ImmunoCellular Therapeutics' (IMUC) CEO Andrew Gengos on Q4 2015 Results - Earnings Call Transcript

ImmunoCellular Therapeutics Ltd (NYSEMKT:IMUC)

Q4 2015 Earnings Conference Call

March 30, 2016, 17:00 ET

Executives

Jane Green - IR

Andrew Gengos - CEO

David Fractor - VP, Finance & Principal Accounting Officer

Analysts

Jason McCarthy - Maxim Group

Joe Pantginis - ROTH Capital

Ron Leger - New England Alternatives

Operator

Welcome to the ImmunoCellular Therapeutics Fourth Quarter 2015 Financial Results Conference Call. [Operator Instructions]. At this time I would like to turn the call over to Jane Green, an ImmunoCellular's Investor Relations Group. Please begin.

Jane Green

Good afternoon. Welcome to ImmunoCellular Therapeutics' conference call to discuss the company's 2015 financial results and corporate update. Today's call is being recorded and is also available via webcast. Participating in today's call are Chief Executive Officer, Andrew Gengos and Vice President, Finance and Principal Accounting Officer, David Fractor.

Following this introduction, Mr. Gengos will discuss the company's performance and future outlook, Mr. Fractor will review the company's financial results, and then company will take questions. If you have not yet received a copy of today's press release, you can obtain one by visiting the company's website at www.imuc.com.

ImmunoCellular would like to remind everyone that during the conference call, members of the management team will make certain forward-looking statements; statements as to matters other than historical facts as defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual events or results to differ materially from the events and include statements about our plans, objectives, expectations and intentions with respect to the potential and timing for success of our scientific approaches to cancer immunotherapy, our ICT-107, ICT-121 and ICT-140 products, and stem and T cell and research programs, clinical development efforts, operations, financial conditions whether or not the SEC will approve as final the settlement terms agreed upon with the enforcing division and other statements that are not historical in nature, particularly those that use terms such as will, potential, could, can, belief, intend, continue, plans, expects, projects, estimates or other similar language.

Important factors known to us that could cause actual events to differ materially from those expressed in such forward-looking statements include those set forth in our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed with the SEC. Please review these and the company's other filings.

Now, I would like to turn the call over to ImmunoCellular's CEO, Andrew Gengos.

Andrew Gengos

Thank you, Jane. Thank you for joining our call today. We welcome the opportunity to provide an update on our company and to review upcoming events. I'll provide updates on our progress in implementing our ICT-107 Phase 3 registrational trial in newly diagnosed glioblastoma. In rolling our ICT-121 Phase 1 trial in recurrent glioblastoma and describe some exciting developments in our stem to T cell program and research collaborations. Then I'll cover our line up of expected milestones for this year. I'll finish by addressing an issue we have been working on with the SEC that is referenced in the press release in 10-K filing and then will open the call for questions.

We've made great progress in every aspect of implementing our ICT-107 registrational trial in patients with newly diagnosed glioblastoma. Our first patient in the U.S. passed screening and was [indiscernible] in January. Doses of both placebo and ICT-107 were manufactured and are ready for the patient once the patient completes standard of care is reevaluated for inclusion in the trial and is cleared for treatment. We expect this first patient to be randomized in April. Just as a reminder we will not know if this patient or any subsequent patient is randomized to receive ICT-107 or placebo as the trial is blinded. In the U.S. we currently have 17 activated sites. The process of bringing clinical trial sites online and screening patients is continuing at a strong pace in the U.S. We now have filed clinical trial applications in all of the nine other countries where the trial will be conducted. These include Canada, the U.K, Austria, Switzerland, Germany, Spain, Italy, France and the Netherlands. We expect the first patient to be [indiscernible] in Canada in the second quarter and in Europe potentially also in the second quarter.

Relative to manufacturing in the U.S we're working with PCT and in Europe we're working with PharmaCell. I'm pleased to report that we're on track relative to manufacturing readiness of both sites. In the U.S. we are currently completing manufacturing runs for patients who have gone through screening and all of the quality stability and validation processes and protocols are on track. In the EU we're on schedule and will be ready to manufacture for the first patient to be randomized in a few months. We're very pleased with our ICT-107 program progress and all leading indicators of screening and manufacturing indicate we're on track. We think the ICT-107 program could be the best design program underway in newly diagnosed glioblastoma. We've rigorously analyzed and interpreted the extensive data collected from our placebo controlled Phase 2 trial. We've been able to understand the treatment effect and determine important trial design elements with the goal of designing a Phase 3 trial with the highest potential for success.

I want to emphasize a point that I've made before and that I think is critically important to understand the improvements we've made in our Phase 3 design and why we are optimistic about it's potential outcome. Among the active or previously active clinical programs in glioblastoma our Phase 2 trial was the only Phase 2 trial to use overall survival as the primary efficacy end point and to have an in-trial control group. We did not simply rely on historical control data. The rigor with which we designed and conducted the Phase 2 trial was critical to our determination of whether there was a treatment effect. Despite the small size of the trial which had 124 patients. We built in some important pre-specified subgroup analyses that yielded important insights. As a result the Phase 2 trial provided a wealth of information we needed to decide whether or not to proceed to Phase 3 and if so to determine how to optimize the design of that trial.

We also conferred with glioblastoma experts and undertook extensive interactions with the regulatory agencies to develop and refine our Phase 3 protocol. Most importantly we reached agreement with the U.S. FDA on the special protocol assessment or SPA for the Phase 3 trial. As we previously noted we think the SPA provides major advantage to our trial and is an important differentiator from other competitive glioblastoma clinical programs none of which has a SPA.

We also entered into agreements with three major cancer cooperative groups to enable access to trial sites and patients. The EORTC in Europe, the alliance in the U.S. and the Canadian brain tumor consortium. We applied for and were awarded $19.9 million from the California Institute of Regenerative Medicine to help support the cost of executing the registrational trial. These four groups like the FDA agreed to support this trial after thoroughly reviewing our Phase 2 results and the design of our Phase 3 trial. We think the support of these independent groups validates the continued development of ICT-107 and the design of the Phase 3 trial. We've made four key improvements in the design of the Phase 3 trial that we believe increase the probability of success by either increasing the expected treatment group survival or better separating it from the placebo group survival.

First we're targeting only HLA-A2 positive patients for the Phase 3 as this is the population that showed the clearest treatment effect in the Phase 2 trial. This population represents about half of all of glioblastoma patients in the U.S. We're also conducting what is called an energy test on patients going through screening to assess the robustness of their immune systems. The stronger the patients' immune system, the greater is the potential to melt an immune response and therefore respond to the ICT-107 immunotherapy. We found in our immune testing that a detectable and significant response to ICT-107 was associated with longer survival. Our intent is to bring the best possible population of patients into the Phase 3 trial. Second, we're enhancing our progression assessment in two ways. We're rescreening patients immediately prior to randomization and eliminating those patients who might have progressed in between receiving standard of care and being randomized into the trial. In the Phase 2 results we saw evidence that some patients those predicted to get little value from chemotherapy in particular might have already started progressing at the time they were randomized. By excluding these patients in the Phase 3 trial we potentially can get a clearer treatment signal. We're also using the more specific and sophisticated iRANO criteria to assess progression centrally as once patients have progressed they discontinue treatment. Our intent is to keep patients on trial as long as possible as per the protocol giving them the best possible opportunity to respond to treatment.

Third, we’re administering more doses than in Phase 2 following induction which consists of four doses in month one, there will be 11 subsequent monthly doses for a total of 15 doses in the first year. This compares with four induction doses and only three additional doses or seven total doses in the first year in the Phase 2 trial. We think that by increasing the number of doses we’re giving patients a better opportunity to mount an immune response which is associated with increased survival.

Fourth, we have changed the placebo and we'll be using the patients monocytes rather than their activated dendritic cells that we used in Phase 2. There is some evidence that could indicate that the Phase 2 placebo had some beneficial activity. With this new placebo we hope that any treatment survival advantage will be more clearly distinguished compared to the placebo population. To recap the trial design we will randomize 414 patients with newly diagnosed glioblastoma post-surgery and chemo radiation. We plan to have about 120 sites in the U.S., Canada and Europe. The primary efficacy end point is overall survival which is the only end point that the FDA and EMA will accept for registration. We will also evaluate safety and secondary endpoints including progression free survival as determined by iRANO criteria.

The regimen is standard of care plus or minus ICT-107 or placebo. We anticipate that we will need two years to randomize all patients and an additional two to three years to achieve the number of required events to conclude the trial. We plan to conduct a futility interim analysis at 33% of events or about the two year mark in an efficacy interim analysis at 60% of the events or about the 2.5 year mark. So we're well on our way. We're pleased with our accomplishments and we look forward to keeping you appraised of our progress.

Now a quick update on ICT-121 which is in Phase 1 for patients with recurrent glioblastoma. The challenge we face with this program is that the original design and entry criteria have presented some high barriers for enrollment. Over the last year we have made several improvements to the program designed to facilitate enrollment. A key change last year was to transfer the I&D from Cedar-Sinai to ImmunoCellular so that we could increase the number of clinical trial sites. In addition we submitted a protocol amendment which is designed to loosen the screening criteria. We've obtained most of the necessary investigational review board approvals of the protocol amendment from the six participating sites. Screening and enrollment are increasing and we hope to complete enrollment of the targeted 20 patients in the third quarter of this year. Today more than half the required number of patients has been rolled that would put us on track to follow up patients and potentially have the first results available in the third quarter of 2017.

Now let's turn to the programs we have underway that are designed to expand our immunotherapy platform and move us toward our goal of building a leading cancer immunotherapy company. These include our stem to T cell program which is based on the technology we license from Caltech, our collaboration with the University of Texas and MD Anderson Cancer Center and the projects we're pursuing with the University of Maryland to enhance both dendritic cell and stem cell technology platforms.

Our stem to T cell program seeks to create antigen specific killer T cells that attack tumors in patients and potentially will work as follows. It starts with the patient's own stem cells which we isolate from the blood or bone marrow. We then engineer in via gene therapy the DNA sequence that corresponds to the T cell receptor we want to display on the killer T cells in the body. We put the engineered stem cells back into the patient where they perpetually divide into themselves and daughter cells. These daughter cells become the antigen specific killer T cells that are preprogramed with the T cell receptor we selected. This renewable population of cells can kill tumor cells and provide ongoing surveillance for disease recurrence. In terms of our progress today we've chosen the antigen we want to target, we're currently working with our collaborators at MD Anderson to select the best T cell receptor corresponding to this antigen.

We expect that work will be completed in the third quarter which will enable initiation of the step to develop the gene therapy component. We've several potential collaborators identified to help us load the TCR DNA sequence into the virus for delivery into the stem cell. Once all these components are in place we can then generate a clinical candidate which we can test preclinically in cell lines in animal should suitable models exist and then in humans. Our collaboration with the University of Maryland is designed to enhance dendritic cell and stem cell technology platforms. We have three projects underway. The first project our collaborators -- in the first project our collaborators have screened and identified FDA approved small molecule drugs that behave effectively like checkpoint inhibitors and potentially prevent the cancer cell from hiding from the immune system. These small molecules appear to down regulate important tumor features such as the PD-1 ligand on the surface of the tumor cells and also up regulate the display of tumor specific antigens. If successfully developed they could be used in combination with our DC or stem to T cell therapies augmenting their ability to recognize and kill tumor cells.

We're also working with the University of Maryland on two other projects. One represents new ways to engineer T cells for combination with DC immunotherapy by amplifying T cell properties directed toward tumor antigens. Another project focuses on modifying antigens for enhanced DC immunotherapy including novel peptide configurations for use in DC based products to induce and enhance T cell responses. All three of these projects while early stage are exciting and promising and represent significant value enhancing opportunities for ImmunoCellular.

We're proud of the progress we made in 2015 and believe that it was a year of accomplishment and value creation for our company. Looking ahead to 2016 we intend to deliver another year of growth and achievement for our company. In the ICT-107 program we anticipate randomizing our first patient in the U.S. very shortly, we expect Canadian and European regulatory approvals to enable randomizing patients in the second quarter. Our goal is to have all sites in all ten countries activated by the end of 2016 and our plan is to provide updates on site activation and patient randomization in our quarterly communications or is important milestones are achieved. In the ICT-121 program we look forward to fully enrolling the Phase 1 trial by the third quarter which could put us on track to have first results about a year later. In our research programs we anticipate having T cell receptors identified for stem to T cell clinical candidate or candidates in the third quarter. We should have the Lentivirus, gene therapy construct containing T cell receptor DNA sequences completed in the fourth quarter. And we intend to make progress in our collaboration with the University of Maryland projects throughout the year.

As always we plan to continue to evaluate opportunities to license or acquire new technology that can further complement and expand our immunotherapy platform and we remain interested in working with pharma companies to explore combination approaches with checkpoint inhibitors. We deeply appreciate the continued support of the medical and scientific cancer community and the confidence placed in our company by our collaborators. Our management team and board remain wholly focused on building an innovative cancer immunotherapy company that can bring valuable new treatments to patients and create value for shareholders. We think that we've made great progress pursuing our goal of building ImmunoCellular into a leading cancer immunotherapy company and we're looking forward to a productive 2016.

Before I ask David Fractor to review our financial results for 2015, I'd like to reference an item included in our 10-K filing. Our company has agreed in principle with the staff of the SEC on a proposed settlement framework to an investigation related principally to our Former Chief Executive Officer involving conduct between November 2011 and August 2012. If the settlement is approved we would consent to the entry of an administrative order requiring that we cease and desist from any future violations of Section 5, 17(a) and 17(b) of the Securities Act of 1933 as amended and Section 10(b) of the Securities Exchange Act of 1934 as amended without admitting or denying any allegations.

The proposed settlement also involves the adoption of certain corporate governance amendments to our policies and practices in particular as it relates to the retention of Investor Relations and public relations firms. The proposed settlement is contingent upon execution of a formal offer of settlement and approval by the Commissioners of the SEC neither of which can be assured. Based upon the settlement framework with the staff of the SEC we have not accrued and do not currently expect to accrue a liability related to this matter. However any final settlement must be approved by the Commissioners. If the Commissioners do not approve the settlement we may need to enter into further discussions with the SEC to resolve the investigated matters on different terms and conditions.

As a result there can be no assurance as to the final terms of any settlement including it's financial impact or any future adjustments to the financial statements.

Now I'd like to ask David Fractor to review our financial results for 2015. And then we'll open up the call for questions. David?

David Fractor

Thank you, Andrew. For the year ended December 31, 2015 ImmunoCellular incurred a net loss of $12.8 million or $0.15 per basic and diluted share compared to a net loss of $9.4 million or $0.16 per basic and diluted share for the year ended December 31, 2014. During 2015 the company incurred $10.9 million of research and development expenses compared to $6 million in 2014. The $4.9 million increase primarily reflects the additional expenses associated with the Phase 3 trial of ICT-107. General and administrative expenses increased in 2015 to $4.6 million from $3.9 million in 2014 primarily due to additional professional fees and payroll related expenses. During 2015 the company recorded a credit to other income of $2.9 million to reflect the write down of the company's warrant liabilities compared to a credit to other income of $530,000 in 2014.

For the quarter ended December 31, 2015 the company recorded a net loss of $4.8 million or $0.05 per basic and diluted share compared to $2.1 million or $0.03 per basic and diluted share during the same period in 2014. The increase in the net loss between periods reflects the additional cost of the Phase 3 trial of ICT-107. We also reported that cash used an operations in 2015 was $19 million compared to $9.9 million in 2014. In addition to the incremental expenses associated with starting the Phase 3 trial of ICT-107 the company also purchased $2.2 million in supplies and made additional vendor deposits of $3.7 million related to the trial. These items will benefit future periods and are reflected on the company's balance sheet at December 31, 2015.

During 2015 the company raised $14.6 million net of operating costs from the issuance of 26.650 million shares of the common stock and warrants to purchase 18.7 million shares. The warrants have a term of five years and an exercise price of $0.66.

During the third quarter of 2015 the company was awarded $19.9 million from the California Institute of Regenerative Medicine that we will be entitled to receive as patients are enrolled in the Phase 3 trial of ICT-107 and during the fourth quarter of 2014 we received $4 million in our first payment from CIRM. The next award payment is anticipated to be $3 million when the next enrollment milestone is achieved. As of December 31, 2015 the company had $22.6 million in cash.

Andrew Gengos

Thank you, David. Operator. Would you please now open up the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions]. Our first question is from Jason Kolbert with Maxim Group. Your line is open.

Jason McCarthy

It's Jason McCarthy. We’re really excited to see you guys moving towards Phase 3. Could you go back and walk us through the overall survival data that you observed in the Phase 2 study and given that you're going to have 414 patients in the Phase 3 study, you know what powering assumptions do you think you're going to be making there and what size difference in overall survival do you expect to see?

Andrew Gengos

The Phase 2 results you will recall that we had 124 patients randomized, 81 of which we’re on ICT-107 and 43 were in trial control. In that trial we enrolled three types of patients according to the HLA status, HLA-A1 patients, HLA-A2 patients and patients that were both HLA-A1 and A2 and what we found as you know ICT-107 is an immunotherapy that's designed for all three of those types of patients. What we found was that the treatment signal appeared to be concentrated most in the HLA-A2 positive patients and so that's the group we're going to take into Phase 3 and that includes patients that are HLA-A2 and HLA-A2 and A1, that second group that is positive for both. The data that we had was also then looked at in one further subgroup. So we're now talking about only HLA-A2 patients but we’re looking at it according to their MGMT gene status as you recall MGMT gene status predicts whether a patient will be receiving survival benefit from chemotherapy or not. And so the group that does not appear to receive any chemotherapy benefit the unmethylated MGMT patients we noted a 15.8 month median overall survival in the active and 11.8 month. In the control which represents a four month increase active to control or 34% increase.

We also noted in the other group the patients that would be expected to get benefit from chemotherapy as the MGMT methylated patients. We noticed an overall survival in the active group of 37.7 months and in the placebo group of 23.9 months. So that's a 13.8 month difference benefit toward treatment and that's about a 58% increase in overall survival. So those are the if you will efficacy signals we saw. I want to caution you that neither of those were statistically significant because while these were predefined subgroups in the trial they were not powered at the subgroup level and so we used those data to the best data that we have and they've been updated over a five year period to design the Phase 3 trial.

The powering of the Phase 3 is a little complicated, I'll give you the simple answer. Simple answer is that we use the hazard ratio derived from the data that I just described to you of about 0.7 and we power the trial at 80%. And so I don't have the number in front of me of what that translates to in terms of a monthly survival advantage that we would expect but in terms of the hazard ratio it's about 0.7, 0.71. The reason it's a little complicated is because we're going to be enrolling both unmethylated in MGMT patients and methylated MGMT patients into the trial and we don't know a priority exactly the mix of those patients. We would expect 65% to be unmethylated and 35% to be methylated. However it could be closer to 50:50 based on some of the design parameters that we put in the trial and so it's really hard to Phrase the powering in terms of an expected month difference survival advantage because we don't know the mix of the patients. Did I answer all your questions?

Jason McCarthy

That was great, that's perfect. And now I want to fast forward to the manufacturing process. You apheresis patients potentially in the second quarter then you're really you're going by year-end. So since you’re moving up to 15 total doses for the year in this study versus about half that in the other study, as one apheresis enough to manufacture enough vaccine to meet that demand.

Andrew Gengos

Simple answer is yes. The facts that we have from Phase 2 are that on average we exceeded about 20 doses of ICT-107 for each day apheresis that we ran through our manufacturing process. Also keep in mind we're making placebo as well because we don't know at the time of manufacturing whether the patient will be randomized to active or placebo. So we would expect even with a larger number of doses administered on average to a patient. We would expect that 20 doses should be sufficient. Remember patients are continued on maintenance therapy until they have been deemed and verified as progessors [ph], once they progress they're taken off therapy and so with 15 doses in the first year if patients don’t progress we certainly have enough for the first year and then thereafter the maintenance schedule is once every six months and so you can see we have about 2.5 more years on average of immunotherapy should the patient live out that far without progressing.

The last thing I'll say is we can also apheresis again down the line if we happen to run out of active or placebo.

Jason McCarthy

And just one more quick one. What are the number -- you're going to get 66% of events, the 2.5 year mark, what do you think the number of events you’re going to need to unblind the study towards the end.

Andrew Gengos

You know I sound a bit like a broken record I apologize I gave you the simple answer. But there's a complicated answer, the simple answer is it's about 280 events. The complicated answer is that there are some constraints in the design of the trial that may lead to more events being required and the primary reason for that is that we want to hit a median survival in both the MGMT unmethylated group which we expect to hit because those patients progress and die sooner than the MGMT methylated group and so by putting in that extra constraint of wanting to hit the median survival of the methylated or longer living group we may end up having more events required to terminate the trial than the number I stated. However, the first interim which is 33% of events in the second interim which is 60% of events will be driven off that initial number. And again I would like to say that you know the trial has started. So we expect the first interim will be at about the two year mark and the second interim will be at about the 2.5 year mark.

Operator

Our next question is from Joe Pantginis with ROTH Capital. Your line is open.

Joe Pantginis

Couple of logistical questions and then a couple more in-depth if you don't mind. First in no particular order with regard to the proposed SEC settlement, Andrew you said you don't anticipate a liability but will this be primarily covered by DNO insurance?

Andrew Gengos

I can't really say a lot about this whole issue, what I can say is we've discussed the matter extensively with our auditors'. As [indiscernible] coincident with the filing of the 10-K you might imagine that and no accrual has been made or is expected under the settlement as currently proposed.

Joe Pantginis

With regard to the next milestone do you disclosed what the enrollment milestone is?

Andrew Gengos

Are you talking about in terms of the CIRM grant?

Joe Pantginis

Yes to trigger the next payment.

Andrew Gengos

We haven't defined those milestones but they are I think as we talked about before they are triggered off randomization. So we're randomizing 414 patients and there are three more milestones associated with randomization. We received the first one that was essentially the start of the trial, three milestones will occur for different levels of randomization and so we expect to get those three milestones over this two year period.

Joe Pantginis

Okay. And moving on I just wanted to be clear with regard to the apheresis process and randomization. You made the comment obviously that you also need to generate the placebo cells as -- I should say the control cells. Is that done from the same patient sample or do you need to -- will the patient already be assigned a group prior to apheresis?

Andrew Gengos

We don't know -- the randomization is done after standard of care, right? And so because we manufacture prior to chemo radiation post-surgery we don't know at that standpoint what group the patient will be randomized into. We take a single apheresis, we ship that overnight to our factory. We're using PCT in the U.S. as you know and PharmaCell in Europe. PCT out of the Bay Area, San Francisco area and PharmaCell in the Netherlands. And from a single apheresis bag we make both all of the placebo controllers you said and all the active we expect to need to treat the patients throughout the trial.

Joe Pantginis

Okay, so both. And then my last question if you don’t mind is it's very good you mentioned the different improvements that you put into Phase 3 and I wanted to focus specifically on the energy test. Can you talk to the types of threshold you would be looking at in that test some of it was getting close to the particular threshold and what are your particular assumptions for people -- the numbers of people not necessarily meeting those thresholds and therefore not being eligible for the study.

Andrew Gengos

Sure. So, we test the patients twice, one at an initial screening, once at initial screening and once just before randomization. And an NRG test for those who don’t aren't familiar with the term, it's essentially a mixture of antigens that a patient or anybody in the population should have seen before in their lifetime and so you inject that into let's say the arm of the patient and then you look for a superficial immune response, redness, a little bit of swelling and that typically will occur over a day or two. And so it's not a highly quantitative or diagnostic kind of test with a specific quantitative output. It's essentially an assessment of reaction to seeing those antigens. The patient only needs to have one positive in those two test. And again the logic there is as we grow older unfortunately our immune system gets weaker and because ICT-107 is an immune based therapy presumably the patient needs to make an immune response to the dendritic cells. We'd like to have patients that are at least capable of making an immune response and that capability we're assessing by proxy through the NRG test.

We really don't have enough experience yet to know what kind of dropout rate we will seem to have which means a drop out would be that a patient fails both tests. Again you only have to pass one test and so you know we haven't randomized our first patient yet, we haven't even reached that second test point yet. Fairly evidence I'd say is encouraging but we really don't have enough information to give you a sense of what's going on. We expect to in our quarterly calls report to you the number of sites activated remember we're trying to get 120 sites and we expect that to happen in 2016 and we’re also going to report to you the number of patients randomized. And so as we get into the year and the randomization starts I think we should be in a better position to answer that question.

Operator

[Operator Instructions]. Our next question is from Jared Cowen with Cowen and Company [ph]. Your line is open.

Unidentified Analyst

Yes just a quick question. What is your projected cash burn for this year?

Andrew Gengos

We don't give specific guidance on our projections. We do anticipate if you look at 2015 you know it was 1 million a month going to 2 million a month and we would expect as you know we're in the highest cost intensity part of the Phase 3 trial right now. The two years of enrollment where we're making vaccine for everybody that's really where the activity is. So I think it's reasonable to say that we would probably be around the 2 million a month level but again you know it kind of it ebbs and flows based on things like making deposits to vendors and activity based on enrollment.

Unidentified Analyst

Okay. But staying around this level give or take? A few $100,000.

Andrew Gengos

Our expectation is plus or minus around $2 million a month.

Operator

Our next question is from Ron Leger with New England Alternatives. Your line is open.

Ron Leger

Just a couple questions if I could. One is, I think that did you have a shelf offering at some point where it's just kind of sitting there and when do you think you might need that money?

Andrew Gengos

In the past last I think it's two plus years we've had a financing facility called an ATM [ph] with Cantor Fitzgerald that facility expired toward the end of 2015. There is just a time constraint on that, we did not utilize the full capacity of that facility. Late in 2015, quite frankly over the year-end holidays we filed an S3 that became active and essentially enabled that ATM to be active again should we decide to use it and so you'll note in David's report that we didn't use it. David at all in 2015 is that correct?

David Fractor

It's correct.

Andrew Gengos

So you know I really can't give you a forecast of how we would intend to use it but we certainly see it as a very good and useful tool to continue to capitalize the company and we now have some more runway on that tool based on that S3 filing that you mentioned.

Ron Leger

And lastly about the patience and randomization, so is this a process that just takes a bit of time to get to that point where you’ve your first patient randomize because we're getting sites up and you’re making sure that everything is -- all your I's are dotted and T's are crossed. Can you just comment on that a little more?

Andrew Gengos

Yes. So there's two factors there. The number of sites you have activated, right and so we've only started activating sites in the United States right now that'll start very shortly I think next quarter in Canada and in eight European countries. So the velocity or the acceleration in the number of sites that we activate will drive the number of patients we randomize. The second factor is and sometimes we forget this the protocol for this trial calls for using this immunotherapy after standard of care and so a typical patient might have a symptom on a Friday and be in surgery the following week, have their tumor removed, recover from surgery, get screened for our trial and let's say pass that screening. We will make the immunotherapy and the placebo at that time and then they'll go into chemo radiation therapy and then they'll be re-qualified for the trial and then they'll be randomized. And in the past and it's our expectation for the Phase 3 that process of surgery through chemo radiation is about 80-90 days and so we may very well screen patients and make control an active treatment for them well in advance of randomization, it's just a timing issue. Did I answer your question?

Ron Leger

Yes you did and are you providing any more color on how many patients have been screened so far?

Andrew Gengos

We’re not going to because we confused a lot of people in the Phase 2 when we were talking about Phase 2 trial few years ago between screening and rolling and randomizing. We're not going to do that this time around. We're just going to simply talk about how many sites we have activated and how many patients we’re randomizing. The trial is designed to randomized 414 patients and we’re going to report on that statistic not on screening or enrolling.

Operator

I'm not showing any further questions. So I will now turn the call back over to Mr. Gengos for closing remarks.

Andrew Gengos

Great. Thank you, Operator. I want to thank everybody again for participating in today's call webcast. We look forward to continuing to communicate with investors in the coming weeks and months and to providing you with additional updates on our progress. Have a great afternoon.

Operator

Ladies and gentlemen this does concludes the program and you may all disconnect. Everyone have a great day.

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