Five Prime Therapeutics' (FPRX) CEO Rusty Williams on Q2 2016 Results - Earnings Call Transcript

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Five Prime Therapeutics, Inc. (NASDAQ:FPRX) Q2 2015 Earnings Conference Call August 4, 2016 4:30 PM ET

Executives

Heather Rowe - Senior Director of Investor Relations and Corporate Communications

Rusty Williams - Chief Executive Officer

Robert Sikorski - Chief Medical Officer

Aron Knickerbocker - Chief Business Officer

Marc Belsky - Chief Financial Officer

Analysts

Jonathan Chang - Leerink Partners

Kennen MacKay - Credit Suisse

Kevin Matthias - Wells Fargo

Kaitlin Sandor - Guggenheim Partners

Operator

Good day, ladies and gentlemen and welcome to the Five Prime Therapeutics Incorporated Second Quarter 2016 Earnings Call. As a reminder, this conference maybe recorded. I'd now like to introduce your host for today's conference, Miss Heather Rowe, Senior Director Investor Relations and Corporate Communications. You may begin.

Heather Rowe

Good afternoon and thank you for joining us. On behalf of Five Prime, I'd like to welcome everyone to our conference call to discuss financial and operational results for the second quarter 2016. We issued a press release this afternoon and also posted slides to accompany this presentation. The slides can be found under the Investor Relations section of our website, under Events and Presentation.

Joining me today are Dr. Rusty Williams, Chief Executive Officer; Mr. Aron Knickerbocker, Chief Business Officer; Dr. Robert Sikorski, Chief Medical Officer; and Mr. Marc Belsky, Chief Financial Officer. Today's conference call will include forward-looking statements under the Private Securities Litigation Reform Act of 1995, including statements regarding our research and development programs and financial outlook.

Actual results may differ from those indicated by these forward-looking statements due to numerous factors, including those discussed in the Risk Factors section of our SEC filings. Our expectations and assumptions could change. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change.

I will now turn the call over to Rusty.

Rusty Williams

Thanks Heather. Good afternoon, everyone and thank you for joining us today. As we review our second quarter results, I am pleased to update you on our clinical programs, which continue to make progress, good progress and we are on track with our previous guidance.

For those following along with the slides and overview these programs can be seen on Slide 3. As you look at our pipeline chart, you notice that FPA008 now has a new official name Cabiralizumab. For brevity going forward, I’ll refer to it as Cabira.

We continue to move forward in our clinical trials of Cabira our anti-CSF1 receptor antibody and remember that it blocks immunosuppressors tumor-associated macrophages. We and our partner Bristol Myer Squibb are studying Cabira in combination with the PD1 checkpoint inhibitor OPDIVO in multiple tumor settings.

Pre-clinical results from us and other suggested a combination of this macrophage inhibitor and a T-cell checkpoint inhibitor can have a synergistic anti-tumor effect and as the basis is this combination process.

We are making solid progress in this Phase 1a, 1b trial that’s expected to enroll approximately 280 patients. Five Prime is running the trial which is approaching the end of the Phase 1a dose escalation phase. We remain on track to move into the Phase 1b portion during the second half of the year.

And importantly, this is a biomarker rich trial. We are analyzing both circulating biomarkers in a broad spectrum of parameters. If we can measure within the tumor biopsies we are taking pre and post treatment.

You may remember that we’ve already reported safety and pharmacodynamic data in 54 subjects from our previous Phase 1 Cabira study, which was done in non-oncology settings.

You’ll probably remember that we are also testing Cabira in Pigmented Villonodular Synovitis or PVNS. By this test made, we generated enough information to advance into the Phase 2 portion of our clinical trial in this orphan disease a tumor driven by the CSF1 pathway.

To hear more details about both of these programs from Bob in a few minutes both are on track and we will work with BMS on appropriate – which venues are appropriate for us to report data from these trials.

Now I’d like to turn to FPA144. This is our isoform selective antibody in development as a targeted immunotherapy for tumors that overspreads the B slight variance of FGF receptor 2. Importantly, 144 is highly selective for this slight variance known as FGFR2b.

Patients with FGFR2b protein overexpression can be identified using our proprietary immunohistochemistry assay and it’s estimated that approximately 5% of patients with gastric cancer have this overexpression due to a gene amplification and these patients have been shown to have a very poor prognosis.

Now key feature of 144 is that we engineered it to have inherent antibody dependent cell-mediated cytotoxicity or ADCC in order to increase direct tumor cell killing by recruiting natural killer cells or NK cells.

At the AACR Meeting in April, we presented pre-clinical data showing that 144 recruits NK and T-cell into the tumor micro environment converting the tumor from a non-inflamed state into an inflamed state, which we believe should promote tumor cell killing.

While Bob will provide more specifics on the updated Phase I data we announced at ASCO in June, I first want to provide context on why we are encouraged by these early findings.

We reported that monotherapy treatment with 144 illustrated initial ant tumor activity that resulted in three out of nine confirmed partial responses in heavily pre-treated FGFR2b positive gastric cancer patients.

In addition, there was one patient with metastatic bladder cancer in a dose escalation portion of the trial and that patient achieved a confirmed complete response. This patient had only a moderate level of overexpression of FGFR2b, as a test by Immunohistochemistry.

These findings are intriguing and they suggest that single agent 144 may work in tumor types other than gastric cancer and the gastric cancer patients with lower levels of FGFR2b overexpression may benefit as well.

Accordingly, we’ve added cohorts include bladder cancer patients whose tumors overexpressed FGFR2b and also gastric cancer patients whose tumors have lower level of overexpression than our original cut-offs.

We’d like to enroll patients in these cohorts by later this year. We have straightforward development strategy for 144. Of course our top priority right now is to advance the current single-agent trial, if the maturing data continue to be positive, we believe there is an approval path for 144 as monotherapy in patients with refractory gastric cancer which overexpresses FGFR2b.

In addition, we are considering combination studies to move 144 into earlier lines of therapy but we are also looking into potential trials in Japan where gastric cancer is much more common. I’d like to point out that we control the development strategy of 144 and we have global commercial rights to this promising therapeutic candidate.

Now with respect to our finances, we have approximately $470 million in cash, making it possible for us to execute on our current and emerging immuno-oncology pipeline, more on that later.

With that, I’d like to turn the call over to Bob to give a few – to give a more detailed update on our clinical programs.

Robert Sikorski

Thank you, Rusty. First I want to cover the Cabira IO clinical trial in cancer patients. We made significant progress with this trial. We are examining the therapeutic potential of Cabira in combination with the anti PD1 antibody OPDIVO from BMS. Recent highlights from the program can be found in Slide 4. The trial design can be found in Slide 5.

Again the trial in cancer patients in September of last year in 1a we are combining escalating doses of Cabira with OPDIVO’s approved dose and are also scoring doses of Cabira with monotherapy. In 1b, we will explore the combination in selective cohorts for the lung, head and neck, pancreatic, ovarian, glioblastoma and renal cancer.

We added renal cancer because OPDIVO was recently proved in that setting. We expect that if we see a signal in any of these cohorts we can advance that indication to the next phase independently of the rest of the trial. Beyond the 1b cohort as I mentioned, we also added two cohorts that will allow us to treat patients with other tumor types.

One of these cohorts will focus on our chosen dose of Cabira monotherapy. For example, in patients with tumors resistant to PD1 pathway inhibitors, this could include melanoma, renal cancer and others.

The other cohort will test our chosen dose of Cabira in combination with OPDIVO. As Rusty said, we are making progress in this setting and still expect to advance into the 1b portion in the second half of 2016.

As you know, we are also setting Cabira in an orphan disease called PVNS. Recent highlights are in Slide 6. The scientific rationale for treating PVNS is straightforward. These tumors are caused by the local secretion of CSF 1, which activates the CSF1 receptor on monocytes and macrophages in joints.

Our Cabira antibody is designed to block that finding and activation. PVNS patients have a tumor which is typically located in joints such as in the hip or lift that can be a high degree of morbidity due to local cartilage and bone destruction in this setting. Surgery is currently the only treatment for PVNS.

The patients often progress following surgery. These patients tend to first present in their 30s and 40s and then fortunately PVNS can affect in the rest of their life.

Historically, the incidence and prevalence of this rare disease haven’t been well characterized. To address this we undertook an epidemiology study using a very large patient registry, which suggests the US prevalence for this PVNS maybe as high as 25,000 patients.

Accordingly, Cabira now has orphan drug status in PVNS. Recall that we initiated the Phase I 2 trial in the third quarter of 2016. In May, we initiated the Phase 2 portion of the trial in which we are evaluating clinical measures including response rate, pain, motion in approximately third patients with PVNS. Slide 7 illustrates our trial design.

Turning next to 144. Recent program highlights can be found in Slide 8. We are currently studying 144 in a single Phase 1 trial in solid tumor focused on gastric cancer. 144 is an antibody with two functions.

First, it specifically targets the B splice variance of FGF receptor 2 which can be overexpressed on tumors. This prevents activation of the receptor. To our knowledge, we are the only company in clinical trials with an antibody that specifically targets this slight variance.

Potentially avoiding toxicities associated with less selective antibodies or small molecules that block FGF receptors. Second, the FT portion of the molecule is AC copulated allowing it to bind with high affinity in T-cells and to recruit them into the tumor triggering an immune gate.

At AACR in April, we presented pre-clinical data that showed that within 24 hours, 144 recruits NK cells into the tumor. 24 to 48 hours later, the tumor becomes infiltrated with T-cells predominantly CDA T-cells. This effectively converts a non-inflamed tumor to an inflamed tumor which is an important goal of immunotherapy.

Worldwide, there are about 1.5 million cases of gastric cancer. Approximately, 5% or close to 80,000 of those patients are believed to overexpress FGFR2b due to an amplification of the FGF R2 gene. Amplification of this gene in gastric cancer patients correlates with poor survival.

As Rusty mentioned, gastric cancer is prevalent in Asia but less so in the US. In fact, the US recently granted orphan drug designation to 144 for the treatment of gastric cancer and cancer of the gastro esophageal junction in patients with tumors overexpressed FGFR2b. The trial as shown in Slide 9 with a dose escalation in unselected cancer patients.

In part1 b, we studied escalating doses in gastric cancer patients, some of whom had tumors that overexpressed FGFR2b. We are currently in part 2 of the trial where we are dosing to find cohorts in patients with 15 milligrams per kilogram of 144 every two weeks. These cohorts include gastric cancer patients whose tumors have various expression levels of FGFR2b as well as non-gastric cancer patients.

We announced updated Phase 1 data at ASCO in June and are encouraged by these early findings. First in terms of the safety, 144 did not reach a maximum tolerated dose in dose escalation and had no dose-limiting toxicities.

Importantly, we didn’t see any evidence of hypophosphatemia or retinal toxicity which has been seen with small molecule kinase inhibitors that have targeted FGF receptors.

Second, looking at efficacy, which is summarized in Slide 10. As of the April 1 data cut-off, nine of the enrolled gastric cancer patients had high levels of FGFR2b as characterized by IHC scored as 3+ in at least 10% of the cells. Of those nine, three achieved a confirmed partial response which translates to a 33% response rate.

The green circles in Slide 11 represents CT scan that showed tumor shrinkage, the level of the partial response. Note that the majority of these patients received doses less than the selected 15 milligram per kilogram dose that were moving forward in Part 2.

In addition, the median treatment duration at the time of the data cut-off was 112 days with these heavily pre-treated patients, which is longer that would be expected based on historical standard of care data. It’s important to note that these patients were in late therapy.

In one instance, 144 with the patients seventh line of therapy. After the data cut-off another patient achieved a partial response, achieved the tenth gastric cancer patient enrolled in the trial with tumor had FGFR2b expression.

As you can see from our test scan in Slide 12, she had very bulky disease that have destructed her urinary tract and required the insertion of a stent. After four doses of 144, you can see reduction on her PET scan, her CT scan showed a partial response and interestingly her kidneys were released with the pressure from the tumor that have destructed her urinary tract. She began to produce urine naturally. So in total, she had a clear clinical response in addition to PET and CT response.

Interestingly and surprisingly during the dose escalation, we saw patients with bladder cancer who demonstrated a partial response which we reported at ASCO GI in January. The patient converted to a complete response and was on study over a year at the time of ASCO in June.

Notably, the patient had a moderate amount of FGFR2b expression. As Rusty mentioned, this encouraged us to add bladder cancer to the trial and to look at gastric cancer patients with lower levels of FGFR2b overexpression.

So in summary for 144, we are pleased with the early monotherapy data from this targeted immuno therapy. We also plan to look at future combination studies.

Let me conclude with a few remarks about FP-1039, an FGF ligand trap. Recent highlights are shown in Slide 13. FGF - FP-1039 is currently being combined with frontline cisplatin pemetrexed in a Phase 1 b trial in patients with mesothelioma.

GSK presented data on the safety and activity from the mesothelioma study at the ASCO Annual Meeting in June. Results showed a median PFS of 6.8 months, though many of the patients had not yet reached their CT scan and were therefore not evaluable. Although GSK has terminated its FP-1039 license from Five Prime, they are continuing to conduct the study.

GSK has now capped the trial at the 25 mesothelioma patients already enrolled at the 15 milligram per kilogram dose. The data are mature and decisions on any future development of FP-1039 in mesothelioma will be based on the overall safety response rate, curability and other considerations such as drug supply and manufacturing.

In summary, we’ve made tremendous progress in our development efforts across all of our clinical trials. And we look forward to future updates as data matures. I will now turn the call over to Marc to review our financials.

Marc Belsky

Thank you, Bob. The full details of our financial results can be found in the press release issued this afternoon, as well as Slide 15 and 16. As Rusty said, we have a strong balance sheet. Our cash, cash equivalents and marketable securities totaled $469.2 million as of June 30, 2016.

Net loss for the second quarter of 2016 was $13.1 million or $0.49 per basic and diluted share. Collaboration revenue in the second quarter of 2016 was $9.2 million up from $6.3 million in the second quarter of 2015.

This was primarily due to revenue recognized under the Cabira licensing collaboration agreement with BMS entered into in October 2015. Recall, BMS is reimbursing us for the immuno-oncology trial expenses.

Additionally, in the second quarter of 2016, we recognized $1.5 million of revenue from GSK exercising its option to take an exclusive license to the intellectual property related to a target we identified under our 2012 respiratory diseases research collaboration.

Research and development expenses for the second quarter of 2016 were $22.2 million compared to $13.3 million in the second quarter of 2015. This increase was primarily related to advancing the FPA144 clinical trial, preclinical development in immuno-oncology research program.

General and administrative expenses for the second quarter of 2016 were $8.1 million for compared to $4.6 million in the second quarter of 2015. This increase was primarily due to increases in cash and stock-based compensation expenses.

Looking ahead, we continue to expect full year 2016 net cash used in operating activities to be less than $120 million comprising less than $90 million used in operation and less than $30 million used for tax payment. We estimate ending 2016 with approximately $400 million in cash, cash equivalents and marketable securities.

I will now turn the call back to Rusty for closing remarks.

Rusty Williams

Well, Bob and I have just described you how we’ve been altering the tumor micro environment in our clinical programs with Cabira reducing tumor-associated macrophages and with 144 increasing NK cell and T-cell implication to the tumor.

In our earlier programs at Five Prime, we continue to focus on changing the tumor micro environment to enhance cell killing by multiple doses. So accordingly, we are investigating new targets that are on immune cells in the tumor. Each of these immune cells are regulated by a surface protein such as TD 1 or CTLI4.

Recall that our unique protein library includes more than 5700 extra cellular proteins and this set includes 700 cell surface immune proteins, we call this the Immunome. We believe that this Immunome set includes important new immuno-oncology antibody targets and perhaps proteins that could be drugs themselves.

We are currently conducting an Immunome by Immunome screen where we determine the interaction of these 700 Immunome proteins with each other and the preliminary results are extremely interesting.

We are also screening the 700 Immunome protein as monotherapy and in combination with PD1 inhibitors using our proprietary in vivo screening platform. At just part of test we believe that will help drive our future immuno-oncology pipeline.

When speaking of our pipeline, we are advancing multiple pre-clinical programs and we expect to have two candidates entering ID enabling studies by the end of the year. As shown on Slide 17, potential candidates include our GITR agonist antibody and another molecule with a mechanism of action that hasn’t yet been in the clinic as far as we are aware.

We still anticipate filing one IND by the end of 2017 and to have efficient preclinical assets to keep the pace of one IND per year for the foreseeable future. Beyond our internal pipeline, the productivity of our unique platform is evidence by the recent announcement that Marc mentioned, in which GSK licensed a respiratory disease target that we identified.

I’ll now draw your attention to Slide 18, which highlights our recent and anticipated milestones. One notable upcoming event is our planned R&D date in New York City on December 8. More details will be forthcoming, but in the mean time please mark your calendars with this date.

In summary, I am pleased we are on track with our immuno-oncology programs, both in the clinic as well as early-stage programs that will help build out our future pipeline. We believe that our differentiated product candidates, our unique platform and our strong balance sheet, all position us well to succeed and delivering innovative therapies to patients with serious diseases.

And finally, before opening the call for questions, I want to thank our employees, as well the patients and investigators taking part in our clinical trials. Now I’ll open it up for questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] And our first question will come from Michael Schmidt at Leerink Partners. Your line is now open.

Rusty Williams

Hi, Michael.

Jonathan Chang

Hi, this is Jonathan Chang stepping in for Michael. Thanks for taking my questions.

Rusty Williams

Hi, Jonathan.

Jonathan Chang

Hi, so, first on FPA008 or Cabira, when might we see data from the Phase 1 oncology study?

Rusty Williams

Yes, we haven’t targeted a data disclosure time. You can sort of see what we are thinking because the Phase 1a we plan to be transitioning from 1a to 1b before the end of the year.

And so the 1b data won’t be available until 2017 in that timeframe. So, we will have to work with Bristol Myer Squibb in terms of our disclosure and we will keep you abreast of this. We’d love to be able to disclose some data on the 1a program and we and Bristol are reaching agreement on the appropriate venue.

Jonathan Chang

Great, thanks. Secondly, can you talk about next steps for FPA144 and provide more color on the opportunities for 144 in combination therapy and outside of gastric cancer?

Rusty Williams

Bob will take this question.

Robert Sikorski

Yes, I can take that. Just for some context here, we just presented an updated dataset at ASCO. The key points to takeaway where we had we believe an active drug in monotherapy. We had a 33% response rate. These are selected patients, heavily pre-treated with the selected biomarker.

So, that is – that underscores the basis for our development plan. We think that late-stage gastric cancer really is an opportunity for another monotherapy. We like the activity of this drug. We also like the safety. We saw no DLTs no MTDs in the dose escalation. We’ve had conversations with lots of key investigators and advisory boards and think that the moving forward into monotherapy is attractive.

Now your other question is, in combination. We showed data on the attractive science behind PDL1 overexpression once you deliver this drug through a mouse model. So the tumor not only becomes inflamed with NK cells initially, it becomes inflamed with PDA T-cells, the PDL 1 goes up. That really leads to an obvious question of whether a PD-1 pathway inhibitor might augment the activity we see.

So I think, if you are thinking on along our lines is follow the science. The science points us toward a combination of immuno-therapy potentially. But again, just a back track, we think mono therapy and a monotherapy path initially would be where we see it. We would like to approach the edging to be with some data and design a trial going forward.

Rusty Williams

And, John, you asked a question about outside of gastric cancer, so far, we have one CR and one bladder cancer patient. And we don’t know yet whether there is going to be a lot of bladder cancer patients to respond or to be appropriate or not we are looking into that.

But bladder is a reasonable place for us to look and to go. So, we are enthusiastic about moving into bladder. There is some other cancers that also express FGFR2b. But we think that bladder is the next place to look outside of gastric.

Jonathan Chang

Great, thank you. And if I may, just one last one. Can you talk about the biology and evidence for testing Cabira in settings where patients have failed checkpoint inhibitor therapy?

Robert Sikorski

Yes, there is some spattering of data, the best thing that macrophages and monocytes are in those tumors.

Whether they contribute directly to response, lack of response, I don’t know, I don’t think anybody knows. I think that would be speculative. But we and others – we are not the only ones have decided to put a few patients, to find patients with PDL-1 resistant with that combination and perhaps some in monotherapy as well on our trial design and test that in the clinic.

Jonathan Chang

Great, thanks.

Operator

Thank you and our next question will come from Kennen MacKay at Credit Suisse. Your line is now open.

Rusty Williams

Hi, Kennen.

Robert Sikorski

Hey, Kennen.

Kennen MacKay

Thanks for taking my question. Hey guys. So, just curious relating to FPA144. I was wondering how you are thinking about a potential Phase 2 trial here after we’ve seen a little bit more data. Will this have to be sort of an active controlled trial versus standard of care and is this something that could also include FGFR2b sort of low expressing patients if we do see responses there?

Robert Sikorski

Yes, great question, Kennen, hi. I’ll use the CYRAMZA REGARD trial for reference you that may help. What they did was to have a placebo-controlled trial CYRAMZA versus placebo. CYRAMZA itself has a very low response rate, it’s under 10%. And they are able to – with that another data have an approved agent. That’s not far out of our thinking either.

Whether it’s randomized, a placebo, whether a single arm, again, we need to have some discussions with regulatory agencies, obviously before we commit. But that’s kind of where we are thinking. The ground work has been laid really by that drug. And your second question about expression, that’s very good.

Just to back track a little bit, remember we amended the trial a little while ago to add lower expression cohort. So we divided them into moderate and low based on IHC. And those cohorts should be enrolling in the second half of this year. So, the timing works out, we hope knock on wood that we can get a signal for there and that would certainly inform our later stage effort.

Our base case though, just to level that is, 5% IHC, 3 plus high expressing, really provides the core to the program and then you have upside here with – as you point out with lower expressing that we could perhaps pull into a pivotal trial design and as Rusty pointed out, bladder cancer which could emerge as a secondary front for the drug development as well.

Kennen MacKay

Okay. Gotcha. And just thinking about when we might get another look at that dataset? Maybe in sort of first half 2017 at some point, at maybe one of the GI conferences?

Robert Sikorski

Yes, obviously we haven’t speculated on where we are going to release, but last year, we were at GI ASCO and that seems a reasonable place to release data. We just released data obviously at ASCO, so.

Kennen MacKay

Yes.

Robert Sikorski

In the next month or so, I doubt your…

Kennen MacKay

No, no I was thinking, okay but, thanks Bob. Appreciated.

Robert Sikorski

That seems reasonable. We also have an R&D Day in December. I just want to let people aware of it, that’s very close to GI ASCO. So I don’t want to give any commitments, but – and then there is ASCO next year, that kind of is playing ground here for this.

Kennen MacKay

Fair enough. Okay, thanks for the color, Bob. And I guess, just, kind of shifting gears back to Cabira, is there – do you have any sense of sort of what a dose-limiting toxicity could be in oncology patients? We’ve obviously seen quite a bit of data from healthy volunteers and RA and patients with PVNS. But wanted to get a sense of whether we should expect sort of similar, a similar DLT in these patients?

Rusty Williams

We don’t have any reason to believe that the types of DLTs would be different. There is non-overlapping biology, when you look at OPDIVO and CSF1 arm antagonist and there is non-overlapping toxicities that have been reported. And so we don’t really expect for the types of events to be different.

Kennen MacKay

Gotcha, okay. Thanks, Rusty, appreciated

Rusty Williams

Sure.

Operator

Thank you. And our next question will come from Jim Birchenough at Wells Fargo. Your line is now open.

Rusty Williams

Hi, Jim.

Robert Sikorski

Hey, Jim.

Kevin Matthias

Hey it’s Kevin Matthias making for Jim this afternoon. This is a busy afternoon, but thanks for taking my question. Maybe just starting on 144, obviously you have several sites recruiting in Korea and Taiwan. And so, have you considered where are you looking at the first approval in one of those territories and is that something why you would plan to commercialize your sales force seek upon that? And I have a follow-up.

Robert Sikorski

Yes, I can take – we will break that into two-parts, I mean, the clinical and then the commercial. So clinically, we started there, because that’s obviously where the patients are. This is a aging-driven disease. As we pointed out in the US it’s an orphan disease. Now but that’s not where all the patients are. Europe has a fair amount as well.

And our goal would be to – if you look forward into a pivotal trial expand beyond those region, I think Asia would contribute, but they would not be the full driver and that’s how others have approached gastric cancer they’ve contributed.

Now as far as first registration, remember we have orphan drug designation in the US, we’d like to take advantage of that, that would be – to apply in the US for marketing optimization. But again we are looking at a global study not specifically for Southeast Asia, Rusty, do you want to add?

Rusty Williams

Yes. We like the fact that this could be our first commercial product in the US. That is our base case plan. We think that we can manage the development and the commercialization of this product in the US. In Asia, it’s likely that we would have a commercial partner and we have a number of strategies for development – developing it.

So at the very beginning, I mentioned that that we need to have a plan for developing 144 in Japan. How we commercialize this in Asia is another question and so we will likely have to have a partner for that. But we think that this can be the basis for Five Prime’s first commercial product and a commercial organization. That would be lean and focused in the US.

Kevin Matthias

Thanks, and then on PVNS, so let’s say now the Phase 2 is open to enrollment. I believe you are trying to recruit about 30 patients there. Can you call in on how enrollment is going and per clinical trial that got data are expected at the end of 2017, is that reasonable?

Robert Sikorski

Yes, I can answer that. It’s going quite well. If you look at the landscape in PVNS, you really have the flexicon small molecule and us are sort of advancing in these patients. So, and we’ve seen lot of interest from patients.

Now as far as the timing, we are obviously in Phase 2, we’ve completed a dose escalation independent of cancer and have – again, we’ve not made any comments on when we would release data. I think based on enrollment, we will have. Again, when we are going to release this, we don’t have a comment.

Kevin Matthias

Okay. And then in terms of the pipeline assets, you’ve identified two lead GITR agonists and then a T-cell modulator. What’s rate limiting in terms of filing two INDs next year next year as opposed to just one?

Robert Sikorski

Well, that we discuss that a lot internally and we’d rather underpromise and overdeliver. So, we are committed to one by the end of the year. But we have several programs at roughly the same stage and so we will see how those goes. We’ll let you know.

Kevin Matthias

Great. Thank you very much.

Robert Sikorski

You are welcome.

Operator

Thank you. [Operator Instructions] Our next question will come from Kaitlin Sandor with Guggenheim Partners. Your line is now open.

Kaitlin Sandor

Hi guys. I just had a quick question on the data…

Rusty Williams

Hi Kaitlin.

Kaitlin Sandor

On the data on AACR, and talking about the recruitment of the NK and T-cells and the switching of the tumor from cold to hot and if you think this is dependent on the level of FGF expression or maybe this is kind of if there is something else going on there? And is it other core tumors?

Rusty Williams

So the, yes, so the finding is, you stated correctly is, we first had NK cells as Bob said, very quickly after within 24 hours of giving the drug. And then, 24 to 40 hours later, T-cell infiltrate and the majority of those T-cells are CDA T-cells. We know that this is due to the drug because we don’t have these kinds of effects.

We know that it’s due to the enhanced FC – because in a drug that is not confident if the FC is modified to not bind to FC receptors we don’t see these kind of phenomenon. So, we designed the drug to do this that is to bind to the target in the tumor and bring the cells in. We are happy that it actually works that way.

And so, that’s the basis of converting a cold tumor to hot tumor it’s simply the fact that the targets is in the tumor and the FC is modified to bring in NK cells. Now, whether that’s dependent on the surface level – I am sure there is some dependency on the expression at the surface.

Where the cut-off of that would be, we are still exploring. In other words, I guess, I am guessing you are wondering what’s the lower level of – the lowest level of expression on the surface that would still get you this phenomenon. And we don’t actually know that yet. So we are exploring that both clinically and pre-clinically.

Kaitlin Sandor

Okay, thanks. That was exactly what I was looking for.

Rusty Williams

Sure.

Operator

Thank you. And our next question will come from Daniel Smith at BMO Capital Markets. Your line is now open.

Unidentified Analyst

Hi, this is Nate on for Ian. Thanks for taking my questions.

Rusty Williams

Hi, Nate

Robert Sikorski

Hi.

Unidentified Analyst

Hi, first, I was wondering if you could speak to some of the data that you are collecting in the Phase 1 trial with Cabira. So, beyond the safety data you are collecting, what metrics of that – are you collecting and would be able to report those once you wrap up the Phase 1a part of the trial?

Robert Sikorski

Yes, this is Bob. I’ll take that. That’s a great question, because we’ve put a lot of thought into this – into the design of the trial. So, remember, this wasn’t the first trial for Cabira. We’ve had this drug in normal human volunteers and we had in rheumatoid arthritis patients.

That allowed us to develop some key assays that has helped us. One, we can look at circulating monocytes for instance and we published on that that are depleted, that have the target, and we use that, that’s a good sense of checking for dosing. But again that measures in peripheral blood.

We also obviously measure PK. With this Cabira trial, we do pre and post-biopsies. They are mandated in fact on all of the dose escalation and monotherapy patients. We do it at day zero and day 30 and we have a large panel of tumor markers, CD markers, PDL1, tumor cell architecture to see if we could not only see which patients may be responding, but what happens after the evolution of the tumor with the drug.

And you are right to say that, I think the thing to expect is, we are generating that translational data. We are certainly using it in our – to inform our program and that would be, I would expect part of the data release with the Phase 1a. Again, we haven’t released the time for the Phase 1a, but that would be part of the package.

Unidentified Analyst

Are you collecting data regarding response rate as well?

Robert Sikorski

Absolutely. So, we will – and we have – if we have responders in there, the Phase 1a is not designed for response rate. That’s where our expectations would be to see those in the focus cohort, but should we see any responders, we also have biopsy for instance, if we had a responder to re-biopsy, we sort of thought this through to see if we can look at the evolution of patients. But again, I am not saying they are responders at all, I am just saying we plan for that in the setting.

Unidentified Analyst

Great, and then, one final question on the Phase 1b part of the study. You mentioned that, you could move – you could advance Cabira into subsequent trials in certain indications should the data support it, so, what types of metrics are you looking for there in order to advance the trial and what type of follow-up would you be comfortable with in order to advance Cabira into subsequent trials? Thanks.

Robert Sikorski

Yes, it’s a good question. To do that we need to accomplish a few things. We do need to show and I think I talked about the PD markers to show that we are actually touching the target, we look in the tumor. That gives us confidence, but also safety, I’ll add up a few things. Safety, we have a math quite a large safety database already. So that’s very, very helpful in making rapid decisions. Now as far as efficacy, it’s probably the heart of your question.

That will depend on the tumor setting. If we found efficacy, let me just take two book in. Something like melanoma if we had naïve patients with melanoma or lung cancer for instance in there for naïve, the background is about 20% response rate with Nivolumab alone.

So, you need to accumulate enough patients that convince yourself you are larger with the background. If you had a tumor type, say, PDL1 resistant melanoma, I’ll throw another book in, you will need a lot of those patients to know you are on to a signal.

So, it’s going to really depend on the two – the setting to know how fast you can move. And that’s I think what we are trying to allude to, the settings can move independent – and they are likely to move independently with each other.

Unidentified Analyst

Great, thanks a lot.

Operator

Thank you. And our next question will come from Kennen MacKay at Credit Suisse. Your line is now open.

Kennen MacKay

Hey, thanks for taking my follow-up. Just wanted to ask one more question on FPA144. The speaker at ASCO had alluded to a potential clinical trial getting set up combining FPA144 with a checkpoint pocket, obviously based on some of the – sort of theoretical synergies that were discussed on the call. I was wondering if there is any guidance you could provide on potentially when we might hear a little bit more about a trial like that?

Rusty Williams

Thanks, Kennen. The short answer is, we haven’t given – we are not ready to give guidance on a trial in combination with checkpoint inhibitor. There is a compelling, pretty compelling story there though when you look at the data in total about the preclinical – well, especially the preclinical data, it’s very compelling mechanistic information, very compelling response rates pre-clinically the fact that 144 increases the T-cell infiltrate and then checkpoints get turned on in the tumor. It’s also compelling just mechanistically. So, you can tell that we are quite interested in this. And then, finally, we would like to move into earlier lines of therapy in gastric cancer. And part of this is sort of trying to read the T leads of where gastric cancer is going to go. So we are quite interested in this, but we haven’t – we haven’t given any guidance yet on when we would initiate such a trial and we are still very intensely looking into this.

Kennen MacKay

Okay, fair enough. Thanks, Rusty.

Rusty Williams

Sure, Kennen.

Operator

Thank you. And I am showing no further questions at this time. I would like turn the call back over to Rusty Williams, Chief Executive Officer for closing remarks.

Rusty Williams

Well, thanks everybody for joining on the call and I appreciate your questions and also your continued interest and support for Five Prime and we are looking forward to updating you in the future on further calls. Okay, thank you.

Operator

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

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