Adrian Rawcliffe - Chief Financial Officer James Noble - Chief Executive Officer Rafael Amado - Chief Medical Officer Gwen Binder-Scholl - Chief Technology Officer.

Peter Lawson - SunTrust Robinson Humphrey Tony Butler - Guggenheim Securities Jenny Leeds - Bank of America Bin Lu - Raymond James Srikripa Devarakonda - Citi Marc Frahm - Cowen and Company Nicholas Abbott - Well Fargo.

Good day, ladies and gentlemen. And welcome to the Adaptimmune Reports 2017 Fourth Quarter and Full Year Update. To your information, today's conference is being recorded. At this time, I would like to turn the conference over to Ad Rawcliffe, Chief Financial Officer of Adaptimmune. Please go ahead..

Good morning, and welcome to Adaptimmune's conference call to discuss our full year and fourth quarter 2017 financial results and other business updates. We issued two press releases earlier this morning, and I would ask you to please review the full text of our forward-looking statements there.

As a brief reminder, we anticipate making projections during this call and actual results could differ materially due to a number of factors including those outlined in our latest filings with the SEC. James Noble, our Chief Executive Officer; and Rafael Amado, our Chief Medical Officer are with me for the prepared portion of this call.

Helen Tayton Martin, our Chief Business Officer; Gwen Binder, our Chief Technology Officer; and Bill Bertrand, our Chief Operating Officer will be available for Q&A after the prepared portion. With that, I will turn the call over to James Noble.

James?.

Thank you, Ad. And good morning, everyone. And thank you for joining us today. 2017 was a transformative year for cell therapy and Adaptimmune.

But before we look back at 2017, I want to share today’s news that we have observed responses in a second solid tumor with NY-ESO in myxoid round cell liposarcoma or MRCLS with three partial responses and one stable disease in the first four patients dosed. We will present an update on these data at an upcoming Congress.

This news strengthened our conviction that we have a pipeline capable of treating solid tumors and that our SPEAR T-cell platform has great potential for the future treatment of many cancers. This conviction is reinforced by the recent announcement at J.P.

Morgan regarding safety in the first parable of our MAGE A-10 pilot studies, the triple tumor and non-small cell lung cancer studies with patients who received 100 million transduced cells.

Thus far in these safety cohorts, there has been no evidence of off-target toxicity and there're have been no report of severe neurotoxic events similar to CAR‑T cell-related encephalopathy syndrome.

On the basis of these data, we also announced in January of this year the safety review committee recommended dose escalation to one billion transduced cells in the MAGE A-10 triple tumor study in in bladder, melanoma, and head & neck cancers.

One billion transduced cells was the threshold which we began to see responses with NY-ESO in synovial sarcoma and Rafael will go into more detail later in the call. Based on the additional expect safety data we expect those escalations for the other MAGE A-10 pilot study in non-small cell lung cancer to be imminent.

We expect to complete the first cohort of six patients shortly and the next dose cohort of patients will receive one billion transduced cells assuming a favorable safety committee review.

Our MAGE-A4 basket study across seven solid tumor indications including bladder, melanoma, head & neck, ovarian, non-small cell lung cancer, esophageal, and gastric cancers is also dosing patients.

Anticipated data readouts for 2018 include, firstly, additional safety and initial efficacy data from the MAGE A-10 pilot studies, secondly, initial safety data from the MAGE-A4 basket study to support dose escalation to a billion cells.

Thirdly, initial efficacy data from the MEGA-A4 basket study as well as additional efficacy data from the MAGE-A10 studies throughout the second half of 2018 and lastly, we anticipate initial safety data to support those escalation in our AFP study in hepatocellular carcinoma later in 2018 with efficacy readouts in 2019.

Our focus on MAGE-A4, MAGE-A10 and AFP have been greater since GSK exercised its option over NY-ESO program as we announced in September last year and we are pleased to say the transition to GSK is well underway. We have continued to manufacture and treat patients in the currently open NY-ESO studies, pending completion of the transition.

The option exercised also extended our cash runway through to early 2020. Not only was 2017 a year of clinical momentum, it was also a year of great progress towards a fully integrated cell therapy company.

We have now successfully manufactured and released product for several patients in our MAGE-A4 study with manufacturing from MAGE-A10 trial scheduled to commence shortly following regulatory clearance.

We also announced in January of this year that we executed an agreement with Cell and Gene Therapy Catapult to provide our own dedicated manufacturing space to secure vector supply for the medium term. We also made great strides in building our executive team in 2017.

We expanded our manufacturing team with Mark Dudley, joining as Senior Vice President of Global Bio-Process and Development and John Lunger, joining as the Vice President of Manufacturing & Supply Chain Development.

Our Co-Founder, Helen Tayton Martin, transitioned from Founding Chief Operating Officer to focus on the newly created role as Chief Business Officer; and Bill Bertrand joined as Chief Operating Officer.

Most recently, Sébastien Desprez, joined Adaptimmune as Vice President of Communications and Investor Relations; and Paul Stead joined as Vice President of Business Development. We believe the right infrastructure and leaders are in place to ensure our success as we aim to be the first company to launch a TCR T-cell therapy to treat solid tumors.

With that, I will hand the call over to Rafael for a clinical update.

Rafael?.

Thank you, James. And thanks to everyone for joining this call. As James said, we have observed responses with our NY‑ESO SPEAR T-cell in a second solid tumor called myxoid/round cell liposarcoma or MRCLS with three partial responses and one stable disease in the first four patients dosed.

Importantly, these patients tolerated treatment well with cytokine release syndrome managed following standard treatment guidelines.

We think that these data are meaningful and a further validation on the potential of our SPEAR T-cell to address solid tumors because although MRCLS is a soft tissue sarcoma like synovial sarcoma, there are fundamental differences between these two malignancies and I wanted to take a moment to go over some of these differences.

MRCLS is a sub-type of soft tissue sarcoma called liposarcoma and is characterized by the proliferation of fat cell precursors called lipoblasts that have self-differentiating into mature adipocyte. In contrast, the cell of origin of synovial sarcoma is unknown.

The peak incidence of MRCLS is 30 to 50 years and it’s estimated that there are approximately 2,000 new diagnoses of MRCLS each year in the United States and Europe.

MRCLS arises in the proximal areas of the limbs, most commonly the thigh, the primary treatment where MRCLS is surgery with or without radiotherapy but reoccurrences are common particularly in patients with high risk tumors. The metastatic pattern of MRCLS is different from other soft tissue sarcoma.

It tends to spread to the bones, abdomen, pelvis and other soft tissues rather than the characteristic spread to the lungs that is seen in other sarcomas like synovial sarcoma. Moreover, there is also defining chromosomal translocation in MRCLS that drives this malignancy.

This molecular signature is different from the translocation observed in synovial sarcoma. I would like to illustrate that potential clinical benefit of our NYESO SPEAR T-cell by briefly outlining the clinical course of one of the initial responders in the MRCLS trial.

This patient is a 59-year-old man diagnosed in 2015 with biopsy proving MRCLS located in the retroperitoneum, he was initially with variation followed by eight cycles of aureomycin plus a phosphamide and he achieved a partial response. Upon progressing he received three months of trabectedin and again achieved higher response.

Subsequent progression led to the participation in a NYESO vaccine trial and participation progressed and entered a trial. The tumor biopsy at screening showed that 60% of the tumor cell stayed positive for NYESO with three type intensity. He received 1.04 billion cell dosed SPEAR T-cells on the 10th of January and tolerated the infusion well.

With both the infusions, we’ve grade 1 cytokine release syndrome characterized by seizure and rash that we solved with supported care. All the adverse events included anemia and thrombocytopenia which are not unusual in these patients. At baseline, a target lesion was a firm tumor in the shoulder measuring 7.6 centimeters in longest diameter.

A week forward that lesion was softer and had reduced in size by 37% meeting the criteria for a partial response. A confirmatory scan four weeks later, showed further reduction of the tumor by 48% compared to baseline with improvement of symptoms.

There was high expansion of NY-ESO SPEAR T‑cells detectible in the peripheral blog, a finding there has been as a theory with clinical responses in synovial sarcoma. As you may recall we have solid tumor data from pilot study of NY-ESO in synovial sarcoma that also remains encouraging.

In 2017, our investigators presented data during an oral presentation at both CTOSS and ASCO. Our NY-ESO SPEAR T‑cell continue to be generally well tolerated in synovial sarcoma with initial efficacy of 13 all cohorts including the low expressing cohort.

As reported at CTOSS in December five of the twelve patients treated in cohort one remains alive with the median overall survival of approximately 120 weeks.

Among cohort one patients there are 60% with confirmed responses at target dose and we have seen confirmed responses in 32% of low expressers in cohort two and 36% of patients in cohort four are modified the condition in regimen cohort.

We have observed that peak and long-term expansion of NY-ESO SPEAR T-cells correlates with clinical efficacy and importantly our SPEAR T-cells migrate into patients' tumors after infusion as seen in both treatment to more biopsies. This supports the notion that our SPEAR T-cells can convert cold tumors into inflamed tumors.

The data for synovial sarcoma pilot study continues to inform development plans with our wholly owned pipeline of products and we together with GSK plan to present mature data on the differences in clinical outcomes that we have observed between cohorts one and four at an upcoming Congress.

Moving onto our wholly owned assets as James said, we received the recommendation from the safety review committee to dose patients at one billion cells in MAGE-A10 triple tumor study. We believe that one billion cells to be the therapeutic threshold based on our experience with NY-ESO in synovial sarcoma.

A peak expansion we will serve at hundred million cells is about ten-fold lower than what was seen with doses above one billion cells and we believe that one hundred million cells is likely to be a sub-therapeutic dose.

We received a dose escalation recommendation from the safety review committee, as I said, they review data from three patients in the one hundred million cell dose cohort in the MAGE-A10 triple tumor study in which there were no dose limiting toxicities or DLTs.

In the other MAGE-A10 pilot study non-small lung cancer, one patient experienced a great full event of cytokine release syndrome which was considered as DLT at that time and it’s worth noting that this patient had a large tumor burden.

This patient’s cytokine release syndrome resolved and we are making changes to the DLT definition to exclude successfully managed cytokine release syndrome event.

At that time however, this DLT led to expansion of the safety cohort in the MAGE-A10 lung cancer study from three patients to six patients and we are now in the process of completing this cohort. After this, the safety review committee will review the data and make its recommendations regarding dose escalation to one billion cells.

Across both MAGE-A10 pilot studies, there has been no evidence of target toxicity in patients who’ve received the one hundred million cells, and we had not seen severe neurotoxic events similar to CAR‑T related encephalopathy syndrome.

In our other trials with wholly-owned assets, we are dosing patients in our MAGE-A4 basket study and we are enrolling in our AFP trial in hepatocellular carcinoma. We anticipate safety and efficacy data throughout 2018 from our MAGE-A10 studies and initial safety followed by efficacy data in our MAGE-A4 basket trial.

We expect initial safety data from AFP in hepatocellular carcinoma towards the end of 2018 with efficacy readouts throughout 2019. And now I will turn the call back over to James.

James?.

Thanks, Rafael. These are exciting times for Adaptimmune. In 2017, we demonstrated compelling results in synovial sarcoma further validated by GSK’s option exercise over NY-ESO and the late breaking news of responses we have seen in MRCLS.

These data with NYESO in two different solid tumors combined with encouraging initial safety in our MAGE-A10 pilot studies, first with one of our wholly-owned assets reaffirmed the potential of our SPEAR T-cell platform in solid tumors. Importantly, we have made great strides towards becoming a fully integrated cell therapy company.

This integration will put us in the best position to conduct future pivotal studies to support approval and ultimately deliver products and value for our patients and investors. In 2018, we are on track to deliver data from our wholly-owned pipeline in up to eight different solid tumor types.

With more than $208 million in total liquidity we are funded to deliver these data and through to early 2020. We are even more confident that we will achieve our goal be first to market with an engineered TCR T-cell therapy in solid tumors. With that, I would like to open up the call for question.

Operator?.

Thank you. [Operator Instructions]. We will take our opening question from Tony Butler from Guggenheim Securities. Tony’s question has been withdrawn. [Operator Instructions]. We have a question from Reni Benjamin of Raymond James. Please go ahead. Your line is open..

Hey, good morning guys. This is Bin Lu on for Ben. Thank you for taking my questions and congrats on all the progress.

So maybe first, can you talk about the durability of the responses that you saw in MRCLS?.

Rafael, do you want to comment?.

Yes. So, this study has been treating patients for not a very long time. So, what we waited until the first couple of responses where it confirms before releasing the news. So, it’s too early to talk about durability.

We know that one patient has responded after 8 weeks and then after 8 weeks later with confirm and then the second patient was confirmed at week 8.

So, if the first scan showed response and the second scan showed confirmation and then the third patient was just scanned and has a shown response and we have a fourth patient that had just had his first assessment and the tumor is smaller but hasn’t met yet criteria for response.

So, these are initial data, but it’s unusual in a cancer patient to see tumor shrinkage in all the patients that are treated which is why we felt this is significant, but you’re absolutely right that it's going to be very important to keep accumulating data and importantly to find out how durable these responses are..

Got it. That’s very helpful, Rafael. Maybe if you can further call it out, I think you mentioned one patient had their reduction in tumors from 37% to 47% if I mirror that correctly.

So maybe can you comment on how like what drives this improvement in response and is it because you get more T-cell expansion over time or does it something change in the immune system? Thanks..

Yeah. It's a really good question. It’s really a behavior that we've seen in synovial sarcoma as well. Unlike in the CAR space where patients are not in complete response within the first four weeks. They're probably not going to respond at least in ALL.

The response that we see in synovial, it appears to be recapitulating in this tumor type as well is more progressive. So, it may be because there’s a much lower antigenic load and the cell has to find the tumor cause inflammation first because these are very cold tumors and recruit other cells. So, we have seen slower responses.

As I said the first patient did not achieve a response at the first scan and we have seen synovial patients that have progressively reduction in tumor size going over a year. So, it’s possible that there’s been an initial decrease and then a sort of functional control of the tumor that occurs over time.

And again, this is in stark contrast with what’s seen in the CAR space. In the patients in whom we have had a chance to look at persistence, all these patients have had really high persistence comparable to their responses to the responders in synovial sarcoma. We don’t have long-term persistence in them because it’s still a short follow-up.

But we would expect that in these patients the transfused T-cell will remain effective as we’ve seen in synovial..

Got it. That was helpful. If I may, one last question from me guys. So, may be just given the totality of the data generated from NY-ESO TCR, can you provide your perspectives regarding how much read through we are getting from these results into the MAGE-A10, MAGE-A4 TCRs.

I think we understand the expression in frequency of those antigens is different. I mean besides that can you comment on the similarities and the differences between soft tissue carcinoma and other solid tumors in terms of their tumor heterogeneity, tumor microenvironment and the potential over T-cells to infiltrate? Thank you..

Yes, obviously, that’s a question that we ourselves would like to know the answer to. But I will give you my thoughts. I think there’s a lot of discussion out there about whether TCRs can really target solid tumors and whether sarcomas are just a one-off.

I think there’s plenty of evidence out there that TCRs can’t target solid tumors of multiple histology. We have seen responses in melanoma, we’ve seen in the myeloma. We have obviously seen them in soft tissue sarcoma. Other investigators out there have seen responses in colorectal cancer, they have seen in cholangiocarcinoma.

And so, I think this evidence that it’s not just mesenchymal tumors but epithelial tumors can be treated with TCRs. I think the point that you make about what this means for MAGE-A10 and MAGE-A4? Well, for us, the most important thing is to discharge the potential cross-activity safety issue.

And we are very pleased with the trajectory that we are aiming so far with MAGE-A10 and we are dosing MAGE-A4 as well. And so, once we discharge safety and we would be in really good position to start testing efficacy. As I mentioned in the call, 1 billion cells appear to be a minimum threshold, so we are not there yet.

But we’re testing these TCRs in a lot of solid tumors, so we hopefully will be able to show the potential of this technology. MAGE-A10 and MAGE-A4 are quite active TCRs in pre-clinical studies, and a newer sort of technology was supplied into development of this TCRs. So, we’re quite hopeful about the potential of these two products going forward..

[Operator Instructions] We will take our next question from Peter Lawson of SunTrust Robinson Humphrey. Please go ahead..

I guess as you think about responses, do you think we get to a point where you can’t correlate responses with biomarkers or is -- do you think it’s still going to be a one-off kind of thing patient-to-patient responses?.

Rafael do you want to start and maybe Gwen can add some things after that.

It’s a very good question and we're very interested in the answer ourselves, Rafael?.

I think the most reliable marker we have now is the peak persistence. So, it’s the maximum persistence which is observed within the first week. And there's a clear difference between responders and non-responders that we've seen in synovial sarcoma. There's also a difference in peak persistence depending on what condition in regimen is used.

But we are not necessarily at a point where by looking at peak persistence we can make a long-term prediction. We do know that patients that don't experience good expansion are very unlikely to respond.

We are starting to look at infiltration of our SPEAR T-cells and other T-cells into tumor in post response biopsies and maybe I'll let Gwen comment on that and some other potential biomarkers..

Yes, hi. So, in terms of understanding what the patient’s tumor looks like. We have initiated a very successful tumor biomarker analysis program so we can understand what mechanisms of resistance might be to our therapy. And so, we're looking at all the usual suspects.

So first and foremost, understanding if there's a change in antigen expression in the patient, both at baseline and post treatment. So, we can understand if there's a priority resistance or if there’s resistance that develops over time.

And for that includes things like looking at antigen processing machinery, looking at HLA expression and looking at antigen expression in the tumors. So that’s pretty straightforward and for the field of checkpoint inhibitors have also been looking very aggressively at these questions as well.

And so, for example in about 10% of patients you do see loss of Class 1 and that mirrors what we see in our patients as well. But we're also looking more deeply at the tumors to understand intrinsic in next-gen generic mechanisms of resistance. So that means in terms of extrinsic mechanisms understanding what the union contexture is in the tumor.

And so that seems like looking at Tregs or myeloid-derived, suppressor cells and trying to understand if you have higher levels of these types of cells in the tumor, does that change the ability of the patient to respond to our therapy or not.

One possibility is that if our product is sufficiently potent because of the affinity optimized T-cell receptor, our T-cell product might be less susceptible to these types of suppressive mechanisms. But we don’t know the answer to that question yet.

And we are also looking at intrinsic mechanisms of resistance so that -- those are things that the tumor actually produces, so things like TGF‑Beta or upregulating the adenosine pathway and/or levels of chemokine receptors and so forth.

So, it’s a long project but we are actively looking at those correlates along with the CRM biometrics that Rafael mentioned. .

Thank you. And then some manufacturing progress that’s been made there.

Do you think you're going to get to quicker turnaround times or shorter brain-to-brain or it’s still around 28 days or so?.

I will let Ad answer that..

So, I think at the moment we have a turnaround time of roughly five weeks and that’s split into two weeks of the manufacture and we are still using 14 days sterility and nobody has noticed but the rest of the industry is moving towards a more rapid sterility, move towards a more rapid sterility and we plan to be implementing that this year.

So, I think with that we would be down at this sort of levels that some of the competitor companies are seeing and obviously Novartis’ process is most alike ours. And so, at that point we will certainly be competitive from a clinical trials perspective and I think while there can be incremental improvements that can be made to reduce that further.

But we are very pleased with the progress that we’ve made in our Navy Yard facility in terms of being able to manufacture very successfully for our MAGE-A4 trials and for our other internal assets. .

And then just finally, how is enrollment going with MAGE-A10, MAGE-A4, last question? Thank you. .

Peter, it’s Rafael again.

I think your question was about enrollment, is that correct?.

Yes, how is enrollment going for MAGE-A10 and MAGE-A4?.

Yes, so the limiting factor has been mostly the stagger required and the need for safety review after we complete a cohort to obtain a recommendation of dose escalation. And we are pleased with how things are going and in fact we are now scanning patients, identifying them early even when they are in prior therapies.

We are increasing many patients before they are ready to be treated so that the cells are ready at the time of progression. And we have I think what we believe is a good number of patients identified in both MAGE-A10 and MAGE-A4 to sort of keep the pace of the trial going.

So, I think the efforts that we’ve made over this past couple of years have paid off. .

We will take our next question from Tony Butler of Guggenheim Securities. Please go ahead..

Yes, thank you very much. So, I have three questions if I may, I'll just ask them all three together. James or Rafael, the question around MAGE-A4, MAGE-A10.

I'm curious if in fact you have a bias to a tumor or a histology or is really the goal simply to think about the marker, MAGE-A4 or MAGE-A10 on a variety of tumors and perhaps being able to develop a tumor independent therapy based upon MAGE-A4 or MAGE-A10 as being that marker. That’s question one.

And then question two either Rafael or Gwen, I wanted to ask about, persistence of cells and the net amount of cells in vivo in which one may need to obtain or there may be a threshold for efficacy.

So the question is as you dose escalate, how many -- is it the net number of cells that need to be present in order to create efficacy and let’s assume the TCR is optimal or is it the net amount of cells which need to be present that they grow out to a certain time point 30 days, 60 days I don’t know or is that both? Thanks very much..

Yeah. Those are great questions, Tony. I think in terms of the first one and there’s a variety of tumor types in both programs.

And obviously there’s the option if we see that the responses of the activity is histology independent to attempt to develop this product in a way that we obtain a label that is defined by the expression of the marker rather than the histology and as you know MSI-high tumors for checkpoints which I think it was kind of a landmark development plan and that potentially could be applicable to other products.

We obviously would love to be able to see activity that would allow this product to be developed in the fashion. I think we would have to show that it is reproducible and that it is across a sufficient number of tumors so that one could been extrapolate, that is only the expression of the antigen that determines response.

It would require a critical number of patients of each histology to satisfy that requirement, but obviously I think it will be a much more fruitful development program and we are mindful of that and we will make sure that we adopt our study to enrich for histologists that maybe lagging behind in terms of recruitment in our trial.

It is the case that there may be an eagerness in the types of tumors that are coming through into our protocol and we are trying to even do that by seeking out types that have a preponderance of patients of a given histology than maybe lagging behind lagging behind in enrollment.

So, I think whether we choose a single histology or a histology agnostic pathway will depend on what we see. But we are going to attempt to look very broadly across all the tumor types that we selected to look for activity.

I think in terms of the second point, what we have observed is that out of 100 million cells, first of all, we see the cells which I think is a great finding. So, we are able to pick up these cells. The persistence of cells is actually remarkably consistent with the dose. So, it is about a lot lower than what we see at 1 billion cells.

And so instead of works out to be a proportional number to the cells that we infused, the difference is that when we infuse 100 million cells they are very short lived in peripheral blood. So, we see the cells expanding. They peak at a level that again is a lot lower and then they disappear, a fair short period of time.

So, my sense is that there is a threshold number of cells that need to expand that is required for the expansion to continue and for the cells to be sufficient in number to traffic and to be able find antigen and expand further.

And that appears to be higher than 100 million which as you know is a different number in the CAR space probably because the accessibility of the cells to the antigen and the antigenic tumor load is still different between tumor -- solid tumors and malignancy..

Yes, I think that’s exactly just about to define the target antigens in solid tumors is more difficult. .

We will take our next question from Robyn Karnauskas of Citi. Please go ahead. Your line is open..

Hey guys. This is Kripa on for Robyn, he apologizes for not being today on the call. Congrats on the data, very excited to see what this year has to bring. I have a couple of questions about safety.

So just wondering if you’ve finalized your pre-conditioning regimen or is that still available as you go through the different trials? And have your studies given any insight into the triggers for neurotox given the low levels of neurotoxicity especially in comparison to the CAR-T? And one more quick question.

Is there any reason to expect that you might see any sort of delayed adverse events? Thank you so much..

Yes, so let me start with the first, so the pre-conditioning that we have chosen in these trials are the same as in Cohort 4 of the synovial sarcoma study. So just to remind people about that those doses of 600 million milligrams per meter square and three of cyclophosphamide of three days and then three days of fludarabine 30 milligrams per meter.

And so, we chose that for the MRCLS trial and we chose that for the MAGE-A4 study and for the MAGE-A10 studies except for the lung cancer study. So, the non-lung cancer study was written when we saw that cyclophosphamide alone perhaps could be sufficient. And so, we had an initial cohort of cyclophosphamide.

And so those patients were treated with cyclophosphamide only. Now we planned in the dose escalation through a billion cells to move into that combination of fludarabine and cyclophosphamide that I’ve just described.

So, the billion cells are going to be given with fludarabine because now we've learned that cyclophosphamide alone, is insufficient and that data that comes from the synovial sarcoma study. So that’s the preconditioning.

Having said that, there is emerging data from the synovial study comparing cohort one and cohort four that we’re going to describe at ASCO that perhaps suggests that there should be further refinement on preconditioning, but clearly the conditioning we’re using in cohort four is active, because we are seeing responses in MRCLS and we’re seeing responses in synovial sarcoma.

The question is whether it's optimal. So that's what I'll say about preconditioning.

In terms of neurotoxicity, there really isn't much to say because we have not seen neurotoxicity and we see some symptoms that sort of match to let's say MedDRA code of neurotoxicity tremors or somnolence, but they’re all explainable by medication or some other factors and there’s nothing that resembles the neurotox, testing with CAR, neither in encephalopathy or some of the more serious events.

In terms of delays adverse events, with this technology and really one worries about the acute events that are seen post infusion whether they’re the classical events of cytokine release syndrome or again neurotox or graft versus host disease, or some other event.

And when one is dealing with a new product like MAGE-A10 or MAGE-A4 you always watch out for anything that could resemble end organ toxicity that’s mediated by cross-reactivity. As I said so far dosing at 100 million cells we have not seen with any of our new products. It is unlikely that once the patient recovers the counts something could happen.

Obviously, we won’t know until we follow these patients longer. But in general, at least our experience with NY-ESO is that it’s very rare to see toxicities once the patient has recovered his or her count..

We will take our next question from Marc Frahm of Cowen and Company. Please go ahead..

Hi guys, thanks for taking my call. Rafael, can you maybe talk a little bit about what you you've seen in screening in myxoid in terms of the NY-ESO positivity, frequency being positive, intensity relative to synovial things like that.

And then also just as we think about, you mentioned there is this potentially the threshold effect of billion cells, you said you clear these first patients out of billion cells.

Just talk about the process of evaluating like whether you should of how you would evaluate, whether you should just expand a billion or continue to try to dose up to a higher level?.

Yeah.

So, the screening pattern is interesting because in the literature the number kind of quoted about half the patients expressing NY-ESO and myxoid/round cell liposarcoma is actually a mix tumor, you have adipocyte and then you have the round cell component and those round cells are actually prognostic, the more round cells there are the more patients are.

And that threshold is about 5% of round cell component. By the time patients get cleaned for our studies, they all have a decent component of round cell in histology and that tends to be more resistant to treatment.

Luckily, the expression of NY-ESO T-cell is seen uniformly in all the further cell types which is such an important in terms of being able to effectively treat the tumor.

And we have seen that the expression of NY-ESO seems to be higher in the patients that we have screened and it may be because the literature referred to patients’ de novo surgical specimens and when the patients are more advanced perhaps the the frequency of NY-ESO is higher.

So, it’s 70% plus of patients that are positive and the intensity tends to be quite high. And so that’s what we’ve observed with our assay of immunohistochemistry assay. In terms of our threshold effect of 1 billion, so that really comes from the synovial sarcoma experience and what we are learning with our own TCR test.

If you were referring to MRCLS, in MRCLS we are not dose escalating because it’s NY-ESO and we already have enough safety with NY-ESO. So, we are treating patients at a target 5 billion, sometimes we don’t make sufficient -- we don’t make 5 billion cells and we treat provided that we’ve made at least 1 billion.

And so, the range is between 1 and 6 where we tend to target 5. And in the dose escalations ….

For MAGE-A10 and MAGE-A4?.

Oh! For the MAGE-A10 and MAGE-A4, yes, so those -- I mean that threshold again comes from synovial sarcoma and the points with the patient I described received 1 billion cells and responded. So, I think there is a good chance that these products are going to accurate when they see something in the next cohort. .

If your question is if we get efficacy at 1 billion cells where we get 5 billion, that is the design of the protocol at the moment, so in both MAGE-A10 and MAGE-A4.

So, it is three levels of dosing a 100 million which is the initial safety dose, the 1 billion that which we hope is the same as NY-ESO that we get to some responses and then we still anticipate that we -- the third arm, the third leg of it will go up to 5 billion. So that’s the intention at the moment, but obviously we have to look at all the data..

We’ll move onto our next question from Jim Birchenough of Wells Fargo. Please go ahead..

Good morning. This is Nick in for Jim this afternoon. Going back to the lung patient that had a grade for CRS.

Did that patient show robust T-cell expansion and if that’s the case, is this to suggest perhaps the need for individualized dosing based on tumor burden?.

Yes. So, if that patient developed, CRS starting on day one prior to the first sample that was drawn for persistence, so we continue to draw persistence samples that we have served very minimal level that disappear very quickly. But the patient had received high dose steroids before the first sample was drawn.

So, it’s very difficult to interpret the persistence in that particular patient because he was put on a protocol for treatment of severe CRS. In terms of individualized dosing based on tumor burden, I don't really think we are there yet and we’ve seen responses in patients that had high tumor burden with CRS which was relatively mild.

And so, it’s not all about tumor burden. It’s about expression levels, it’s about the ability of the T-cells to penetrate the tumor and I think you would be -- it would be very difficult to actually do experiments where we could come out with dosing according to tumor burden.

But one thing, the measurement of tumor burden in cancer patients is very imprecise and it would be quite complex to do that. It's not even done in the CAR space where it’s easier to measure for instance, leukemia according to blast counts. And so, I don't foresee that that being a way of dosing going forward..

So, I guess, maybe a follow-up then.

Were there any baseline characteristics of this particular patient that allow you potentially to identify similar patients that may not be a good candidate, particularly for a much higher dose?.

I think that when people have publicized or published their parameters that co-relate with CRS, tumor burden does come up. I think when we have a patient that has large volume disease and has high expression and the cell dose is high because we’ve been able to manufacture high cell dose. And obviously one have to be vigilant.

I will not say that the guidelines for treatment CRS has really improved and evolved. And the majority of patients are treated quite successfully like this patient was. And this patient was already in the ICU and the definition of grade 4 is the requirement of ventilatory support.

But that was done also to preserve the airway because the patient had high tumor burden in the shoulder, neck and so on. So, it’s unclear whether it was the CRS that led to the criteria that actually met the definition of grade 4.

And so, I think the answer of that is one should be vigilant if there are some of these factors that I measured but in qualified centers such as the centers where we operate and most gene therapy is done, there are already very clear algorithms for treatment and initiation of tocilizumab and secondary agents including steroids.

And it’s been a long time since we’ve heard of stable event in CRS and I think it’s just because the whole field has learned how to manage this. .

Okay.

And then my second question is, are you tracking what therapy these patients are receiving post MAGE-A4 and A10 and honestly, I am thinking more of a checkpoint inhibitor and checkpoint sensitive tumors?.

We track pre-treatments in this phase one studies wherein we’re not tracking post treatment. But I can tell you that all the patients that we are enrolling have received checkpoints unless they have an indication where checkpoints are not approved. So, they are all checkpoint progressors if you will..

Then last question is, what should we be expecting throughout the year in terms of as new INDs and new technologies and obviously we know the encouraging progress reported by your collaborative Bellicums for the inducible activation switch?.

We don’t expect any new INDs this year. That’s -- we hope to have our next new target IND next year if everything goes well. But so, it’s going to be data on MAGE-A10, MAGE-A4 and we hope some safety data on AFP this year. I wouldn’t expect to see any other data this year..

We will take our next question ….

We’ll take the last question from Ying Huang..

Ying Huang, your line is open. Please go ahead..

Hi, guys. This is Jenny on for Ying. Sorry, he is on another call.

We’ve just been getting a lot of questions about I guess how you guys are controlling for on target but off tumor toxicity so may be if you could just remind us kind of your internal process for selecting the binding motifs that are specific to the peptide to kind of minimize your tumor tox? Thank you..

So, I will ask Gwen to comment in detail. But as you know following the cross reactivity we observed in 2011 and 2012 with MAGE-A3 we developed a complete new system which we have published and we can send you the publications on that if you like. Because they are published in greater detail.

But I will ask Gwen to explain a little bit about the way determine the motifs..

Yes. I think a good place to start is, by the starting with the basics that targeting TCR engineered T-cell therapy you have the ability to select tumor targets that are actually specific for tumors.

So, you can actually pick a target and through -- we have a target validation program where we very carefully will screen many normal tissues and look at expression of genes on tumor tissues and then select targets that are only expressed in tumors.

And so, with our MAGE-A10, MAGE-A4 programs, and also NY-ESO, these are cancer tested antigens that are not expressed on any normal cells and on non-cancer cells, except for cells in the placenta and during embryogenesis.

Now with the toxicity that James mentioned that's a situation where the TCR recognizes the peptide that prevented in the context of HLA. And so, we now carefully screen each of those peptides to make sure that we understand what the consensus binding sequences of the peptide.

Prior to MAGE-A3 event we just screened the sequence of the peptide against the human genome and now we actually screen the consensus binding sequence. So, we wait each of amino acid residues. And so, we use that to find out of those any other proteins that might have a different sequence, but the TCR will still recognize.

And so, we do that for all of our T-cell receptors as well as screen against the panel of B-cell lines that represent the vast majority of the HLA profile in population, the world population in order to look for any other reactivity as well. So, we have the most comprehensive preclinical screening program for T-cell receptors.

And just one final closing comment is that, right now in the field of CAR T-cell therapy, it’s extremely difficult to find proteins that are expressed on the surface of target cells that are actually tumor specific.

So, this on-target off-tumor toxicity is going to be a pretty common and ongoing problem in CAR field, but it’s something that is less of an issue for us TCR field..

Thanks very much everybody. So extremely good set of questions today and we’re very pleased to be able to present the data on the new cancer and to give you an update on progress. This is still a year where we are expecting to be very data rich as a company.

We’re growing as well as we can and discover that we have got responses also to relay the responses in three out of four MRCLS patients the way we've to do today I think lends creditability to the concept of the about the other stations where we have to think.

Lends credibility to the concept of the T-cell platform having broad applicability in solid tumors. So, it’s very exciting year, we're just at the beginning of it and I look forward to further discussions that are on next releases. Thank you very much..

Thank you. That will conclude today’s conference call. Thank you for your participation ladies and gentlemen. You may now disconnect..