ZIOPHARM Oncology's (ZIOP) CEO Laurence Cooper on Q2 2016 Results - Earnings Call Transcript

| About: ZIOPHARM Oncology, (ZIOP)


Q2 2016 Results Earnings Conference Call

August 09, 2016, 04:00 PM ET


Laurence Cooper - Chief Executive Officer

Caesar Belbel - Chief Operating Officer

Francois Lebel - Chief Medical Officer and Executive Vice President of Research & Development


Keith Markey - Griffin Securities

Reni Benjamin - Raymond James


Good day, ladies and gentlemen. And thank you for standing by. Welcome to the ZIOPHARM Oncology Incorporated Second Quarter 2016 Financial Results Conference Call. All this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]

I would now turn to introduce your host for today's presentation Dr. Laurence Cooper, Chief Executive Officer of ZIOPHARM. Sir, please begin.

Laurence Cooper

Thank you very much and good afternoon and good day to everybody. Joining me today is Caesar Belbel, our Chief Operating Officer and Francois Lebel, our Chief Medical Officer.

And if we could now all together just turn to slide two. Before we begin, let me remind you that during today's conference call we'll be making forward-looking statements to represent the company's intentions, expectations or belief concerning future events. These forward-looking statements are qualified by important factors set forth in today's press release and the company's filing with the SEC, which could actual results to differ materially from those in such forward-looking statements. Information discussed on today's call is accurate as of today and we do not intend to update.

So with that disclosure out of the way. Let's get into the meeting of the presentation on slide three. This is ZIOPHARM's pipeline. It’s been really shown throughout the year and for the purposes of orientation I am going to give a brief overview and then we'll go through each program in depth.

The top, in bold print is the Ad-RTS-IL12, these our words to describe AD for adenovirus. So this is an Adenovirus based product. The RTS is the RheoSwitch which is a set control systems that I will be explaining at length. And then IL12 is an important cytokine that in our estimation is the master regulator in terms of controlling in the immune response.

This adenoviral genetically engineered virus has been now been deployed in two ongoing trials that we'll discuss in an update format in this presentation. And additionally I'll be giving some guidance to the listeners regarding our interest in a pediatric indication, as well as the first combination trial, in which we're combining this adenovirus with the checkpoint inhibitor.

Turning from the viral program now to the cell based therapy program. We have multiple short term goals. The first listed here is CAR or chimeric antigen receptor in which we have now disclosed that ZIOPHARM has interest in two targets, CD19 which is on B-lineage malignancies and CD33 which is on myeloid malignancies of which the most common type is acute myeloid leukemia. And again we'll be talking about those programs as we move forward.

Our relationship through Intrexon and into Merck KGaA, is for the purposes also of exploring CAR-T therapy. Here we have identified with them two targets, we haven’t disclosed what those targets are. But I can reassure the listeners that we are on-track in moving steadily to the clinic with our partner Intrexon in relationship with that bio pharmaceutical company.

We also have interest in developing off-the-shelf T-cell therapies. This is a pre clinical program and I won't spend too much more time on that today. However, I will update you on a different type of off-the-shelf therapy using NK, our natural killer cells.

In particular, we have made really dramatic progress I think in lining up this type of therapy for off-the-shelf infusions. And here we'll be talking about primary NK cells that’s different for instance in others that are using immortalizing NK cells, these are walking, talking if you would NK cells harvested from patients have their proliferative potential and we have now essentially on the verge of starting clinical trial use in these as an off-the-shelf therapy.

This is important for ZIOPHARM as you can see because attendant to these primary NK cell program is combination therapies with the adenoviral vector that I mentioned and also programs that was not yet announced where these primary NK cells are genetically modified so that they can have an improved therapeutic potential.

Transitioning back to the T-cell world, we also have programs that as steadily advancing using TCR, the T-Cell Receptors and here I want to provide guidance that this really for the purposes of targeting solid tumor, and in particular epithelial cancers, because in our estimation patients with metastatic epithelial cancers still have very few options in the immuno-oncology space and the ZIOPHARM together with Intrexon is highly motivated to provide targeted and personalized therapies.

And we think the linchpin to unlocking essentially the personalization of TCR therapies for solid tumors is the sleeping beauty system that’s non-viral approach to gene transfer that I will provide an update on through our conversation.

And then finally, we also have program in pre clinical phase where we are developing regulatory T-cells, as well as altering the microbiome for the purposes of controlling graft-versus-host disease. So this is our beginning of the story.

Turning now to slide four, it’s another way to describe ZIOPHARM. Certainly has a catalog of immuno oncology potential products and I think this is really important to I'll just pause for a second and reflect upon.

When I joined this company in May of last year there was already excellent work with Intrexon to develop the adenoviral system and really in very short order now we have now essentially developed all these other goals using our alpha beta, T-cells, using NK cells using regulatory T-cells and using a bacteria to alter the microbiome. I think this really represents a terrific effort by the company to essentially pressure test multiple aspects of the immune system for restoring human health.

Having said all of that, of course our lead product and our lead candidate is the adenovirus, the engineered adenovirus that I've drawn on the red box around and now in slide five you can see that we are testing this adenovirus in combination with the real switch technology.

This is a technology that’s been developed with our partner Intrexon and they provided essentially the SEED data that’s allowed us to enter - take this clinical grade adenovirus for the purposes of understanding its therapeutic potential in two important disease settings.

For the purposes this investor update, I am really just going to focus today on the GBM program, the glioblastoma multiforme program. So in order to introduce that to you, I want to go through these cartoons on slide five.

In the top left hand corner, you can see that there is syringe and the reason I drew that syringe is it, we are essentially directly injecting the adenovirus that’s been engineered to express the RheoSwitch system, the RTS system, we are directly injecting it into patients who have recurrent brain tumor, and in fact we have patients on our trials who had multiple occurrences of that brain tumor.

The RTS system and you can see it there in smallish font, you can see by the color that are on your screen that this RTS system require potential advance between proteins that are activated transcription. Those proteins are there, but they only come together and coordinate the segment and sit down on the DNA to file off transcription when an activator ligand is present and that activator ligand is [indiscernible]

So you need the transcriptional potential, in other words, you need the cells getting ready to make the IL12 and then essentially they are given the go signal to make IL12 when the activator ligand is taken by mouth. Importantly, when the activator ligand goes away, so the transcription starts and the gene of interest goes away and you'll see real clinical data coming up.

So that’s sort of the baseline data and now with a little grey figures on the bottom you can see an archetypical patients who has a red brain tumor. This patient will have had standard of care therapy or perhaps a resection, would have to receive temozolomide or radiation, this is sort of upfront therapy for these patients with GBM.

But unfortunately for these patients almost all of them reoccur. They've been eligible for our clinical trial. They under go resection, and I would pace them to add this resection is by no means definitive. There is no patient for instance who has recurrent GBM who undergoes near a surgery by itself and is cured.

So these patients essentially have control of their disease by basis of the neurosurgical procedure. But at that time the neurosurgeon, he or she then takes the virus, the little syringe full of virus and injects it into the resection cavities and see that - and I have drawn that out and you'll figure here.

And the patients then activates the gene transcription deposited by the virus and essentially starts making IL12 from within the tumor micro environment and now you can just take your eye and look at the two figures in the right hand side of your screen and we can begin to ask question.

For instance, if the patients takes a certain amount of veledimex, let's just call it one capsule for this purposes of slide five, then we are making IL12 from essentially the brain tumor in the head and that IL12 has the concentration grade here, where essentially then will leak out into the circulation and the question will be can we detect it. But if we give more veledimex, will more IL12 and therefore would there be a greater therapeutic effect and perhaps there would be more IL12 leaking out into circulation.

So you can already see the advances in clinical medicine through this technology. On the upper left it was essentially the on-off switch when you have veledimex there the transcription practice come together in their orchestrated manner and they file up transcription, the activator ligand goes away and you start making the protein.

And on the right hand side, what we're coaching you is the fact that we can actually not only have an on off switch, we can have a Rheostat. We can have an amplification where the more drug is added the more product is made.

So now let's essentially turn to slide 6 and see the clinical data. It’s directly essentially taken from the trial for patients who have recurrent glioblastoma. So the first piece is whether or not that the veledimex crosses the blood band barrier. So patients take the veledimex by mouth and they can take a variety of dosing, obviously in the absence veledimex they make no IL12, but then they essentially in these ongoing cohorts they have graded amounts of veledimex, 20 milligrams in cohort 1 and 40 milligrams in cohort 2.

This drug is taken by mouth and then has to cross the blood band barrier, as you can see by the dotted line and what you can now turn to is in these essentially the data in Panels A through D a description of what happens when we do this biology in human.

The first is that when you essentially take veledimex, rather its at the red level or the increase level of blue you can find essentially the veledimex in the serum which is Panel B and you can importantly find that its cross the blood band barrier and its in the tumor kind of way.

And then the question is does it turn on gene transcription, does veledimex essentially bring together that programming language deposited by the adenovirus to then fire off transcription, in other words, fire off the production of IL12 and in deed in policy it does because the baseline these patients have no IL12, it is detectible in that serum.

But you start adding essentially the veledimex dose level 20 milligrams and you see a certain amount of IL12 and in deed it acts as a Rheostat, you add more veledimex, you get more IL12 and this isn’t non-functional IL-12. This isn’t something that just comes out of virus and ZIOPHARM can measure it.

This is activating IL-12 because we can then see the body's reaction to that IL12 cytokine cytokine because it is a master regulator and it kicks off a cascade of events. And one of those events for instance is the production of gamma interferon. So we can now measure gamma interferon coming from the body.

Now recall this isn’t coming from their virus anymore, this is coming as a response essentially by the body feeling the colt arms essentially that’s been carried by the IL12 messenger, so at base line you see the background level of gamma interferon in these patients. And then as you increase essentially the veledimex, you can drive out the gamma interferon levels in panel D.

So this has proved positive that the RTF system works. And it not only works in the sort of on off system, but it works in rheostat system. It works away that you have veledimex dependent expression of the IL12 transient.

So turning to slide seven now is harnessing this IL12 biology and really ZIOPHARM is delighted to share these data because they continue to mature in a very encouraging way. These are data where we are showing you in blue those patients are alive and in red those patients who have unfortunately deceased, who are now enrolled in three dosing cohorts.

Dose 1 receives 20 milligrams of veledimex, dose 2 or cohort 2 receives 40 milligrams of veledimex and then we just started a new dosing cohort which is essentially cohort 3 and this cohort I would hastened is ongoing and its really too early to really get into this cohort, they start to provide essentially guidance that we are actively recruiting and we've had no problems in terms of rolling to the trial.

But what I think is most striking about these data and continue essentially to impress the company is that when we trace out the overall survival of these patients, particularly for cohort 1, we're able to now see these patients living longer than would have been expected based on historical controls.

And you call, especially from our ASCO presentation in the data - essentially on our website if you wish to revisit that, that these patients in cohort 1 had had multiple relapses, multiple prior lines of therapy, and a very essentially injured from their underlying disease.

So we are delighted by these data, because they really stand in contrast to essentially the historical control, which would share - which would essentially reveal that the average life expectancy would be somewhere between three to five months for these patients. And as essentially we follow this cohort out, we essentially have now exceeded that median survival. And for some patients it's actually been quite remarkable going out which approximately a year or so.

As essentially the data have matured in cohort 1, the company through essentially the protocol design said look, 20 milligrams appears to have some biology here, some survival signature that looks meaningful and perhaps we can essentially do better with the idea in a typical Phase 1 trial that you essentially try to find the maximum tolerated dose. So indeed that’s what the company has done.

So we now went up from 20 milligrams to 40 milligrams. And we essentially have fully enrolled that cohort and we are following essentially the fate of those patients on that cohort. But as you can see on the graph these data continue to mature and are going in the right direction, particularly for patients who again had multiple line of prior therapy.

As cohort 1 data that matured into cohort 2 data, we could learn more about the biology of gamma interferon. And I think what's quite remarkable is that as I shared with you on the prior slide 6, we could detect as IL12 coming out of this of the brain tumor into the peripheral blood, and as we do that we are able to essentially see what the upper limits of tolerability are.

And I think what's really been interesting about the trial is that the upper limits of tolerability are not neurologic, that’s systemic. In other words, when nobody knew these data before we did, before we got into this, how much essentially IL12 could a patient handle when the IL12 is being pumped out of their brain tumor environment.

Well it turns out that we now have a sense of that, but it's not limited essentially by how much the brain can handle. It's really limited by how much the systemic circulation can handle, essentially the liver and the bone marrow.

And we fight it off against those essentially dose limiting toxicities in cohort 2. So then with advice from our investigators, we essentially said we look is there a sweet spot, we have enrolled successfully on 20 milligrams, we think we may even have therapeutic activity. We see 40 milligrams has perhaps been to - essentially too much IL12 produced will 30 milligrams essentially hit the sweet spot, and that's where we are right now.

And that's appropriate for the company and essentially will provide us guidance going forward. Because obviously and I've said this many times in public is that these data are now a highly motivating to go towards a registration trial. And the company as it reflects on these data now anticipates finishing up this Phase 1 trial by years end, seeking guidance from the FDA and opening a registration trial next year both in the European theater, as well as in the in the United States for the purposes of pressure test in this drug with an eye to commercialization.

I would also add that in addition to monotherapy which really is our major thrust for this drug. But we also have really discovered some extraordinary mouse data, where we can cure mice now, where we've never before been able to do this, but we can cure mice with at the duality of the adenoviral vector combined with anti-PD-1.

So in other words, the controlled release of IL12 and this immune checkpoint inhibitor gets 100% survival in certain combinations. And no other therapy that we have actually looked at, whether it's all temozolomide or monotherapy by itself or particularly monotherapy with PD-1 – anti-PD-1 by itself will give us that type of results.

Again highly motivating for the company and we will seek to test this now by years end in patients in a clinical trial to see if they are essentially - there can be a combination therapy to look even better than the survival data that I'm sharing with you on slide 7.

So before we leave slide 7, I also want to just point out that the standard to which we hold ourselves in terms of approaching the FDA is really the measurement of overall survival. Our guidance to listeners and indeed the advice we receive from the regulatory authorities is that these standard by which our therapy will be measured is overall survival. And essentially vast the data therefore that I speak too on this slide, because we think is the most important and again we're highly encouraged based on historical controls.

Turning to slide 8. So we are leaving the world of engineered adenovirus and we are now going to the world of engineered T-cells, particularly for instance T-cells that can be engineered to express chimeric antigen receptor and T-cell receptors and so forth.

So to get into that, I put on slide 9 essentially this triangle, where at the top of the triangle is sort of where the field is right now in terms of top positive T-cells targeting tumors and there is a lot of excitement around targeting CD-19 leukaemia’s and lymphomas. But increasingly and you can see now as the triangle widens there is more essentially opportunity in terms of market size and patients that need to be treated who have for instance CD-19 negative hematologic liver disease.

And then perhaps the biggest opportunity is to get solid tumors. So ZIOPHARM has thought deeply about this, we've been partnership with Intrexon about how we are going to take on these challenges and this is really wide, this is an introductory slide for the following few slides that I will share with you.

But I have got to explain on the right hand side of the slide is that there is an underlying essentially principles in which you need an approach to address issues for instance of CD-19 negative hematology malignancies or to address issues of solid tumors in which you not only have understood issues of safety, but also understood the issues of scale up, can this essentially be commercialized.

So slide 10, so there are variety of ways to generically re-program cells and indeed ZIOPHARM and Intrexon are lucky, we actually can use both viral systems, for instance lentivirus and non-viral systems for instance using the sleeping beauty system.

These have a particular attractive properties and one is not necessarily better than the other unless you start thinking about it, in the context of the type of engineering solutions we are trying to undertake.

So as I guide you now through these next few slides of our T-cell engineering we'll be talking about these two approaches, lentivirus and non-viral approaches using the sleeping beauty system as essentially the technology that’s needed to provide solutions.

So before I do that, I just want to remind everybody what the sleeping beauty system is, because it’s still relatively speaking the new kit on the block. And for the purposes of this call its a two plasmid system, the plasmid on the left hand side, for instance carries a chimeric antigen receptor under a promoter and that essentially then is expressed within a T-cell and its hard wired into the T-cell genome, that part is lifted out of the donor plasmid by an enzyme called transposase on the right hand side.

And that transposase for instance it goes by the number and lettering SB-011, that Transposase is an enzyme and its catalytically active and it clips out the essential of the CAR as it recognizes these inverted or IR or repeat elements that are flanking essentially the construct, the CAR construct and paste in a cut and paste reaction into the T-cell genome. And one way to put these plasmid into T-cells is by electroporation.

So on slide 11 and we've seen some of these data before, but I think it is important to go through this because as we have actually now amplified these data into publication format that just came out, I want to highlight that the sleeping beauty system which met our complete expectations. And the reason I can say that now with confidence is that we have tested it in two settings in a Phase I trials in partnership with M.D. Anderson Cancer where I worked before taking on the job of CEO.

And these two settings are where we engineered the T-cells from patients who had Diffuse Large B cell lymphoma, in other words the type of non-Hodgkin's lymphoma and then we infuse these CAR modified T-cells into patients who had target transplant and I followed these patients for three years. So this isn’t just like a short term follow up study, this is three years of follow up now and as you can see we had about 80% or so three year survival to these patients.

And indeed, we could trace out the survival of the T-cells and they live for about 200 days on average and sometimes we could find them out for about a year. So there is really little doubt now that the sleeping beauty system can be used to engineer T-cells to be able to do so safely and it can give long lived T-cells in patients and when you trace out the survival of these patients it appears that double survival for patients with non-Hodgkin's lymphoma and then similarly we have data where we infused allogeneic T-cells after donor-derived, donor transplantation.

And in this situation almost all the patients had acute lymphoblastic leukemia and again it was highly encouraging because these patients T-cells, excuse me these donors T-cells that were infused in this context again lived for about an average of 50 days with a maximum of about half a year. And again we could double the overall survival for these patients.

So in this initial Phase 1 trial it was highly encouraging and on slide 12 we've now gone on and reported just came out a few days ago in peer reviewed format and it goes through essentially in depth the type of T cells that have made, it looks at the integration studies, about where the CAR inserted and explains a lot about the patient and so forth and so on and I invite you to read that paper for additional information.

We are also continuing to test the sleeping beauty system at M.D. Anderson. We have an ongoing trial that’s enrolling patients and we've made continued improvements in the CD-19 CAR design and we continue to make bio-processing improvements to the sleeping beauty system really now is increasingly representing this engine of ingenuity around how it is that we can improve bio-processing and appropriately that is getting tested with our colleagues and friends at M.D Anderson using their manufacturing facility. So that we are in a sort of an iterative process now, that bench to bed side and back to bench as we essentially harness the power of the sleeping beauty system so that we can make fundamental advances. And I would just ask the audience to remain tuned to and to sort of follow with me as I publish on those advances.

So we have already put out essentially teasers on this. We had a presentation earlier in the year, the American Association of Celgene therapy and where we showed that and we can produce T-cells in just 14 days now using the select operation strategy, using the sleeping beauty system and that timeline continues to shorten, and again I would just ask audience to stay tuned because we believe that there will be some updates on that through the remainder of the year.

In addition to CD19, we are also targeting CD33. And so this we are using a lentivirus and there was strategy around this and its not to say the sleeping beauty system doesn’t work, I have just showed you excellent data saying it does. So when we are essentially designing these trials and getting these essentially targets ready for clinical testing, this is done right at the beginning of my 10 year at ZIOPHARM and one in which we were essentially stratifying the risk between essentially understanding how the sleeping beauty system works and as understanding how the lentivirus works and we think if there is essentially there is advantages for having two types of gene transfer technology.

We also think there is major advantages for instance in targeting CD-33 rather than being another company that’s also targeting CD-19. We think there is wide space here, as relatively few competitors in the AML CAR space.

We therefore have produced really excellent data and have now marching steadily through the regulatory envelope, as many of you know we are through the direct process. We are working with the contract manufacturing organization, so the viral processing and the production of our CD-3 CAR modified T-cells and we expect to have the trial essentially meet all its regulatory approval by year end.

So this is essentially our CAR program that I'm going to formally update you at the moment. And I'd like to transition though to slide 13, because one of the advantage, I think of the relationship between ZIOPHARM and Intrexon is that it can also think deeply about the types of biology that we can put into T-cells.

So I share with you now on slide 13 essentially there are now three tumors on one normal cell, there is kind of an orange tumor, that is purple tumor, that is a tumor that has both purple and orange antigens and there is a normal cell in dark blue and there are essentially stratogens for designing if you would system for the conditional activation of T-cells and indeed some of our competitors who have thought about this, we also at ZIOPHARM and Intrexon are interested in this type of biology.

But I would hasten to add that none of these types of biology here address the fundamental question of whether or not you can turn on an off a T-cells. These type of biology that I'm going to go with you in through in a second all address essentially the specificity of CAR modified T-cells.

So for instance in Slide 8 is the garden variety if you would CAR targeting the orange tumor, if you need essentially to broaden the specificity you can put in the purple CAR with the orange CAR, you can put in two cells or you can put both CARs on one cell and that is kind of B and C or you can indeed fuse these ligand binding motifs to make a single polypeptide with both the purple binder and the orange binder and frame with each other as one longer CAR molecule.

You can also be thoughtful and you can separate the signaling molecules, so both the orange and the purple have to co-bind to get the signalling little green, circle and little green triangle that comes together in a coordinated fashion and you can even inhibit to CAR molecules like this with orange CAR is essentially a give positive signal, but the dark blue CARs given inhibitory signal, so we trying up to target a normal cell.

These are examples that type of conditional or controlling activation at T cells and indeed there are groups for instance that are published papers where you can have a one binder the orange that then far off transcription to generate essentially a second CAR specie then would bind the purple, but this isn’t over a switch that goes to the issue of controlling CAR behavior in terms of we just going to turn it off if there is an adverse event.

This is switch type of biology that goes to the question whether or not you can target a broader class of tumors. So, I think this is important because on slide 14 ZIOPHARM and its partner Intrexon are doing something different.

We are asking the question can we turn on an off the cock, which all of those essentially diagrams on 13 are not asking, you need new biology here, a you know as a audience you can imagine why that’s important. For instance if the patient has an adverse event and needs that CAR to go away to stop essentially the ongoing toxicity then the patient essentially wants those T cells to go away and if these happens patients takes steroids if they have the type of toxicity, patients can take IL6 blockade antibody if they had that toxicity.

But wouldn’t it be great if you could actually control the CAR expression with an oral drug and this is essentially now where we are. And so the CAR-T is set this up to you, as that we have now developed in panel H a system where the patient can take a drug and now you are familiar whether it’s called veledimex. It’s the same oral ligand that explained to you that’s now being ready tested in clinical trials in the adenoviral system.

Patients can take this drug and CAR expression occurs in T cells and patients stop taking then drug and CAR expression diminishes and again we’re using the same type of biology that we’ve already developed or already testing in our GBM trail.

So on slide 15 these are some of the data that I’m showing with you right now that we can indeed turn on and you can see that in the upper essentially flow commentary box and the red is guidance here to CAR expression.

I including veledimex and the tissue culture, we can derive of expression of the CAR and you can see that on the graph on the right hand side, we’re now driving up in green, the amounts of CAR expression. We take the veledimex away and now the CAR expression diminishes, but importantly we can add it back.

So, now we have essentially new biology that really a sort of first time available to us, I think really available in the field where we can modulate the expression of CAR on the surface using the clinically appealing technology, using the same system were in the clinic and now essentially we can harness those data and ask questions about turning on and turning off CAR expression, which may be extraordinarily useful for instance for controlling essentially the CAR biology when it comes to toxicity.

So here it is no slide 16 putting it all together, again in cartoon format, where the first generation technology for instance in a sleeping beauty system where you have T-cells that conditionally expressed the CAR, this is where everyone in the field is right now.

But the new generation of T-cells is essentially a pass, where T cells now can express the CAR, when the patient takes the drug and when the patients stop taken the drug as you can seek as the cost out on the bottom right hand side the CAR expression goes away.

So slide 17. So, as I’ve talked with this essentially, this idea that you can turn on and off CAR biology is important for the potential controlling toxicity. But obviously we started the conversation with the A through G, those other CAR species, well why will they developed, why a companies and academic interested in and making CARs that have boarder specificity.

They are interested because they know that the minority of the tumor antigens on the cell surface and those are the only antigens really that can be targeted by CARs, so there is a race now to try and harness essentially the types of biology in A through G on your slide here to be able to go after these few endogens that are on the surface and develop clutter technologies that allow the CAR technology to serve essentially as the effect mechanism of which you can broaden specificity to go after solid tumors, but that’s one way of thinking about it but really there is no alternative.

And of course the alternative is to say okay for solid tumors, you need TCR and this is where ZIOPHARM and Intrexon are, we are now are in the world where we believe that to really identify and to target solid tumors you need to engineer T-cells to have T-cell receptors. And so to do this, you need to have programs in which you can express T-cell receptors and you may be able to do this in a way that’s highly personal.

So the question then is what type of antigens you are going after and again I want to make a distinction between us and others in the field, other programs are going after what is called public antigens, these are wild type antigens, they are expressed in the genome, the normal genome of humans but they happen to be expressed in tumors the POSTER trial for instance is NYSO-1 [indiscernible] or WT-1 there is a list there.

But those proteins in my estimation have limited appeal because the T-cell receptors essentially don’t have a lot of intrinsic value, they need to be modified outside of the body using engineering principles that drive up their specificity and when that has occurred, there has been this adventure.

For instance programs that have target the NH family have inadvertently targeted tighten and there has been patients death and all furthermore we believe that the number of the patients that really benefit from targeting wild type proteins is few.

This is in contrast of going after these private or mutated antigens and they also go by the world of neo-antigens, here the T-cell receptors has never seen the neo-antigen before, so your T-cell receptors in the body are fully functional, able to bind those mutated proteins, the question is can you essentially harness those T-cells to make a therapy and now on slide 18 we are beginning to share with you the story that we can indeed do this, because now using the sleeping beauty system, we can identify in partnership with the NCI, Neoantigen and this situation in cartoon form you can see that we can take essentially the T-cell receptor and we can find those T-cell receptors that are specific to the Neoantigen and express them using the sleeping beauty system and this is now in publication format and invite you to read it.

But in Slide 19, it really goes on to show you why the power of the Sleeping Beauty System is so important. And the reason is, is that each set of Neoantigen for each patient is unique, and this is essentially the excitement of the field, as well as the challenge for the field. And you need a gene transfer technology that essentially is customizable and cheap enough, so that you can essentially make T-cell receptors for one patient.

So on the little kind of flesh colored patient with the red tumor on the left hand side go through the story here to identify the Neoantigen to make the T-cell to identify the TCR to then program the T-cells that could go back in. And indeed that's that patient story, but that patient story is not the green patient story, they need us another set of T-cell receptors and it wouldn't be the blue patient story so forth and so on.

So the key to unlocking essentially the potential of going after Neoantigen is the Sleeping Beauty System is the only essentially road map to therapies for targeting Neoantigen with genetically modified T-cells.

So picking up speed a little bit here on Slide 20, I’m just going to really touch on our NK cell program on Slide 21, just to update the community that this NK cell program is one of which now it will be on track to open a trial by the end of the year using off the shelf, off the shelf NK cell for the purposes of treating advanced AML.

We’ve now essentially developed the engineering principles using specialized cells. We have indeed essentially got the bio processing, and manufacturing down so that we can make very large numbers of these NK cells, and we really look forward now to opening this trial, which for the first time in human history we’ll test off the shelf NK cells for an important disease there really has no therapeutic potential, which is essentially refractory AML.

On Slide 22, as we get to the end of the presentation. Again just guidance that our program for GvHD our graft-versus-host-disease continues to progress nicely through the preclinical work up if two shots on goal on Slide 23, the first is regulatory T-cells these are T-cells that are natural in the body, but we've figured out technologies to make them sort of super regulatory T-cells using genetic engineering principles in particular for the controlled delivery of IL-2.

And then we've also in partnership with Intrexon, worked on [indiscernible] program that they have already in-house and we're harnessing that engineering bacteria for the purposes of controlling and preventing graft-versus-host-disease of the guide, and I look forward to telling you more about that as we go forward.

Slide 24, is our corporate and financial highlights. I'm going to just, really just say that well capitalized. We have cash, we have a cash runway through essentially the end of 2017, we have highly efficient operation and headcount we have amended our exclusive channel collaboration with our partner Intrexon. It really now we look like a bio technology company. And I think this is really important for us we go forward in particularly as you can hear my enthusiasm around the adenovirus program and potential for commercial success.

So the last slide now is slide 25, it really is the summary and take home points, and in fact is that in green we're on track for registration in the GBM trial for 2017 and we have additional work in the breast cancer I am not updating you in particular about that right now, but you can follow with us to do the clinical trial update through the year. I'd talk to you at some length about the combination trial with checkpoint inhibitors and GBM.

I've told you that we have two CAR trials essentially by year end for CB19 and CB33 and that we're going to be launching our of-the-shelf NK cell program. So those are my prepared remarks, and I'll now just open up the conversations with my colleagues to hear from the audience.

Question-and-Answer Session


[Operator Instructions] Our first question or comment comes from the line of Keith Markey from Griffin Securities. Your line is open.

Keith Markey

Good afternoon. I was just wondering if you could tell us what your impressions are about the Veledimex and the RheoSwitch for regulating the CAR expression, is the half life of Veledimex and the recurrent of the cells short enough?

Caesar Belbel

Yes, sure. So I think these are – so Keith is important question, it really goes to that idea of how it is that the transcriptional on of weight of CAR expression we honor and hear the biology really –is really in development and we'll be working on that. So I think you know the issue I want to share with you is that its clearly working now, that you can turn on and off CAR expression and this essentially is really I think first in class biology that been out pressure tested in the human.

Keith Markey

Thank you. And one other question, I was just wondering when you go into GBM trial with IL-12 will you be using overall survival as the endpoint even with the anti-PD-1 molecule is that’s the way you choose to go?

Francois Lebel

Yes, Keith, so absolutely. The primary endpoint that the FDA [ph] want to use for any brain tumor study is overall survival, obviously we would collect additional information and with the combination we clearly – there is going to be dose-escalation and we need to focus on toxicity of the combined regimen at different doses. So you know, dose-escalation initially identifying the correct dose, but all the way obviously we're attracting survival.

Keith Markey

Okay. Thank you.


Thank you. Our next or comment comes from the line of Reni Benjamin from Raymond James. Your line is open.

Reni Benjamin

Hi. Good afternoon, guys. Thanks for taking the questions. Maybe just starting off with the Adenovirus program, can you – finally it was a great presentation, really very thoughtful and so this is sort of – so these are just maybe some specific questions.

But starting off with some of the preclinical work, can you tell us what the half life of eh IL-12 mRNA is and I guess where I am going with this is once you stop taking Veledimex how long does it take to the IL-12 protein expression to actually go down in the body?

Laurence Cooper

Right, so in the brain tumor patients you know, we don’t have that opportunity to kind of give really example of the brain, so what we do have obviously is two important guide points. One is that sitting in Boston, Dr. Lebel can control the gene expression at patients in Los Angeles. And therefore we can advice the clinician and he or she will call us and say oh look, the patient has a fever, they are behaving this and that and we can guide that patient in real time, now the doctor in real time to dose adjust to Veledimex.

And so one way to answer that question is its clinical, in other words, we follow these patients clinically and can make real time adjustments to what's going on. And the second of course is the biomarker which is the amount of IL-12 in circulation and I'll let Francois just comment on that.

Francois Lebel

Yes, the Veledimex half life is dose-dependent to some degree but its roughly 14 hours, so once we stop the Veledimex, it will get cleared and but clinically when we look at targeted side affects, depending on the nature of the side affect, but if you look at cytokine related side affects, they will abate within 24, 36 hours.

So as long it’s indicated and we can track along that. The level of cytokine, so there is a direct correlation between the targeted side affect and the measure cytokine level at the periphery.

Reni Benjamin

Got it. And when we talk about overall survival in this disease indication, I guess, I am curious to try to figure what other treatments for these patients getting, so for example, you mentioned that these patients do recur, do they undergo further surgical resection each time, have the patients been dosed further with injections of the Adenovirus and do you have any PSS results that might more directly give us a sense as to – as to what the therapeutic affect - immediate affect of the Adenoviral Vector might be?

Francois Lebel

Sure. So if you look at the slide seven, where we showing you the overall survival and you will notice the green [indiscernible] and that indicates the time at which by imaging, by MRI imaging, the tumor size is changing and at that point it can either reflect or represent for progression or sudo progression and its then important to understand at that point if our therapy worked your first image that it works which show that the tumor size could increase simply because you are eliciting an inflammatory response immune cells, NK cells, cytotoxic T cell, our in cell treating to tumor and we have evidence of that as well. So that tells you that.

In terms of the – we know that it doesn’t necessary correlate with overall survival and the PSS that is and that is why the FDA, especially for immune therapy want to get the data in the primary endpoints on studies is overall survival because PSS does not correlate directly and the prime example is Avastin.

So you're asking what other therapy are being used, so various calculating agents like CCNU, Temodar, so in other words the patient that has failed Temodar in first line could – you know patient later on could be given Temodar again. There is a paucity of agent to be used that have been shown to be effective and some have shown improvement in PSS, but none have really shown improvement in overall survival, especially after a patient has failed Temodar and Avastin.

Reni Benjamin

Got it. And have these patients also gone through further receptions and have they've been dosed again with the Adenovirus agent?

Francois Lebel

We've not. In the animal data that we have suggest that one course is sufficient to activate the immune system and you will get the benefit as a result of that. And as the Lauren's had indicated, we've also now have data showing that in combination with the PD-1 inhibitor we can – we not only prolong survival, but we may actually be able to cure the disease. We've not done that in human yet, but certainly the data in animal is highly promising.

Reni Benjamin

Got it. And just regarding that combination study with the PD-1 inhibitors, you mentioned you'd be hopefully starting that by the end of the year, can you let us know which PD-1 you are going to choose and is this something that make sense to be done in combination with a partner, to move forward with?

Francois Lebel

So we have not communicated which one it is. We know which one we want to use and we have discussed with potential partners going jointly in this efforts but discussion is ongoing.

Reni Benjamin

Got it. Any update just sticking with Adenovirus, any update on the breast cancer program that’s ongoing or when we might see an update from that?

Francois Lebel

Yes, we will provide an update at ESMO, I believe in October in Copenhagen and we will be able to show you the clinical results, as well expanding on what we seen and presented at ASCO recently, as well as provide you various biomarkers.

Reni Benjamin

Okay. Just switching gears to the CAR program real quick, I guess, one question is, should we be thinking about the sleeping beauty system now, given your presentation as primarily the go to system for the TCR franchise and tackling the solid tumors and the lengthy the viral system for more the homological malignancies?

Francois Lebel

Yes, that’s an excellent question and that’s where my brain is too. I mean, the company clearly has a valuable asset and that we have the gating technology to go after solid tumors now for the purposes of targeting new antigen.

So the other way to say that is, you know, you can't use Adenovirus at situation. So the only way for it is a non-viral approach if you are interested in targeting T-Cells that are going after new antigens. So that’s a truth.

The question is what's the better message regarding [indiscernible] and there I think we are in echo point in the company. We're going to look and see at our data from Adenovirus and we're going to continue to make process improvements in the CBD system, particularly its not the question – its really around efficacy, it works, the question is can I build a system which is one in which for instance limits the amount of time, I have to spend money in the DNT facility that allows me to build a program where I can treat many, many patients, but I don’t have essentially as to lag time of having to just make viral base sector.

And that’s essentially within my field of view right now. So as I think about the CAR program, I am very interested about building the sleeping beauty to really be essentially disruptive to really if I can really do something special beyond essentially making CD19 CAR therapy.

Reni Benjamin

Got it. And when will the real RheoSwitch control the CAR cells be in the clinic and I guess when I think about the switch, it seems to me that you would either want this switch on or off and that this might be a case where you definitely really don’t need a real or so dial it back sort of activity, I am thinking about that right or…

Francois Lebel

Yes, no, I mean, so exactly, I am just giving you one embodiments right now with the CAR and the control of RheoSwitch. But obviously I have a clinical program that’s controlling cytokine under a RheoSwitch, but you know, that just happens to be an Adenovirus.

So I think you know, without giving away too much of our treasure, I think its reasonable to conjecture that we will start looking not only at CARs under RheoSwitch, but other types of biology under the RheoSwitch. Ones that maybe for instance quite useful for not just one, off, but on Rheostat off and so forth and so on. So the CAR is really just the tip of the iceberg.

Reni Benjamin

Got it. And just one final question from me, on the NK platform, can you maybe just help us understand how this is different than let's say NaN Quest [ph] platform or you know, Jeff Miller's work at the university of – I think its Minnesota where he has NK cells in the clinic as well?

Francois Lebel

Yes, so let's do the bulk, so NaN Quest obviously delighted that they are in the field, but they have really put themselves firmly behind using a tumor cell line, NK 92 cells, which is an immortalized NK cell. And my read of – in that space is one of which there is a challenge and that challenge is that because if you've had to eradiate I think for the most path in cells they may have limited life span after their infusion. And therefore we have developed an alternative, and that alternative is using primary NK cells and these primary NK cells have full replicative capacity.

They are not – they haven’t been irradiated, they are ready to propagate, they are ready to divide, just like CAR therapies divide in the human. So that’s a major difference between us for instance and our competitors who are using an immortalized product.

And then your question to Jeff, who is superb, and I know I am well, University of Minnesota, he has developed an elegant approach where really don’t need any propethane [ph] you have a isle to activation set and then you put these cells on a magnet and you strip out all of the T-cells and you had a product that’s enriched for NK cells and you essentially then try and put in these NK cells for the purposes of therapy in the AML space.

That is a potential solution, but in our estimation difficult to commercialize because it really is patient derived product, it requires some specialized bio processing, I am much more of mind guy about what I can do with primary NK cells just like Jeff, but one in which I can handle a campaign and make these NK cells in advanced that a patients need, so they are infused on demand, in other ways, the patients gets the NK cells when they are needed not necessarily when they are available such as using if you would the Miller approach.

Reni Benjamin

Got it. Thank you very much for answer the questions and good luck going forward.

Reni Benjamin

Sure. Thank you so much. Thank you.


Thank you. Showing no additional questions in the queue, I would like to the conference back over to Dr. Laurence Cooper for any closing remarks.

Laurence Cooper

Okay, I just want to give everybody and thank you for listening and we wish everybody a good day and evening. Bye-bye now.


Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect: Everyone have a wonderful day.

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