Anca Alexandru – Head of Communications Adi Hoess – Chief Executive Officer Florian Fischer – Chief Financial Officer.

Maury Raycroft – Jefferies Do Kim – BMO Capital Markets Michael Schmidt – Leerink Peter Lawson – SunTrust.

Good day and welcome to the Affimed Second Quarter 2017 Financial Results and Corporate Update Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Anca Alexandru. Please go ahead..

Thanks. I would like to welcome you to our investor and analyst call on the results for the second quarter of 2017. On the call with me today are Adi Hoess, CEO of Affimed, who will present the corporate update; and Florian Fischer, Affimed’s CFO, who will walk you through the financials.

Slide 2, before we start, please note that this call and the Q&A session contains forward-looking statements, including statements regarding our future financial condition, business strategy, and our plans and objectives for our future operations. These statements represent our beliefs and assumptions only as of the date of this discussion.

Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

These forward-looking statements are subject to risks and uncertainties and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors including, but not limited to those identified under the section entitled risk Factors in our filings with the SEC and those identified under the section entitled cautionary statements regarding forward-looking statements in our Form 6-K filed with the SEC earlier today.

Thank you for your understanding. I will now hand the call over to our CEO, Adi Hoess, who will provide the corporate update..

Thanks a lot, Anca. Affimed has developed an immune cell engager and our clinical and preclinical pipeline based on tetravalent bi and trispecificantibody formats. We’re an industry leader in NK cell engagement and our lead product candidate AFM13 is to our knowledge, the most advanced NK-cell engager in clinical development.

We also have a well-differentiated T-cell based approach, which includes our clinical candidate AFM11 and we’ll provide an update on these clinical programs as well as our pre-clinical programs today.

We employ about 75 full time equivalents with our headquarter located in Heidelberg, Germany, and affiliate offices in the U.S., that is Affimed Inc., as well as our subsidiary AbCheck in Plzeň, in the Czech Republic. Slide 4.

We have an unencumbered clinical and pre-clinical pipeline of NK and T-cell engagers, with our NK-cell engagers being developed in hematological diseases and solid tumors. Based on our NK-cell platform, we have one clinical and two pre-clinical programs in developments.

And based on our T-cell platform, we have one program in our own clinical development. And second T-cell engager program based on our platform called AMV564 is being developed by Amphivena, a company of which we own about 18.5% fully diluted. AMV564 has recently entered clinical development.

Slide 5 summarizes our second quarter updates for our NK cell engager program. For AFM13, we have completed the dose escalation part of our Phase 1b combination study with Merck’s Keytruda in Hodgkin Lymphoma and initiated the expansion phase.

The AFM13 Phase 2a monotherapy trial in Hodgkin Lymphoma sponsored by the German Hodgkin Study Group is open to recruit under new study design, which includes patients pre-treated with both brentuximab vedotin and anti-PD1.

Columbia University has recently initiated a translational study of AFM13 in CD30-positive lymphoma with cutaneous manifestation and I will provide more detail later. We made further progress in our collaboration with MD Anderson Cancer Center to evaluate AFM13 in combination with MD Anderson’s NK cell product.

In June, we presented new data for our NK cell engager’s AFM24 and AFM26 at two conferences and I will go into detail later on this. Slide 6 summarizes the progress, we have made with our T-cell engager.

Two Phase 1 dose-escalation studies are ongoing with AFM11, which offer a significant opportunity to address the high unmet medical need in diffuse large B-Cell lymphoma and mantle cell lymphoma. We believe that both the properties of AFM11 and the design of our studies can attract, specifically, mutations of other drugs in development.

Both dose escalation studies, which are conducted in ALL and in NHL respectively are designed with accelerated titration followed by a classical 3+3 design. In both studies, AFM11 was overall well tolerated with no dose limits and toxicity observed to date.

In the AFM11 study in relapsed refractory ALL, which was initiated in September 2016, patients are currently being recruited into the fourth dose cohort. 12 sites are open and recruiting in the Czech Republic, Poland, Russia, Austria and Israel.

As mentioned, no DLTs were observed in particular no AFM11 related grade 3 or grade 4 neurotoxicity or side effects are frequently observed with T-cell engaging antibody agents observed. In our study of AFM11 in relapsed refractory NHL, patients are currently being recruited into the third dose cohort.

Recall that this study has been amended in the past to enroll patients under a new revised study design. We believe that we have addressed this lower than effective recruitment by opening further trial sites. A total of 10 sites are now opened in the Czech Republic, Poland, Germany as well as the U.S.

Like in our ALL trial, no AFM11 related grade 3 or grade 4 neurotoxicity was observed to date under their revised study design. We intend to provide regular update on both the AFM11 studies in the future. A second T-cell engager program based on our platform is AMV564, a bispecific tetravalent CD33/CD3 antibody developed by Amphivena in AML.

A Phase 1 study is recruiting. However, no further updates have been provided by Amphivena. Slide 7 shows our platform, which is very distinguished from others as, in contrast, the most comparatives were developing tetravalent bispecific molecules.

The bivalent binding of two receptors on two different cells enables high-affinity binding through the avidity effect, which is advantageous to maintain high specificity at very high affinity. We believe that this is very important in order to obtain a favorable safety profile. Furthermore, our platform allows multi-specificity in the tailored PK.

Further differentiating Affimed, while most immune cell engaging approaches to date focus on T cells, our technology platform reliably generates both T and NK-cell engagers. While increasingly NK-cells are becoming a cornerstone of cancer immunotherapy, and we're excited to be pioneering this development.

There are a number of reasons why NK-cell-based approaches are very attractive and one of the reasons is that there seems to be a positive correlation between NK-cell infiltration and clinical outcome in patients. In this context, it has been described that a low cytotoxicity is associated with higher incidence of cancer.

In addition, recent clinical data show improved anti-tumor responses of ex vivo expanded and activated NK-cell populations. NK-cell-based immunotherapy has recently advanced with different treatment approaches, including engagers, check points, cytokines and adoptive cellular transfer.

To-date, it seems that NK-cell-based approaches have this strong advantage of controlling a well manageable favorable safety profile. This creates an opportunity for NK-cell redirection to address the lack of recognition of cancer cells and also allows for potential combination of NK-cells with other approaches to enhance efficacy.

A common theme in all different cancer types is the ability of the tumor cell to evade recognition by the immune system and, specifically, by NK-cells as shown on Slide 9. Normally, NK-cells are capable of killing foreign or aberrant cells, like tumor cells, have acquired mechanisms to escape the so-called immune surveillance.

As a result, such NK-cells cannot recognize tumor cells as foreign or aberrant and, therefore, cannot fight them. We believe that our platform has the potential to overcome these limitations by disabling the tumor evasion mechanisms, and I will explain on the next slide what this belief is based on.

Our expertise and leadership in natural-killer cell-based approaches is one of our key assets.

As we can see here, there are a multitude of activating and inhibitory NK-cell receptors being discovered that CD16A, a dominant activating receptor on innate immune cells, is the only activating receptor that triggers the cytotoxic activity of naïve human NK cells, even in the absence of costimulatory signals.

Based on these properties and on our preclinical and clinical data generated to date, we believe that targeting CD16A is key for efficient recruitment of and killing by NK cells and macrophages. We have secured a solid IP position around CD16A targets. Slide 10.

We believe that through targeting CD16A with high affinity and specificity, the significant limitations of IgGs can differ. With our tetravalent bispecific immune cell engagers, we can restore NK-cell killing in tumor immune control, and this is depicted here.

Let me explain in more detail why we believe that our approach is superior compared to IgG-based approaches. The human body is not using NK-cell engagement by IgG to eliminate cancer cells. However, this mechanism is used for cells infected by viruses or bacteria.

In this situation, the human immune system generates a collagen antibody response that highly decorates such infected cells or organisms. Highly decorated means that many different proteins are expressed on the cell surface, which can then be found bound by antibodies.

This polyclonal and high-density binding leads to NK-cells killing upon high avidity XP binding, plus antibodies for CD16A on the NK-cell and other XP gamma receptors, for example, CD32 and CD64. In the setting of targetable cancer cells, however, with IgG, the situation is very different. Firstly, the therapeutic molecule targets a single epitope.

Hence, it confers ammonia killing response. And secondly, there are cancer cells which express only very low numbers of the desired target. The consequence of this very low target density is an insufficient amount of IgG, decorating the cancer cells and thereby not being able to efficiently recruit immune cells. This is shown in the middle picture.

Interesting, most therapeutic monoclonal antibodies are target-modulating antibodies, such as cetuximab, polatuzumab, gevokizumab, just to mention a few of them. We are addressing this limitation by targeting CD16A with high affinity and specificity, as shown.

Indeed, our immune cell engagers has the potential to elicit a robust NK-cell killing and immune control due to multivalent and apparent high-affinity binding to CD16A even at limiting antigen densities on the target. Slide 11, furthermore, CD16A in confers additional superior engager features.

The binding of immune cells through CD16A with high affinity and specificity induces NK-cell activation, which triggers an integrated immune response that can be mediated by both innate and adaptive immune cells. In particular, our NK-cell engagers do not bind to CD16B and neutrophils, which avoids the sync effect.

Their affinity has been demonstrated to be over 1,000 fold higher than that of monoclonal antibodies and our engagers bind independently of the 158 valine phenylalanine polymorphism. Most importantly, there’s virtually no competition with plasma IgG, which is shown here.

In the ground stage, CD16A on innate immune cells is occupied by polyclonal plasma IgG. But there is a huge excess of plasma IgG versus therapeutic antibodies, this creates a significant threshold for FC-based therapeutic antibodies, however, not for CD16A target enhancement.

Our tetravalent and bispecific molecules, which recognize a different epitope from CD16A, are virtually unaffected by plasma IgG. All these unique features result in overall increased potency and efficacy of NK-cell engagers. Slide 12.

Our lead candidate, CD30/CD16A-specific NK-cell engager, AFM13 is a first-in-class antibody suitable for mono and combination therapy. This has demonstrated safety and clinical activity in heavily pretreated Hodgkin lymphoma patients in a Phase 1 study.

In this Phase 1 study, tumor shrinkage and potential responses were observed in patients treated with four weekly doses of at least 1.5 mg/kg of AFM13. In 62% of patients, which was eight out of thirteen patients, we observed tumor shrinkage in 23% of patients, which was a total of three out of thirteen experienced partial response.

None of the patients experiencing a PR had been previously treated with brentuximab vedotin.

Recall, that in our investigation the Phase 2a trial for AFM13 in relapsed and refractory Hodgkin lymphoma, which is led by the German Hodgkin Study Group, we have previously guided to change the study protocol to ensure a recruitment of a homogeneous patient population pre-treated with both BV and anti-PD1 antibodies.

The study is now open to recruit under the new study design. We had also provided some preliminary data from patients enrolled under the original study protocol, where partial responses were observed in two of seven evaluated patients who had been pre-treated with brentuximab vedotin, but were anti-PD1 naive.

This suggests, now, for the first time that AFM13 is active as a single agent in this heavily pre-treated group of patients and, in particular, that AFM13 is active post brentuximab vedotin.

We have learned from the study sponsor that both after-responders had failed BV as the most recent treatment prior to AFM13 therapy, with one patient experiencing stable disease and the other one partial in the progressive disease under the BV treatment.

As previously guided, full data from the ongoing study will be presented upon its anticipated completion in 2019. And prior to that, a decision of data publication time points will be made together with the German Hodgkin Study Group. We are further developing AFM13 as a combination therapy.

Preclinical affinity has been demonstrated in combination with anti-PD1 in vivo in a PDX model. This has been the basis of our Phase 1b trial in relapsed refractory Hodgkin lymphoma in combination with Merck’s Keytruda. And here, we have completed the dose escalation part of the trial.

In detail, three patients were enrolled into dose levels one and two, respectively, and six patients were enrolled into dose level three.

While no grade three or four adverse events related to the study treatment were observed, one DLT was observed in cohort 3, which was a repeated grade two infusion-related reaction, leading to discontinuation of AFM13 treatment. This event is classified as a DLT according to the protocol definition. No further DLTs occurred.

The dose expansion cohort has been initiated with the highest dose explored during dose escalation. Data readout is ongoing in the treated cohort and we intend to present data from the dose escalation at a scientific medical conference in the second half of 2017.

Another update this quarter is that Columbia University has initiated a translational Phase 1b/2a study to evaluate the validity of activity of AFM13 in patients with relapsed and refractory CD30-positive lymphoma with cutaneous manifestation.

Affirmed is supporting this trial which is designed to allow for serial biopsies, thereby enabling assessment of NK-cell biology and tumor cell killing within the tumor environment. The first patient was enrolled into the study in July 2017. In general, we view CD30-positive lymphoma as an attractive indication that may broaden the potential of AFM13.

In terms of further guidance, we will work together with Columbia University to provide update on this study. Slide 13. Additional opportunities for our NK-cell engagers include combinations with adoptive NK-cell transfer.

Patients on NK cells can be stimulated by monotherapy using NK-cell engagers to overcome tumor immune evasion and immunosuppression. Ex vivo expansion and stimulation of autologous NK-cells followed by reinfusion alone or in combination with NK cell engager, is a viable therapeutic approach providing increased numbers of activated NK cells.

Alternatively, NK cells can be derived from peripheral blood, cord blood or IPS cells from healthy donors, which is an allogeneic setting, or from immortalized cells. After ex vivo stimulation and expansion, the NK cells are infused into the patients in combination with NK cell engagers. We are investigating this approach with our partner MD Anderson.

Initially, we plan to investigate AFM13 with MDACC’s NK-cell product in the transplant setting. Preclinical research activities are on track and these are intended to be followed by Phase 1 clinical trial. Proof-of-concept for this combination would also pave the way for combinations of other pipeline product such as for AFM23.

Affimed holds an option to exclusive worldwide rights to develop and commercialize any product developed under the collaboration. In addition to our clinical product candidates, we have created a strong preclinical pipeline.

Over the last quarter we have further characterized our most advanced preclinical candidates, AFM24 and AFM26, which we are developing for three solid tumors and multiple myeloma respectively.

Despite several marketed agents such as cetuximab and tyrosine kinase inhibitor or TKIs, there is a significant medical need for a novel approach to treat EGF receptor-positive tumor. Both efficacy and toxicity can be addressed.

EGFR-blocking drugs have been described to have side-effects including serious skin toxicity which might impact physicians’ willingness to prescribe a drug. In terms of efficacy, there is a need to overcome intrinsic or acquired resistance. For example, there is no clear indication of efficacy of EGFR-blocking antibodies in patients with RAS mutation.

We are developing a first-in-class NK cell engager designed to overcome the limitations of conventional therapy. AFM24 is designed to effectively treat EGFR-expressing solid tumors, such as lung and neck, or colon cancers.

It is an EGFR/CD16A targeting tetravalent bispecific antibody that is well differentiated from cetuximab, it is more potent cytotoxicity in vitro and in vivo including a potential to kill RAS-mutant cell lines.

There is novel mechanism of action in safety profile and it has the potential to overcome intrinsic or acquired resistance, which is described by many patients with EGFR positive tumors. AFM24’s potent NK cell recruitment may enable the shift of the validated target EGF receptor, primary receptor block toward immuno-oncology.

We have identified several development candidates for which we have initiated IND-enabling studies. Slide 15, there are several factors which differentiate AFM24 from other therapy. Firstly, AFM24 is differentiated through its efficacy.

Here you can see that in vitro, our NK cell engager which is highly potent tumor cell killing independent of RAS mutational status. In vivo, we have demonstrated efficacy in tumors resistant to EGFR targeting agents. Importantly, as shown in the graphs on the right hand side, AFM24 was similarly efficacious in a cetuximab-sensitive model.

Secondly, AFM24 is differentiated through safety, Slide 16. We have completed pilot toxicity studies in cynomolgus monkeys with no major safety findings.

At the EACR-AACR-SIC Special Conference, we presented data on a dose-range binder study in which AFM24 was dosed up to 93.75 mg/kg and a repeated dose study in which AFM24 was dosed up to 30 mg/kg in 4 weeks. No AFM24-related macro or microscopic changes were seen in tissues including vital organs, skin and injection site.

Importantly, there was no evidence of skin toxicity in those studies. Also no signs of delayed toxicity was observed in the repeated dose study recovery animals. On a molecular level, we learned from in vitro toxicology studies but there was no cytokine release or NK cell proliferation in the absence of target cells.

This further substantiates AFM24’s potential beneficial safety profile. Slide 17, like for EGFR targeted tumors, there is a significant need for a novel approach to treat multiple myeloma.

Even though, new therapies have significant improved outcomes, cure still remains elusive and the medical need to achieve minimal residual disease negativity is not yet addressed. MRD positivity is associated with a poorer prognosis, and it has been recorded that persistent MRD by predictive marker of unsustained complete response.

A particular hurdle for therapeutics aimed at immune cell engagement are very high M-protein serum levels up to 170mg/mL. Indeed the competition by serum IgG is known to strongly impair antibody-dependent cell-mediated cytotoxicity, the activity of monoclonal antibodies.

We are developing AFM26 to overcome the limitations of conventional therapies in multiple myeloma. AFM26 is a first-in-class tetravalent bispecific antibody targeting BCMA/CD16A. Targeting BCMA and employing NK cell engagement offers the potential to achieve MRD-negativity.

For AFM26, NK cell binding is largely unaffected by circulating IgG, which creates the potential of NK cell activation in the presence of M-protein. Indeed, the high affinity binding to both target and NK cells leads to a prolonged cell retention. This is shown on the right – on the slide on the right bottom.

AFM26 shows high cytotoxicity – cytotoxic activity towards both low and high BCMA-expressing myeloma cells. AFM26 may be potentially safer than T cell-based approaches, which would allow for faster development timelines.

Based on these characteristics, AFM26 might be positioned in first line of combination with adoptive NK-cell transfer during ASCT or in a salvage setting. AFM26 binds the B-cell maturation antigen, which is an antigen ubiquitously expressed on malignant plasma cells.

Its expression on healthy tissues is limited to plasma cells and peripheral dendritic cells. We believe the BCMA is an ideal target for immunotherapy of multiple myeloma. At ASCO and at the EACR-AACR-SIC, both in June, we’ll present the data on AFM26 NK-cell binding properties and activity.

As shown here, these data underscore that compared to native and FC-enhanced IgG. AFM26 shows improved binding and cell surface retention. Slide 20, we also show that AFM26 is well differentiated through target cell binding in potent NK-cell mediated tumor cell lysis.

And this is shown here in comparison with two marketed agents, daratumumab and anti-CD38 antibody and elotuzumab, which targets PS1. Importantly, other than described for daratumumab and elotuzumab, AFM26 did not induce NK-cell mutation.

Slide 21, like our other NK-cell engagers, AFM26 is also well differentiated for other agents [indiscernible] safety. Here you can see that compared to a T-cell engager, AFM26 is similarly potent that shows a reduced cytokine release pattern.

This point is going to improve safety profile, making AFM26 uniquely suited to engage NK-cells with multiple myeloma. I will now hand over the call to our CFO, Florian Fischer, who will provide further details on the financial figures..

Thank you, Adi. Affimed’s consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board or IASB. The consolidated financial statements are presented in euro, which is the company’s functional and presentation currency.

Therefore, all financial numbers that I will present here in this call unless otherwise noted will be in euros. Any numbers referring to Q2 2017 and Q2 2016 are unaudited. Cash and cash equivalents and financial assets totaled €48.9 million as of June 2017 compared to €44.9 million as of December 31, 2016.

The increase was primarily attributable to the net proceeds of €16.4 million from a public offering of common shares in the first quarter, and of €2.5 million from the drawdown of the second tranche of the loan from Silicon Valley Bank, largely offset by operational expenses.

Net cash used in operating activities was €13.1 million for the six months ended June 30, 2017compared to €17 million for the six months ended June 30, 2016.

The decrease was primarily related to lower cash expenditure for research and development in connection with Affimed’s development and collaboration programs and to the expiration of the Amphivena collaboration. Affimed expects to have cash to fund our operations at least until the end of 2018.

This provides runway for the planned development of our clinical programs, as well as for product discovery and early development activity. Revenue for the second quarter of 2017 was €0.5 million compared to €2.1 million for the second quarter 2016.

Revenue in the 2017 period was primarily derived from AbCheck services, while revenue in 2016 period predominantly to Affimed’s collaboration with Amphivena. R&D expenses for the second quarter of 2017 were €5.4 million compared to €8.6 million for the second quarter of 2016.

The decrease was primarily related to lower expenses for AFM13 and our discovery and early stage development activities and the expiration of the Amphivena collaboration. G&A expenses for the second quarter of 2017 were unchanged at €2.0 million compared to the second quarter of 2016.

Net loss for the second quarter of 2017 was €7.9 million, or €0.18 per common share, compared to a net loss of €8 million or €0.24 per common share for the second quarter of 2016. The decrease of operating expenses was offset by lower revenue.

In addition, the result was affected by finance costs of €1.2 million in the second quarter of 2017, whereas finance income of €0.5 million was shown in the second quarter of 2016. I will now turn the call back over to Adi for a summary of our two clinical programs and our pipeline.

Adi?.

Thanks a lot Florian. Our strategy is to maximize the value of our unencumbered clinical and preclinical pipeline of NK-cell and T-cell engagers, as well as from our platform.

We’re leveraging our lead product, AFM13, for CD30-positive lymphoma initially focusing on the Hodgkin Lymphoma salvage setting enabling a fast development path and allowing the establishment of a cost efficient marketing and sales structure.

In addition, we believe investigating AFM13, both as monotherapy and in combination with Keytruda, reduces its development. Overall, our preclinical and clinical strategy is designed from the scientific leadership of our NK-cell platform with CD16A as proprietary target.

We are expanding the preclinical and clinical activities of our tetravalent and bispecific NK-cell engager platform in solid tumors with our preclinical candidate AFM24 and in hematologic diseases, where we intend to leverage additional opportunities for AFM13 and AFM26, for example, in combination with adoptive NK-cells.

We also develop T-cell engagers and our lead T-cell engager, AFM11, is being investigated in two ongoing ALL and NHL trials. BMV564, a T-cell engager derived from our technology platform, is in clinical development through Amphivena to treat AML.

In addition, as mentioned earlier, moving beyond our standard format, we are developing different tetravalent bispecific antibody formats tailored to specific indications and patient populations.

And as outlined in previous earnings calls, we have more projects ongoing at the discovery stage and preclinically, including molecules developed from our MHD type complex targeting platform. Thank you very much for your interest. The call is now open for questions..

Thank you. [Operator Instructions] Our first question now comes from Maury Raycroft from Jefferies. Please go ahead..

Good morning. Thanks for taking my questions.

So I was wondering if you can mention what the AFM13 dose was that the DLT patient received in the combo trial? And then what you’re going to use in the expansion cohort? And then is this dose higher, lower or in line with your predictions?.

Hi, Maury, this is Adi. What we have done is we have used or given a PD-1 as its active dose and have dosed up AFM13 under the following strategy, under the following regime. We always are initially giving AFM13 three times per week for two weeks. Then, we give AFM13 once weekly for six weeks and, subsequently, we dose AFM13 every three weeks.

The starting dose was 0.15 mg/kg and then switching to 0.5 mg/kg, the next one was 0.5 mg/kg going to 1.5 mg/kg, and the highest dose was 3 mg/kg going then to 7 mg/kg. So the three is always three times per week, and the seven is the weekly or every three weeks. We have seen 1 DLT in the highest dose.

So at three times 3 mg/kg and once 7 mg/kg then have included an additional three patients and have not observed another DLT. So that’s why we decided to go with the highest dose of 3 mg/kg three times per week subsequently given – and then subsequently followed by 7 mg/kg..

Got it, okay.

And you also mentioned earlier about the two PRs generated with the monotherapy treatment? And I think you said there is a stable disease, but I missed some of the additional context, and I was just wondering if you can recap that for me?.

So what we have been doing is some – we have currently only reported on the two responders. And so two out of seven patients, had a partial response and, as compared to the Phase I, the majority or all patients in the Phase II now had to be pre-treated with brentuximab vedotin.

The 2 patients that had a response received brentuximab as some of those recent therapy, and then after a few months were switched over to AFM13. A patient under BV had received – had actually a stable disease and the second one had progressive disease.

So these were largely patients that were not responding to the brentuximab but showed a response to AFM13, a very nice response. We haven’t yet worked up more data but we intend to obviously present more data on these two patients..

Got it.

And can you comment on the durability of the PR’s?.

Not yet. So we are still – so the protocol allows for further treatment and we’ll, as I say, we’ll work with the German Hodgkin Study Group once we have the full data on these patients available..

Got it, okay. And then just wondering for AFM26, if you compared the bite to AFM26 in a model where you target cells that are expressing ultralow BCMA.

I guess, I’m wondering if there is a threshold of low expression where you see superior killing with AFM26 based on the better affinity?.

That’s a good question. And I’m not – yes, it’s a good question. So we haven’t yet explored that further. We know that some of the BCMA’s saw unsteady cloisters at a few hundred receptors, and we were seeing a very nice killing by AFM26.

So this data that we were showing here is not really intended to see if a T-cell engager or an NK-cell engager is very different in potency, because we believe eventually that both can achieve very similar outcomes of producing MRD negativity.

What really is a difference is that there is much less cytokine released, which could have an advantage in the side effect profile. And the second advantage, is how we – our molecule, which is very important in terms of when you look at the treatments of multiple myeloma patients.

So they receive first five, which is a standard chemo probably including in the future daratumumab, but the – and then patients go into a stem cell transplant.

After stem cell there is a longer period of where patients are not treated, and this is where we believe we can demonstrate proof-of-concept with AFM26 in two conditions, probably at the time, though shortly after transplant while active T-cells and NK-cells are the first to repopulate. And we can also do this combination with adoptive NK.

So probably given at the time of transplant. So this is a very unique opportunity and in order to be very potent here, you need to have a very high affinity to NK-cells, and this is why AFM26 T-cell is [indiscernible]..

Got it. Okay, thank you very much..

Thank you. Our next question is from Do Kim from BMO Capital Markets. Please go ahead..

Hi, thanks for taking my questions. First on the AFM Keytruda combo study.

Just based on the safety of the high-dose cohort, since you only saw one DLT, would you consider going to a higher dose?.

A higher dose than where we are? So at the moment we have determined that this is the highest dose that we are continuing, so we’re not exploring any higher doses than what was just described before. Again, infusion-related reactions may not be too uncommon. They have been described for other combinations, also for Keytruda combinations.

They, in our hands, were reasonably well manageable. And again, the effect for grade 1C, why we held the DLT is not because we have a grade 3 or 4, as you see, but the patient couldn’t receive the full dose. So this is why you had to include an additional three patients and here we didn’t see the issues again.

So we always have some grade 1, grade 2 infusion-related reactions, but obviously well manageable by the physicians, so it has not been a concern to go and pursue the dose cohort expansion as the highest dose..

Okay. And for the responses that you’ve seen so far in this combination study.

Do you have any follow-up data? For instance, the first cohort where you saw a couple of responders?.

Yes. So we have – you are correct, we have treated a total now of 12 patients. What we have decided to do is that we will present the entire data set at a conference later this year.

So we have submitted an abstract – or we are submitting an abstract where we want to give the full picture and they also already include some patients from the dose cohort expansion. So currently, you have to bear with us a little while until we can show the efficacy data of the combo..

Okay, thank you. And just a big picture question.

You have a lot of clinical programs going on, how do you think about prioritizing all these assets as you head into bigger trials and potentially have more programs with AFM24 and AFM26 reaching the clinic? Do you think – start thinking about partnering some of these drugs?.

Yes, thanks for this question, and it’s a good question. And it would take a little while until I can give you a full picture on how we prioritize. So it’s – without going into detail, we believe that each of the programs has a significant value, and thereby would warrant to be taken forward.

There is an option that we may eventually partner one of the programs at certain stages. And as of that – to give you any details on that is – would take far too long at the moment.

But we’re carefully looking through the opportunities, and we view AFM13, despite the competition in Hodgkin Lymphoma, attractive still in Hodgkin Lymphoma as we may have a better safety profile as compared to brentuximab.

On the other side, we may think that into CD30-positive lymphoma, as Chris mentioned, in the study that we have opened with Columbia University. So we are expecting to see data from this study also, and thereby demonstrate the usefulness outside of Hodgkin Lymphoma. And AFM11, you’ve heard a practice in my mind T-cell in mantle cell lymphoma.

So we are listening to parties that – to pharma companies that have an interest to develop these drugs with us, but for the time being, I think we have carefully selected all these opportunities. And as I said, we still have tests for – until the end of 2018, so we can continue our work with these programs..

Okay, great. Thanks, Adi..

We take our next question from Michael Schmidt from Leerink. Please go ahead, your line is open..

Hi guys, good morning. Thanks for taking my question.

I had a couple on AFM13, the question there is, if we look forward to the dose expansion cohort, whether you’ve set a bar on efficacy level that would be critical for a go, no go decision in terms of moving forward?.

So you mean what we would expect in the past?.

I guess, I’m asking is there a certain level of activity that you would consider to move this program into Phase II or maybe even Phase III trials.

What is that efficacy bar for you internally?.

Yes. So that’s fine. That’s a very good question. So the answer is that the PD-1’s already have substantial monotherapeutic activity as you may remember. It’s in the mid-60s of tactical response rates and in the low teens in terms of the CR rate.

We’ve always said that the goal is to improve on the CR rate, and if we will be in the 20-plus, I think it’s already considered to be a success. How high we have to come, we are currently discussing with the physicians because our goals are dependent on how other trials have perform. A year in combination of brentuximab plus Opdivo.

So this will set probably a new standard. And then we’ll have to figure out – so we only have some early data from that study, also in practice, it’s just too few patients. And once more patients have been treated there, we can give more precise – or we can develop a more precise view of how high the efficacy has to be.

But coming back to what we think as a success, I think if we can roughly double the CR rate, hopefully in the mid-20s, this is already a success for [indiscernible] NK cell engagers.

Does that answer your question?.

Yes, yes. Thank you. And then a question on AFM26, the BCMA targeted NK cell engager. I’m wondering there has been some discussion around soluble BCMA in multi-myeloma, and whether that might be an antigen sink potentially.

And I was just wondering if that is something that maybe you have encountered in early preclinical studies or considered even by when you designed the binding domain for this molecule?.

Yes. Good question. So we’ve had that issue of a soluble antigen, although we were specially deferred. And here we have followed CD30 levels after infusion of AFM13, and it was very interesting that at dose levels of around 1 mg/kg and higher, we can fully eliminate soluble CD30. And then it wouldn’t repopulate.

So you need to that for certain dose in order to be able to do that. Now NK cell engagers, they simply have the advantage of being dosed higher because they, at least for AFM13, we have been a one manageable safety profile. And we haven’t reached it.

It maybe different for T-cell engagers which usually are dosed very low and there may be such a competitive issue, but we don’t see that at the moment for our NK cell engagers. On top, there is where our platform now comes to a real advantage because we have this ability, in fact.

If you’re buying soluble BCMA, you just have monovalent binding affinity. If you have cell bound BCMA you get the ability impact meaning that you have a 50, 100-fold higher likelihood of finding the cell bound BCMA versus soluble BCMA.

So this is where the tetravalent molecules clearly are advantages over the regular process where you’re process one binding anti-BCMA and one binding on for T-cells..

Okay. Great, thanks for taking my questions..

Our next question now comes from Peter Lawson from SunTrust. Please go ahead your line is open..

Adi, thanks for taking the questions. Just is there any help you can give around guidance on timing around AFM11 data? There is that NHL in the second half or the first half 2018.

Any help around that will be great?.

Yes. Thanks for this question it’s a very good question. And according to our own analysis and our own data that we have generated, we have a very potent drug in development. So we have – we have done our math behind that and based on this, we would not be far off in the dose escalation of seeing first effects.

However, this is for T-cell engagers and another reason that it’s important in terms of timing is obviously recruitment fees and side effects. And even if we accept that our side effect profile currently looks quite reasonable, you never know what is going to happen in your trial.

And then you may have to, instead of using one, three or three patients, you may have to include six patients.

So this – what it may make a little bit hard to really predict, but what I’ve said before in other words, we are achieving dose levels or reaching dose levels where we’re hoping to see already, first time, the efficacy of our drug in the near future. That’s all what we can say for the time being and that’s based on in vitro efficacy of our drug..

Got you. Okay. And then just AFM26, what are the next steps forwards, anything you can say around timing of data, next update, timing of getting it into the clinic, et cetera? That would be great..

Yes. So we haven’t yet specified any times yet on neither 24 or 26 for the reason that we’re currently developing several molecules for each of these candidates in parallel to see what the different features are. So we have initiated – or we have identified a first set of what we call final candidates that we are profiling now in R&D-enabling studies.

So we will give updates on our next earnings call on those details. But if one of these candidates is already good enough, and we can determine this to be the final candidate, and then we can say when we can do the R&D pilot. But it will take a little while before we can give precise timelines here.

But we are on good track because we’re moving this front into R&D-enabling studies..

Thank you, understood. And then just AFM13 plus Keytruda, you said there was going to be an update in the second half.

Is that going to be a data update? Or kind of a timing of when we could see data? Any elaboration around that would be great?.

So what we're intending to do is to present data and not just when you can see data and when you can hear data. So that the impact that we're currently preparing an abstract for medical conferences, and once they are accepted, we can – we will let you know. And that's when we, then, will have the data available.

Our tenure rate goes within that we'll finish all the work around the dose-escalation at least by year-end so that we can then present data on this time point as well. But we intend to give you an update on the program and with more data in one of the next upcoming conferences later this year..

Okay.

So you think we'll see data this year at a conference and not just – it won't spill into next year?.

Correct..

Got it, okay. That’s encouraging..

Yes. So what we are dependent on is the abstracts are accepted. That's the one limitation we have..

Got you. Thanks so much..

We take our next question from Jim Birchenough from Wells Fargo. Please go ahead. Your line is open..

Unidentified Analyst:.

[Yan] (52:20):.

Two of very good question. Thanks a lot. So the reason why brentuximab did not show us the same response is not clear. It could be related to CD30 expression or it could just be related to resistance to the payload. Unfortunately, those data have not – are not available.

So we come to the biopsies and then have a high enough resolution in order to understand the level of the expression of CD30. But what is quite interesting is that, indeed, the CD30 expression is usually detected in thresholds of about 20 – maybe 25,000 receptors and more.

And we have looked into if such a threshold is important for CD30 for AFM13 activity. And we have identified that we can eliminate and kill cells that have a much lower target expression. For CD30 we have gone down to into the low thousands of receptors and for BCMA we have been in the low 100s of receptors.

So you can see that, indeed, that could be an advantage. But at this stage, with the patients we don't know, we are currently analyzing if we can identify certain biomarkers within these patients RE NK-cell, if it's number related or activity related, but for the time being we don't have such data yet available.

And we have to work with the German Hodgkin Study Group in order to better understand why these two patients were responding and the other five did not have a positive response.

But overall, I think this is very encouraging, that we see patients responding to AFM13, that previously failed brentuximab treatment because that's exactly the patient group that we are currently treating with our combination. So this is very important as it helps to validate the T-cell activity of AFM13..

Got it. That's very helpful. Thank you, Adi..

Our next question is comes from Hartaj Singh from Oppenheimer. Please go ahead. Your line is now open..

Hi, good morning. This is Emma on for Hartaj.

So for AFM24 and AFM26 as you go through the high IND-enabling studies, what I guess is specific risk benefit profile that you're looking for in selecting the final clinical candidates from among these development candidates?.

So you have to bear a little bit until we explain on work we are doing here. What you can guess already is that we have developed novel formats. And what we're doing is we're comparing these novel formats to understand the molecule, and then we can take a data driven decision.

We haven't yet said on how our new formats are going to look like and what they compose, but the answer is we need to better understand if you – almost on how they behave both biologically and also from tox side and that's what we are currently doing..

Okay, great. Thank you..

Thank you. Ladies and gentlemen, that will now conclude today's question-and-answer session. I would now like to turn the call back to Adi for any further remarks..

Yes. Thanks a lot. Thanks a lot for all of you who are listening to our earnings call, and I look forward to a follow up with fiscal 2018. For all of you who are interested please contact Caroline, and then we can have a phone call in the next hours or days in order to discuss further details. Thank you very much..