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Merrimack Pharmaceuticals Inc (NASDAQ:MACK)

Q2 2014 Earnings Conference Call

August 11, 2014 08:00 AM ET

Executives

Geoff Grande - IR

Bob Mulroy - President and CEO

Bill Sullivan - CFO

Tad Stewart - Head of Commercial

Peter Laivins - Head of Development

Kathleen Gallagher - Director of Corporate

Analyst

Geoff Meacham - JPMorgan

Peter Lawson - Mizuho

Brett Holley - Guggenheim Securities

Operator

Good day ladies and gentlemen and welcome to the Welcome to the Merrimack Pharmaceuticals Second Quarter 2014 Investor Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, today's call is being recorded.

I would now like to turn the conference over to Geoff Grande with Investor Relations. Sir, you may begin.

Geoff Grande

Thank you, Shannon. Good morning everyone and thank you for joining us. Today, we'll review our second quarter 2014 financial and provide an update on our clinical progress. A press release detailing this information issued earlier this morning can be found in the investor section of our website at www.merrimackpharma.com. This call is being broadcast live and will be archived on our website for six weeks. I'm joined today by Bob Mulroy, our President and CEO, Bill Sullivan, our CFO, Tad Stewart, Head of Commercial, Peter Laivins, Head of Development and Kathleen Gallagher, Director of Corporate Communications. We’ll end the formal portion of the call with time for Q&A.

Before we begin, I need to remind you that during this call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements about our future expectations and plans, clinical development timelines, the potential success of our product candidates and financial projections.

These statements involve risks and uncertainties which are described in the risk factors section of our most recent Form 10-Q and the other reports we filed with the SEC, which are available online at sec.gov. While these forward-looking statements represent our views as of today, they should not be relied upon as representing our views in the future. We may update these statements in the future; we are not taking on an obligation to do so.

With that, I'll turn the call over to Bob.

Bob Mulroy

Thank you, Geoff and good morning everyone. Thank you for joining us. It's a pleasure to speak with you all today to provide an update on our recent progress. As we’ve done with past calls, let me start with the brief overview of Merrimack for anyone who may not be familiar with the company and is listening for the first time. We are building a fully integrated cancer company. Bending the bench to the bedside to provide novel therapeutics coupled with companion diagnostics. There are engineer to improve the treatment of solid tumors.

We believe we have fully integrated approach is require to move the needle on this very difficult disease. Our lead program MM-398 recently achieved the primary overall survival end point in a Phase 3 trial in metastatic pancreatic cancer in patients who have received higher treatment with gemcitabine. We are now building out our commercial organization as we prepared to file an NDA in 2014 and prepare for launch in 2015.

Behind MM-398, we have pipeline of 5 additional novel therapeutics in clinical development, all derived from our systems biology discovery engine. Our systems found and researched integrated engineering, computing in biology to achieve a more complete understanding of the complexities of cancer and enabled the efficient generation of precise diagnostics and therapeutics. We believe our system biology approach has the potential to transform the productivity of R&D, improve the precision and impact of cancer care and provide multiple revenue opportunities and growth for our investors.

Slide 5 summarizes the clinical and pre-clinical products we have in development. Our systems approach has identified novel insights for the cancer that have driven development of our robust pipeline of large molecular therapies targeting specific disease mechanism, withstands (Ph) solid tumors. With the news we put out today, the MM-302 has initiated potential accelerated approval study and is now on a registration path, we have four late stage assets in development.

On today’s call, we want to focus on the launch of the 302 accelerated approval study, an update on MM-398 including a view of the patient numbers for the post-gemcitabine opportunity in the United States in the general pipeline of financial update. Before getting into discussion of our later-stage assets, I’d like to comment on our progress on the business development front.

Though I cannot give a more detailed update today due to the confidentiality of the process underway, we do continue to be actively engaged in discussions. And we are confident that we remain on track to close the business development transaction on MM-398 per our guidance. We’ve made great progress in what has been exceptionally robust process, as mentioned previously we are seeking to maintain U.S. right to MM-398 so that we can build our commercial capabilities in U.S., while securing partners to support the global reach of the product.

We remained hard at work on that front and look forward to updating you in the near future with more details. We’ve also began active discussions on partnering MM-121 subsequent to return of rights to Merrimack. We’ve been engaged in conversations pertaining to other assets across our pipeline and subsequent to a deal on MM-398 expect to an additional partnerships in the future to support the growth and development of our pipeline.

Moving on a Slide 7 let me provide an update on the clinical development of MM-398 or nal-IRI, which is our nanoliposomal encapsulation under chemotherapeutic irinotecan. With the recent success of the MM-398 5-FU and leucovorin combination and the NAPOLI-1 Phase 3 trial in post-gemcitabine metastatic pancreatic cancer, we believe there’s a clear approval pathway given the orphan drug designation and the important unmet need of better treatment options for these patients.

We have begun discussions with the FDA on next steps. And based on these discussions, we continue to maintain our goals of submitting a new drug application for MM-398 by the end of this year. We’ve also begun to expand our commercial organization to prepare for marketing in the United States.

On Slide 8, we provide a summary of the data set of the NAPOLI-1 trial attributes these to ESMO GI this past June. The results, as you can see in the slide, are robust and only from a top line perspective that also because of consistent benefit we see across all the secondary endpoint, include PFS and overall response rate. Reaction for the Pancreatic Cancer Community in the United States, Europe and Asia has been exceptionally positive and we continue to keep you updated on MM-398 progress as we move through the NDA process in the coming months.

Now with NAPOLI-1 results that we presented, we want to take the time on this call to discuss the opportunity we see for MM-398 in the metastatic pancreatic cancer setting. I’d like to introduce Tad Stewart who heads up Merrimack’s commercial division. Tad has been with Merrimack since 2001 and prior to that has background in consulting for pharmaceutical companies on commercialization.

This fall we will be hosting an analyst day focused on the commercial opportunities of our late stage product assets.

For today’s discussion, we’d like to clear some confusion on the label we were seeking for MM-398 and present our view of the market for post-gemcitabine pancreatic cancer in United States. Tad will discuss the U.S. treatment landscape in pancreatic cancer and how we see those shaping up across multiple lines of therapy in the future. Tad.

Tad Stewart

Thanks Bob. Good morning everyone. Happy to be joining on the call today to help clarify the very exciting opportunity we see for MM-398 and post-gemcitabine metastatic pancreatic cancer.

Following up on the release of the NAPOLI-1 data, and as we prepare ourselves for launch we thought it was appropriate to walk through some of the primary market research we’ve completed with GI oncologists. And I am pleased to share a few of the key takeaways with you today. Let me start by reiterating two of the reasons we believe this is such an exciting opportunity from a commercial perspective.

First, this is a significant and growing opportunity. With the introduction and growth of new regimens like Gem/Abraxane and first-line, the opportunity for treatment in later lines like second-line and third-line therapy are growing. Patients tend to be in better shape when the disease progresses, they are willing and able to handle more lines of therapy and oncologists are looking for better options for these patients.

Second, there is a clear need for a new option for patients who have previously been treated with gemcitabine. There is currently no consensus on post-gemcitabine treatment options, no standard of care and little if any robust clinical evidence in the post-gemcitabine setting.

The NAPOLI-1 study is a well-designed, well-controlled multi-national study of over 400 patients all survival end points and the study potentially has the power to change the way oncologists treat pancreatic cancer patients who have already received gemcitabine therapy.

Now I’d also like to talk about the intended label for MM-398. This is not second-line metastatic pancreatic cancer. The label for MM-398 that we’ll propose to FDA is for use in patients who have previously received gemcitabine. Many of those patients will be second-line metastatic patients but the post post-gemcitabine setting is actually a much broader opportunity. Gemcitabine and gemcitabine combinations are used in all lines of therapy, including of course neoadjuvant therapy, which means that if FDA agrees to our proposal patients could be eligible for treatment with MM-398 in the first-line, second-line and third-line settings and beyond.

Based on our market research, we believe the post-gemcitabine opportunities approximately 19,000 patients in the United States which is about twice as big as second-line metastatic alone.

Moving to Slide 10. We presented a simplified treatment flow diagram for pancreatic cancer that highlights our view on the dynamics of pancreatic cancer treatment. The flow chart shows at high level how patients could become eligible for MM-398 treatment in first-line, second-line and third-line settings.

As you can see, second-line is the largest segment of the opportunity and correspondingly also comprised the largest proportion of patients in the NAPOLI-1 study. But there are significant populations who could be eligible for MM-398 in first-line and third-line settings, if the commercial label supports it.

We’ve noted also the proportionate patients who entered the NAPOLI-1 study from these settings and you can see that together they represent about 45% of the patients from the NAPOLI-1 study. These data cooperates that oncologists are looking for new post-gemcitabine options whether it be after prescribing gemcitabine in the adjuvant or neo- adjuvant setting or for patients who have already seen multiple lines of therapy; a population that very few people believe they existed when we started the NAPOLI study.

Finally moving on to Slide 11, we also see similar though not identical dynamics in Europe and Japan, which represent additional large opportunities that we expect to pursue in collaboration with the partner.

There is one other thing I want to note here, which is we plan on additional development of MM-398 and will certainly focus efforts on moving up in the treatment pathway, for example conducting studies of MM-398 in front line pancreatic cancer, regardless of whether patients have received gemcitabine.

This will represent an opportunity to expand our position in pancreatic cancer into additional opportunities beyond post-gemcitabine treatment with MM-398. Hopefully this helps to clarify and define how we view the opportunity for MM-398 and pancreatic cancer patients previously treated with gemcitabine. We’re excited that our market research continues to confirm our hypothesis on the size and scope of the opportunity. And as such we’re moving forward appropriately building out a focused team of experienced professionals, who are tackling the key work streams required for a successful launch of MM-398 in the United States. We look forward to keeping you updated on the team’s progress and introducing them in the months ahead.

With that I’ll turn the call over to Peter Laivins, who’ll discuss MM-302 and the trial we announced today. Peter.

Peter Laivins

Thanks very much Tad and good morning everyone. I am pleased to update you about the exciting news for MM-302 our next in nanoliposomal program in the development after MM-398. This morning, we announced the launch of a Phase 2 trial of MM-302 and HER2 positive breast cancer that’s intended to support an application for accelerated approval by the FDA. This study is important from two perspectives. First, because it defines a sizeable population of women, who despite the advent of new targeted therapies are a need of better therapeutic options that they continue to fight with HER2 driven breast cancer. And second, because our therapy MM-302 was specifically engineered to target HER2-positive expressing tumors and we believe it may have an important role in helping these patients. As you can see on the graphic on Slide 12, MM-302 is a HER2 targeted nanoliposomal doxorubicin, which integrates three validated therapeutic approaches into a single entity. The HER2 targeting arm is designed to target a direct large payload of doxorubicin in HER2-overexpressing cancer cells. And based on our preclinical studies, the nanoliposomal encapsulation should protect other cells especially cardiac myocytes from the harmful effect of free doxorubicin.

Moving to Slide 13; over the last decade, there have been several therapeutic advances in treating women with HER2 breast cancer, which have reduced mortality and prolonged survival for women in this setting. But despite these advances, most patients will ultimately progress as they travel through successive lines of treatment and eventually need additional therapeutic options. This table demonstrates this effect, note that the number of patients annually treated in the U.S. in any give line of therapy is approximately 8,000. The relative stability of this number from line-to-line shows that women are able to survive across multiple lines of treatment and are healthy enough to receive treatment with subsequent options.

Note as well that clinical outcomes from each line of treatment are progressively worse until third line and beyond where there is no accepted standard of care. At this point, cancer progression is rapid with median PFS on treatment of physicians’ choice of about three and a half months and 90% of patients do not achieve a response based on the recently reported THERESA (Ph) trial. This third line and beyond setting is precisely where MM-302 may have an important role after patients’ experience progression on agents such as trastuzumab, pertuzumab and T-DM1.

On Slide 14, we show the reason for the diminished efficacy of trastuzumab in combination with standard chemotherapies after second line therapy is not known. However, cycling use of chemotherapies with the similar mechanism of action in this case microtubule-targeted agents may contribute to this phenomenon. Anthracyclines, such as doxorubicin, which were previously shown to be very active in HER metastatic breast cancer are now in frequently used due to the cardiotoxicity of free doxorubicin in conjunction with trastuzumab which although has the potential for cardiotoxicity.

Today, we estimate that approximately 75% of HER2-positive patients in the United States are anthracycline-naïve and it’s our belief that these patients may benefit most from MM-302 treatment. Slide 15, summarizes our experience to date with MM-302 in Phase 1 where the drug is being evaluated both loan and in combination with trastuzumab. In patients who are often being exposed to numerous lines of treatment, the overall observed PFS is currently about 5.7 months, whereas among those who are anthracycline-naïve, the PFS is 10.9 months. Although these results may change with longer follow-up, this potential signal of greater activity in anthracycline-naïve patients has encouraged us to seek regulatory advice on a potential Phase 2 study in this population.

Turning to Slide 16, the HERMIONE study, as it’s named, is a potentially pivotal multi-center randomized study of MM-302 in patients with HER2 positive, locally advanced and metastatic breast cancer. Importantly, pursuant to discussions with the FDA, the study is designed to support an application for accelerated approval of MM-302 assuming the primary endpoint of progression free survival is met and the results are considered clinically significant. The study will compare MM-302 plus trastuzumab versus chemotherapy of physicians’ choice plus trastuzumab in HER 2-positive metastatic breast cancer. In patients, who have experienced progression and were previously treated with trastuzumab, pertuzumab and T-DM1, patients must not have had prior anthracycline exposure.

Merrimack and our clinical investigators are enthusiastic about the initiation of this important trial and we look forward to keeping you updated on progress in the coming months. Bob?

Bob Mulroy

Thanks Peter. Moving to Slide 17 let me provide a quick update on MM-121, our monoclonal antibody targeting ErbB3. Earlier this summer, we were pleased to announce that we have regained the global rights to MM-121. We remain excited by the Phase 2 data we presented at ASCO have demonstrated the pre-selected biomarkers we built into the Phase 2 study designs in three different indications and combined with three different types of backbone therapy, were able to identify the patients’ most at risk of poor outcomes and that 121 was able to restore clinical benefit to those patients.

We achieved statistical significance in the biomarker populations in each of three indications as we had hoped and I am pleased the results matched our model predictions right down to the specific cut points of the biomarkers. The results supported our belief that MM-121 could meet an enormous market need in which up to 30% to 50% of all solid tumors made ErbB3 as path of resistance, representing a potential patient population of several hundred thousand. In terms of the latest developments, in July, we successfully regained the IND to MM-121 which has enabled us to initiate conversations with the FDA around the registration enabling path.

We look forward to keeping you up-to-date on that progress. I would know, we are very aware that many of the top oncology companies are advancing ErbB3 inhibitors in competition with 121. Given that we were the only company to pre-specify our biomarkers in Phase 2 and were able to validate our assays for Phase 3, we still believe we have the opportunity to be first in class and we’re in diligently to maintain that leading position.

As we stated last month, in order to fund the registration efforts on 121 we intend to gain new partner. As announced and return of 121, we have initiated conversations and encouraged by the level of interest we have received thus far. As we have stated also in the past, Sanofi will continue to fund the program into December.

Finally, before we get to our financials. Let me provide a few quick updates on other product candidates in our pipeline summarized on Slide 18. MM-111 is our bispecific antibody designed to inhibit the signaling complex created on ErbB3, heregulin and HER2 bind together. In 2013, we announced the launch of our Phase 2 trial in gastric cancer. We continue to make progress with enrollment in our study and anticipate data in 2015.

We expect to present a biomarker data from MM-111 Phase 1 study at the upcoming ESMO meeting and look forward to discussing more at that time. With regard to the rest of the pipeline, I wanted to give you an update on the timing of moving 141 and MM-151 into Phase 2 studies. Both candidates have progressed through Phase 1 development, we’re pleased with the progress we’ve seen across both programs. At the current time given our focus on the MM-398 commercial planning and NDA process and the deployment of our resources we don’t anticipate starting a Phase 2 for either asset this year.

Currently, we expect to start a Phase 3 study for MM-141 in the first half of 2015 and we’ll provide guidance on the timing of a Phase 3 trial for 151 in the future. With an effort to keep you updated on these programs and others in the month ahead.

Moving to Slide 19, summarizing our upcoming milestones, this year we expect to file NDA for MM-398 as well close on one or more business development transaction across our pipeline. This fall we were holding Analyst Day to review the commercial opportunities for our late stage program including 398, 302 and 121 that are all on a registration path at this point. We also host an upcoming medical meeting, additional data on MM-398 including one year survival and a more detailed analysis by region and last therapy from the NAPOLI-1 study. And in 2015, we anticipate the initiation of our Phase 2 study for 141 for pancreatic cancer as well as Phase 2 data for MM-111 in HER2 positive gastric cancer.

With that let me turn the call over to Bill Sullivan our CFO to discuss Q2 financials.

Bill Sullivan

Thanks Bob and good morning to everyone. Our second quarter 2014 financials were included in our press release, which was distributed earlier this morning. Net loss for the second quarter of 2014 was $18.3 million and consisted of $27.8 million in revenues, $41.7 million in operating expenses and $4.4 million in net loss from other expenses.

The $27.8 million in revenues primarily consisted of $3 million in R&D reimbursement revenues on encouraged second quarter MM-121 R&D expenses and $24.8 million in deferred revenue amortization related to our MM-121 collaboration with Sanofi. Of this $24.8 million in amortization revenues approximately $22.5 was due to change in accounting estimate related to the revenue recognition period for previously received upfront milestone and manufacturing payments as a result of the upcoming termination of MM-121 licensing collaboration agreement with Sanofi.

Please note, we expect continued non-cash amortization of revenues on our MM-121 collaboration will be approximately 46 million in the second half of 2014. As we recognized revenue on remaining deferred revenue balances over the remaining development period. After the termination of our MM-121 collaboration, which we estimate will be on December 17, 2014, amortization of revenue will be zero thereafter.

Moving onto operating expenses $33.8 million or 81% of operating expenses consisted of research and development expenses. Of this $22.3 million or 66% relates to expenses on our 6 clinical stage programs. $7.9 million or 19% of operating expenses consisted of general and administrative expenses, which include a cost related to the commercialization efforts of MM-398. The $4.4 million in net loss from other expenses primarily relates to $4.6 million of interest expense our Merrimack’s term loan with Hercules in convertible senior notes issued in July of 2013. Approximately $2.0 million of this interest expense is imputed non-cash expense primarily related to the conversion feature of the senior notes.

With regards to our balance sheet, cash and cash equivalents in available-for-sale securities decreased $31.4 million during the second quarter of 2014. Please note that previously noted reassessment of the revenue recognition period for MM-121 under the licensing collaboration agreement had zero impact on the decrease in cash and cash equivalent and available-for-sale securities in the second quarter of 2014.

As far as our financial guidance, Merrimack expects existing unrestricted cash and cash equivalent and available-for-sale securities as of June 30, 2014 of $92.7 million, ongoing interest income, and Sanofi reimbursement to remaining life for the MM-121 licensing collaboration agreement to be sufficient to fund operations into 2015. Any inflows from business developments which as Bob just mentioned remains a priority which further extend our cash run way.

At this point I’ll turn it back over to Geoff.

Geoff Grande

Thank you Bill. A brief reminder that we’ll be hosting an analyst day focusing on our commercial capabilities this fall, details will be forth coming but hope you all will be able to join us.

With that operator we’d like to open the line to any questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). Our first question is from Geoff Meacham of JPMorgan. You may begin.

Geoff Meacham - JPMorgan

I know you guys can’t say a lot about 398 in terms of the deal that you would do. But I want to just kind of get what your priorities would be for such a partnership or alliance or something like that and I have a couple of follow ups.

Bob Mulroy

I think our priorities are; one, tying a very strong commercial partner particularly for Asia where the majority of pancreatic cancer incidence occurs and it is growing rapidly. Number two, we obviously want to gain the financial strength from the deal and with a partner who wants to invest in developing this into additional indications. And then three, obviously, the financial resources to support our commercial activities on 398 our launch.

Geoff Meacham - JPMorgan

And just on the number three Bob, can you talk a little about maybe the pace of investments that you’ll make assuming that you can keep U.S. at last partial U.S. price. What types of cash burns sort of acceleration as we go into the launch, but that’s going to be somewhat, I guess just help us with the size and scale what you think that investment maybe.

Bob Mulroy

Sure, we’re not prepared to talk about those specific numbers today but couple of points I can make. First is we’ve already made the investment in creating a commercial facility that can provide a global capacity, global supply of product, that facility is up and running and we’ve produced our engineering lots for CMC section and all that. So we’re in great shape there, so one of the largest investment areas we’ve already taken care of.

With respect to the commercial side, one of the really thrilling things about commercializing the U.S. for Merrimack with 398 is that the post-gemcitabine pancreatic cancer opportunity is significant as Tad laid out, we believe there are patients in the first, second and third-line who are available. But what’s great about that is most of those patients are treated only at 25 centers. So there is a tremendous flow of those greater line patients into a limited number of centers. So it makes the commercial launch and marketing of this product a pretty manageable effort for us. And so it’s pretty appealing that the first product launch and one that we think we can easily handle without a significant resource deployment.

Geoff Meacham - JPMorgan

And then just finally, when you look at the pipeline chart on Slide 18. Just want to kind of get your sense for where 121 sits relative to 302? And when you look at 121, is there any bit of clinical data or any additional information that you need to kind of determine the next path or is it just simply a discussion with the FDA?

Bob Mulroy

So it’s really more the latter. I mean we set out in these trials and I think no matter how many times you try to say it before data, we said at that biomarker population. We didn’t get much credit for that, it’s exactly what we expected to happen. It happened right. We thought a third to a half of patients on those three indications on three different therapies. Would be positive on the biomarkers we indicated and that those patients would do well. And they all had near tripling of these, which was pretty exciting in those indications. And I think particularly exciting given these patients at the bottom of the response curve; these are the patients who biomarkers is pointing out. These patients are not going to drive benefit from the therapies that they would traditionally receive in these indications.

So it is perhaps one more important medical patient population that are out there. Everything we expected to see we saw on those studies. So right now we’re in conversation with the FDA given we have the IND backed to set our own registration path on those programs. We have a set of priorities in terms of indications we want to go after and we have to work that through the FDA.

And to your point we also have to work that through with the number of partners that we’re talking to, given we want to continue to be aggressive with this product given that our preclinical data the data of the other 11 players in the ErbB3 space that they put out on conferences continue to show that this resistance phenomenon is not just isolated to ovarian, lung or breast cancer. We saw it appears to be pervasive across all different solid tumors and all the preclinical data and publications you have seen.

So it remains a very important thing for us to maintain what we think is a first in class position given we have our evaluated assays can launch directly into Phase 3 now trials. And I think the key over the next few months as we get towards the end of the year is to get the regulatory conversations completed, get a new partner on bard so that we can keep this product moving as quickly as possible.

Operator

Our next question is from Peter Lawson of Mizuho. You may begin.

Peter Lawson - Mizuho

On scale of sales and marketing adds, you are going to be doing 398 anything this year?

Bob Mulroy

Hi, Peter, this is Bob. Could you repeat your question, we missed the first half of it.

Peter Lawson - Mizuho

Could you walk us through the timing of the adds in the scale of those adds for sales and marketing for 398 please and if there was anything this year?

Bob Mulroy

So, I think at this point what we have done in commercial is that we have added the heads of the various areas, head of our sales effort, head of our marketing, the head of our reimbursement area, we have built the teams around training, hold much of focused area so there is a sizable sort of team in place doing all the planning. I think that as in most cases the majority of the hires for commercial come as we build up a field force which will mostly likely be a 2015 item.

Peter Lawson - Mizuho

And then the best plan for partnerships with 398/121 co-partnerships possibility and is there other preferred route?

Bob Mulroy

So, for 398 we have start and continue to expect to believe that we are going to close a partnership in near term where we will retain U.S. rights and we will have identified a partner or partners to cover the rest of world with great commercial capability. It’s a great brand and as I said earlier, we are particularly focused given the very high incidence in populations that have pancreatic cancer in Asia to make sure that we have a strong partner there. I think for 121, we are at the beginning of the process and there is lots of interest and we just got to move through that process if I had an ideal world, we could use something similar but we will just have to see all those conversations proceed and it could end up in many different forms. I think we are very aware that at least we think we are sitting on a Lipitor, Torvast sized opportunity and that we want to get this moving as quickly as possible, so we will try and manage that process as best as we can to find partnerships, we can to fund to start trials but also get the best possible commercial opportunity we can for 121 and our investors.

Peter Lawson - Mizuho

And just data for this year, so it sounds like there is MM-111 data, is that Phase 2 and also biomarker subdivision data as of now and is there anything else at the moment anything of the triples?

Bob Mulroy

So, for this year, we are expecting just additional Phase 1 data on 111 on the biomarkers, we specified that program for Phase 1. The Phase 2 is underway in gastric, which has as primary endpoint patients, who are positive for HER 2 and positive for heregulin. So, in this case the primary endpoint is the biomarker population that study we expect to report next year 2015.

Peter Lawson - Mizuho

Is there anything else that’s scheduled for this year, any data?

Bob Mulroy

I think the next time we will be presenting data which have haven’t announced the conference, it will be an update on the 398 where we start the data on one year survival and we can take additional cut points and looks at how different regions did. We don’t have a conference targeted for that, as soon as we do, we will let you know but at this points we have to look the data continue to roll. When we will have the data in-house, we will identify conference for presentation.

Operator

Thank you. Our next question is from Brett Holley of Guggenheim Securities. You may begin.

Brett Holley - Guggenheim Securities

I guess the first question I have is on the broad level for 398 given the fact that NAPOLI was concentrated in the second line setting, what gives you I guess confidence that you kind of get a very broad label for 398 in U.S. and secondarily in EU.

Peter Laivins

Thanks, Brett, it’s Peter Laivins. The Napoli-1 study included patients that come from all settings post- gemcitabine, so certain percentage had been treated in what we call the adjuvant or neo-adjuvant setting which gemcitabine. They might have received MM-398 as their first line metastatic treatment and so on and so forth. And we see patients coming from all of those setting, the post-adjuvant, first line extensively, second line, classic second line and second and third and fourth line, so there is this evolution and these are all the inclusion criteria of the trial and therefore that’s the basis for the label we are seeking as those patients. And benefit is robust and taken as in total and therefore should support the spot indication and that would work both in the U.S. and in the EU because really the key defining principle of any of these patients is progression to metastatic disease and prior exposure to gemcitabine.

Brett Holley - Guggenheim Securities

And then as far as front line goes, I mean how do you conceptualize the possible design and the character of front line and pretty rapidly evolving paradigm in pancreatic cancer?

Peter Laivins

Right that’s a great interest of the investigators once we announced the NAPOLI trial, we immediately had interest from investigators to look at front-line setting particularly I think we have mentioned previously that the strong interest in optimizing is, what they call [indiscernible] regimen, which is affective but terribly toxic, interest and trying to integrate MM-398 into that regimen in front line settings, so sort of the opposite group to those who would have received Gem Abraxane in first line, that’s a strong interest. And we’re working with investigators to design strong front line trials to initiate it as quick as we can in the coming months.

Brett Holley - Guggenheim Securities

And then on 302, I guess, what -- a couple of times I’m curious about that trial is, how confident are you, either to read on what -- might be treatment effect for 302 combination Herceptin would be in that kind of population? And I guess the other question I have the physicians truly from is -- one, would it include the lapatinib, I mean how do you think about that and see what lapatinib kind of anywhere, kind of, factored into the design of the trial?

Bob Mulroy

Great. So I have got two questions. So I’ll try to handle the first one about how confident we are about moving forward in the trial. If you look at the Slide 15, you would probably notice that Tom, the patients that we’re treated with MM-302 either in monotherapy or in Trastuzumab had the greatest affect if the patients were or previously anthracycline-naïve and they achieved a very at least in this ongoing trial. a very robust results of about 10.9 month PFS. Now compared to other trials where we saw the treatment of physician’s choice, I’m thinking of the Theresa trial here for example, they observe the median PFS of about 3.5 months. So we see a broad differential between what we’re observing in our evolving Phase 1 and what was observed in a large trial for treatment of physician’s choice.

So we’re very confident that we can move forward with this. And in fact that was the core of the discussion we had with the authorities when we submitted for an accelerated approval trial design. And so, we believe that our investigators and the authorities are pretty excited as well about the opportunity here.

But I think those are the main questions you asked, you asked about lapatinib, lapatinib is not include in the treatment of physician’s choice in our trial, although it may be possible that patients had previous exposure to lapatinib and then came into our trial that’s the possibility. However, we’re trying to limit the treatment of physician’s choice to three commonly used agents in that setting.

Operator

Thank you. Our next question is from Eric Schmidt of Cowen & Company. You may begin.

Unidentified Analyst

Hi, this is Jeff in for Eric. Good morning and thanks for taking questions. So I was wondering if, you can speak a little bit MM-398 in terms of ex-US strategies. Are we looking for EU partner or an Asian partner that would there be a difference in terms of announcement, the timing on this? Thanks.

Bob Mulroy

Good morning Jeff, this is Bob. So I can’t comment on the deal too specifically at this point. But we did look at both partners who are capable of covering, the entire rest of the world; we took a look at regional players, obviously from logistics point of view our preference would define one solid player in there. But with the four data updating this specifically on the partnership program we put together to get 398 up to the rest of the world in the near future.

Unidentified Analyst

Okay. Thanks. And for MM-121 given the conversation with Sanofi was in early July can you give us a sentiment in terms of how sentiments might have changed over this couple of months in terms of discussions with other partner, potential partners?

Bob Mulroy

I think that there we get a back, we had in-bound interest from companies out there, I mean it’s not a deferred loan in the ErbB3 space right, you’ve got another flock most of leaders in oncology other’s Genentech, Novartis, and Amgen all have products development. Amgen announced earlier this summer that they were moving forward into combined Phase 2, Phase 3. So people are seeing data that’s confirming ErbB3 as an exciting target. And those groups of companies are seeing data across all the different solid tumor indications. So the potential breath of this opportunity not only a step is also been supported. So what we can say at this stage as you know there’s a lot of interest in it. We’re pursuing those conversations, as quickly as we can; given the urgency we feel to maintain our leading position in this space. And we look forward to updating you as the process we put in this fall.

Unidentified Analyst

Okay. Thanks. So we would expect any of the 398 and 121 partnership announcements during like the Analyst Day or would it just be a separate press release? Thanks.

Bob Mulroy

So 398, we’ll certainly expect to get that done. This year as we’ve said and we expect that to be out in a press release and we have it. I think the timing of 121 given you just started we’ll just keep you updated on our expectations on that, as we go through the fall, we haven’t set a specific date on it, obviously sooner rather than later it will great, but these things will take a little bit of time to cook up in the kitchen. So we’re just working on that right now. And hopefully we’ll get done on 121 as soon as we possibly can.

Operator

Thank you. With now, we are out of time and we will be completing the Q&A session. I’d like to turn the conference back over to Geoff Grande for closing remarks.

Geoff Grande

Thank you everyone for joining us and we look forward to talking you again this fall.

Operator

Ladies and gentlemen this concludes today’s conference. Thanks for your participation and have a wonderful day.

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Source: Merrimack Pharmaceuticals' (MACK) CEO Bob Mulroy on Q2 2014 Results - Earnings Call Transcript

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