

Thank you for joining us today to discuss our 2013 operations and our expectations for 2014. With me today are Gordon Link, our Chief Financial Officer; and Dr. Nicholas Vahanian, our President and Chief Medical Officer. We have continued to advance and made solid progress in both of the cancer immunotherapy platforms, HyperAcute immunotherapies and IDO pathway inhibition programs.

Let’s start with the HyperAcute immunotherapy, which is designed to stimulate the patient’s immune system to recognize and attack cancer cells. The algenpantucel-L, our lead HyperAcute product, we completed enrollment in our pivotal Phase 3 IMPRESS trial for patients with surgically resected pancreatic cancer in September 2013. We recently announced that the independent data safety monitoring committee or DSMC completed the first interim analysis of this study. The DSMC was scheduled to analyze the first interim analysis data during the first week of March after the 222nd event was reached in February. DSMC recommended for the IMPRESS study to continue as planned without any modifications.

We were further reassured by the conformation that there were no unexpected safety concerns. A second interim analysis was planned upon reaching 333 patient events which is expected to occur sometimes later this year with the final analysis planned, if needed at 444 patient events. We are encouraged by the apparent lengthening of survival in the combined rounds of this study because we believe the body of evidence in prior multi institutional trials of resected pancreatic cancer patients treated in the United States indicates that survival outcomes remain very poor in this unfavorable unfortunate group of patients.

As we approach the second interim analysis we will continue our commercialization strategy and planning efforts including building the infrastructure needed to support an independent launch in U.S. market for algenpantucel-L as a treatment for patients with resected pancreatic cancer. For markets outside the U.S. we intend to secure a partner for additional development where needed, as well as for ex-U.S. sales and marketing. We expect this timing to co-inside with the interim analysis timeline for the IMPRESS trial.

We continue to actively enroll patients in both our Phase 3 pivotal study which combined algenpantucel-L with the standard of care for patients with locally advanced pancreatic cancer and our Phase 2b/3 study of tergenpumatucel-L or HyperAcute lung immunotherapy, which is being compared to docetaxel in advanced non-small cell lung cancer.

We have recently launched a Phase 2 study of dorgenmeltucel-L, our HyperAcute melanoma, in combination with ipilimumab for advanced melanoma patients. In addition we recently launched a first-in-human Phase 1 clinical trial of HyperAcute renal immunotherapy in patients with metastatic renal cell cancer.

Looking to the future with our HyperAcute immunotherapies, both algenpantucel-L and tergenpumatucel-L have demonstrated the potential to expand the benefits of chemotherapy by sensitizing the patient’s immune system to chemotherapy. This chemo sensitization effect, which was presented at ASCO 2013 provides the opportunity for improved treatment outcomes for patients in metastatic disease receiving chemotherapy after prior exposures to HyperAcute immunotherapy.

The IDO pathway is regarded as a key immune checkpoint target. Our IDO pathway inhibitor platform expanded and made significant clinical progress during this past year. IDO pathway inhibitors are designed to counter act a fundamental mechanism by which tumors evade immune mediated destruction.

Indoximod, our most advanced IDO pathway inhibitor continues to advance patient enrollment in separate clinical studies of Indoximod in combination with standard of care for a variety of different indications including melanoma, pancreas, prostate, breast and brain cancers. We are briefly initiating clinical trials with our second IDO pathway inhibitor drug NLG-919 in patients with advance solid tumors.

We have found these two IDO pathway inhibitors to have different mechanisms of action. So they represent two distinct drugs which in fact have shown synergy with each other. We look forward to initiating a number of additional clinical trials of the IDO pathway inhibitors during 2014, including evaluating them in combination with other cancer immunotherapies such as other checkpoint inhibitors in cancer vaccines as well as chemotherapy and radiation.

In addition, we expect to report preliminary results for several of our ongoing clinical trials at appropriate scientific and medical forums throughout the year. In fact, two posters related our IDO pathway inhibitors were accepted for presentation at the American Association for Cancer Research Annual Meeting being held April 5th through 9th in San Diego. The first described the synergistic anti-tumor effects of combining checkpoint inhibition with anti PD-1, PDL-1 antibodies and our IDO pathway inhibitors NLG-919 in Indoximod in the context of active immunotherapy.

The second highlights the role of ideal IDO pathway inhibitors in tumor immunotherapy more broadly. We’ll talk more about this data once it has been presented. We have seen significant interest from a number of parties for clinical collaborations as well as potential exclusive partnerships around our IDO program.

Our business development strategy for this platform is to secure a global co-development partner in the near term. We believe the best partner for NewLink is one that supports our long-term business strategy. Therefore while it is important for this partnership to bring extensive resources for development and commercialization, it is critical that NewLink will continue to contribute scientifically, financially and strategically to the joint development planned going forward.

Of note, concerning our IDO pathway is a good platform, in January of this year we held an event in San Francisco simultaneous with the annual JPMorgan healthcare conference, in which we invited experts in the emerging field of checkpoint inhibition to speak based on their particular areas of expertise.

I’ll briefly hand the call over to Dr. Nick Vahanian, our Chief Medical Officer to provide a summary of the events.

Nick Vahanian

Thank you Chuck. Our expert panel for the event included Dr. David Munn of Georgia Regents University Cancer Center who are the key pioneers to describe the main function of IDO porting. Dr. Munn provided an overview of IDO pathway and its emerging role in cancer immunotherapy. Dr. Samir Khleif, Director of Georgia Regents University Cancer Center and a highly regarded leader in the field of PD-1 and PDL-1 discussed a synergy observed by combining Indoximod, our IDO pathway inhibitor with inhibitors of PD-1 or PDL-1 function. Dr. [indiscernible] of the Memorial Sloan-Kettering Cancer Center, a researcher with considerable CTLA-4 experience discussed a rationale and data supporting inhibition of CTLA-4 full function in combination with IDO inhibition.

The panel has discussed the fact that QME [ph] checkpoint pathways CTLA-4 IDO and PD-1 are interrelated and as a result [indiscernible] may prove more effective than single agent interventions. This was supported by multiple preclinical studies in which IDO pathway inhibition was shown through this local to new media immunosuppression providing potential for enhanced anti-tumor responses in combination with chemotherapy or radiation and in combinations with other immunotherapies such as cancer vaccines and other checkpoint inhibitors such as inhibitors of CTLA-4, PD-1 or PDL-1.

We know that CTLA-4 blockade has been shown to enhance tumor specific immunoresponses that co-relate with improved survival in melanoma tumors, as demonstrated with the ipilimumab. However the therapeutic benefit has been limited due to resistance mechanisms within the tumor micro environment. By combining anti-CTLA-4 and Indoximod, improved the anti-tumor effects including reduced tumor growth and increased survival in multiple tumor models we observed.

Importantly this combination was well tolerated by mice with no weight loss, further clinical size of acute or delayed toxicity or autoimmunity. This activity was also observed with antibodies targeting PD-1. In addition IDO blockade with Indoximod enhanced the effects of PD-1 and PDL-1 blockade. Furthermore in checkpoint inhibition resistant tumors, employing a whole [indiscernible] vaccine, prior to combinations with checkpoint inhibitors, Indoximod and ipilimumab allowed for effective immunoresponses. This key concept is important. So it’s mainly human tumors resistant to checkpoint blockade.

In summary, our panel demonstrated that blocking the IDO pathway reduces immunosuppression and enhances immunoresponse an IDO exhibition that's synergistic in combination with other immunotherapies CTLA-4, PD-1 or PDL-1, cancer vaccines, chemotherapy and radiation regimens.

Indoximod is currently in multiple phase II studies and phase I studies of indoximod demonstrated an excellent safety profile and it was well tolerated. Noteworthy, we did observe that some patients developed autoimmunity that was reversible. Interestingly, the development of autoimmunity with checkpoint inhibitors has been regarded as a harbinger of drug activity with [indiscernible] and PD-1, PDL-1 blockades. We have also demonstrated early evidence of the potentiation of chemotherapy with indoximod.

In our phase I trial patients with progress on prior chemotherapy will have [ph] found some objective responses when given indoximod with Taxotere. This included solid partial revisions in a patient with [indiscernible] carcinoma with previously filled Taxotere in a fifth line breast cancer patient.

Although this deal is early, we feel it represents important initial clinical activity of indoximod. These clinical observations are consistent with previously published [indiscernible] medicine on indoximod by George Prendergast, another member of our scientific advisory board. Give that new NewLink has two related yet distinct IDO pathway inhibitors, blocking immunosuppresion and a portfolio of cancer vaccine inducing immune activation, we believe we are well positioned to be a leader in the field of cancer immunotherapy.

I will now turn the call over to Gordon Link, our Chief Financial Officer to review our financial results.

Gordon Link

Thank you, Nick and thanks to all of you for joining us on our conference call this afternoon. We ended 2013 with approximately $51.5 million in cash and cash equivalents including the net proceeds from the sale of $17.5 million worth of shares under our ATM. We expect to end 2014 with approximately $40 million in cash, cash equivalents and marketable securities, including net proceeds from the sale of $27.7 million worth of shares under our ATM. Approximately $13.9 million remained unused under the ATM. Research and development expense increased $4.9 million to $22.7 million in 2013 over 2012, primarily due to expanded clinical trial activities for IDO pathway inhibitor programs, NLG-919 and indoximod.

General and administration expense increased $2.4 million to $9.5 million in 2013 over 2012, primarily due to increased personnel related expenses as we prepared to launch Algenpantucel-L should it be approved by the FDA. We currently expect our cash resources to allow us to fund operations through 2015. The loss for 2013 was $31.2 million increasing from $23.3 million for the year ended December 31, 2012. Comparison of our per share losses is not meaningful as our weighted average common share count changed due to shares issued in NewLink's follow-on offering in February 2013.

With that I would like to turn the mike back over to Dr. Link.

Charles Link

So, to summarize in 2013 and early 2014, we advanced all of our major development programs and look forward to the following milestones in the remaining of the year. As far as the HyperAcute immunotherapy platform, as we mentioned earlier in the call, based on the first interim analysis, we will continue the algenpantucel-L phase III IMPRESS study for resected pancreatic cancer with the second interim analysis expected upon the 333rd event later this year. We plan to continue accrual in our algenpantucel-L HyperAcute pancreases phase III pillar study for locally advanced pancreas cancer with our preliminary data for presentation anticipated in early 2015.

We plan to continue patient accrual in our tergenpumatucel-L HyperAcute lung study Phase 2b/3 in advanced non-small cell lung cancer. In 2014, we launched a phase II study with dorgenmeltucel-L HyperAcute melanoma, in combination with ipilimumab for advanced melanoma patients and we intend to complete enrollment in our recently initiated phase I HyperAcute renal study for metastatic renal cancer. We also plan to initiate combination immunotherapy trials in 2014 evaluating the activity of our HyperAcute immunotherapies in combination with our IDO pathway inhibitors.

Turning to the IDO pathway inhibitor program, we intend to be very busy with clinical efforts for that program as well. As far as indoximod, late this year early 2015, we anticipate presenting preliminary data for our ongoing phase II study of indoximod plus docetaxel in breast cancer patients. We will continue to advance our programs for our ongoing Phase II study of indoximod plus PROVENGE in metastatic castrate resistant prostate cancer and our phase I, II clinical study of indoximod plus temozolomide in advanced brain tumors.

Furthermore, we intend to make rapid progress in our phase I studies of indoximod in combination with ipilimumab for advanced melanoma and indoximod and combination with gemcitabine impact with [indiscernible] and metastatic and pancreatic cancer.

Shifting gears to NLG-919, we have the following milestones planned. We intend to present preliminary data for our ongoing phase I study of NLG-919 in advance solid tumors late this year or early 2015. We plan to initiate multiple phase II studies of NLG-919 plus indoximod plus HyperAcute immunotherapy in solid tumors and additional studies evaluating NLG-919 in combination with chemotherapy and/or other Checkpoint inhibitors. As you can there are no shortage clinical activities this year and we look forward to keep you apprised of our progress in weeks and months to come.

With that, I will open up the questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instruction). Our first question comes from Salveen Richter of Canaccord. Your line is now open.

Unidentified Analyst

This is Andrew on the line for Salveen and thanks for taking my question. Just to start with could you remind us of overall segment benefit you’ll need on the second and third analysis [ph] to stop it for efficacy and can you just kind of just talk about how you’re thinking about the likelihood of hitting that benefit given the Board's decision on the personnel.

Charles Link

So, we still -- as we’ve previously said the first interim analysis was statistical high bar and we knew that, the main reason being that a number of the patients that were enrolled, about the half the patients enrolled during the last year in three months of the study had not had very long follow up to be able to created up differentiation for that segment of the population to achieve that statistical high bar in that P value 0.004. But second interim analysis, which we anticipate will occur later this year will have approximately -- that will acquire approximately a 30% improvement between the two arms based on log rank analysis and the P value for that is 0.019, a much what we feel were a realistic bar in terms of activity to achieve and we think that there is significant potential for that integral analysis.

Of course the study is designed to detect a 20% difference in overall survival based on log rank analysis comparison of the two arms of the study at the final analysis which we believe will occur during 2015 and will be trigged when there are 444 patient events. That final analysis we actually require as P value of 0.043.

Nick Vahanian

Andrew, if I could emphasis on that one more time, that important point which is the 30% approximate improvement as Chuck mentioned is log rank analysis without actually knowing it occurs and how they could separate. That’s a projection of the estimated survival between two groups and how they could separate on the expected benefit between the two groups. So for the approximation of around 30% benefit.

Unidentified Analyst

Okay, that’s helpful. Thank you. And then just a quick follow up on the IDO pathway. When you’re thinking about partnering, are you talking to people about partnering both terms together in these complete [ph] effort.

Charles Link

The answer is its depends upon the interest of the partner. We could partner one asset separate. We could partner both assets together or the second asset by itself. So it really depends on the partnership and what the partners interested in and how well their clinical development plans fits with our clinical development plan for what we think is a traffic class of Checkpoint inhibitors. I think it's interesting that we found that IDO inhibition seems to be right in the center of the pathways that relate to CTLA-4 and PD-1. So it seems to be a very central and important target.

Nick Vahanian

In other words, Andrew we are pursuing all opportunities between one compound to second compound. We've moved onto discussions and we evaluating all opportunities.

Operator

Thank you. And our next question comes from line of Jason Cantor of Credit Suisse. Your line is now open.

Unidentified Analyst

Good afternoon. This is Jeremiah for Jason. In terms of the trajectory for the second interim analysis that’s 333 events, you mentioned that you expect that sometime this year. How confident are you in terms of trajectory? Will [indiscernible] do you expect for like a certain period or certain timeframe or is that range kind of broad still?

Nick Vahanian

Before we emphasize the later this year comments about the second interim analysis 330 [ph] events, I would like to reemphasize the point that in our phase II the benefit projected from the HyperAcute vaccines went up as one year at 37%-38%, the second year to 58% and then final third year analysis showed over 100% benefit. So there is an increased benefit through our immunotherapies in general and I believe -- we believe HyperAcute vaccines have demonstrated that as well. Keeping that in mind, having the 222nd event in February, our projection at this time is towards end of 2014 will be 330 events?

Unidentified Analyst

And then you spoke about terms of you saw that increasing benefit overtime for in your Phase II study, and that’s something as soon as prefer a characteristic of immunotherapy where you have the Kaplan Meier curve start to level off as the time goes on. Would you mean, just hypothetically speaking -- would you expect to see that before the second interim analysis, just kind of theoretically or is that something you might to see more towards the final analysis?

Charles Link

I think that some of those events are beginning to accrue in the data currently. If you think about the first patients that were enrolled in early 2010, those patients are going to have three years or more follow-up here in not too distant future and so if you look at the survival curve from Phase II, we had a flattening that occurred between years two and years three in that survival curve. The tail effect if you will has been a uniformed part of immunotherapy that’s been seen with PROVENGE, it’s been seen with ipilimumab, it’s been seen with PD-1 inhibitors.

And we believe that we saw a similar tail phenomenon in our Phase II testing in a variety of different disease with hyper-acute technologies. So we do believe that the pattern of response is going to be similar with regard to that. So it’s very distinct than what you see with chemotherapy or small molecule inhibitors where a lot of the beneficial effects are dominant early and fade later. Here you see sort of the opposite pattern that seems to be a general principal for immunotherapy that we think will also hold true for the hyper-acute program.

Unidentified Analyst

Just is a follow-up, is it possible at all to predict when that might happen or is that something you need to -- based on it -- because you’re saying it is sort of a range on patients who enrolled. But is that just something you can’t really predict before and is more near after the analysis is done more retrospectively?

Charles Link

No, I think that you’ll be able to see the curves in real-time once we have access to the data but obviously we’re blinded to the data currently. We continue to believe that the control group performance is not going to vary dramatically than what has been seen previously before in large multi-institution trials in the United States, In that U.S. trials have a particular pattern of recurrence in death that has been reproducible over several decades. It is true that the advent in the use of Abraxane and Folfirinox may be adding a month or two or three to those survival curves, but we think if the beneficial effects of those new agents that have limited ability of metastatic disease and second line recurrent metastatic disease will also have limited benefit and therefore we find that encouraging.

We think that it’s very important to sort of distinguish the clinical pathologic patterns with pancreatic cancer from other types of malignancy that can have tremendous variation and outcome. The outcome in pancreatic cancer unfortunately for patients has been one of the toughest ones that we have to deal with, and I can tell you that as we've been in oncology for the last 30 years it’s one of the toughest with the patients that ever meet in the clinic.

Operator

Thank you. Our next question comes from Mara Goldstein of Fitzgerald. Your line is now open.

Mara Goldstein - Fitzgerald

I just wanted to ask a follow-up on that issue -- on a question around control and how that control arm might be acting. Given that the events, the 222nd event happened in February, is it your expectation then that the control arm is performing as you would have figured it to in the statistical plan at this point in time based on when you know patients were enrolled in a trial?

Charles Link

So we designed a statistical plan that would easily tolerate a control arm in the low 20s and we did that purposely, even though we knew historically in the United States the outcome, for instance the RTOG-97-04 trial was 18.6 months, if you include all the patients in that trial. So our view remain the same as we’ve had all along, which is there may be some benefit from these new chemotherapies that had been approved, but the benefit we believe from those treatments will be modest. And we don’t believe if there is any fundamental change that’s occurred in the United States that’s suddenly going to jump the survival of pancreatic cancer patients in the control arm by five or six months. We don’t believe that. We obviously don’t have access to the data. We’re blinded to it. But we have been reviewing and thinking about this issue a lot and reviewing other data a lot.

Mara Goldstein - Fitzgerald

Okay and then if I could just ask a follow-up question on the question of partnering, you had said that you would like to partner but you have some requirements around that. Some would be participation. Can you talk about what that would mean in terms of personnel involvement, as well as financial involvement?

Charles Link

Yes, we very much feel that we’ve as we’ve been in the checkpoint heavier fields for now more than 10 years and we first merged the IDO technology into our company by taking over and merging in a privately held company in Philadelphia that was formed by George Pendergrass that had some intellectual property it’s IDO we subsequently in-licensed the bulk of the intellectual property from Georgia regions university David Monn and Andrew Miller’s group that a lot of the pioneering work on IDOs target.

So our view is that with that team we have a very good sense of what we think the logical combinations of checkpoint inhibitors are the logical sequencing of vaccines followed by checkpoint inhibitors. We sense that some large companies have not spend as much time thinking about the importance of driving a sector T-cell function before you do checkpoint inhibitor blockade the reasoning is if we do checkpoint inhibitor blockade and there aren’t the right type of T-cells around in the environment that create affected anti-tumor responses even if you release them allow them to proliferate they might not have the right targeting.

So if you do vaccinology prior to that and drive the immune response and then do checkpoint blockade all of the preclinical work suggest that in some instances you can double the effectiveness of the checkpoint blockade. More importantly, and this was actually from data recently published Ricky (Ph) Home Guard and one of the reasons we had talk with the JP Morgan event some tumors seem to be completely resistant to single checkpoint blockade inhibitors or a multiple checkpoint blockade inhibitors in combination but they found in some of their experiments that if you give a whole cell vaccine prior to the checkpoint inhibitors you can revert the genotype and make the tumor sensitive again. But I think that’s going to be a general principle and of course NewLink was found on that fundamental principle of believing that driving the effector immune response followed by checkpoint inhibitor blockade was the right combinations ultimately and in terms of how to imply immunotherapy.

Operator

Thank you. Our next question comes from the line of Biren Amin of Jefferies. Your line is now open.

Biren Amin - Jefferies

Yes thanks for taking my questions guys. I guess also with HyperAcute pancreas on the HyperAcute pancreas interim why wouldn’t -- why shouldn’t we assume that the control arm would be living beyond the low 20 so for example could we make this often that the control arms living at 24, 25 months and if so what does that do to your staff assumptions? Thanks.

Charles Link

I’ll start by referencing a recent study that was published by John Hopkins group which demonstrated that for the last three decades going all the way back to 80s, 90s and all the way to 2011 the survival expectancy in pancreatic cancer was 19.2 months in all three decade survival did not change in United States. Looking at [indiscernible] study which was the largest pancreatic cancer study completed prior to ours in our second patients the median survival was 18.6 months.

The benefit of Gem Abraxane combination in metastatic setting upfront is 1.7 months assuming all of our patients received Gem Abraxane follow up in the [indiscernible] setting after recurrence. And assuming that even in the recurring setting they’ve got a benefit as much as they would in upfront setting that would move the needle from 18-19 months to low 20s as best. And there is no between the size pool [indiscernible] which is again similar benefit and again in the metastatic setting. The benefits are limited in pancreatic cancer for the last two decades.

Considering that it is our expectations, it is our belief that in our study today we don’t have any reason to believe that median survival for these patients will be more than low 20s. Nevertheless, our study even though expectations were 18-19 months studies designed were low 20s to be able to is powered around that to be able to capture the difference around 20% in survival for the final analysis. So statistical plan has been prepared to capture the difference around 20% as well as 20% with control group coming into low 20s but we believe that’s the reason for our confidence for the statistical plan for the study. Chuck you want to add to that?

Gordon Link

Yes if I get your question I think even if the study control arm comes in at 23 or 24 or 25 months there is certainly still the opportunity to touch this study could be positive at the final analysis given where the projected overall means for the study are currently. I know but one issue that came up that somebody had question was there was an enrollment criteria for the Phase 3 protocol that patients have expectations of six months of survival and as I understand it the RTOG study had an expectation for enrollment of three months of survival we don’t believe that that entry criteria has any material difference between the two studies specifically the decisions to go to surgery or not are made at most of the universities by teams of surgical and medical oncologists, and sometimes in concert with radiation oncologist. And if they don’t in general believe that the patient has an opportunity to live at least six months, generally they wouldn’t be taken to surgery. And that’s very similar to decisions made by many of the similar types of teams at many of the same universities that participate in the RTOG 9704 study in our study.

So that criteria we don’t believe is selecting for somehow a different group of patients that were present in the last national trial. I think one of the things that would argue that to be true is when we published September of last year, the initial demographic characteristics which we’re going to put out, we hope to put out in more detail at ASCO that the patient population from a U.S. only multi-institution trial more than 70 sites looks very similar between the RTOG 9704 study and the NewLink IMPRESS trial.

So I think if the patient demographics are similar in the stages the patients entering this trial are similar that, similar institutions and similar large study we think that it’s going to reflect what that U.S. population looks like. The fact that the John Hopkins data they published overlaps with two years during the period where NewLink was enrolling patients on the Phase 3, between 2000 and 2011, 1,100 U.S. patients medium survival of 19 months, I think that Hopkins is typical for the type of university, tertiary result centers that are receiving and treating patients under our Phase 3 IMPRESS trial.

Charles Link

I would like to add one more point. So again I want to reemphasize that our expectations being around let’s say low 20s, 21 months, 22 months for the control arm for the reasons that we just went over. And a number that maybe 23 months, 24 months, even if you go higher with that for some reason the control arm comes at those levels, even though we do not expect it. Nevertheless, we have as you remember we have demonstrated in the phase 2 study we had three patients with CRs, that have been cured after vaccine and the treatment complete responses.

So the chemo session effect that we have demonstrated with our tergenpumatucel and algenpantucel pancreatic cancer vaccine that we believe further benefits the vaccine in this trial if there was a high benefit to the control arm that impacts always more in the study arm. So we believe for some reason that if we’re miscalculating instead of saying low 20s and the number comes 23 months, 24 months the impact will be even larger in the study arm for that reason.

Biren Amin - Jefferies

If I could get a follow up also on HyperAcute, what’s the baseline of the patients that are R0 versus R1 in the study? I think you disclosed some baseline characteristics last fall, b that wasn’t one of the criteria that you had disclosed. And then also I think the radiation use in IMPRESS is that investigators discretion. And so I wanted to maybe if you could share the level of radiation in the IMPRESS trial if you could potentially share that information.

And then lastly I guess on the timing of the second enrollment the final, given that all the patients are enrolled in the study, why wouldn’t we expect to see an acceleration of events now these patients have been enrolled for quite some time, thanks.

Charles Link

Sure, so I’ll start with your first question. The patient characteristics that we put forward and right up for the enrollment completed in September, was the important prognostic indicators that impacts survival, which was also notification factors, namely nodal status and levels. When we started this study in May 2010 when the first patient was enrolled and prior to that designing of this study we offer very careful consideration in talking to the key opinion leaders and reviewing all the literature. We have decided that nodal status and 99 levels are the most important prognostic indicators.

Based on that when the study was completed we have at least a criteria for nodal status and 99 level in our Phase 3 study, to demonstrate the patient characteristics were very similar to expected U.S. population where our nodal status was 70% on our IMPRESS trial where RTOG 9704 was 68% and both trials - levels were 9%.

So that was our reasoning behind why we chose those characteristics. To your question about further characteristics in the upcoming meetings we will put up more discretion of our petition characteristics in the IMPRESS trial and the meetings.

Gordon Link

I do think that there was a little bit of a teaching point I guess in terms of R0 versus R1 receptions, that’s important we believe. If you look single institution trials that patients who have smaller tumors or node negative tumors or only one node positive with adequate node sampling which usually means 10 or more nodes that have been sampled. In subsets of patients that have small tumors generally less than 2 centimeters or zero -- one of those positive those patients are the ones that have by far and away the best prognosis and that’s true in any population of resected pancreatic cancer patients from almost any institution. In that subset of patients, R0 versus R1 in single institutions has been demonstrated to be a very important prognostic factor that’s been demonstrated in a study recently at [indiscernible] it was a prior publication that came out as single institution study from John Hopkins and so in that setting R0 versus R1 is important. If patients are node positive with two or more nodes with adequate sampling probably two of its one or more nodes in inadequate sampling for larger tumors that are greater than 2 centimeters or 2.5 centimeters in size. There does not seem to be an independent impact, statistically significant impact of R0 versus R1 since the majority of the patients are node positive or have larger tumors then the impact of R0 versus R1 at single institution phase is limited to that smaller subset of the patients which is less than half the patients.

In multi-institution trials surprisingly people have studied this effect including the RTOG 9704 study that was published and found that there wasn’t independent prognostic effect, very limited value in R0 versus R1 comparison. The reason that the experts believe that’s the case at least what they have told us is that in multi-institution trials you have the problem that different institutions define R0 versus R1 differently, so some institutions do it on certain number of millimeters from the edge, some write on the edge, some 5 millimeters in the edge it varies. The bulk of the case that, to do that pathology it has to be done very carefully and very completely to truly define where all the two possible tumor margins are after the resection. And so when you look at multi-institution studies and this was true, both in our phase II study we compared to R0 versus R1 outcome and found no statistical difference in survival in our phase II.

And was also true in the RTOG 9704 but that did not turned out to be a significant variable, so we anticipate and our data we will be able to analyze this of course that there isn’t going to turn out to be much different in our large 70 plus institution trial between R0 and R1 impart because it’s dominated by the fact that there are no positive and larger tumor patients of the majority of the patients, so it’s only a smaller subset that follow to that category but also impart because the variability across the 70 institutions were how thoroughly or completely or how they define R0 versus R1 resection.

Charles Link

And if I can comment on your last question which was about timing for the second and final analysis if you consider now 222 events took close to four years starting in May 2010, we in fact except few there will be some acceleration of events occurring because next 111 events, we are saying that it is going to happen towards end of 2014 which is nine, 10 months from now, eight to 10 months from now. But in fact considers that but you have to consider the balance between late impact or exaggerated impact or late impact of immunotherapy as the time progresses. So, it’s going to be the balance between patients benefiting more and more from HyperAcute immunotherapy and acceleration of events because of higher number of patients in the pool that’s why we are projecting towards end of 2014. Does that answer your question?

Operator

Thank you. And our next question comes from Stephen Willey of Stifel. Your line is now open.

Stephen Willey - Stifel

Yes guys, good afternoon. May just a follow-up on the last point, I guess given it looks like the first interim was triggered when the median study population the median OS of the study population was kind of in the 26 month ballpark. Would you anticipate that median study population OS to kind of hold up as we go forward?

Charles Link

We can only make projections about this but our impression is that the overall median is in the high 20s somewhere. So, I can’t tell you exactly 25 month or 26 months or 27 months or 28 months but we believe it’s in the high 20s. We will have to see what happens overtime in terms of that overall median, obviously we will begin to get a solid out and more and more patients get out further on the trial to see if there is a shift in that median. There has been no appreciable difference in entry criteria throughout the conduct of the trial but we believe the patients that were enrolled at the beginning of the trial are very similar to the patients enrolled at the later stages of the trial. We did make one minor trial modification during the conduct of the trial where we allowed patients to be out to nine weeks, after 10 weeks after surgery before enrollment because there are some patients who wanted to get into the trial that just weren’t recovering from surgery fast enough. Those patients tend to be a little bit sicker clinically but the surgeons felt that they will be good candidates and so we modified the criteria from eight to 10 weeks after surgery to still allow them to be permitted to try and that modification was done I think early 2012. But really we believe the patient characteristic where you need to be very fairly uniform across the study and look very much like U.S population and not like a European style population.

Stephen Willey - Stifel

Okay. And I guess, you kind of talked about the flattening of the curves that occurred between two and three years in the phase II study and as we start to get into that period whereby you get greater percentage of patients in that range and this kind of, I’m trying to think about what kind of obligation DSMC may have beyond just taking kind of a specified event driven look at the data and if by chance I think there is some extension there, is there any opportunity for DSMC to potentially step in absence of actually hitting one of these predefined.

Charles Link

As you know Steve, there are obligations to the patients and their obligation is to do what is clinically best for the patient. So, if they defend that there was a substantial benefits they always have the right to stop the study when they see fit if that would the case. The data that currently is planned to be, the next time the data would aggregated and presented to them would be when there are 333 events borrowing some other request that we didn’t know about from DSMC but they have the right to ask the data or do modifications or things that they see fit. Obviously, this is what we believe to be a very well defined rigorously designed trial that we’re really I think proved hopefully the effectiveness of what we’re trying to do but they obviously are in the responsibility in the driver seat for the patients.

Nicholas Vahanian

And Steve if you also consider the fact that all patients are already enrolled in the study and nobody is being randomized in placebo. So there that kind of pressure is not present for the DSMC to make any, or any aggressive decisions about when they get -- and the trail and I think statistical endpoints are well defined [indiscernible] as you know. So, that point considering it would be clearly based on schedule and that will be my expectations.

Stephen Willey - Stifel

Okay. I know, a question is been asked a lot to you was I guess the rational for structure in interim but only half of the events have occurred and I guess in the context of this kind of statistical disadvantage that we know that immunotherapy tend to be from kind of statistical perspective. Just wondering if you can provide any color around that strategy.

Charles Link

Sure. The strategy that we’ve employed it is thoroughly look we expected that nevertheless, the fact that we lost very little alpha the final analysis will be point 043 so with the single study on the spot we lost very little alpha because of that -- and we also learned that there is no safety concerns for the product and there was no modifications suggested in the person from analysis and when we started this over four years ago with statistical plan it seemed like a [indiscernible] plan getting at early analysis even though all along as we’ve communicated this is a very high bar with the P value of 0.004 and we emphasis our low expectations for the first interim analysis.

Never the less, it was put in place because it was also cost because the bar was so high, it cost very little alpha. Now second interim analysis on the other hand with the P value of 0.019 is a reasonable expectation and we have confidence in the final analysis with the power 80 as the study was designed.

Gordon Link

You know Steve, when we look back at the phase II data, I think that what were struck by and we didn’t really fully understand, you know the phase II data didn’t have treatment arms. So the phase II data was limited. But one think that we know was true is that in the high dose group that one year out of the 26 stations, only a single patient had died and that really exceeded any expectations that experts in the field had for what would happen in terms of one year survival and that one patient when we looked at that patient had a 12 centimeter tumor, a fairly enormous tumor [indiscernible] surgery perspective.

So we felt that that single fact the survival of one year was a very strong efficacy signal for the trial in the high dose group and we did believe that we’ve evidence of those responsiveness in both lung cancer and pancreatic cancer that then let us to do this 12 months treatment plan. And so, since we didn’t loss much alpha, we thought why not take an early look at this if there was more dose responsiveness and more duration responsiveness in the clinical effect maybe there could be something of that magnitude. So, that’s what we did.

Stephen Willey - Stifel

Okay. Just quickly, how just shifting quick loans for IDO. Now setting stone or some of these proposed trials just for the respect to timing and initiation, I asked the question I guess just in context of the color that you’ve provided with respect with exclusivity around the potential partnership and often times when these exclusive partners are brought on Board. They tend to have a bit of development agenda and so I just curious as to whether or not the plan that you have outlined or definitive plans for ’14 or there are all kind of subjects to change, if anything happens on the BD front?

Charles Link

So as always as your developmental stage company, we’re going to follow our nose in the clinic and we consider ourselves to be fairly good at looking at clinical activity, clinical scenarios and trying to resolve trials and things around that obviously the clinical development team has been doing that kind of work for 30 days. So we feel that as we see different activity or different occurrences hopefully in this different varying phase to trials, the intensity and speed with which those will transition or go to larger trials or be transformed to the registration trials will be very dependent upon what kind of clinical activity and observations we have in the clinical. And substantive observations in the clinic that come out of Phase II obviously we’ll try to let people know about the sooner as then latter.

In terms of limitations of a large corporate partner and limited team development to the drug, I think that we would feel very strongly that on the trials that we’re launching that we think have the strongest preclinical or clinical evidence to support them that we will be reasonably hedged strong about making sure that those studies went through. Now as you know everything is in negotiation and we would make rational good decisions with that partner because we’d want a good long-term excellent partnering relationship.

Stephen Willey - Stifel

Okay and then lastly just one housekeeping question maybe forgot and if you can just give us what the cost basis of the ATM withdrawals were in I guess 40 and also year-to-date and how much of that ATM is remaining? Thank you.

Charles Link

I guess maybe you missed that piece. We have just under 14 million left on the ATM and we sold about $27.7 million worth of shares on the ATM in the first part of this year and the remainder in the end last year. So all together we sold about $45 million under ATM out of $60 million selling agreement.

Stephen Willey - Stifel

What is your cost basis that you can provide us with?

Charles Link

Well, it’s no more than 4% that’s what the selling agreement.

Stephen Willey - Stifel

No cost basis on per share?

Gordon Link

Yes, there is really no problem with that. It ranges about 25 bucks a share.

Operator

Thank you and that does conclude our time for Q&A today. I would now like hand the call back over to Charles Link for any closing remarks?

Charles Link

Well, thanks everybody for dialing in today and we will continue to work hard and focus on developing this immunotherapy platform. And many thanks to all of the physicians, investigators and all of the clinical patients who are participating our clinical trials without their support we wouldn’t go anywhere. Thank you very much.

Gordon Link

Thank you.

Operator

Thank you, ladies and gentlemen for participating in today’s conference. This does conclude today and you may disconnect. Have a great day everyone.

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