Jack Henneman - Chief Financial Officer Charles Link - Chairman and Chief Executive Officer Nicholas Vahanian - President and Chief Medical Officer.

Stephen Willey - Stifel, Nicolaus Mara Goldstein - Cantor Fitzgerald Peter Lawson - Mizuho Securities Laura Chico - Robert W. Baird & Co.

Good day, ladies and gentlemen, and welcome to the NewLink Genetics First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today's conference call is being recorded.

I would now like to turn the conference over to Jack Henneman, Chief Financial Officer. You may begin..

Good morning and thank you for joining me, Dr. Charles Link, Chairman and Chief Executive Officer and Chief Scientific Officer and Dr. Nicholas Vahanian, President and Chief Medical Officer; for the NewLink Genetics first quarter 2015 earnings conference call.

Earlier this morning, we issued a press release announcing our financial results for the quarter. Certain statements made during this call are forward-looking and actual results may differ materially from those projected in any forward-looking statements.

Additional information concerning factors that could cause actual results to differ is contained in our periodic reports filed with the SEC. The forward-looking statements are made only as of the date hereof and the Company undertakes no obligation to update or revise the forward-looking statements. I will now turn the call over to Dr. Link..

Thanks, Jack. Thank you for joining us today to discuss our first quarter results and progress in our clinical and business development programs.

In our pursuit to bring better treatment options to patients with cancer around the world, we have developed two complementary immuno-oncology platforms, HyperAcute Immunotherapy technology, which features a whole cell vaccine approach to cancer immunotherapy and IDO pathway inhibitors which focus on disrupting the mechanisms of tumors evade immune system.

I will review our corporate accomplishments for the quarter and Dr. Vahanian will provide an update on our proprietary, late-stage clinical trials in the HyperAcute and IDO programs, and I’ll just add that we are looking forward to sharing additional details on the IMPRESS trial and we announced the interim analysis this quarter.

Finally, Jack will provide an operational and financial update. While we remained focused on bringing novel immuno-oncology medicines for patients with cancer, our vaccine expertise has also led us to a promising Ebola vaccine candidate.

During the first quarter, we earned a $20 million development milestone payment from Merck for our investigational Ebola vaccine candidate, which we partnered with them in November of 2014. This vaccine was originally developed by the Public Health Agency of Canada.

It is the only vaccine currently being tested in two of the three large-scale trials in West Africa and the vaccine was also recognized at the 15th Annual World Vaccine Congress on April 8th in Washington DC as the best prophylactic vaccine.

While we are pleased to see the potential of our Ebola vaccine, we remain focused on our immuno-oncology pipeline. With that in mind, we continue preparation for our anticipated commercialization efforts for algenpantucel-L.

We have sustained or accelerated hiring this quarter and NewLink Genetics now employs more than 160 people across Ames Iowa, Austin Texas, and the Boston, Massachusetts area. We expect to continue strategically building our team to support our broad development plans. Now, I will turn the call over to Dr. Vahanian to update you on our clinical program.

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Thanks, Chuck. We continue to believe that our HyperAcute cancer immunotherapy program has the potential to improve treatment options across multiple cancer indications.

Our most advanced program, algenpantucel-L, also known as HyperAcute pancreas currently is being studied in two Phase 3 trials, IMPRESS or patients with non-RESectable pancreatic cancer and PILLAR, or patients with locally advanced pancreatic cancer. We continue to expect to report the second interim analysis of IMPRESS in this quarter.

Possible outcomes include the continuation of the study as design, to the pre-planned endpoint, or stop the trial early for efficacy and move towards a BLA filing with the FDA. Beyond this, we are not going to comment any further on the upcoming interim analysis until we release the results.

Our expectations for the PILLAR trial, which examines algenpantucel-L in patients with locally advanced pancreatic cancer remain unchanged.

We anticipate that the trial will be fully enrolled during the second half of 2015 and we will provide an update on the timing for preliminary results as we the additional insight into the – and the completion of enrollment. We are working to expand our manufacturing capabilities.

We will provide additional details around our manufacturing progress and commercial supply for algenpantucel-L as we move closer to the potential launch. Our HyperAcute candidate or non-small cell lung cancer, Tergenpumatucel-L is being tested in a randomized Phase 2b study in patients with advanced lung cancer.

We expect to provide a more detailed update about this program in the second half of 2015. We continue to believe Tergenpumatucel-L may play an important part in the treatment of patients with lung cancer including in combination with checkpoint inhibitors.

On the IDO/TDO front, we have successfully launched both our small molecule research and clinical development teams with Genentech and are excited about the program’s progress with this partnership. It is anticipated that the lead molecule GDC-0919 combined with PD-L1 and Anti-OX40 antibodies.

Further program updates will be at the discussion of Genentech. On today’s call and in future communications, we will focus on our updates and our continuous studies of Indoximod that are not included in the agreement with Genentech.

In particular, there are four ongoing Indoximod studies which we expect to complete enrollment within the next 12 to 15 months First, is NLG2101, our global randomized Phase 3 trial testing Indoximod in combination with docetaxel or paclitaxel in patients with metastatic breast cancer with full enrollment expected by the end of 2015.

Two, next is NLG2102, a Phase 1b2 trial testing Indoximod in combination with temozolomide in patients with progressive or refractory glioblastoma. We expect to report results from the Phase 1b portion at the American Society of Clinical Oncology Meeting on Monday the June 1.

Then, there is NLG2103, a Phase 1b2 trial testing Indoximod in combination with ipilimumab in patients with advanced melanoma. We expect to report Phase 1b top-line results by the end of 2015. And finally, we have NLG2104 a Phase 1b2 trial testing Indoximod in combination with gemcitabine plus vaccine in patients with metastatic pancreas cancer.

Phase 1b top-line results are expected in 2016. Now, I will turn the call over to Jack for a brief discussion of our results and financial expectations for the coming year.

Jack?.

Thank you, Nick. Before we move to the Q&A, I want to provide a quick overview of key financials this quarter. We finished the quarter with $214.4 million in cash and equivalents, compared to $202.8 million at the end of 2014.

The increase was attributable primarily to the net proceeds received from the milestone payment from Merck, sales under the company’s at the market facility which was completed in the quarter and amounts received under government contracts.

Research and development expenses in the first quarter of 2015 were $18 million compared to $6.4 million during the comparable period in 2014. The increase is primarily due to increases in clinical trial and manufacturing expenses.

General and administrative expenses in the first quarter of 2015 were $8.4 million compared to $3.3 million during the comparable period in 2014. The increase was primarily due to an increase in share-based compensation expense, as well as increases in consulting and legal fees, and medical affairs and pre-commercial activities.

NewLink Genetics reported net income of $11.2 million or $0.35 per diluted share for the first quarter of 2015, compared to a net loss of $9.2 million or $0.33 per diluted share for the comparable period in 2014.

NewLink Genetics received approximately $13.5 million in net proceeds from sales under its At The Market offering during the three months ended March 31, 2015 and ended the quarter with 28.5 million shares outstanding. We are currently expecting to end the year with approximately $160 million in cash and cash equivalents.

This guidance also recognizes that an early halt in the IMPRESS trial for effectiveness would require the need to accelerate organizational development and spending levels. Of course, we will provide updated guidance should the results of the IMPRESS interim analysis change our forecast materially.

Before we open the call for questions, friendly reminder, we expect to announce the interim analysis of IMPRESS this quarter and we are not going to comment further on interim analysis timing or its method of analysis. With that, I’ll turn it over to the operator for questions..

[Operator Instructions] Our first question comes from Stephen Willey of Stifel. Your line is now open. .

Yes, hi guys. Good morning. .

Good morning, Steve..

Hey, how are you? And then – and so I understand the sensitivity around the interim, so I am going to try to – try it lightly, but I am just wondering if you can characterize, maybe just kind of the ongoing discussions that are going on with FDA without getting into any kind of specifics, maybe just their receptivity around some of these different methodologies that may or may not be used and I guess also, whether or not you would choose to move forward without kind of any formal and then towards spa?.

Well, Steve, we appreciate the question. I think that, what we intend to do is to report out the interim analysis this quarter and when we do that, we report it what statistical methodology was employed. And we are just been mature of leave it at that, we prefer not to comment on any discussions with the FDA’s.

And those are very calm and sort of private waters where we think it’s best not to make any comments or try to interpret how the regulatory agency makes its decision. .

Okay, that’s fair.

And then, just on the upcoming IDO data at ASCO, just kind of wondering the extent of the data that may or may not be included within the abstracts that are released on Wednesday and is this going to be a final read from the study or there going to be kind of a continued follow that that we are going to have stand up with them?.

This is the phase 1 portion of the study. We will have additional data between the abstract and on the poster. And we’ll discuss that during the poster section but the study is continuing for the Phase 2 portion of the study..

Okay, I’ll hop back to the queue. Thanks guys. .

Thank you..

Thank you. Our next question comes from the line of Mara Goldstein of Cantor Fitzgerald. Your line is now open. .

Thank you very much for taking the question.

I was hoping to get just a little bit more color on PILLAR and specifically around how that study is being conducted and are there also interim analysis that can to what, we are seeing in IMPRESS?.

Good morning, Mara. Nice to hear you..

Thanks Chuck. Thank you. .

The PILLAR study is an open-label two arm randomized trial enrolls 280 patients, is that right Nick?.

Yes. .

And the primary endpoint of the study is overall survival. As we get closer to completing enrollment, we’ll be doing an update in making some projections about when the first data will occur and what methodologies are being employed there. But the enrollment process is going really well.

That study occurred because of the enthusiasm with the investigators that are working on the post-resection trial and they actually came to us and ask us to open that trial. So we’ve been very pleased at the response, very thankful that we always are to both the patients and physicians who have been participating and make that trial goes so smoothly.

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And in that trial, the intervention, is it physician choice to use FOLFIRINOX versus Gem-plus-abraxane?.

I’ll let Nick take that question Mara..

The answer is, that’s correct, Mara. It’s physician’s choice, physician and the patient’s choice either go with the FOLFIRINOX regimen or Gem-abraxane combination. .

Okay, and all patients will get radiation?.

Yes..

Okay, thank you..

No, that is depending on the how intense the disease is with the patients. .

Okay. .

And Mara, in that trial, while if somebody gets downsize because they have good response to initial therapy, then they would be potentially also candidates for such a resection and as they fall into that category. .

Okay. All right, I will hop back in the queue. Thank you..

Thanks Mara..

Thank you. Our next question comes from the line of Peter Lawson of Mizuho Securities. Your line is now open. .

Good morning Peter. .

Good morning. Again, I’ll try lightly around the IMPRESS interim analysis question.

Have you kind of settled on a statistical method or is that still up in the air?.

So, as we responded to Steve’s question earlier, Peter, we appreciate the question, however at this point, we are not providing any further updates on the interim analysis or what method we chose.

As Chuck mentioned, as we announce the results, yet this quarter, we will give further details about the results as well as the statistical method that was chosen. .

Peter, just to give a little bit of color, I mean, we continue to be encouraged about what’s happening in the trial and confident that the size and power of the trial will be adequate to determine and what we hope to be a successful result in the analysis.

The encouraging things that we hear from clinicians that fall into two categories, one, is a stand that, you have to remember each clinician at the various clinical site is following a smaller number of total patients, but none of them can know.

So we don’t know and no one else knows at the moment what the results of the IMPRESS trial’s interim or final note this will be issued as being required.

But, the arm physicians believe it’s an issue of pure patients recurring, some physicians believe that patients recur seem to be responding better to follow-on therapy and it’s been seen historically this information is anecdotal but encouraging.

When you look at the trends in the overall median in the trial, which have been very encouraging for quite sometime though it seem to have stayed consistent and based on that information, we are making very large strategic investments in expanding our manufacturing capabilities for vaccines and in developing and laying our initial commercial teams and all the work which is as you know very – a lot to do all the way from reimbursement to logistics, to supply chain, to strategies for commercialization and marketing.

So we are doing a tremendous amount of work in this area because of our sense of confidence about what’s happening in the trial. .

Is there any way you can highlight why you’ve added the headcount in commercial operations?.

Yes, do have the sense Jack?.

Sure, so, I’ll just make a very – since I’ll draw an arbitrary line.

Since I joined the company on October 1, we have gone from about 120 total heads to about 160 of that growth, call it a dozen are in our Boston facility supporting the Ebola work and so, that leaves 25-ish which are probably evenly split between manufacturing, supply chain on the one hand, most of which is in Iowa.

And, commercial operations, market access, marketing, medical spares that kind of stuff, most of which is based in Austin Texas. .

Got you. Thanks much. I’ll jump back into the queue. .

Thank you, Peter. .

Thank you, Peter..

Thank you. Our next question comes from the line of Chris Raymond of Robert Baird. Your line is now open. .

Good morning guys. This is Laura Chico in for Chris Raymond today. Just following up on the last question if I might. Chuck you also made a comment in the opening remarks about sustained hiring in this quarter and Jack, the color on those numbers is very helpful in terms of the growth on total headcount.

As I look at G&A though, I think, on a sequential basis, it was essentially flat.

So, I just want to make sure I am clear, has there been an acceleration in the hiring and if so, could you possibly breakout kind of what portion of the spend has been on the pre-commercial activities versus kind of administrative expenses?.

Well, I think, as you know, we are a development-stage company. I’d say, administrative specs – if you sort of step away from a formal accounting classification, our administrative expenses are very low. The whole finance department is six people. The whole IT department is five or six people.

So, in that sense, administrative stuff has not been a huge component of the cost. The great majority of the expense growth has been attributable to essentially three categories. One is, the work we are doing, developing our manufacturing capability and supply chain.

The second is, a significant overall increase in R&D expense which consists of a couple components, increased clinical trials and when you’ll see in the consolidated numbers, there is also a bunch of expense which is offset by grant income for the production of Ebola vaccine. So, that rolls through the R&D line.

And then, the third component is the headcount I just discussed around market access, marketing programs, that are obviously permitted for that.

Moving forward, we have a series of senior heads that we are going to add over the next few months and we will talk more about that in the future as we are able to announce some strong people coming on and I’ll give you some for instance is, in some areas like, quality systems, RA and alike. .

Okay, that’s helpful.

So, and I don’t want – I know, you’ve kind of given guidance and it kind of depends a little on the IMPRESS trial in terms of the forward trajectory on the SG&A front, how should we be thinking about that?.

We’ll say more about that when we have a sense of our timeline and the sense of the timeline will be very much driven by the results of the interim analysis. .

Okay, thanks very much guys. .

Please give our best to Raymond. .

Thank you. Our next question comes from the line of [Indiscernible] of Jefferies. Your line is now open. .

Hi, this is [Indiscernible] speaking in Biren Amin today. Thanks for taking my question.

Just a follow-up on the NLG-2102 trial in GBM at ASCO, can you tell us a little bit more like how many patients that are in the trial and will get to see response rates and duration of responses?.

Hi, thanks for the question. I think we are going to save that to the poster section details of it. We are very excited about the Indoximod’s potential. As you know, we are pursuing that in these indication including GBM. And we are now in the Phase 2 portion of that study which enrollment has gone very well.

We are very excited about that study and more details will be given at the ASCO poster discussions. .

Okay, got it.

And also my second question is on just given Roche’s deal on with Curadev Pharma, can you talk about how this affects your collaboration with them?.

Well, I don’t think that it affects our collaboration at all. The Genentech group runs a lot of their work in dependent of Roche, and so the – every indication that we have in our collaboration with Genentech is at its full speed ahead on all fronts. So, the formation of our chemistry small molecule committee which is up and running.

That collaboration is going very well. Our scientists that been in Genentech there is Genentech’s scientists has been at NewLink the clinical development committee has meet and laid out a strong game plan.

What’s been said publicly is the intention to combine GDC-0919 with the IDO inhibitor that we licensing to Genentech with both the anti-PD-L1 antibodies and the Anti-OX40 antibody programs, where we are super excited about those combinations on those potential. There will be more to follow on that.

Genentech wants to only dispose it that when it materializes to incur, one thing that’s important to understand I think about the collaboration with Genentech is that, the licensing deal has over $1 billion well over $1 billion of milestones and it’s important to understand that this is not a back-ended deal.

This is a deal that has a lot of substantial, potential successes for NewLink in the collaboration that come much earlier than some of the deals that you see that could be very material to NewLink to help finance the company. So we are excited about the structure of that deal the potential for it.

And thus far, Roche with Genentech is going gangbusters and we are very pleased. .

Okay, great. Thanks for taking the question. .

Thank you. And our next question comes from the line of Stephen Willey of Stifel. Your line is now open. .

Yes, thanks for taking the follow-up. Just three more on the interim if you don’t mind, just joking.

If you could just, so I understand that the second interim has been triggered in terms of rate, but just wondering if you guys would be comfortable kind of just characterizing the run rate of events that you’ve seen post the triggering of the second interim and just whether or not that appears to be kind of consistent with the run rate kind of between the first and the second interims.

Thanks. .

We really haven’t provided any color on that, Steve. So, I think, what I can tell you is that, when we look at the projected blended median of both arms of the study, it’s been consistent over a period of time now in the higher 20 so months as we discussed multiple times over the past year. But that trend has basically been consistent.

Obviously, we don’t know if that’s the control arm or the treatment arm, that results in net effect. .

Again, Steve, I appreciate the question, but I think, going through the second interim analysis, whatever the results maybe, hopefully positive. So we don’t have to think about it, predicting the final events.

But either case, I think, after the second interim analysis, it will be more appropriate to give all the direction about the run rate and potential prediction for the final if necessary. .

Understood. Best of luck. .

Thank you, Steve. .

Thank you. .

Thank you. And our next question comes from the line of Mara Goldstein of Cantor Fitzgerald. Your line is now open..

Well, thanks. I just, I actually had a question on the Tergenpumatucel study.

If I recall correctly, there is an adult patient in that study and based around biomarker and I am wondering if you can discuss at the next data point what we should be seeing out of that trial?.

As you know, thanks for the question Mara. As you know, there is a lot going on in the lung cancer with the recent positive results on PZ1 with small cell groups. So we are continuously observing that trial and we will provide more guidance in the second half of this year with our exact strategy with that trial and putting their results. .

Okay. Thank you..

Thank you. .

Thank you. And I am showing no further questions. At this time, I’d like to hand the call back over to Charles Link, Chairman and CEO for any further remarks. .

Well, we appreciate everyone during the call this morning. We are thankful that we are making good progress, obviously thanking – thankful to all the patients and physicians who have helped us along the way. And we look forward to updating you on our additional achievements in the coming months. .

Ladies and gentlemen, thank you for participating in today's conference. That does conclude today’s program, You may all disconnect. Have a great day everyone..