Juno Therapeutics' (JUNO) CEO Hans Bishop on Q2 2016 Results - Earnings Call Transcript

| About: Juno Therapeutics (JUNO)

Juno Therapeutics, Inc. (NASDAQ:JUNO)

Q2 2016 Earnings Conference Call

August 04, 2016 05:00 PM ET

Executives

Nikki Keith - IR

Hans Bishop - CEO

Steve Harr - CFO

Hyam Levitsky - Chief Scientific Officer

Mark Gilbert - Chief Medical Officer

Bob Azelby - Chief Commercial Officer

Mark Frohlich - Head of Portfolio Strategy

Analysts

Chris Shibutani - Cowen & Company

Tom Meacher - Goldman Sachs

Robyn Karnauskas - Citigroup

Peter Lawson - SunTrust Robinson

Ren Benjamin - Raymond James

Jon Eckard - Barclays

Michael Schmidt - Leerink Partners

Tony Butler - Guggenheim Securities

Whitney Ijem - JPMorgan

Jason McCarthy - Maxim Group

Matthew Harrison - Morgan Stanley

Operator

Good day, ladies and gentlemen, and welcome to the Juno Therapeutics Second Quarter 2016 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Ms. Nikki Keith, Head of Investor Relations. Ms. Keith, you may begin.

Nikki Keith

Thank you, Andrea. Welcome to our second quarter 2016 financial results conference call. Joining today's call from Juno are Hans Bishop, our Chief Executive Officer; Steve Harr, our Chief Financial Officer and Hyam Levitsky, our Chief Scientific Officer. Mark Gilbert, our Chief Medical Officer, Bob Azelby, our Chief Commercial Officer and Mark Frohlich, our Head of Portfolio Strategy will also be available during Q&A.

Earlier today, Juno released its financial results for the second quarter 2016 by means of a press release that can be found on our website at www.junotherapeutics.com. During this call, we will make a number of statements that are forward-looking, including statements regarding Juno's business plans and objectives, Juno's ability to advance its product candidates through development, approval and commercialization, Juno's projected clinical trials and regulatory approval timelines, predictions regarding clinical trial results and the implications there off. Juno's ability to achieve its research objectives, the potential of technologies that have been licensed or acquired by Juno and Juno's projected cash burn and capital expenditures.

Forward-looking statements are subject to numerous risks and uncertainties many of which are beyond our control, including the risks and uncertainties described from time-to-time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statements. In addition, we use non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions.

We believe that the presentation of these non-GAAP financial measures is useful to Investors because they enhance the ability of investors to compare our results from period-to-period and allow for greater transparency with respect to key financial metrics we use in making operating decisions. Please see our press release for a reconciliation of our GAAP and non-GAAP results. Please note that you may hear some jet noise as the Blue Angels are here in Seattle today.

With that, I’ll turn the call over to Hans.

Hans Bishop

Thank you, Nikki. Good afternoon everyone and thank you for joining us for our second quarter 2016 financial results call. We plan to cover a number of topics today including an update JCAR015 and the ROCKET trial and progress with our broader CD19 program including JCAR014 and JCAR017. We will be providing an update on our plans for understanding and preventing neurotoxicity. We've also covered a recently announced acquisition of Redox Therapies and the licensed agreement with Memorial Sloan Kettering and Eureka Therapeutics in multiple myeloma.

Starting with JCAR015 and the ROCKET trial. The trial is open for enrollment, the hall was listed within a week and we're now continuing with two modifications, first going forward, we will use single agent cyclophosphamide preconditioning and second we will limit treatment to one patient per week until six new patients have been treated. Regarding ROCKET trial the process of getting IRB approval across multiple sites along with the gated enrollment for the next six patients leaves us to now estimate approval as early as the first half of 2018.

Given the significant unmet needs for these patients and the potential for JCAR015 to change the standard of care it remains an important priority for us to proceed with registration plans. I would like to spend a moment explaining the decision to continue with single agent side preconditioning. The ROCKET trial death [ph] following the addition of fludarabine to the preconditioning regime the association of toxicity coinciding with the addition of flu along with our modified plan to proceed without flu have led some to conclude the toxicity was caused by flu alone.

This is not the case. As we explained on our last call we systematically reviewed multiple possible factors that could have contributed to the neurotoxicity recently seen on the ROCKET trial including preconditioning, patient characteristics, toxicity management, product characteristics and [indiscernible].

We believe that the intensity of the two agent lymphodepletion combined with JCAR015 dose in the second of ALL contributed to some patients experiencing very rapid cell expansion which in turn correlates strongly with the risk of severe toxicity. Although more than one factor may have contributed based on our data review which included a 129 patients treated with the CD19 CAR outside of the ROCKET trial and ALL. We believe that the addition of fludarabine when combined with JCAR015 is promoted appropriately modifiable factor. In our experience across the Phase I MSK trial and the early part of the ROCKET trial we've treated over 60 patients with [indiscernible] and we've not seen a single case of cerebral edema.

We remain encouraged about the potential of JCAR015 to treat relapsed refractory adult ALL if the ROCKET trial achieves results in the range of the Phase I trial we believe JCAR015 will be an important advanced to adult ALL patients and change the standards of care in this difficult disease. As most recently presented at ASCO in early June, Phase I trial day for JCAR015 showed a complete remission rate of 82% in 50 evaluable patients. Overall survival is the most important outcome for patients and the place [ph] on the overall survival curve is 40%. Severe cytokine release syndrome was observed in 27% of patients and severe neurotoxicity was observed in 29% of patients. These results from the Phase I experience show a marked improvement over the historical results with salvage chemotherapy.

Now turning to JCAR017. We continue to move forward with JCAR017 as the backbone of our CD19 franchise. We have encouraging safety and efficacy data with JCAR017 in both NHL and pediatric ALL and we believe that JCAR017 has the potential to be best in class. We expect this product candidate to be on the market and its first indication as early as 2019 with approvals projected in four indications that is NHL, pediatric and adult ALL and CLL as early as 2019. If we obtain comparable results in our registration trials with the current JCAR017 data we then will have the opportunity to change the medical standard of care again. To date our defined sold products JCAR014 and JCAR017 continue to generate differentiated data across B cell malignancies when we look forward to sharing more data later in the year at ASH and other scientific meetings.

At ASCO data presented showed 36 of 36 evaluable ALL patients attained both a complete remission and a complete molecular remission in children and adult using the flu/cy preconditioning. At the current dose, these drugs have a side effect profile consistent with our prior experience with 20% to 40% of patients having severe CRS and 20% to 40% of patients having severe neurotox. With JCAR014 in 20 evaluable relapsed or refectory aggressive NHL patients at the current cell dose who also received flu/cy preconditioning, 80% of patients had a response and 50% of patients had a complete response.

As reported ASCO, the severe sCRS and for the Neurotox rate in this portion of study has been rather than assessing 10% for both. In relapse or refractory CLL JCAR014 again with flu/cy the other response rate is over 90% and the compete response rate is 45%. The side effect profile in the CLL setting has been closer to what we are seeing in ALL.

In addition, the JCAR014 ASCO presentation also offer encouraging rates of the out patients administration and hospitalization across ALL, NHL and CLL. So patients in this trial Dr. Cameron Turtle presented the Hutch experience with outpatient delivery of CAR T cells. In this study 71% of patients receive CAR T cells as outpatients. For those with NHL 30% did not require any hospitalization and 30 days post CAR T cells administration. Across all indications for those who required hospitalization the medium-term in hospital [indiscernible] causes ranged from 5 to 8 days. These days encourage us with a potential for our defined cell products to be use broadly and the outpatient setting.

Finally, on our conference call last month, we reviewed interim Phase I NHL results of JCAR017, all of whom had DLCBL. As of early July, we have 13 patients valuable for safety, 2 or 15% experience sever neurotoxicity and no patients experienced sever cytokine release syndrome. In 10 valuable patients, this safety profile is associated with promising efficacy with an overall response rate of 80% and a completer response rate of 70%. It is potentially encouraging that these response rates are at the lowest dose of this dose escalation trial.

Currently, we’re using a flat dose at a target of (5 x 107 cells) which is equivalent to approximately (7 x 105 cells/kg). This is 50% to 75% lower than other CAR T cell products in this indication. For further comparison, this dose is lower than the current dose of (1 x 106 cells/kg) that is currently being used to treat children in the JCAR017 ALL trial. We’re particularly excited to see what results we can achieve for the next dose, we look forward to updating data with more patients and information on durability as a future scientific meeting later this year.

With that, I’ll turn the call over to Hyam to discuss our research programs.

Hyam Levitsky

Thank you, Hans. Research at Juno’s starts with a deep commitment to understand the fundamental mechanisms that govern T cell biology. This is critical not only in building a long-term self-sustaining pipeline across a growing number of disease indications, but also in developing better and safer products overtime. Illustrating this, I’d like to begin with an overview of the work we’re doing in research to better understand and eventually present sever neurotoxicity.

Our strategy is studying in multiple clinical candidate that differ in cell composition and signaling pathways provides us with access to one of the largest efficacy and safety data basis in the field encompassing over 300 patients. In debt analysis a key patient and disease attributes as they relate to safety and efficacy has been an important component of the research and clinical development teams for some time. Although still very much a work in progress including significant insights into the factors that predispose to severe neurotoxicity.

With the resources and focus that we are bringing this topic hypotheses of the pathophysiology are emerging supported by relevant preclinical models. These have the potential to predict those most at risk as well as suggest preventative and interventional strategies using drugs that are already in the clinic. Expect to hear more from us overtime.

Changing topics, we recently announced the acquisition of Redox Therapies who’s founder Michail Sitkovsky pioneered the discoveries that established the adenosine pathway as a critical regulator of both innate and adaptive immunity. The acquisition provides us with exclusive license to vipadenant, a small molecule adenosine A2a receptor and antagonist that has the potential to disrupt important immunosuppressive pathways in the tumor microenvironment in certain cancers.

It’s important to note the CAR T cells just like our own natural T cells have to battle with the immunosuppressive microenvironments tumors create. Clinical experience with checkpoint antibody show just how powerful the tumors ability is to down regulate T cell function. We believe as we move forward to developing CAR Ts to treat solid tumors it will be critical to understand how to protect CAR T cells from this immunosuppressive microenvironment.

To that end you recall that as part of our plan to deliver best-in-class efficacy in NHL, we have an open-study exploring the combination of JCAR014 with a checkpoint antibody. NHL, while a blood cancer also has an immunosuppressive microenvironment. So, how does the acquisition of vipadenant fit with this picture? We believe that the adenosine receptor may give us access to an even more important regulatory pathway than conventional checkpoints such as PD-1. Why? Because adenosine is increased in regions of tumors with low oxygen, a feature common to most solid organ malignancies, as well as some lymphoma’s, adenosine is directly immunosuppressive to T cells and also drives the differentiation and recruitment of cells, many of which are immunosuppressive in their own right through pathways that include but are not limited to PD-1.

So, the adenosine pathway can be viewed as being upstream of the suppression mediated by immune checkpoint.

In this instance, we decided to acquire the molecule rather than partner on combination trials for several reasons, including time-to-market consideration, control over the clinical development, the significant safety data from the clinic, which provides a clear path to an IND in cancer, and last but not least, the opportunity to work directly with Dr. Sitkovsky, the world’s foremost authority on this pathway. We intend to explore this molecule in combination with our engineered T cell platform and over time explore it in other areas as well.

Finally, an update related to our pre-clinical multiple myeloma pipeline. We announced today an exclusive license agreement with MSK and Eureka Therapeutics for a novel, fully human BCMA Car Construct along with binding domain against two additional undisclosed multiple myeloma targets to be used for the potential development and commercialization of CAR T cell therapies, binding domains were developed under collaboration between Eureka Therapeutics and MSK.

We expect the BCMA CAR to enter human testing as early as the first half 2017 we’re optimistic the CAR T cell therapy can be an important component in treating patients with multiple myeloma. And we are pleased to bring additional fully human body domain against BCMA and other targets into our program. We believe that a multi-pronged approach may be necessary to treat this disease and hence the importance of access to several human constructs specific for more than one target. MSK and Eureka constructs are promising editions to our portfolio that will accelerate our efforts and provide additional opportunities to combat this disease.

With that, I’ll turn the call over to Steve to discuss the financial results.

Steve Harr

Thank you, Hy. In our press release, we provided details and a reconciliation of our GAAP and non-GAAP results and there are significantly more details in our Form 10-Q, which will be filed tomorrow with the SEC.

We ended the second quarter with $1.11 billion in cash and cash equivalents, excluding business development activities, cash burn the second quarter was $5.2 million, which notably includes a $50 million payment from Celgene for the CD19 license. Revenue in the second quarter was $27.6 million, which included a milestone payment from Novartis related to its license of our CD19-BB patent, amortization of the Celgene upfront license payment and a partial quarter of Celgene reimbursement in its share of CD19 related expenses.

As a reminder, Juno and Celgene generally share worldwide research and development expenses for CD19 directed CARs. The practical implications of this is that in any given quarter, if spend is greater by one party, the other party will reimburse a portion of these expenses to equalize cost. In the second quarter, that net effect was the partial reimbursement of cost incurred by Juno, resulted in revenue for us.

GAAP R&D expense for the second quarter was $72.3 million. Non-GAAP R&D expense is $72.1 million and included payment to St. Jude related to the Novartis milestone, costs related to our executing our clinical development strategy, manufacturing our product candidates and our growing research unit as well as stock based compensation expense of $8.9 million. Adjustments made from GAAP to non-GAAP the second quarter include an expense of $3.5 million related to our potential success payment liabilities and a gain of $4.5 million resulting from a decrease in the estimated value of our contingent consideration liabilities.

Non-GAAP adjustments for the quarter also, including non-cash stock based compensation expense of $1.2 million related to the partial vesting of 2013 restricted stock award to a co-founding Director, who became a consultant upon his departure from Juno’s Board of Directors in 2014.

Our GAAP net loss for the second quarter was $64.8 million, or $0.64 per share. Our non-GAAP net loss for the quarter was $64.6 million or $0.64 per share. We continue to expect cash burn for 2016 outside of cash inflows or outflows from business development activity to be between $220 million and $250 million, of which a $170 million to $190 million will be operating cash burn and $40 million to $55 million will be capital expenditures.

I’ll now turn the call back over to Hans.

Hans Bishop

Thank you, Steve. All of us here at Juno share a deep commitment to the brave patients and families taking part in these trials. Our task of delivering treatments that will help them beat their disease is by far our most important goal. And together, we are going to deliver treatments that often you hope and of course, the potential for cure to these patients.

Thank you for your continued support and I’d now like to turn the call over for Q&A, so back to Andrea.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Chris Shibutani with Cowen & Company. Your line is now open.

Chris Shibutani

Thank you very much. We appreciate the update. From JCAR017 in the NHL where you started to provide us with some data in the Phase 1, I am really struck by the level of efficacy as well as in particular on the safety and you highlighted the difference in the dose level that you’re using. Can you give us a sense for what you think -- how you think that dosing level could be factoring in as well as any other factors because it seems this is an opportunity for you to provide a differentiated CAR T offering?

Hans Bishop

Mark, would you like to take that?

Mark Frohlich

Sure. Look, Chris, I think you’re actually hitting the nail on the head in the sense that we’ve known for some time that one of the factors that can contribute to toxicity is cell dose and we do believe that the fact that we can use lower cell doses in this setting and actually achieve high levels of efficacy at least in this preliminary data set that we had experience with is significant in that we don’t see much in a way of significant toxicity.

What is important within that as far as what drives that is we think there’s probably two factors that we’re continuing to understand or try to understand and continue to monitor. One, of course is the construct itself and trying to look at the differentiation that provides both from the standpoint of safety, and particular with the 4-1BB construct, but also with the defined cell product and in our opinion right now we believe that both of those do contribute to the profile that were seeing, again with very early data out of that trial.

Chris Shibutani

And with the data from that trial, can you just comment what the source of the CAR T manufacturing is from the patients that you reporting on this far and will be updating us on, is it from Bothell?

Mark Frohlich

The trial manufacturing has now switched the Bothell. The first part of this trial is I think it covers most of the patients treated thus far, Mark, started out at our partner SCRI.

Hans Bishop

That’s correct. That’s correct. And they have continue to manufacture for a short period of time forward here, but most of his handset is switched over to Joe [ph].

Chris Shibutani

Great. I’ll behave and get back in the queue. Thank you.

Operator

Thank you. Our next question comes from the line of Salveen Richter with Goldman Sachs. Your line is open.

Tom Meacher

Hi, this is actually Tom on for Salveen. Thanks for taking the question. I just had one on BCMA. I know it’s kind of early here, but I was just wondering if you give us any color on what that product might look like. Should we think of that kind of as JCAR017 of the different binder or are you thinking of making changes to the cell population or co-scimitar Mainer domain or any of the other factors. Thanks.

Hans Bishop

No, that’s fine. I think that the product will start off as a true first in human study with assessing of the binders specificity and activity and in that context we will use the 4-1BB in the domain, as with a number of our other product. Looking forward, we are certainly very much interested in advancing this not only to include additional specificities as I talked about in my prepared remarks, but also to look at next-generation platforms.

Mark Frohlich

And Tom, close as we get past the highest point. There is first in human study where we were to get the test binder the with this 4-1BB constructs, of course it’s very much in our plan to then decide when to move it into our defined cell platform.

Tom Meacher

Got it. And one quick follow-up on that, do you think that you will need to use or do you expect to use suicide preconditioning in the swing given it’s a human binder?

Hans Bishop

Yeah, I think we will move to that point. Again we’re -- the first I human elements of this will have a more conservative on rent, but that is the goal.

Tom Meacher

Great. Thanks again.

Operator

Thank you. Our next question comes from the line of Robyn Karnauskas with Citi Group. Your line is now open. Please check your mute button Robyn.

Robyn Karnauskas

I’m sorry. I am so sorry. Thanks for taking my question. So my question is on updated thoughts and how you treat patients to get [indiscernible] and the Hutch biomarker tool that you could use to sort of predict and see [ph] if can get it and [indiscernible] on how you treat these patients and what things you may be doing and how you evaluate whether to use those [indiscernible] whether to use [indiscernible] and help us understand what have you learned over the last month and then what will we learn over the next year about the best way to treat these patients since you get [indiscernible]? Thanks.

Mark Frohlich

So, Robyn, this is Mark. I’m going to start, and then I think I’ll hand it over to Hy for the majority of the answer to your question. I think over the last month, in particular, we’ve been doing, as you know, a number of analyses that are qualitative within the clinical setting as well as clinical to CMC. And I think we’ve actually been understanding a great deal around what we’re capable of doing both with thinking about cytokine levels, as you’re suggesting, for potential predictive test and what days we might be able to do that. Those data are still coming in and we certainly are in the hypothesis generation phase.

The second is, as far as the early intervention and so forth, I think, there are signals from the clinical data that we have that suggest that while these therapies you mentioned are very effective in treating severe CRS, they may not be completely effective in ameliorating neurotoxicity. And I think that’s were Hy will probably address a few more things that we’re looking at specifically here overall.

Hyam Levitsky

Yeah. I know that’s exactly right, Robyn, and I think that the opportunities here are really twofold. One is, as we refine our understanding of the pathophysiology and get greater precision around predictive assays, there is in principle the opportunity to intervene before there are overt symptoms knowing that a patient is highly likely, if left untreated, to go on to have that pathology.

And those treatments could include some of the types of therapies that are currently used in the clinic such as steroids or anti-cytokine antibodies or alternatively we’re exploring other more targeted approaches that impact on other parameters of the pathophysiology.

The other large opportunity that that we’re quite intrigued by is, whether it would be possible to actually prophylactic or prevent the development of neurotoxin entirely. Again, this is really exploratory. It’s something that we are studying in preclinical models, and if those are our positive, we would be aggressive in trying to move these forward into the clinic and certainly once we have some insight into the efficacy of those we would be very fast to reveal these to larger community.

Hans Bishop

And Robyn final point, I think you made reference to the Hutch assay that Dr. Turtle presented at ASCO where he pointed out that there is a cytokine assay that’s used on day one, that’s pretty predicted of neurotoxicity, and we’re going to continue to follow that work closely. Today, it’s an exploratory assay from a validated tool and of course we’ve only had experience with it in the JCAR14 trial, but that does have potential to be used more broadly assuming there are experience where it develops positively.

Operator

Thank you. Our next question comes from the line of Peter Lawson with SunTrust Robinson. Your line is now open.

Peter Lawson

When is the next time we see an update for JCAR17 and NHL [ph]? And do you think we still see kind of that PD-1 combination data by year-end?

Hans Bishop

It’s difficult to be precise about the JCAR17 question Peter. We would hope it would be at ASH, but of course until as you know, abstracts are accepted, it is impossible to be sure, but certainly it’s the goal to try and get those data out toward the end of the year at a scientific meeting. Mark, can you take the question -- Peters question on the follow-up on the PD-1 combo?

Mark Frohlich

Well the thing I would say most is that trial is open at this point in time, and I think we’re looking forward to getting data out of that, but --.

Hans Bishop

It’s too early to predict when Peter.

Peter Lawson

Okay. Perfect, thank you so much.

Operator

Thank you. Our next question comes from the line of Ren Benjamin with Raymond James. Your line is open.

Ren Benjamin

Hi good evening guys, and thanks for taking the questions. Maybe the first one, Hans, can you just review for us maybe the registrational study initiations because you mentioned you know you’re hoping to have -- or the potential for pediatric AOL, CLL and NHL available in the market in 2019, but can you just take us through when each program could be on the market and when a registration study for those programs could be running?

Hans Bishop

Hi Ren. I mean, is it too early for us to be in a more precise than I was in my remarks around the exact sequence. I mean, you do know obviously that we are most advanced in pediatric ALL in terms of data we have today and NHL where we obviously already have a company sponsored multi-center study up and running, Phase I. We’ll provide more updates to you as the clinical plan develops and the timelines allow us to sequence the answer to your question.

Ren Benjamin

Okay. But for now, we have the ROCKET study with the potential to be on the market in the first half of 2018. The other program in 2018 is DLBCL with JCAR017, is that correct or do I mishear that?

Hans Bishop

Well, what we said is, we expect the product candidates be on the market as first indication as early as 2018, with approvals in 4 indications and that will likely be DLBCL by the way, and then the other indications pediatric adult ALL and CLL, as early as 2019.

Ren Benjamin

Got it. Okay. Just switching gears to JCAR015, I know that you had mentioned and we had seen this in an earlier scientific meeting that patients who had received JCAR015 were comparable between groups that had received a subsequent stem cell transplant and those that didn’t. And I was kind of wondering, how long are those responses, how durable are those responses between the groups?

Hans Bishop

Yes, Mark can take that one.

Mark Frohlich

Yes, as far as the response duration that we have right now, when you’re talking about the group, as to whether or not -- I have got to qualify this only from the standpoint that when you’re comparing between the two groups, those that undergo transplant later and those that don’t undergo transplant, there is an inherent bias in the comparison. And that’s why I’m making this qualification so you literally have to take those patients out to do proper analysis and with that the durability of those responses. If you’re looking at a median, actually runs out roughly about 8 to 9 months in that circumstance.

Hans Bishop

Let me answer the question this way, I think the [indiscernible]. If you look at the JCAR015 patients that get into the duration mission, high dose, they get out 10 months, 12 months, and then they didn’t go on get a transplant, how many relapses have we had in that group?

Mark Frohlich

There has been zero.

Hans Bishop

If you look at the Kaplin, MIRIAN and again, Mark, correct me if I messed up any of this, if patients get out to -- it’s around about 10 to 12 months the survival plateau becomes very flat on both those that go on to get transplant and those that don’t.

Mark Frohlich

That’s correct. I think the way you just stated maybe a little bit differently, I am thinking about it from a biological standpoint when you have gone in CR for roughly 12 months or beyond. We have not seen relapse

Ren Benjamin

In either of those case?

Mark Frohlich

In those groups, yes. That has been with the transplant group we’ve had one patients die of treatment related mortality, that’s a different issue.

Ren Benjamin

Thank you.

Mark Frohlich

And Ryan for completeness about 40% of patients in that JTCR015 phase 1 get onto that plateau.

Ren Benjamin

Got it, got it. Okay. That’s great. I appreciate the clarity. And then one final one for me in the JTCR017 study from children’s you mentioned let’s see if I got this right, that the rates of severe CRS and severe neurotoxicity were similar between the flu/cy and cy cohorts of the trial, and I just want to know what were the rates there and when you talk about these complete responses -- these response rates, is that after a follow-up of at least three months or what is the follow-up minimum to be documented as a response.

Hans Bishop

Very good. So first to take the question on toxicity. The comparable toxicity is roughly a rate of about 29% of severe neurotoxicity or severe CRS system seen in that trial, due recall and that Ren that there is a number of different dosing levels that are seen within that trial, and toxicity does increase with dose as I mentioned earlier.

But it’s in that range for report across [indiscernible] group and that’s true for the flu/cy group as well. As far as how far to -- how far out minimally they have durable responses. Generally, speaking, the flu/cy group has been the most recently treated by Seattle children’s and in that trial there most recently treated patients actually are out roughly 4 months now the last patient treated in that cohort. So there are over that, over that is the minimum.

Ren Benjamin

Got it. Thank you very much. Good luck going forward.

Operator

Thank you. Our next question comes from the line of Jon Eckard with Barclays. Your line is now open.

Jon Eckard

Thank you very much for taking the question. So I guess the first question is on the JTCR015 and JCAR017 with the new timelines of as early as first half 2018 for the JCAR015 approval and as early as 2019 for JCAR017, basically, and by that time all four kind of key indications, how can we think about some of the benefits or return on investment of the JCAR015 if it’s going to get kind of leapfrogged by JCAR017, a year-and-a-half later, could you just do that? And then I have another question on the armored [ph] CAR afterwards.

Hans Bishop

Yeah. I think the -- Jon, the reason that we think it’s still important to move forward with 15 acknowledging that we have a gap in the range you mentioned. Is that -- these patients really need better therapies and from our point of view asking them to wait whilst we get JCAR017 to market take this longer way, doesn’t seem inappropriate, particular when you consider the cy-only data remain very compelling.

So -- and by the way from a company perspective, developing all of our supply chain and manufacturing and commercial processes behind that, I think it also an important thing, before we move into this phase of launches in different diseases. So I think for multiple reasons it makes sense and I think the gap makes sense. Do you want to add something, Steve?

Steve Harr

No. Go ahead. Just for clarity, Jon, as you said 2019 is -- so we did say JCAR017 that its first indication is really in 2018, just so we’re clear.

Jon Eckard

Yeah. I just meant. Well, I mean, the pediatric or the start of the adult ALL that -- the same indication would be 2019.

Steve Harr

Yeah.

Jon Eckard

But that’s a good answer. Thank you very much. And then the second one was. armored CAR. At some point I thought there we may have seen something from armored CARs this year and I was just wondering -- I didn’t see anything in the press release on that [technical difficulty]?

Hans Bishop

Yeah. Dr. Sadelain has presented and published, we think, pretty exciting pre-clinical data on the armored CAR construct. But we haven’t yet presented any clinical data. We expect the trial of our first armored CAR to open sometime this year.

Jon Eckard

Great. Thank you very much.

Operator

Thank you. Our next question comes from the line of Michael Schmidt with Leerink Partners. Your line is now open.

Michael Schmidt

Just wanted to circle back to the ROCKET trail, JCAR015, and just looking back at some of those Sloan-Kettering Phase 1 data. It looks like some patients at least were treated with cy/flu as well in our trial but without significant neurotox and just wondering how you reconcile that you know just with the findings from the ROCKET study.

Hans Bishop

Thanks for the question Michael. So when we went through our investigation off of the ROCKET events with cerebral edema, we were asking the same question and fundamentally here’s the way it breaks down, although we with -- many of our trials we’ve had large experience with flu/cy conditioning, the memorial experience in ALL has been predominantly that of cyclophosphamide conditioning alone.

And when they’ve gone to the flu/cy conditioning as you’re saying roughly 10 patients have been treated with that condition. The same one we use on the ROCKET by the way, or did use on the ROCKET within the trial. And what we found was is that there were patients divided out having either very low levels of disease burden which we know poses lower risk levels for neurotoxicity or they had very high level of disease in which the expansion of CAR T Cells in that circumstance actually can also be a bit more blunted.

And so we don’t believe that the population of those 10 patients actually were representative of the patients that we’ve been subsequently we’re enrolling into the ROCKET trial. And that’s basically how we see it as far as the distinction.

Michael Schmidt

Great. Thanks for that clarification and then one on the Celgene CD19 Op end [ph] Steve. Just to confirm that cover, does it cover all CD19 products and ongoing studies, including some of the NexGen product as well?

Steven Harr

That’s correct.

Michael Schmidt

Right.

Steven Harr

That’s correct. Generally think about the options on a target basis.

Michael Schmidt

Great. Thank you.

Operator

Thank you. Our next question comes from the line of Tony Butler with Guggenheim Securities. Your line is open.

Tony Butler

Yes. Thanks very much. Two brief questions if I may, one, just around JCAR014 and CLL there were patients treated with cy alone, albeit small number. Then the question really is around, but while the flu/cy response rates were extraordinary, question is moving forward are you sticking with that combination? And then the second question is around Redox and vipadenant. Despite the fact that Sitkovsky is a adenosine Guru -- there are two parts to this question.

One is, what’s the composition of matter IP or you could remind us of that? And the second is, while you clearly have purchased a very strong inhibitor of adenosine receptors, what about the anti CD73 antibodies are also in development at some competitors and just the thought process around that versus the vipadenant product itself.

Hans Bishop

Okay. Mark, you should take the CLL questions, Steve, the IP question and then Hyam if you could talk to CD73.

Mark Frohlich

Okay. Tony, this will be relatively short. Since fludarabine and cyclophosphamide are both active drugs generally in CLL, we are intending to use the combination moving forward as a conditioning regimen. What we likely will be doing is testing lower intensity versus higher intensity in order to make that regimen more palatable to folks who are older or more-frail in that disease setting. But our intention is to take that forward not only with JCAR014, but ultimately with our other CD19 product as well, in this case JCAR017.

Hyam Levitsky

Mark could you clarify Anthony’s question, how many of the patients in that JCAR014 CLL trial had flu/cy preconditioning?

Mark Frohlich

So of the 13 patients that have been reported, 11 of those had flu/cy conditioning and they had the high intensity because that’s commonly used in CLL therapy, only two had the cy or non-flu/cy regimens.

Tony Butler

Thanks.

Hyam Levitsky

On intellectual property, Tony, without extension the composition of matter patent for this compound extends to 2023. They are also with this acquisition with other intellectual property, including methods of use patents that we think are going to be quite important, not only for this molecule, but the field in general, and those extend late into the next decade before we contemplate extension.

Mark Frohlich

And I would add, Tony, of course, normally you would look at your MPV on a small molecule gauge to when you expect generics, because, of course the economic considerations for us are more complicated than that. I mean, we will gain -- if this combination helps us improve efficacy in solid organ tumors with CAR T cells, our economic interest is as much related to their market shares that supports CAR T cells as it is to the economics of the small molecular line.

Hans Bishop

And Tony in regard to CD73 is as you know this molecule is an ecto-enzyme that converts basically AMP into adenosine. So, if blocking is a way to diminish one pathway by which adenosine is generated, but it is not the only pathway. And so, in contrast, the approach that is taken with an A2aR inhibitor like the patented is that you are essentially blocking the ability of that molecule adenosine to suppress at the level of the receptor.

The other difference, I think relates to the form of the drug such that most of the attempts at blocking CD73 are using monoclonal antibodies that may have difficulty penetrating some of the very deep seeded hypoxic liaison [ph] of the tumor that is the problem in the first place. And we think, we can do better with a small molecule there.

Tony Butler

Thanks very much.

Operator

Thank you. Our next question comes from the line of Cory Kasimov with JPMorgan. Your line is open.

Whitney Ijem

Hey guys. This is Whitney on for Cory. Thanks for filling us in here. I guess, one question is for the ROCKET trial. Can you just remind us how many patient you are targeting for the primary endpoint analysis and do the 15 or however many patients or however many patients that were initially enrolled and treated with cy alone count towards that total. Are you kind of starting over there?

Hans Bishop

So Whitney, that’s a great question. We need 50 morphologically relapsed patients coming into their CAR T cell therapy in order to satisfy the primary analysis group. We are looking -- we may not have to start completely over, but we likely will be enrolling the majority of the 50 patients from this point forward.

Whitney Ijem

Got it. And then, going back to -- I think you guys had a human -- fully human CD19 CAR in development somewhere, but you kind of de-prioritized it once you saw the results of the addition of fludarabine. Is that correct, how am I remembering it? And had there been any change in thinking there given some of the safety to drive?

Hans Bishop

Yeah. Whitney I’ll go first and hand over to Mark Frohlich. We didn’t de-prioritize it. Actually when Hy came in, when he first run the company he looked at that binder and said he thinks we can do better. And so we decided to take more time and that was an easier decision to do following seeing the benefits of fludarabine.

But we still believe the fully human constructs are fundamental important. Remember the time as it was also said we would very much like to explore reducing the -- reducing further the intensity of the lymphodepletion were used. So, maybe Mark you can say a few more words about fully human CD19.

Mark Frohlich

Sure. Yeah, so, we anticipate working in collaboration with our college to file IND by year end type range.

Whitney Ijem

Okay. Thanks.

Operator

Thank you. Our next question comes from the line of Jason McCarthy with Maxim Group

Jason McCarthy

Good evening. Thanks for taking the question. I think we all know that you guys have shown the CAR T space, the journal has shown unprecedented efficacy in leukemia and lymphoma in the salvage population. Given what happened in the rocket study, and creating that perfect immune environment for CAR T to be the most effective, what is they’re going to take to move past salvage into the larger populations of less sick populations?

I know Juno is doing a lot of work in defining cell composition. But can you just kind of walk us through what’s in the pipeline. How are you better defining the CAR T product, and what do you think regulators are going to require to move into these less sick patients, which where we believe is the larger commercial opportunity?

Hans Bishop

Well, I’ll take a dig at that first Jason, then hand over to Mark Gilbert. I mean, of course, I think the most important answer to your question is, we and regulators and physicians will look at benefit to risk, and we need to demonstrate that in these first populations we’re moving forward in, and then clearly show it in early disease populations too. I think, we’re quite optimistic about our ability to do that for a couple of reasons, obviously, we need to do the trials and get the evidence. One, is generally speaking the risk of toxicities does correlate to disease burden, certainly I would say that’s true, and particularly true in ALL, which is the hardest disease, in which to find therapeutic window, and I can explain a bit further why that is.

And I think you’re also seeing a glimpse with these data that Dr. Turtle presented at ASCO in lymphoma that show general progress about efficacy, and safety leading to the date from that trials supporting a good number of those patients being treated as outpatients, and actually a meaningful number completing that course of therapy as outpatients, and of course, in the -- as you move forward into earlier lines of disease in lymphoma that becomes very important, because unlike these refractory ALL patients, they -- more of the [indiscernible] in the community. What would you add?

Mark Gilbert

I think you covered it quite well. I think the three pieces I think one in moving into earlier lines of therapy. I think we have to find the equation to treat patients with Laurinburg disease is hence said. I think we’ve got be able to manage or actually reduce the toxicity and increase the tolerability profile, so these products can be delivered in the outpatient setting. If we aren’t able to do that, I don’t know that there’ll be a real strong move to move them upfront since there are so many competitors in the space as you’re moving to those earlier lines of therapy.

And finally, I think we’re going to have to be able to demonstrate and I think we’re getting there, long-term durable remission for leukemia and long-term durable responses for the lymphomas because as we move to those upfront settings, even though it may be easier to manufacture because the patients have been exposed to less chemotherapy or other agents. I think then we’re needing to extend the durability for a longer period of time.

Jason McCarthy

Great. Thanks for take the question.

Operator

Thank you. And our next question comes from the line of Matthew Harrison with Morgan Stanley. Your line is open.

Matthew Harrison

Great. Afternoon, everybody, thanks for taking the question. I have two which are relatively quick I think so. One, I know you talked about this a little bit earlier, but on BCMA, can you just tell us to the extent you’re willing any differences between your BCMA beyond the fact that they’re fully human compared to some of the other ones that are available from competitors? And I have second after that.

Hyam Levitsky

Sure, Matthew. This is Hy. Obviously, we’ve in the due diligence that was conducted prior to going forward in the deal, we did a pretty extensive comparison and there are some striking differences in terms of potencies of the binders as measured in vitro assays and an in vivo [ph]. And then there are some other biophysical properties that were quite intrigued by.

One of the unknowns at the moment in terms of its significance relates to, for example, whether the binders are inhibited by soluble BCMA. There are differences here between some of the candidates that we’ve licensed and others that are in the field. I wouldn’t try to posit that we know the significance of that, but it is a measurable difference.

Matthew Harrison

Okay. Perfect. Thank you. And then second, just on ROCKET, you talk about some logistical steps as you restart, maybe if you could just go through all of the NCI, I know you mentioned obviously, you have gauging enrolment for these first five patients, can you just talk about what steps has to be taken with IRBs and in that process and then any additional monitoring that’s been added to the studies or changes that you would expect in institutions behavior towards the study? Thanks.

Hyam Levitsky

Very good. So, Matthew in essence the first step that we are actually dealing with as we come back online and by the way we’re open to both to enrollment and to re-treatment at this point in time and have enrolled new patients and retreated new patient since the whole. But the first step is actually as Hans mentioned earlier, going through the institutional review bodies. It’s more than just the IRBs with the Institutional Review Board, but in essence, this amendment that we put forward required a full review by these panels. And so that actually does take some time as it goes through each of the institutions [indiscernible] to give full approval.

The second part that you mentioned already is the gated enrollment that we have for the first six patients that were as we move forward, there’s an additional caveat, that you may recall, we saw most of this cerebral edema or the cerebral edema cases occurred in younger individuals. We also have an additional gate on the younger, less than 30 years of age that could continue forward beyond the first six weeks or the first six patients, excuse me, that that we would be treating.

And the final thing which I think will be less impactful but as Robin asked earlier, we’re going to need to just sort of restart, if you will, with our primary analysis group of 50 patients, roughly speaking, and so it’s those three things that contribute to that.

Matthew Harrison

Okay. Perfect. Thank you very much.

Operator

Thank you. This concludes today’s Q&A session. I would now like to turn the call back over Hans Bishop for any closing remarks.

Hans Bishop

Very good. Well, thank you all for joining the call today, and we look forward to reporting on our continued progress in the future. Thanks very much.

Operator

Ladies and gentlemen, thank you for participation in today’s conference. This does conclude the program. You may all disconnect. Everyone have a great day.

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