MacroGenics' (MGNX) CEO Scott Koenig on Q2 2014 Results - Earnings Call Transcript

| About: MacroGenics, Inc. (MGNX)

Start Time: 16:37

End Time: 17:22

MacroGenics, Inc. (NASDAQ:MGNX)

Q2 2014 Earnings Conference Call

August 5, 2014 04:30 PM ET

Executives

Scott Koenig - President and CEO and Director

James Karrels - VP, CFO and Secretary

Analysts

Michael Schmidt - Leerink Partners

Steve Byrne - Bank of America Merrill Lynch

Stephen Willey - Stifel Nicolaus

Christopher Marai - Oppenheimer & Co. Inc.

David Nierengarten - Wedbush Securities

Debjit Chattopadhyay - ROTH Capital Partners

Operator

I will turn the call over to James Karrels, Chief Financial Officer of MacroGenics. Your line is now open.

James Karrels

Thank you, operator. Good afternoon and welcome to MacroGenics conference call to discuss our second quarter of 2014 financial and operational results. For anyone who has not have a chance to review our results, we issued a press release this afternoon, outlining today’s announcement which is available under the Investors tab on our Web site at www.macrogenics.com.

Your can also listen to this conference call via webcast on our Web site and it will be archived there for 30 days beginning approximately two hours after the call is completed. I’d like to remind listeners that we will make forward-looking statements in today’s call. Therefore I’d like to also remind you that today’s discussion will include statements about the Company’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provision under The Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factor section of Annual Report on Form 10-K filed with the SEC on March 20, 2014. In addition, any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change.

Now I’d like to turn the call over to Dr. Scott Koenig, MacroGenics President and Chief Executive Officer.

Scott Koenig

Thank you, Jim. I’d like to welcome everyone participating via conference call on Webcast today. Thank you all for joining us. We’re very pleased that during the second quarter we continue to accomplish key objectives that we set for MacroGenics to achieve in 2014 and to make contributions in the emerging field of immuno-oncology. This includes advancing our first DART into the clinic and submitting and clearing the IND for our second DART with the FDA.

During the second quarter, we also announced the option agreement we entered into with Takeda Pharmaceutical Company for the development and commercialization of MGD010, a DART molecule for the treatment of autoimmune diseases.

For this call Jim will give a brief recap of our financial results and then I review our second quarter accomplishments in more detail and provide an update on plans for the remainder of 2014. After our prepared remarks, we will open up the call for a question-and-answer session.

With that, I’ll hand it over to Jim.

James Karrels

Thanks, Scott. This afternoon we reported financial results in line with our expectations. Briefly as we described in our release MacroGenics had research and development expenses of $17.3 million for the quarter ended June 30, 2014 compared to a $11 million for the quarter ended June 30, 2013. This increase is related to the advancement of programs into later stage clinical trials as well as the addition of new product candidates to our pipeline and is consistent with comments made on our earlier conference calls this year.

We had general and administrative expenses of $4.1 million for the quarter ended June 30, 2014, compared to $1.5 million for the quarter ended June 30, 2013. We record a total revenues consisting primarily of revenue from collaborative research of $9.2 million for the quarter ended June 30, 2014 compared to $12.3 million for the quarter ended June 30, 2013.

Collaborative research revenue includes the recognition of deferred revenue from payments received in previous periods as well as payments received during the quarter. For the quarter ended June 30, 2014, we had a net operating loss of $12.3 million compared to a net operating loss of $0.3 million for the quarter ended June 30, 2013.

Our cash and cash equivalents as of June 30, 2014 were $194 million, compared to $116.5 million as of December 31, 2013. Based on these cash balances and our current operating plan, we continue to expect that our current cash and cash equivalents combined with anticipated non-equity funding from strategic collaborations will fund the Company’s operations into 2017.

With that, I’ll hand the call back to Scott.

Scott Koenig

Thanks, Jim. As Jim mentioned, in the second quarter we extended our track record of advancing our portfolio product candidates of those fully owned by MacroGenics and those being developed in partnership with our collaborators. Further, we strengthened our balance sheet with additional payments under our existing corporate partnerships in addition to our recently announced collaboration with Takeda.

As many of you know, every product candidate in our portfolio was designed for a specific therapeutic application using our proprietary antibody technologies. These technologies include our Fc-optimization platform which enhances the body’s immune system to mediate the killing of cancer cells through antibody-dependent cellular cytotoxicity, or ADCC.

Our Dual Affinity Re-Targeting, or DART, platform which enables the targeting of multiple antigens or cells by using a single molecule with an antibody-like structure, and now the cancer stem like cell platform which provides the unique discovery tool to identify cancer targets shared both by tumor-initiating cells and the differentiated cancer cells derived from them.

Due to successful integration of these platforms into our product development efforts, we remain on track to initiate clinical development of additional product candidates such that we will have a total of six programs within our proprietary immuno-oncology portfolio by the end of 2015.

Our most advanced product candidate is Margetuximab, a monoclonal antibody engineered using our Fc-optimization technology to target a broader range of HER2-expressing tumors, then colon HER2 therapies. We have now completed the enrollment of three Phase 1 intermittent dosing cohorts that explored dosing every three weeks at doses up to 18 mg/kg in various tumor types.

Margetuximab continues to exhibit a favorable safety profile and to display evidence of single-agent activity in refractory HER-2 positive cancer patients. We have previously indicated plans to initiate pivotal trials and [ph][similar indications] in patients with cancers with HER2 gene amplification by FISH and with the highest levels of HER2 expression by IHC and to that end our planning is underway for a Phase 3 study in patients with HER2 positive gastroesophageal cancers, we’ve progressed after standard first line and second line therapy.

In addition to developing Margetuximab in our refractory patient population, we’re also looking to expand the potential market for Margetuximab therapy to include subpopulations which currently do not receive anti-HER2 therapy. We continue to enroll our Phase 2a study in patients with metastatic breast cancer whose tumors exhibits lower expression of the HER2 protein and lack evidence of HER2 gene amplification by FISH.

As you may recall, this is a two segment study and we will only advance to the second segment if we have a response rate of 10% or better in the first segment. Timing wise it is taking longer to recruit patients than we had originally anticipated, so we’re adding additional clinical sites which may delay the completion of enrollment beyond 2014.

Our second Fc-optimized monoclonal antibody in the clinic is MGA271, which targets B7-H3, a member of the B7 family of molecules involved in the immune regulation. Given a high level of B7-H3 expression on many cell tumor types, we believe that MGA271 has brought potential and is currently positioned to be a first-in-class therapeutic agent against this target.

We expect to complete enrollments of the first three dose-expansion cohorts of a Phase 1 clinical study of MGA271 by the end of the year. We also plan to initiate additional monotherapy expansion cohorts in the coming months and also plan to initiate additional trials that investigate MGA271 in combination with other therapies to certain tumor types.

Shifting now to our DART technology, I will provide unique advantages over other methods used to create bispecific or multi specific molecules. Further we believe that this platform may afford considerable flexibility in developing combination immuno-therapy approaches for cancer and autoimmune disease.

Accordingly several large pharmaceutical and biotech companies have recognized the versatility and potential of our DART platform and have partnered with us to utilize this technology.

Our first DART molecule to enter the clinic is MGD006, a bi-specific molecule that bonds to both CD123 and CD3. CD123, which is the interleukin-3 receptor alpha chain, is expressed on leukemia and leukemic stem cells, but had very low levels, if at all, a normal hematopoietic stem cells. CD3 is expressed on T cells.

MGD006 is specifically designed to engage these two targets by body to CD3 T cells and that activating them to kill CD123 expressing leukemic cells which we believe is an ideal illustration of the utility of our DART platform.

MGD006 is part of an option-based regional collaboration with Servier. They exercise their option in February 2014 to obtain an exclusive license to develop and commercialize MGD006 in certain territories. MacroGenics retain development and commercialization rights in North America, Japan, Korea, and in India.

During the second quarter of 2014, we dose the first patient in a Phase 1 clinical trial of MGD006 in patients with acute myeloid leukemia. The initiation of clinical trials for MGD006 was a key corporate objective for MacroGenics this year, but also one that we believe is an important milestone for the DART platform itself.

In May, we were very pleased to announce that we entered into an agreement with Takeda Pharmaceutical Company for the development and commercialization of MGD010, a DART molecule that simultaneously targets CD32B and CD79B, two B cell surface proteins.

MGD010 is being developed for the treatment of autoimmune diseases. As part of the agreement, we received a $50 million upfront payment. We are also eligible to receive an option exercise feedback when combined with an early development milestone with total an additional $80 million.

Assuming successful development and commercialization of MGD010, we can receive up to an additional $468.5 million in milestone payments and double-digit royalties on any global net sales. We have the option to co-promote MGD010 in the United States and may participate in funding late stage development in the program in exchange for a share of North American profit.

In addition to our progress with MGD006 and MGD010, I’d like to update you on MGD007, a DART molecule that recognizes both the glycoprotein A33 antigen or gpA33 and CD3. gpA33 is expressed on over 95% of primary metastatic human colorectal cancers, including cancer stem cells which are thought to be responsible for tumor recurrence and metastasis.

The primary mechanism of action of MGD007 is its ability to redirect T cells, via their CD3 component, to kill gpA33-expressing colon cancer cells. Just a few weeks ago, we also announced that our IND application was cleared by the FDA and we’re now planning to initiate a Phase 1 study trial for MGD007 in patients with colorectal cancer later this year. The clearance of our IND also triggered a milestone payment of $5 million from Servier.

I hope that this overview provides everyone with an understanding of the clinical, preclinical and business development opportunities that MacroGenics antibody technology platforms have generated and the significant activity arising from those opportunities.

With that, I’d like to conclude my formal remarks and open-up the call for questions. Operator?

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions) Our first question comes from Michael Smith of Leerink. Your line is now opened.

Michael Schmidt - Leerink Partners

Hey good afternoon. Thanks for taking my question. Can you hear me all right?

Scott Koenig

Yes, very well.

Michael Schmidt - Leerink Partners

Perfect. Could you just comment on Margetuximab regarding the Phase 2a study in breast cancer? Why does it take so long to enroll the study?

Scott Koenig

Thank you very much for the question. I appreciate that Michael. So when we said out to enroll for this study, we relied on the published literature in terms of looking at the incidence of this expression pattern in patients with breast cancer. These as you know are typically patients who are deemed HER2 negative. The literature had clearly documented that when looking at any patient with any degree of IHC positivity, we’d were expecting that two-thirds or more of those of patients would have expression of HER2 at the two plus level without gene amplification. When we actually did our analysis and in fact we’ve screened over a 100 patients, the rate of two plus expression was lower than previously reported. So therefore over estimate -- we under estimated the time in terms of recruiting this particular population. In fact, found approximately two-thirds of the patients were more at the one plus level rather than at the two plus level and this we think is -- was probably the main reason that this hasn’t rolled as quickly as before. Having said that, we have a number of patients ready to go on study as you know one of the requirements for treatments with Margetuximab in this population is the requirement that these progress on other previous therapies. And so until that happens we can’t -- the patients can’t be enrolled in this trial. We have a large number of patients who are ready to go for the study, but they have to progress on current treatment. So rather than prolong this and keep the number of sites we currently have, we made a decision that we’d like to complete on the study and we made a decision to seek out additional centers that could also participate in the study. And that we believes the main reason here, nothing more than that.

Michael Schmidt - Leerink Partners

Yes, okay. And on 271, when do you think you will be able to present first clinical data on that program?

Scott Koenig

So Michael, as we discussed before, as you know quite well we’re in this Phase 1b expansion cohort in three distinct populations: 15 patients with melanoma; 15 patients with prostate cancer and then 15 patients with a combination of other tumors expressing B7-H3 of which no more than five will be a given tumor type. The expectation as we indicated today is that we will complete enrollments of those three segments this year. And of course we don’t know how long those patients will continue on the therapy and we’re hoping that they will stay on therapy quite long. And as a result, we can’t have precision specifically about when we will present that data. We’ve also indicated that we want to start additional monotherapy cohorts beyond that of melanoma, prostrate, etcetera. And we have a number of monotherapy studies being planned as I’ve previously indicated one of the things that precluded us from doing more studies in a larger population earlier is that we had manufactured material at our side and did not have sufficient drug ready to be able to go to a larger number of cohorts. Now we have that drug available, we expect to start these additional monotherapies in the next couple of months. We also have a plan to combine MGA271 with other therapies and those studies are expected to start in very early in 2015. So what I would best guide you at this point is, stay tuned. We expect the enrollments of the melanoma, prostrate, and third cohort done by December. We will have a better idea in terms of how many patients will be still on therapy and we can give you a little bit better guidance about -- describing that data with those cohorts plus additional cohorts that we plan to start this year and early next year.

Michael Schmidt - Leerink Partners

Okay. And on MGD007, I guess it will be the first bispecific antibody from your portfolio that will target a solid tumor as opposed to a hematological indication. And I was wondering whether there are special considerations on that topic or whether you would expect a similar -- whether there is no difference really with -- scientifically whether you would target a solid versus a liquid tumor with the bispecific antibody?

Scott Koenig

So from a strategic standpoint, we look at the -- this platform being uniformly able to target both hematological liquid tumors as well as solid tumors. And so you should expect in addition to the ones we’ve described, future trials will include both types of -- both tumor types or tumor types that form both categories. Our preclinical [ph] [oncology] data, our studies preclinically have all shown a very potent activity of this molecule. And as I’ve spoken previously, based on both the pharmacodynamic, pharmacokinetics as well as the activity profile, we expect depending on the tumor type and obviously depending on the specific molecule designed in the -- in a targeted antigen the dosing range for this molecule could be in the range of nano grams per kg to micro grams per kg. So again very well doses required both in solid tumors as well as liquid tumors. Of course we have established what we believe is a very wide window of therapeutic responses that would give a very favorable safety profile, but obviously until we dose patients it will not have a confirmation of that observation. I should also note that the MGD007 will be our first DART molecule will have the Fc domain incorporated into the -- in the bispecific part of the molecule which will allow us to give less frequent dosing of this molecule and so again this will be the first chance to explore some of the pharmacokinetics around Fc in a situation where we’re targeting a solid tumor.

Michael Schmidt - Leerink Partners

Yes. Did you expect the parenthesis in T cell infiltration rates to affect the -- across different tumor types to affect the effectiveness of 007 or any other bispecific antibody?

Scott Koenig

That’s an excellent question. As we begun to really understand the importance of immune oncological approaches particularly T cell dependent approaches, we look back in terms of the historical responses in patients who haven’t received such therapy. And as you know there has been some publications that have shown that patients with particular tumor types and the perfect example here is in colorectal cancer that individual, irrespective of the stage of disease those patients who have tumors with larger numbers of [ph] [interval] training T cells clinically have better responses and they tend to have a longer live and irrespective of actually the stage and so I would not be surprised that in particular histological types that have a higher infiltration of T cells, these patients may respond better. Having said that, the extraordinary activity of these molecules in this platform to essentially recruit any cell -- any T cell that’s circling in the body and obviously that will (indiscernible) also into tissues could potentially be recruited. And so, some of the, a subset of these cells may also be actually antigen specific. So, in addition to expanding populations that do not have cognate recognition of the particular target, you may actually be able to actually sensitize more antigen specific T cells. We have not shown that. This is obviously an objective of future studies both preclinical -- clinically and clinically. But if we were able to achieve that, that would be obviously a very good opportunity for a long lived response in these patients.

Operator

Thank you. Our next question comes from Steve Byrne of Bank of America. Your line is now opened.

Steve Byrne - Bank of America Merrill Lynch

Yes, I might continue down that same path that Michael brought up and that is; do you have any evidence that when the CD32B is one of the binding domains that you can affectively trigger the T cells to be cytotoxic even if you have the checkpoint inhibitors are up regulated either on the tumor or on the T cell. Do you have evidence that it will still work?

Scott Koenig

Thank you very much Steve, that’s a terrific question. And so the answer is absolutely, yes. In fact particularly for MGDOO7 we have the advantage here that there are small amounts of gpA33 expressed on normal mucosal tissue. And as a result if you put the extreme of dosing of this molecule we have been able to; number one, show that we can activate T cells and actually they will be recruited to those areas of the normal mucosa and actually kill those parts of mucosa. Of course we have established quite nicely in our preclinical studies a very nice broad safety window in which we can get anti-tumor responses in the absence of responses in the normal issue. So, we have objective, in-life evidence that can do that in monkeys. We have objective evidence also in reconstituted mice. So, if you take immunodeficient mice and reconstitute it with human T cells and you let a tumor grow subcutaneously interdermally and you then at a second site give your bispecific molecule. We have now in number of cases where we see a beautiful recruitment of the T cells into the -- specifically into the tumor site and destroying those tumors. That was obviously the basis for going ahead with a lot of these molecules. With regard to the question about immune checkpoints, that one was the question we had addressed quite directly. And so when dosing monkeys with constant infusions over many, many weeks, over a month of dosing of these animals where we can actually detect up regulation of the markers of particular immune checkpoints. When you take out those T cells and look for cytotoxic activity against a target ex-vivo and you actually compare it to T cells that are naïve that had not been exposed to the DART molecule. There was exact equivalent amount of affective cell killing -- T cell killing of those targets. One should be aware that, if one looks at the hierarchy of the inhibitor responses that T cells will demonstrate loss of cytotoxic functions is virtually the last thing to go. And so, despite the fact that many of these T cells may have up regulation of specific checkpoint markers they tend almost in all cases to be very effective killers. And therefore we think that our technology would serve the treatment of cancers very well in this setting.

Steve Byrne - Bank of America Merrill Lynch

And can you comment on what kind of combination studies you’re considering with 271. Is it more along the lines of other targeted drugs or the various immunotherapy drug?

Scott Koenig

That’s an excellent question, Steve. And so, as you know as we’ve spoken before, we’re sort of looking isn’t a much broader question. Its obviously people gravitate and say, well which immune checkpoint do you want to add to MGA271, and we are also looking at that pathway. But we’re not looking at this quite narrowly. We are looking at the opportunity now to complement both in terms of alternative targets, other biological molecules, other cell types of mechanism, and even in some cases small molecules and that may have chemotherapeutic effects. And so again, we have mapped out a strategy in multiple different tumor types where a combination of these different therapeutics we believe would work quite nicely with MGA271 and that’s what we would like to test in 2015.

Steve Byrne - Bank of America Merrill Lynch

And on the Margetuximab study that’s in the metastatic breast; do you think that you could have efficacy even with the HER-2 one plus non-amplified tumors?

Scott Koenig

That’s the purpose of this study. And so just to give you a little bit more granularity of some changes we have made here is that in addition to two plus patients we are also utilizing beyond IHC the HERmark test which will identify the highest level expressing one plus patients in the population. So, we will include patients that are both one plus positive and two plus positive in this study, and that will be part of the plan going forward.

Operator

Thank you. Our next question comes from Stephen Willey of Stifel. Your line is now opened.

Stephen Willey - Stifel Nicolaus

Thanks for taking my questions. On the 271 expansion cohorts, these are all open-label correct?

Scott Koenig

Correct.

Stephen Willey - Stifel Nicolaus

So I guess the next logical question would be just, given some of the preparations that are being made to expand into additional tumor types and initiate some of these (indiscernible) studies, is it safe to say at this point that there is some encouraging signs of activity?

Scott Koenig

I don’t want to comment on specific activity profiles. Again, I believe that it’s too early to discuss this. As we described in the original 26 patients on the dose escalation phase we had 10 of those patients had evidence of a stable disease during that treatment didn’t have a full PR or CR in those cases. But these were the old criteria that we had been used for obviously chemotherapeutic intervention in treating patients with cancer. We are going to begin adopting the more current immune criteria for training these patients. And so, we would like to have a broader data base to be able to prepare and present to give the best look at the activity of this molecule.

Stephen Willey - Stifel Nicolaus

Okay. And then just with respect to the [ph] [commentarial] strategy, are some of the things that you’re considering, will they require you to form any additional collaborations I guess specifically maybe stuff that’s non-exclusive for drugs that are not yet available?

Scott Koenig

At this point we have no specific plans of or need to establish a particular collaboration to prepare combinations of drugs that we want to take into the clinic. Having said that, you can imagine a number of the companies that are engaged in this space have expressed interest to work with us on this molecule. And again, we will make some decisions going forward if that is the best pathway forward. But at this point, we have not planned to establish a specific collaboration to look at combinations in molecules.

Stephen Willey - Stifel Nicolaus

Okay. And then I guess just with respect to the guidance to having six oncology focused compounds in development by the end of next year. I guess my elementary math scores get me to four now, and presumably the next -- the next two are go to be programs that are DARTs?

Scott Koenig

Correct.

Stephen Willey - Stifel Nicolaus

Okay. And then maybe just one quick housekeeping question for Jim. How should we think about the amortization of the Takeda upfront? Does that go into the licensing option fee?

James Karrels

Hi, Steve. Yes, some of it does. I don’t have exact amortization period at my fingertips, but a portion of it is -- will be amortized going forward.

Stephen Willey - Stifel Nicolaus

Okay. Thank you.

Operator

Thank you. Our next question comes from Christopher Marai of Oppenheimer. Your line is now opened.

Christopher Marai - Oppenheimer & Co. Inc.

Just with respect to MGD006, I know in the literature it has been highlighted that there had been some potential bone marrow toxicity problems with prior CD123 targeted T cell therapy. So, I’m wondering if you had seen this in your preclinical models and/or if that finding was just an artifact of the model you used in the study? Thanks.

Scott Koenig

Thanks, Chris, excellent question. If I recall the study that you’re describing I think that one was with one of the CARs, if I’m not mistaken.

Christopher Marai - Oppenheimer & Co. Inc.

Right.

Scott Koenig

Okay. Yes, now we haven’t seen any issues with that, and obviously we did a very extensive testing in primates which have similar distribution pattern on hematologic cell types and so that was not -- what turned out not to be a problem. We haven’t seen it in the mouse model systems which obviously there is less course reactivity, but certainly not in the monkey. So, it may have been peculiar to the CARs, but obviously this is something we will monitor going forward.

Christopher Marai - Oppenheimer & Co. Inc.

Okay, great. And then when do you think we’re going to foresee data for MGD006?

Scott Koenig

That’s the question I would love to be able to answer. As you know we have guided people that the FDA and I’m sure the European regulatory agencies are very cognizant of the potential side effect profiles of certain Immuno-Oncology drugs. And as a result the guidance is to go slow at first and essentially these are single patient dosing on a sort of a monthly basis to go to the next dose. So, it’s going to be slow and we’re hoping to be able to give you better guidance sort of in the middle of next year on both on 006 and 007 in terms of the timing.

Christopher Marai - Oppenheimer & Co. Inc.

Great. And then just lastly, the next DARTs that you’re bring into the clinic here, are those also going to include your Fc domain? And then how does that impact on manufacturing relative to 006? Thanks

Scott Koenig

So, thanks for that question. Yes, both DARTs will -- that we intent to bring into the clinic will contain the Fc domain. We in fact are -- have and are continuing to plan to manufacture those lots for those new product opportunities for the clinical trials next year, so that will be done in-house. As you recall, part of the proceeds for the follow-on offering earlier this year were to expand our production facility in MacroGenics, so we’re in the engineering phase, planning phase of that we will start to turn over the site for the larger tanks. And so we will be actually be able to produce at a 1000 liters scale and we expect this will increase our productivity two to three fold shortly thereafter.

Christopher Marai - Oppenheimer & Co. Inc.

Okay. Thank you.

Operator

Thank you. Our next question comes from David Nierengarten of Wedbush. Your line is now opened.

David Nierengarten - Wedbush Securities

Hi, guys, thanks. Since everybody asked questions on all the DARTs, I’ll go back to Margetuximab. I actually, just when you talk about continuing to see responses, I mean could you -- is the response rate similar to what we’ve already seen or could you give us any more detail on any responses seen in the dose cohorts that you’ve treated?

Scott Koenig

Thanks, David. As we indicated we finished these intermittent dosing regimens which were -- patients were receiving every three weeks either 10 mg/kg, 15 mg/kg or 18 mg/kg and on a weekly basis -- on a Q3 weekly basis. And we are very, very encouraged. I mean that there are lot of patients still on therapy. I know we have at least on of the patients who is in the 10 mg/kg dose is now still on therapy over 15 months of therapy and is doing exceptionally well. I asked the folks to take a look at this data closely and to get a better sense of are we seeing even a better response in this intermittent cohort than the earlier patients and I think it’s just too early to come to that conclusion. There’s obviously different mixture’s of tumor types and so it’s just too early to give you that but it’s extremely encouraging.

David Nierengarten - Wedbush Securities

Great. Thanks.

Operator

Thank you. (Operator Instructions) Our next question comes from Debjit Chattopadhyay of ROTH Capital Partners. Your line is now opened.

Debjit Chattopadhyay - ROTH Capital Partners

Hi, thank you for taking my questions. Firstly on Margetuximab, as you plan for the MAGENTA Trial given the responses that you’re seeing with the intermittent dosing up to the 18 mg/kg cohort, do you -- or would you reconsider the dosing for, in the gastro cancer setting, and also does it have any implications for the lower HER-2 expressing breast cancer patients, could you go higher with an intermittent dosing in the Phase 2a trial?

Scott Koenig

Debjit, those are great questions. This is a topic of conversation ongoing right now given the very favorable pharmacokinetics and responses we’re seeing in the intermittent dosing population, and so, we are having conversations now with the principal investigators and others who are planning to participate in the study. We haven’t made a decision about that but that’s certainly a topic on this discussion. With regard to the lower HER-2 expressing, again we want to get this at least this first cohort done on the 6 mg/kg weekly. But that would be certainly an additional topic of conversation that we need to address once we have a fuller analysis of the current Phase 1 study and when that’s complete. So, that’s something we might go back to if this provides an opportunity to increase the response rate.

Debjit Chattopadhyay - ROTH Capital Partners

Then on the DART platform and the T cell infiltration question. Is there a biomarker that you can look at to maybe prospectively identify patients or can it be done through the tumor samples that you collected to kind of predict if these patients with higher T cell responses or T cell infiltration would respond better?

Scott Koenig

That’s something that we’re not going to do prospectively in the Phase 1 study. We will obviously capture that data, one of the key questions will be to understand both the profile of cells at the time of diagnosis as well as the profile of the particular T cells and other inflammatory cells that will be infiltrating into the tumors and for current trials and for future trials we expect to obtain biopsy specimens to be able to begin to analyze that. We will also obviously -- we’re certainly obviously monitoring circulating T cells as well to look at change of activation markers. And so, we’ll gather that information and hope that will give us some better guidance in terms of preferred populations that might best respond.

Debjit Chattopadhyay - ROTH Capital Partners

And one last questions. In terms of memory that you’ve been potentially creating; have you seen any impact on rechallenged models and in your mouse models?

Scott Koenig

We haven’t done any rechallenged models. Obviously again as you know these models that we’ve been focused on are using xenograft models in immunodeficient animals and they -- those aren’t usually the best models for re-challenging. Obviously the circulating T cells really have finite periods of time when they last. Some of the rechallenged models are best tested in these mouse, in generic systems. But certainly it’s something that we could consider in future studies.

Debjit Chattopadhyay - ROTH Capital Partners

Thank you so much and congratulations.

Scott Koenig

Thank you very much.

Operator

Thank you. This concludes the question and answer session. I will now turn the call back to Dr. Koenig for closing comments.

Scott Koenig

I would just like to thank everyone again for joining us and let you know that we look forward to updating you on each of the programs that we discussed today as we continue to make progress in 2014. Thanks again. Bye.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone have a wonderful day.

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