Kite Pharma's (KITE) CEO Arie Belldegrun on Q2 2016 Results - Earnings Call Transcript

| About: Kite Pharma (KITE)

Kite Pharma, Inc. (KITE) Q2 2016 Earnings Conference Call August 8, 2016 4:30 PM ET

Executives

Greg Mann - VP, Investor Relations

Arie S. Belldegrun - Executive Chairman, President & CEO

David D. Chang - Chief Medical Officer, EVP-Research & Development

Cynthia M. Butitta - Chief Operating Officer

Paul Jenkinson - CFO

Analysts

Salveen Richter - Goldman Sachs & Co.

Michael Yee - RBC Capital Markets

Mark Frahm - Cowen and Company

Biren Amin - Jefferies

Robyn Karnauskas - Citigroup Global Markets, Inc.

Thomas Shrader - Stifel, Nicolaus & Company

Kaitlin Sandor - Guggenheim Securities

John Newman - Canaccord Genuity, Inc.

Ren Benjamin - Raymond James Financial, Inc.

Peter Lawson - SunTrust Robinson Humphrey, Inc.

Eric Criscuolo - Mizuho Securities USA, Inc.

Jonathan Eckard - Barclays

Operator

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to Kite Pharma's Second Quarter 2016 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. Please be aware that today's conference call is being recorded.

I'd now like to turn the conference over to your host, Greg Mann, Vice President, Investor Relations. Please go ahead.

Greg Mann

Thank you, operator, and good afternoon, everyone. After market close today, Kite issued a press release that provides a corporate update and financial results for the quarter ending June 30, 2016. The press release is available on our Web site at www.kitepharma.com. We also remind listeners that today's call is being webcast live on our Web site and will be available for replay.

Joining me on the call today are Dr. Arie Belldegrun, our Chairman, President, and Chief Executive Officer; Dr. David Chang, Executive Vice President of Research and Development and Chief Medical Officer; Cynthia Butitta, Chief Operating Officer; and Paul Jenkinson, Chief Financial Officer.

During today's call, we will be making certain forward-looking statements. These statements may include statements regarding the success and timing of our ongoing and planned clinical trials, plans regarding regulatory filings, review and approval, future research and development, manufacturing capabilities, plans regarding commercialization, and our cash burn among other things.

These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our Form 10-Q for the period ending June 30, 2016, and Form 10-K for the year ending December 31, 2015. You are cautioned not to place undue reliance on these forward-looking statements and the Company disclaims any obligation to update such statements.

I'll now turn the call over to Dr. Arie Belldegrun.

Arie S. Belldegrun

Thank you, Greg. Good afternoon, everyone, and thank you for joining us today for our second quarter 2016 conference call. This is an important time for the Company as we continue to prepare for regulatory filing and launch of our lead candidate KTE-C19.

Based on the results we’ve delivered in our growth clinical program, we believe that KTE-C19 has the potential to transform the treatment of B-cell malignancies in advance of potential entry into the market next year, we have in place manufacturing capabilities and infrastructure and a commercial team with industry proven track records, as well as a strong presence in the hematology oncology community.

Additionally, we continue to acquire NAV technologies for next generation cell therapies and advance our expensive pipeline of chimeric antigen receptor and T-cell receptor product candidates. We have obtained a leading position in advancing new cancer therapies and we are extremely excited about our progress in our plans for the future of the Company.

I will now briefly review our recent accomplishments. Last month we completed enrollment of all 72 patients with diffuse large B-cell lymphoma or DLBCL, in the pivotal Phase 2 portion of our ZUMA-1 study, the first multicenter pivotal study of engineered T-cell therapy in non-Hodgkin lymphoma or NHL.

By the end of this quarter, we expect to report interim results from the first 50 DLBCL patients in the Phase 2 portion. Pending this progress and subject to discussion with the U.S Food and Drug Administration or the FDA, we anticipate another defining achievement by the end of this year. Submission of our Biologics License Application, BLA for the KTE -- KTE-C19. This filing would position us to be the first Company to bring to market a chimeric antigen receptor T-cell therapy for non-Hodgkin lymphoma as we prepare for potential product launch in 2017.

Our other ZUMA studies, ZUMA-2 through ZUMA-4 continue to enroll and progress. During our Investor Day on October 18, we will review the progress of these studies and other pipeline programs. Also during Investor Day, we will provide an overview of commercial and manufacturing preparations. We are confident that we are putting in place all the elements we need for a successful launch.

For those of you who have known us from the early days, you will be interested to know that we now number more than 300 employees. Approximately one quarter are in R&D, a critically important area for us with an additional one quarter in SG&A, including the members of our commercial team. Approximately one half of our workforce is involving cell manufacturing, including supply chain and quality assurance functions.

Returning to our recent clinical accomplishment at the June 2016 ASCO meeting, we presented follow-up data on the durability of response reported in the Phase 1 portion of the ZUMA-1 study of KTE-C19. Three of seven patients remained in complete response at nine months follow-up. Grade 3 or higher cytokine release syndrome was observed in 14% and neurotoxicity in 57% of the Phase 1 patients. All were reversible except in one patient with dose-limiting toxicity.

The result highlight the potential of KTE-C19 to produce major and lasting tumor regression with a single administration of cell therapy in patients with chemorefractory aggressive non-Hodgkin lymphoma. These findings from Phase 1 portion of ZUMA-1 also showed favorable consistency with data from the clinical proof-of-concept research at the National Cancer Institute.

At the recent ASCO meeting, our NCI collaborator, Dr. James Kochenderfer, presented results of anti-CD19 CAR T-cell investigational therapy combined with low dose chemotherapy conditioning. In this study, 9 of 19 DLBCL patients or 47% achieved complete responses. All of which were ongoing as of the most recent reported follow-up and had a duration of 7 plus to 20 plus months.

In the second quarter, Kite became one of the first companies to gain access to the European Medicine Agency newly established priority medicines or PRIME initiative for KTE-C19. PRIME provides early and enhanced support to optimize regulatory applications and speed up the review of medicines that address high unmet need.

Kite received FDA breakthrough therapy designation for KTE-C19 last year and have orphan drug registrations in the U.S and EU for all six indications in the ongoing and planned KTE-C19 development program. Looking beyond KTE-C19, we’ve an extraordinary growth pipeline of cell therapy candidates in chimeric antigen receptor and T-cell receptor platforms and through internal research and external collaboration.

At our Investor Day, we plan to review in detail several near-term clinical programs in both hematologic and solid tumors to follow KTE-C19. We recently entered an exclusive license agreement with an NCI for a fully human anti-CD19 CAR T-cell product candidate. This latest addition to our CAR T pipeline originated from the work of Dr. James Kochenderfer and his team at the National Cancer Institute Experimental Transplantation and Immunology Branch, where the investigational T-cell therapy is currently in the Phase 1 clinical study to treat advanced B-cell malignancies. As well through a new Cooperative Research and Development Agreement or CRADA, with the National Cancer Institute and Dr. Christian Hinrichs, also had experimental transplantation in immunology branch we expanded our TCR pipeline in solid tumors.

Dr. Hinrichs and his team are preparing a clinical study of novel TCR therapy candidates targeting human papillomavirus or HPV-16 E7. In addition, last month we initiated technology collaboration with UCLA and Dr. Gay Crooks to develop off-the-shelf allogeneic T-cell therapies from renewalable human pluripotent stem cells, which we think is essential to overcome the disadvantages of previously reported allogeneic approaches.

Also in the past quarter, we signed an agreement with Cell Design Labs to develop next-generation precision-controlled CAR product candidates incorporating a molecular switch technology for rapid and reversible control of CAR T-cell activity. Further, in June we held official opening of our 43,500 square foot commercial manufacturing facility. We were very happy to welcome so many members of Kite extended family and to see many of our investors in attendance.

Our commercial facility will have the capacity to produce up to 5,000 patient therapies per year and we expect it to be operational in producing clinical materials by year-end. Overall, we have continuously been optimizing key aspect of our manufacturing, supply chain, and quality control and possess a proprietary process that dramatically reduces the time to approximately 14 days for when a patients material are shift to our facility to when the engineered T-cells are released to the patient. This is one of the fastest rates in the industry.

In May, we further expanded our senior team with appointment of seasoned industry leader, Paul Jenkinson, as Chief Financial Officer. Paul has been responsible for all aspect of financial planning and analysis, working with commercial operations, manufacturing operations, research and development, and general and administration functions in multiple international markets.

His expertise specifically includes financial operations to support global product launch and commercialization activities, including most recently at Allergan. Paul's appointment represent the continuing evolution of our leadership structure and expanding focus and specialized needs of our organization. And we’re thrilled Paul has come onboard.

Our ability to execute and prepare for commercial launch of KTE-C19 is supported by a strong financial position. We ended the second quarter of 2016 with more than $530 million in cash and investments. We’ve accomplished a great deal in the past quarter to advance launch readiness for KTE-C19 and to further advance and broaden an industry-leading pipeline of CAR and TCR programs, including next-generation candidates that have entered or are progressing towards the clinic.

We are on track and on plan with our world class manufacturing facilities and the logistic capabilities to bring to market what may become the first CAR therapy for non-Hodgkin lymphoma in the U.S. Our approach to treatment has been referred to as personalized medicine and during our upcoming Investor Day, you will hear more about our programs to personalize all aspect of the patient experience.

With this, I'd like to invite David Chang to discuss in more detail our clinical development progress and our key initiatives in both CAR and TCR programs. David, please go ahead.

David D. Chang

Thank you, Arie, and good afternoon, everybody. We continue to advance four clinical trials of KTE-C19, which are expected to enroll more than 330 patients and up to 55 in the U.S. Our plan is to begin broadening the scope of KTE-C19 development to include new studies, additional indications, and activities outside the U.S. All of our ZUMA trials are focused on patients with refractory B-cell malignancies who have few or no remaining treatment options.

As Arie noted, we intend to announce pivotal ZUMA-1 top line data from the first 50 DLBCL patients with three-month follow-up by the end of this quarter. Subject to these results and discussions with the regulatory authorities, we plan to submit our BLA to the FDA by year-end 2016 and the registration filing in the EU in 2017. Data from our ZUMA-2, 3, and 4 studies are anticipated in 2017.

We have completed enrollment of all 72 patients in the DLBCL cohort in the pivotal Phase 2 portion of our ZUMA-1 trial. It is important to note that all patients in the ZUMA-1 and in other ZUMA studies received the low dose lymphodepletion conditioning regimen of cyclophosphamide and fludarabine and we have tested in the Phase 1 safety portion of ZUMA-1.

This low dose conditioning regimen was also employed in NCI's anti-CD19 CAR T study and the data Dr. James Kochenderfer presented at this year's ASCO meeting. So low dose Cy/Flu conditioning regimen using the KTE-C19 program is the culmination of nearly 10 years of cumulative clinical experience at NCI and Kite. More than 100 patients have received Cy/Flu conditioning in connection with studies conducted by NCI and Kite.

In the course of their research, NCI reviewed multiple conditioning regimen in the broader context of T-cell manufacturing dose, potency, expansion, and other variables. And on the phase made deliberate and step wide modifications to their lymphodepletion approach. Kite continue to build on this body of clinical experience in the design of our KTE-C19 clinical studies.

At the recent ASCO Annual Meeting, we reported findings that provided important context for understanding the disease severity of chemorefractory DLBCL and the limitations of current treatment options. The SCHOLAR-1 study is a retrospective meta-analysis across four major datasets in 635 patients with chemorefractory DLBCL. Analysis of these data showed an effective response rate of 26% and a complete response rate of 8% with a median overall survival of 6.6 months.

SCHOLAR-1 provides a rigorous data driven historical benchmark for assessing the potential clinical significance of KTE-C19 therapy in chemorefractory DLBCL. We are actually planning the expansion of the KTE-C19 development program with a goal of initiating the second wave of ZUMA studies in 2017. These new activities include studies of KTE-C19 in earlier lines of DLBCL and in new indications, such as follicular lymphoma and chronic lymphocytic leukemia.

In addition, later in the third quarter, we expect to initiate a combination study of KTE-C19 and Genentech's anti-PD-L1 checkpoint inhibitor atezolizumab and chemorefractory DLBCL. Available literature indicate that up to 25% of DLBCL although express PD-L1. The expression of PD-L1 on tumor cells and within the tumor microenvironment, coupled with activation dependent expression of PD-1 on engineered T-cell makes this an important study as we explore ways to further improve the efficacy of KTE-C19.

Our plan to initiate KTE-C19 studies in Europe later this year remains on track. In addition to the progress in our lead program, we’re continuing to advance our growth CAR and T-cell receptor product portfolio, collaborating with partners including Amgen, bluebird bio, Genentech, Alpine Immune Sciences, Cell Design Labs, Leiden University, UCLA, and the NCI.

During the second quarter, we enter into a licensing and collaboration agreement with Cell Design Labs to develop next-generation, precision-controlled CAR product candidates that incorporate molecular switch technology. By incorporating the CDL technology into CAR product, we believe physicians will have the ability to rapidly control and reversibly titrate the activity of CAR T-cells when needed.

We’re excited to be working with Dr. Gay Crooks of the Broad Stem Cell Research Center at UCLA. Dr. Crooks established for the first time a cell culture system that replicates the human [indiscernible] and allows the differentiation of stem cells into functioning T-cells. We believe this breakthrough technology has the ideal attributes of using stem cells as the renewable and flexible source of T-cells and in time will provide the platform for additional gene engineering to enable off-the-shelf allogeneic T-cell therapies.

We’re continuing to advance our T-cell receptor programs. We expanded the development of T-cell receptor therapies targeting HPV associated cancers through our new CRADA with experimental, transplantation, and immunology branch of the NCI and the lead investigator Dr. Christian Hinrichs. Our NCI collaborators preparing a Phase 1/2 study of a novel T-cell receptor therapy targeting HPV-16 E7 as immunotherapy and in combination with our checkpoint inhibitor in solid tumors.

Separately we entered into collaboration agreement with Leiden University in the Netherlands to support research and discovery of additional HPV-16 T-cell receptor product candidates. In addition, based on the proof-of-concept data in solid tumors generated by NCI against another T-cell receptor target MAGE A3, we expect to file a Kite sponsored IND for MAGE A3 T cell receptor product candidates later this year. We plan to provide further updates on our clinical program at our Investor Day, on October 18.

With this summary, I will now pass the call over to Cindy.

Cynthia M. Butitta

Thank you, David. I will speak briefly. When I joined Kite, there were fewer than 10 employees and as Arie mentioned, we now have over 300. We built each function from the top down with the hiring of very seasoned executive through the expertise and experience to support a multibillion-dollar commercial Company. The hiring of Paul Jenkinson as CFO, continues to support this objective.

Paul brings over 20 years of large company experience, most recently as Vice President, Global Commercial and Corporate Finance at Allergan. Paul's broad background in financial planning and analysis, and in particular, his most recent experience supporting global product launches will be critical in building the systems and financial controls for a commercial growth Company. I will continue in the role of Chief Operating Officer and focus on building out the infrastructure for our continued growth. I’m very pleased that Paul has joined our Kite team and I will now pass the financial review over to Paul.

Paul Jenkinson

Thank you, Cindy, and good afternoon to all of those on the call. It's exciting to be here at Kite, working in a space with technology leadership that will dramatically improve clinical outcomes for the patient. As a new member at Kite, what stands out to me is how the executive team has leveraged their tremendous experience progressing both operations, as well as the finance function.

As already outlined today, the second quarter of 2016 represented excellent progress towards key R&D and operate milestones. Our financial position remains strong and as shared with you in previous calls, this has allowed Kite to fund multiple clinical development programs, prepare for our BLA for KTE-C19, as well as the advance our commercial and manufacturing activities in preparation for the planned U.S launch of KTE-C19 in 2017.

Turning into our financial position. As outlined in our press release and the 10-Q filing today, we provided details on our financial results for the period on a GAAP and non-GAAP basis.

Our operating expense on a GAAP basis of $71 million for the second quarter of 2016 included approximately $6 million of expenses related to our collaborations with Alpine Immune Sciences and Cell Design Labs. At the end of June 2016, Kite had cash and investments and marketable securities totaling $551 million. Cash burn for the second quarter was $46 million, including $8 million associated with the collaboration and investment in Cell Design Labs.

Capital spend in quarter two approximated $3.5 million as we slow the rate of spend and officially opened the El Segundo facility. Kite continues to operate debt free with approximately 50 million shares of common stock outstanding. As previously guided, we expect to use between 230 -- $235 million and $250 million in cash in 2016. This use of cash includes approximately $20 million in capital spend and consistent with previous calls, our cash guidance excludes cash inflows or outflows from future business development activities, if any.

With that review of the financials, we will now turn over the call to questions. Operator?

Question-and-Answer Session

Operator

Thank you, sir. [Operator Instructions] Thank you. Our first question comes from the line of Salveen Richter of Goldman Sachs. Your line is open.

Salveen Richter

Thanks for taking my questions. Just wondering with regard to the top line ZUMA-1 data that we’re going to see in late third quarter. Will you breakout relapse versus refractory patients and what percentage of patients in terms of the data we're going to see are going to be over three months of duration. And just curious in terms of the filing on three months of data. Do you think the FDA would -- how many months of data do you think the FDA would want to see given you’ve shown overall survival, median overall survival in SCHOLAR-1 of 6.6 months? Thanks. And I’ve a follow-up too.

Arie S. Belldegrun

Dave?

David D. Chang

Yes. So, this is Dave Chang. I will take your question. So the interim analysis will be triggered when the 50 subjects and actually the number will be 51, because on the last day there were two patients who are enrolled on the same date. When so -- when 50 target patients had an opportunity to have a three-month follow-up, and the plan is to have both safety and efficacy data to be reviewed by the independent DNC, which will then inform us whether study has met at pre-specified boundary for the objective response rate.

Again, I would also say that it is important to highlight that the interim analysis by itself will not offer the conducted ZUMA-1 as we have previously announced the target enrollment in the ZUMA-1 study has been met, and on -- all enrolled patients would have been treated and being the follow-up Phase by the interim analysis data. Is communicated. At this point, we plan to issue a press release communicating the recommendation of the independent DNC the details of interim analysis. However, we will be presented at a scientific meeting and we’re currently targeting American Society of Hematology Annual Meeting, in December.

So, some of the detailed questions that you're asking the breakdown of relapse versus refractory, whether the duration of the patients and follow-up, all those right now we are currently targeting at a scientific presentation and not in the press release. And I would say that, that meetings are better form to get the detailed color into what we saw at the interim analysis. And I just to follow-up on your second question about what the FDA would expect from us. I mean, I’m not in a position to speculate on what FDA wants to see.

What it has communicated to us so far is that FDA -- they will not -- They cannot define a specific response rate of priority that would indicate the effectiveness of our product. And that is very consistent with what FDA has done in my experience where they’ve to look at the data in totality. That includes both the response rate, the duration of response, and I think in this particular case they would pay some attention to the complete response versus partial response. And lastly, safety that will also be scrutinized in detail, and that’s my expectation.

Salveen Richter

Thanks. And just a follow-up. What are you doing to understand neurotoxicity and mitigate this as a side effect.

David D. Chang

Well, toxicity we have been looking in details both from biomarker perspective and we have published few abstracts of a lot 18 months or so, highlighting how following the lymphodepletion and cell therapy, how the different cytokine label -- cytokine levels go up and peak at different time point. We're trying to understand this better and also during the conduct of clinical studies, we have gained a lot of experience in using atezolizumab as well as steroid to control the side effect and as part of a way too, we plan to look into these things more in detail probably in a preemptive study where we would introduce mitigating treatment before any symptoms or side effects evident. So that’s another way to control overall benefit in a KTE-C19 by reducing the potential adverse event that occurred following the cell therapy.

Salveen Richter

Thank you, David.

Operator

Thank you. Our next question comes from Michael Yee of RBC Capital Markets. Your line is open.

Michael Yee

Hi, good afternoon. Thanks. In relation to the two different patient populations that were just talked about, can you confirm that the prior CR rates of those patient populations are essentially identical in prior studies? And how you view your expectations for how your drug would be in those two populations in ZUMA-1? And can you also comment as to how the FDA views those two different populations? Do they view them differently, do they’ve different unmet needs? How do you expect the FDA to view those as part of your filing?

David D. Chang

Okay, Mike. D. Chang, again. And I will take that question. There's a lot of attention being given to the two different population that we are studying in ZUMA-1. Just to be clear, the two different populations are defined as chemorefractory, meaning that these patients to their last line up chemotherapy containing regimen, they do not respond. The best response was either progressive disease or stable disease. And the second part of the population is, patients who have recurred within 12 months after undergoing a target stem cell transplantation. So these two patients were chosen and I would say that this is very narrow patient population to keep the patient population as homogenous as possible, which is what FDA frequently seeks in this setting.

What we have learned from our SCHOLAR-1 data that both patient population behaved poorly. Combined their response rate is as I've stated, 26% would only 8% being complete response rate and median overall survival is only 6.6 months. As for the behavior of these two different patient population to CAR T therapy, so far there have been some skewing data, which is what I think has occurred in small number of data sets that have been presented. When I look at the data in totality and that’s across different time point that this data has been cut and studied.

I would say that there is no reason for me to suspect that refractory versus relapsed patient population would behave any differently. And when we present the data at -- hopefully at ASH, we will detail the behavior of these two patient population in full detail.

As to the second part of your question, how FDA would view these two different patient population? It is very hard to speculate what FDA may do, but in general it is very much dependent on the data that the sponsor would present. And I would say that through SCHOLAR-1 where we’ve studied over 635 patients with their -- categorizing them according to their prior treatment history, as well as response to the existing established treatment. And I believe that we have a very strong case to -- for making that these two patient populations, homogenous income to in response to the currently available treatment.

Michael Yee

Okay. And then my last question is just in terms of the competitor who had a partial clinical hold. Can you confirm that you haven't been contacted by FDA in terms of any safety questions as well or anything like that? Was there any follow-up there or its totally business as usual, no issues as it related to that? Thanks so much.

David D. Chang

Yes, through the breakthrough therapy designation that we have, we have relatively frequent interactions with FDA. And I would say that our studies that's like that ZUMA-1, but also Zuma-2 or 3 and 4, all those studies progressing per plan.

Michael Yee

Thanks.

Operator

Thank you. Our next question comes from the line of Mark from of Cowen and Company. Your question please.

Mark Frahm

Hey, guys. Thanks for taking my question. I think you’ve described your interactions with the FDA towards approval, but maybe you could talk a bit about now that you’ve the PRIME designation, how the MA is reacting and what -- how they might view it any differently than the FDA? And do you think you need to generate a SCHOLAR-1 like database for the EU population?

David D. Chang

Mark, with respect to EMA, we already have had couple of interactions with the CHMP, getting scientific advice both on the clinical study -- clinical development plan, and also a another scientific advisory made discussions around the manufacturing. And we are not going into the details. I would say that those two discussions were very collaborative and we have a pretty good understanding what EMA may be looking for. And as we’ve pointed out, we recently got the PRIME designation for KTE-C19 in the DLBCL and that allows us to have additional meetings with EMA and which will occur within next couple of months. So far all the interactions have indicated that the expectations in Europe in terms of clinical data, development program, it would not be that much different than what FDA has communicated to us so far.

The second question about whether we need to generate another SCHOLAR-1 like data, that’s covering Europe. The answer is no. SCHOLAR-1 it contained full clinical dataset, two of which were coming from large international studies, one from Europe that's based on the multicenter clinical trials that cover both Europe -- European as well as U.S patient population. So in my view, SCHOLAR-1 dataset is generalizable across both Europe and the U.S.

Michael Yee

Okay. And then, thinking about the study you are going to start soon combining KTE-C19 with atezolizumab. How are you thinking about the dosing and in terms of how to dose escalate and do you dose concurrently or how far do you space out the T-cells versus the PD-L1?

David D. Chang

Yes, excellent question. I mean, all those things were considered when the study team were working together with Genentech study team to finalize the study design. The study will be initiated in -- within next couple of months, within third quarter. So at that time the details will be provided. Current approach, just to give you a sense, we’re more interested in the timing of different regimens, when to give the cell and when to get anybody and those will be detailed once that information goes on the clinicaltrial.gov.

Michael Yee

Okay. And then one final one turning to ZUMA-3 and 4, are you still in the Phase 1 portion or have you guys progressed to the Phase 2? And then, whenever you do go to the Phase 2, would we expect to see Phase 1 presented separately kind of like we have with ZUMA-1?

David D. Chang

Yes, so Phase 1 we believe is an important aspect of any clinical development. It's a different indication than the DLBCL, and also as we have previously communicated, the cell manufacturing process that we used for ZUMA-3 and ZUMA-4 slightly different than the one that we're using in ZUMA-1. So for that reason we included a separate portion of Phase 1. The Phase 1 study is ongoing and our plan is to present that hopefully by the year-end at ASH meeting.

Michael Yee

Okay. Thank you very much.

Operator

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

Biren Amin

Yes. Thanks for taking my questions. Maybe I’ll start with ZUMA-1 interim. David, what the pre-specified objective response rate that you set for the IDNC. And also, is there a pre-specified complete response rate that you set for the IDNC to evaluate during the interim?

David D. Chang

Biren, so in terms of pre-specified conditions that I set, it's already stated in the DNC charter, as well as in the protocol. And when we announced the recommendation of either DNC, we will indicate what the pre-specified conditions are. But for now until that happens, I would consider that somewhat as a competitive information and prefer not to release it at this point.

Biren Amin

Got it. And then like, clearly I understand the SCHOLAR-1 patient definitions you use, but can maybe go over how the SCHOLAR-1 patient baseline characteristics matched to ZUMA-1 patient baseline characteristics. Are they similar?

David D. Chang

We haven’t publicly said anything about the patient population in ZUMA-1 Phase II portion so far. What we have seen in the SCHOLAR-1, when you look at the entire patient population, about two-third of them are chemorefractory, meaning their best response to the last chemotherapy was either stable or progressive disease, and the remaining one-third being patients who progressed after autologous cell therapy. When we look at for example, what was done at NCI, I would say that ratio is maintained. In terms of patient population in the Phase II portion of ZUMA-1, they will be part of the scientific presentation.

Biren Amin

Got it. And then, can you maybe talk about what discussions you’ve had with FDA regarding comparability between your commercial and clinical supply? And what data the agency would require of you?

David D. Chang

So that has been discussed at multiple different occasions with the agency, and I would say that, based on the feedback that we have received from the FDA we are very much on track for submitting the BLA by yearend.

Biren Amin

All right. And then just one last one, I guess on ZUMA-3 and ZUMA-4, can you talk about if the data would be sufficient for you to file for ALL next year. And given these are separate R&Ds, could you file the BLA in 2017 as ZUMA-1 is under review?

David D. Chang

At so far, we have guided that the data availability from ZUMA-3 and ZUMA-4 will be in 2017. And we expect if there is positive data, we will be able to apply our BLA. In terms of how that maybe different than what we’re doing, I would say that by then we would have pretty good understanding about how to handle the CMC issues as well as the data package requirement that FDA maybe asking -- maybe seeking it.

Biren Amin

Great. Thanks.

Operator

Thank you. Our next question comes from the line of Robyn Karnauskas of Citi. Your line is open.

Robyn Karnauskas

Great. Thank you. Maybe you can help us understand a little bit; once you file, what are the timelines for someone with breakthrough designation. So for example, timelines for FDA feedback, are they different than the normal review, timelines for the FDA manufacturing inspections and how you’re going to communicate all these events given that it's the shorter timeline? Thanks.

David D. Chang

Yes, so first of all in terms of what breakthrough therapy designation will do is, it will give us a priority review, which means that PDUFA clock from the completion the acceptance of BLA data packaged to the final decision will have to be within eight months. During that entire time period, there is communication that is pre-set as well as sort of ad hoc communications that would occur. The first is sort of response following the BLA commission is 74 day response letter. And from that point on, there is multiple or different discussions that will occur. In general, we would not comment so much on the ongoing regulatory discussions. However if the information is material, then we will issue a press release on that regard. But while the review is ongoing, don’t expect detail of communication from us about the status of that review.

Robyn Karnauskas

Okay, great. And then, as far as next generation, further next generation, I know you mentioned for leukemia and the PD-L1 combos. But next generation molecules, when do you think we’ll hear about that? And how are -- when can we get enough data on the Amgen collaboration?

David D. Chang

So much of them and I’m going to differ to the October 18, Investor Day. We will definitely go into the so called, the mid-space pipeline that are ready for, would be starting the clinical studies within 2017, 2018 timeframe.

Robyn Karnauskas

Okay, great. Thank you.

Operator

Thank you. Our next question comes from Tom Shrader of Stifel. Your question please.

Thomas Shrader

Hi, good afternoon. So you’re not updating the three CRs the duration? Has that -- have we heard the last of that, or just some reason why we’re not hearing that today?

David D. Chang

We will be -- I mean, we consider that to be sort of wordy or scientific presentation. Our current plan is to target another scientific form in the third or fourth quarter perhaps at ESMO to give a further update on those three patients. Just those three patients we have updated to the nine month follow-up, and they’re all in CR, and next follow-up will be incremental, just to be clear.

Thomas Shrader

So this is just falling under the -- this in barcode essentially, because you’re going to present this?

David D. Chang

Yes, the plan is to submit and use the scientific form to communicate follow-up status of these three patients.

Thomas Shrader

Okay. And then, the PMBCL patients, we kind of never talk about them -- they’re enrolled. How are they going to be dealt with? So is that going to be a completely different BLA or is it just, just what can tell us about that group?

David D. Chang

Yes, so just on that for clarity, ZUMA-1 has two different cohort. Cohort 1 will be DLBCL cohort, and cohort 2 allows patients with a primary mediastinal B-cell lymphoma, and transform follicular lymphoma to be enrolled. And at the time of the BLA we intent to submit data coming from both Cohort 1 and Cohort 2. And obviously with that we will be seeking label for both -- all three indications.

Thomas Shrader

Okay. And then last question, the Cell Design Labs deal, does that include SynNotch, the kind of very popular switch, or is it novel technologies beyond that?

David D. Chang

Yes, the Cell Design Lab certainly, their molecular switch technology I think is one of the best that's out there. I mean, its protein dimerization base embedded very tight, very instantaneous when the ingesting agent is provided and also withdrawn, and it allows you to either, activate, de-activate and then re-activate. So, it is really novel design switch that allows the control of the CAR T therapy. A sort of follow-up technology that's coming from the Cell Design Lab is SynNotch, which is transcription based. We are exploring the potential of using such technology in our platform.

Thomas Shrader

Okay. Great. Thanks a lot for all the color.

Operator

Thank you. Our next question comes from Kaitlin Sandor of Guggenheim. You question please.

Kaitlin Sandor

Hi. Just switching gears a little bit here. With regard to your BioLife, biostore agreement in early July, can you help you understand a bit more about how their technology will fit into your shipping and manufacturing process? And what are maybe some advantages of their technologies? Thanks.

David D. Chang

Yes, so actually -- so, I missed the first part of your question. The collaboration with ...

Kaitlin Sandor

With BioLife?

David D. Chang

Okay. So that's really focused on the Cryo preserving the T-cell product before they’re shipped out to the clinical sites. So that covers mostly the supply agreement, and continuing to work on the Cryo preservant to further improve what we’re doing now.

Kaitlin Sandor

Okay. Thank you.

Operator

Thank you. Our next question comes from John Newman of Canaccord. Your line is open.

John Newman

Hi, guys. Good evening. Thanks for taking my questions. David, you mentioned that there is a pre-specified response rate [technical difficulty]. Just wondering if there’s also some referral regarding integration response [technical difficulty].

David D. Chang

John, you’re cutting off -- being cut off. Please can you repeat the question?

John Newman

Yes. Can you hear me?

David D. Chang

Yes, right [technical difficulty]. Okay.

John Newman

My question is, you mentioned that you have pre-specified hurdle for response rate, can you also have a pre-specified hurdle for the duration of response [technical difficulty]. Second question that I have is; you think that some proportion of patients at the age you’d like to see is two groups that you talked about, chemorefractory as well as patients that have previously had a successful stem cell transplant, given you might expect the stem cell transplantation [technical difficulty] whatever sample…?

David D. Chang

Okay, John, I had a problem understanding your second question. So I’ll do my best answering your first question, and then I’ll try to answer your second question which I think had to do with stem cell transplantation that may occur after CAR T therapy.

John Newman

Actually I was wondering before, if there’s a certain percentage of patients that the agency wants to see that have had successful stem cell transplant therapy before proceed with CAR T or [technical difficulty]?

David D. Chang

Okay. Well, let me respond to the first question. So the question about, whether there is multiple pre-specified criteria that the DNC is looking for. So when you set a pre-specified criteria, that is really a statistical question about whether the bond or is that -- it's related to the clinical hypothesis actually closed or not, and that's usually based on the primary endpoint which in our case is subjective response rate. So that is the single determinant that DNC would use, that has been pre-specified. But I would also add that, independent DNC they have the ability to look at not just that pre-specified criteria, but also other elements including the duration, safety aspect before they render the final opinion. So exactly what the DNC will say, I do not know. It will all depend on the data package. But as for the pre-specified criteria that is only based on the objective response rate. So the second question, I still had problem understanding exactly what the question is.

John Newman

So if you look at the data that we’ve seen thus far from [technical difficulty]?

David D. Chang

John, you’re being cut off. You’re on and off and we cannot understand. I’m sorry. There is a problem with the line here -- with your line.

John Newman

Sorry. Is that better?

David D. Chang

Yes, you’re in and out. Sorry.

John Newman

I’ll get back in the queue. Sorry about that.

Operator

Thank you. Our next question comes from Ren Benjamin of Raymond James. Your question please.

Ren Benjamin

Hi. Good afternoon, guys. Thanks for taking the questions. I guess David, to maybe ask it in a different way. The duration of responses, can you give us a sense as to what is maybe a clinically meaningful duration of response versus one that's meaningful to the regulatory agencies if possible or are they different?

David D. Chang

Well, that's -- in general there is a high overlap there. I mean, what the regulatory agencies will be looking for in the BLA package is, statistical significance of the finding and demonstration of clinical effectiveness of the treatment. Meaning whether the magnitude of clinical benefit can view of the adverse events that is also reported in the study is sufficient to make the determination that the patients are actually benefiting from the treatment. And this is not just a simple discussion. This is multifaceted data review issue, and that's why FDA will frequently differ on this matter as a clinical review issue. And then, -- and just to complete my comments about what FDA would be looking for, they would also want to make sure that product quality aspect is controlled and that has to do with cell manufacturing, the release criteria in comparison to between one patient to another. So that’s the whole part of the question which our CMC group is heavily addressing as we speak. And then the last sort of minor, but not an insignificant portion is, conduct of clinical study. Making sure the quality of data are believable, so those in a nutshell four different areas that FDA would be paying attention to. So hopefully my comment answers your question.

Ren Benjamin

Yes, and thanks for that clarity. And I guess, just looking at it in a different way, when you guys have your advisory group meetings and you’re talking with transplanters, how are they looking at this duration of response, since when they do give transplants to patients they do most of the times you see a sustainable benefit. What is relevant to them based on your discussions with these clinicians?

David D. Chang

So this is sort of inputs that we have had from various key opinion leaders, either in person or in a advisory meeting setting. What we have heard, relatively consistently is that treatment that can double the response rate. And also treatment, the response that can go on for six months or beyond would be considered as clinically meaningful in this setting. And I think that makes a whole lot of sense when you look at the median of work survival in this patient population begin over six months. So in that setting if the response lasts more than six months, you can estimate the impact that it will have in the overall survival.

Ren Benjamin

Got it. And just, you had mentioned on the call and in your prepared remarks about the commercial infrastructure and the commercial team. Can you give us just a little bit color, has the commercial team been built up, and how big will that team grow prior to a launch?

Arie S. Belldegrun

We have here with us, Shawn Tomasello, our Chief Commercial Officer, so you can hear it directly from here and ask the right questions.

Shawn Cline Tomasello

Hi, this is, Shawn. Thanks for the questions. We’re going to review that in more detail at our Investor Day on October 18, but we definitely have all of the seasoned proven leaders in place for every function across commercial at this point in time. And we are -- right now publically we have posted 10 to 14 MSL positions, so we’re starting to build out that group from a standpoint of scientific exchange and education. But we will talk in more detail from October 18. But yes we are building out that team.

Ren Benjamin

Got it. And just, maybe just as a follow-up to that, is it -- I guess is it fair to say that the initial targeting of centers would be restricted to transplant centers and the centers that you’ve worked with in the past or would it be more of a broad based sort of targeting?

Shawn Cline Tomasello

It will be broader than that and we will also review that on October 18. But just to be a little more general, it will be between 50 and 70 sites.

Ren Benjamin

Got it. And just one final question for me, can you give us any additional color on the IPSC technology and how it's maybe different than others that are working in the same space and when that might actually come to the clinic?

David D. Chang

Thanks for that question. So, we entered into a research collaboration with Dr. Gay Crooks, who is really been a pioneer in this area. So, there has been a lot of discussions about allogeneic off-the-shelf cell therapy. I mean, one line of research that's really needed there is, genetic engineering to overcome so called self and non-self recognition. That will really address the concerns of our graft versus host disease as well as a rejection of the engineered T-cells. Another thing that really has not been discussed much is, being able to generate T-cells reproducible and consistent manner. And we have been looking into this from both angles and we felt that the technology that has been pioneered by Dr. Gay Crooks allows a consistent differentiation of functioning T-cells from stem cells, either IPS or embryonic stem cells. So we believe that this will be a big component of the test to allogeneic T-cell therapy and we believe that this will be a platform on to which that we can apply additional gene engineering to achieve the final product characteristics that will allow us to make the cells product ahead and be ready to given to the patients when the patient shows up to the clinic. In terms of fine line, this is a technology where the scientific foundation is there. However translating that into something that's clinically feasible and scalable, that will take some time exactly how many years, I can only speculate, but given how things are progressing in this area, I’m hoping that within next three to four years, and we can move towards IND ready stage.

Ren Benjamin

Got it. Thanks for taking the questions, and good luck going forward.

David D. Chang

Thank you.

Operator

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

Peter Lawson

David, just considering what’s happened to a couple of peers. Just have you seen any even inbound questions from the FDA or EMA around your TCR programs or the use of therapy?

David D. Chang

So the T-cell receptor we have ongoing collaborations with an MCI where there has been number of clinical studies and also we are in the process of finalizing the IND, Investigational Drug Application to the FDA which we plan to do for MAGE-A3 T-cell receptor program by yearend. We have had some informal discussions. And I would say that best way to characterize those interactions have been very collaborative as well as on our end no real surprises in terms of what FDA is looking for, for any investigational therapy. So we are very much on track to submit the MAGE-A3 IND by year end.

Peter Lawson

Thank you. I may have missed this, but what’s the first solid tumor data that we could see?

David D. Chang

So solid tumor data, MAGE-A3 the Phase I data have been presented, that program in terms of presenting the additional data coming from our IND studies, let me just push it out to sometime -- end of 2017 more likely 2018 timeframe.

Peter Lawson

Got you. Okay. Thank you so much.

Operator

Thank you. Our next question comes from Eric Criscuolo of Mizuho. Your line is open.

Eric Criscuolo

Hi, good afternoon. I guess David, do you -- or looking long-term, do you expect Allogeneic to be the primary platform for Kite or do you think that it will be some kind of mix of between allogeneic and autologous therapies?

David D. Chang

Great question, Eric. I think it's really hard to predict the future. But I think we are positioning ourselves both from improving automation of some manufacturing to which is more applicable in the autologous cell therapy as well as also investigating the off-the-shelf allogeneic cell therapy. How the future will unfold. I mean your guess will be as good as mine, but we will maintain the optionality of taking either a platform in terms of how we manufacture the cells in this patient.

Eric Criscuolo

Okay. Thanks, David. And then, I guess for Shawn. How soon after FDA approval do you think that you can launch after the ZUMA-1 approval?

Shawn Cline Tomasello

Immediately. We’ll be ready.

Eric Criscuolo

Okay, that's pretty specific. Thank you. And then just to jump back to David. I think on the 10Q, there was mention of an expanded cohort for ZUMA-1. Is that emulation to just a European trial or is that something else entirely?

David D. Chang

So, the expanded cohort I mean we will detail exact plans about what we are doing at the Investor Day. But some of the areas that we are very interested in is, as I’ve sort of talked earlier about coming up with a preemptive treatment to mitigate the adverse events that occur with CD19 CAR T therapy.

Eric Criscuolo

Okay. So there’ll be additional data at the investor conference in October, is that correct?

David D. Chang

Correct.

Eric Criscuolo

Got it. Okay. Thanks a lot.

Operator

Thank you. Our next question comes from Jon Eckard of Barclays. You line is open.

Jonathan Eckard

Thank you very much for taking the question. So I just wanted to confirm. So the BLA filing that you expected for yearend, is that going to be a complete filing or will the clock -- like review clock will start on that filing or how are you going to handle the final analysis data. Is that going to be an amendment to the filing or will the clock start after that data?

David D. Chang

Yes, so ongoing regulatory discussions I’m somewhat hesitant to detail about what’s going on. As we hear back more from the FDA that information we will provide additional guidance to that.

Jonathan Eckard

Okay, great. All my other questions were asked. So thank you very much.

Operator

Thank you. And that concludes our question-and-answer session. I would like to turn the conference back over to management for any additional comments.

Arie S. Belldegrun

Okay. Thank you all for your time today. Kite’s team has continued to execute in all areas of our company delivering promising results of our lead product candidate KTE-C19 rapidly advancing our preparations for a potential DNA filing in 2017 launch, and continuing to be a leading innovator across multiple applications of both CAR and TCR approaches with access to key enabling technologies. Our accomplished executive leadership team is united in transforming the cancer space and bringing the benefits of these new therapies to the market. In October, we will host our Investor Day in New York, during which we will provide an extensive overview of our KTE-C19 commercial planning as well as a review of our manufacturing and team readiness. All team members of our senior leadership will be on-hand to describe our planning for launch as well as our broad pipeline of CAR and TCR programs.

Thank you for participating in our call today. Operator, you may now disconnect. Thank you.

Operator

Thank you, sir. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may now logoff and disconnect. Everyone have a good day.

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