Jack Henneman - CFO Charles Link - Chairman, CEO & CSO Nicholas Vahanian - President & CMO.

Stephen Willey - Stifel Mara Goldstein - Cantor Fitzgerald Eric Criscuolo - Mizuho Securities.

Good day, ladies and gentlemen, and welcome to the NewLink Genetics Corporation Third Quarter Financial 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, this call is being recorded.

I would now like to introduce your host for today's conference Mr. Jack Henneman, Chief Financial Officer of NewLink Genetics. Please go ahead..

Good morning and thank you for joining Dr. Charles Link, Chairman, Chief Executive Officer, Chief Scientific Officer; Dr. Nicholas Vahanian, President and Chief Medical Officer; and me; for the NewLink Genetics third quarter 2015 financial conference call. Earlier this morning, we issued a press release announcing our results for the quarter.

Certain statements made during this call are forward-looking and actual results might 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.

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..

Thank you, Jack. Thank you to each of you for joining us on the call to discuss our third quarter results and progress in our immuno-oncology business.

In our pursuit of bringing better treatment options to patients with cancer we have developed two complementary immuno-oncology platforms; HyperAcute Immunotherapy technology, which features a whole cell immune activation approach to cancer, and checkpoint inhibition through our targeting the IDO pathway, which disrupts the mechanisms by which tumors evade the immune system.

Our vision in the emerging consensus in the immuno-oncology world is that combination therapy will become the new standard of care. We are well positioned to execute on that vision by combining cellular immunotherapy and checkpoint inhibitors, whether our own or those of our strategic partners.

Our industry-leading pipeline addresses multiple cancer types including pancreatic, non-small cell lung, prostrate, renal, breast and brain cancer as well as melanoma, with seven product candidates in clinical development from Phase 1 to Phase 3.

Our goal is to develop these therapies to the point where they can be launched independently or in combination with other therapies. Our leading cellular immunotherapy candidate algenpantucel-L for patients with resected pancreatic cancer is nearing completion in the Phase 3 clinical trial known as IMPRESS.

We expect to learn the results of this large scale trial in 2016. Our leading checkpoint inhibitor program, including GDC-0919 which we are partnered with Genentech and indoximod have also made great progress this year. We expect continuous data from both programs over the next few quarters. We are well-financed to achieve our objectives.

With more than $200 million in cash and equivalents as of the end of September. We're using those resources to expand a top flight team with a proven history of commercial success to prepare to launch our first potential products. These are exciting times for NewLink Genetics.

And now Nic will give you an update on recent accomplishments and expected events in the fourth quarter.

Nic?.

Thank you, Chuck. We continue to make progress in advancing our product candidates in both our HyperAcute cellular immunotherapy program and our IDO checkpoint inhibitor program. I will first address my comments on the platforms for which we have new data. As Chuck mentioned.

we are very pleased with the progress of our collaboration with Genentech on GDC-0919 and the development of our IDO/TDO product pipeline. Genentech's commitment to the collaboration in terms of people, priority and funding is everything we had hoped it would be.

Scientifically we are particularly excited key data being presented by Genentech in a post to Society for Immunotherapy of Cancer Annual Meeting in Maryland on November the 6th.

The title of the poster is improved anti-tumor immunity and efficacy prompt combination of the IDO inhibitor GDC-0919 with anti-PD-L1 blockade versus anti-PD-L1 alone in preclinical studies. We have long believed that optimal trends for immunotherapy may require the blockade of more than one checkpoint and this early data validates that hypothesis.

The poster number is 317 and it will be presented at 12:45 PM to 2 PM Eastern in Prince George's Exhibition Hall A at the Gaylord National Resort & Convention Center in National Harbor, Maryland. Genentech-NewLink clinical development team has advanced GDC-0919 into a combination study with atezolizumab that is actively enrolling patients.

We hope that we will be able to say more in the not too near term. But as you know Genentech is in charge of the communications around GDC-0919. As we discussed previously the Genentech agreement includes over $1 billion of potential milestones, some of which are reasonably early in the development plan for GDC-0919.

We will report any financial and the nature of the milestones should they occur. In addition the collaboration is planning combination studies of GDC-0919 with OX-40 agonists. In September favorable data on two of our product candidates was presented at the European Cancer Congress in Vienna.

Genentech reported data on the Phase 1a study on the safety, pharmacokinetics and pharmacodynamics of GDC-0919 in 19 patients with recurrent or advanced solid tumors. The data showed a favorable safety profile, disease stabilization and preliminary evidence of peripheral pharmacodynamic modulation.

GDC-0919 was well tolerated and of the patients who were available to be evaluated for response seven out of 17 achieved stable disease. Additionally the reported data from our Phase 1b study of indoximod in combination with ipilimumab, for the treatment of patients with metastatic melanoma.

The combination was well-tolerated and encouraging clinical responses were observed. Indoximod was also subject to an exciting publication.

In the October 13 issue of the journal Cell Reports, a team of leading immuno-oncologists, Allison, Munn, Wolchok, et al, reported a indoximod versus reversed tumor-associated immunosuppression in pre-clinical melanoma models and that there is a strong rationale for therapeutic targeting of IDO as one of the central regulators of immune suppression.

We are on target to achieve full enrollment in two clinical trials during the fourth quarter.

The PILLAR Phase 3 trial of algenpantucel-L in locally advanced, unresectable and locally advanced unresectable pancreatic cancer and NLG2101, a global randomized Phase 2 trial testing indoximod in combination with docetaxel or paclitaxel in patients with metastatic breast cancer.

We will present and post over preliminary data from this study at the San Antonio Breast Cancer Symposium on December 10th. We will also give a study update on a Phase 1b study of indoximod in combination with temozolomide in temozolomide-refractory glioblastoma patients at the Society of Neuro-Oncology Meeting on November 20th.

We are of course eagerly awaiting the final results of IMPRESS and we continue to expect to report results in 2016. As we reviewed in detail this past July we have good reason to plan for success and are advancing our investment in both manufacturing and pre-commercial activities to prepare for the ultimate commercialization of algenpantucel-L.

Furthermore we expect to discuss the endpoints in planning for the PILLAR data in the first half of 2016. Now I will turn the call over to Jack for a brief discussion of our financial results. Jack? Jack Henneman Thank you, Nic. Before we move to the Q&A, I want to provide a quick overview of key financial metrics this quarter.

We finished the quarter with $200.4 million in cash and equivalents compared to $202.8 million at the end of 2014. Research and development expenses in the third quarter of 2015 were $22.5 million compared to $10.9 million during the comparable period in 2014.

The increase is primarily due to increases of clinical trial expenses related to NewLink's broad line -- broad pipeline of product candidates as well as expenses for manufacturing and research related to the Ebola vaccine candidate. Most of the Ebola related expenses are subject to reimbursement under government contracts.

NewLink Genetics reported a net loss of $15.9 million or $0.55 per diluted share for the third quarter of 2015 compared to a net loss of $5.6 million or $0.20 per diluted share for the comparable period in 2014. We are currently expecting to end the year with more than $160 million in cash and equivalents.

While we will continue to make significant investments during the remainder of 2015 and 2016, as we prepare to advance algenpantucel-L and our six other pipeline products, we are focused on maintaining a strong balance sheet to support our activities. Now I will turn the call over to the operator for questions..

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

Good day, guys. Thanks for taking the question. So with respect to IMPRESS I know that you are -- I guess now -- I guess it hasn’t changed in terms of '16 being the dissemination.

But I am just kind of wondering, of there is any opportunity to maybe characterize I guess the pace of events that maybe occurring since the second interim analysis and I guess how that may compare relative to the event rate that was observed in between the first and second and I guess prior to first?.

Yes. That's a very good question, Steve and I think that's why we have kept the guidance that we expect to report the results in 2016 as opposed to narrowing it. There has been a reduction in the rate of debt over time in the trial and that has made it difficult to narrow the expected timeframe of the final IMPRESS analysis.

So over time the -- as I think we have disclosed may times before we see updated reports of the total debt in the blind data set on a monthly basis and the decline in that rate has made it difficult to predict with much certainty of when in fact those results will read out. But we do continue to believe that the results will read out in 2016..

Okay. I know that there is also a couple of indoximod related catalysts between now and the end of the year that Nic mentioned I think the GBM study, I guess which is going to be later this month and then the San Antonio presentation.

So just kind of wondering, I guess how much incremental patient data we might be getting from each of those kind of de-abstracts that will come out, but if maybe you can provide just a little bit of kind of high level characterization with respect to what we might see?.

Hi, Steve its Nic. Those will be study updates on refractory with glioblastoma and the San Antonio meeting for the 2101 for the breast cancer study. Again we want to stay within the rules and regulations of the meetings and prior abstract releases. But they will be study updates..

Okay. Then maybe just lastly, I know that the Ebola contract was just extended or at least re-upped and just kind of wondering, as to what the next steps are now with respect to just of -- and Merck. I understand that there has been data that's generated.

Do you have any clarity on Merck's and with respect to what the regulatory path looks like at this point going forward?.

So there has been a tremendous amount of work in the collaboration that NewLink has with Merck on the development and manufacture and expansion of clinical trials using the Ebola vaccine candidate.

We are very excited about the initial clinical data that came out of the study in [Guinea] but that data is really part of a much larger data package that includes a series of different trials that are being funded through BARDA, through the Defense Threat Reduction Agency of the Department of Defense and with our collaborators in Canada, in Europe.

These additional data sets include expanding the total population eligible to receive the vaccine, beyond just help the adults to patients with -- people with chronic illnesses, the younger people and it’s part of a complete regulatory strategy and package is being assembled by the few teams working together very diligently with all of our international and national collaborators.

We feel very good that there has been solid progress and that the type of data that's being generated will be what's necessary to file to registered departments at some point in the future. I can't make really a prediction about when that would occur.

There is a series of ongoing dialogs that's been underway with regulatory agencies, they have really been very productive discussions and I can't say enough about how well this collaboration has been going with our partners at Merck.

It's been a terrific experience working with Roger Perlmutter and the gang over there and we think that this is really a vaccine that it's going after a great unmet need. That's just about what I can say. Obviously there is very large set of contracts that we have disclosed. They are flowing -- the funds are flowing into project.

This cost [new in] trail of money out of pocket to continue this development of the Ebola vaccine and we are excited about it..

Okay. I appreciate the color guys. Thanks..

[Operator Instructions] Our next question comes from the line of Mara Goldstein with Cantor Fitzgerald. Your line is now open..

Thanks very much for taking the question. I have two questions.

On the first related to the program with Roche and I am wondering if you can speak to at all, in order words things on biomarkers and those combination studies with indoximod -- GDC-0919 as I know that Roche has a fairly large effort in the area of biomarkers and immuno-oncology?.

That's a very good question. We are looking at the final as to partner GDC-0919 and our IDO/TDO pipeline, companies that have large, robust biomarker programs were actually a very important criteria that was included in that analysis and the two or three finalists in that process all had such programs.

You are right that Roche Genentech has very expanded programs and is very actively [indiscernible] patients in order to advance checkpoint blockade inhibitors to the clinic. I think that it's very logical to think that such approached might lead some of the trials to IDO inhibition.

None of the details of any of that have been disclosed and that would totally be up to Genentech and Roche to decide what and when they want to disclose those details. That's part of a formal partner contract. But obviously that's mindful that will be the case..

Okay. If I could just ask a question. You have significant cash resources but as you look out in the planning and making the working towards commercialization of products of the HyperAcute.

I am curious as to, from a strategic perspective how you think about funding the launch from existing cash versus new sources of cash?.

So as you know we tend to be very cost effective compared to many of our biotech brethrens in terms of how we manage our cash and funding resources.

As you also know since we just mentioned it, began on this conference call, the agreement with Genentech includes over $1 billion of potential milestone some of which are reasonably early in the development plan for GDC-0919.

So it may well be as we look at our sources of funding that we will make decisions on a case by case basis or depending on what we have to get accomplished as to when and how we will time our fund rates.

We haven't made any other disclosures about those plans but our intention as we stated for quite some time now is to commercialize algenpantucel-L in the United States ourselves. So our intention is to form a rollout plan.

We have made a lot of progress on that front specifically in expanding viability to increase the size and scope of commercial manufacturing which we are very pleased about and we think we are lying ourselves up for success on supply.

We put in a lot of key team members that are going to be working on issues to related to reimbursement and development of the product and in the full range of different activities required for commercialization and there is a tremendous amount of focus, density on that -- those plans and strategies and building currently going on at NewLink..

Thank you folks. I will hop back in the queue..

Our next question comes from the line of Eric Criscuolo with Mizuho Securities. Your line is now open..

Good morning and thanks for taking the questions.

For the -- so the Roche related milestones, is there any potential to see anything come through by the end of this year?.

So we aren't making any disclosures. We are making no projections about when the next millstones will happen and we are going to sort of stick with our language that we have developed and some of which are reasonably near -- reasonably early in development plans for GDC-0919.

Because the way the agreement works that we can't disclose what those milestones are, we have only been given permission to disclose that those are milestones that are earlier in the development of GDC-0919 than is typical for some of these type of larger milestone based agreements.

I do think that the program is going very strongly both in terms of enrolment, in terms of plans and other protocol development. And so we are really thrilled to say the least about how well the partnership with Genentech has been proceeding..

Would you be free to say if those early milestones are like say simulated or timing related as far as initiation of trials or anything like that?.

Unfortunately as much as I would like to discuss about them, we really are restricted not to say anything that are indicative. Once the milestones achieve we will both report the financial impact of the milestone and then we will discuss publicly what the milestone is and has been achieved.

But we think that there is strong upside here in the collaboration with Genentech because of the way the deal is structured and we will be acquired to report when we are able to but unfortunately I can’t say anything about it more specifically right now..

I got you. I will stop going that line of questioning then.

On the IMPRESS trial is there any built-in or any way to look at efficacy results by antibody response like you previously disclosed for the Phase 2 trials?.

Nic, why don’t you take that question..

Sure. We are part of this study and we are collecting patient samples and we will continue to analyze those results.

But is your question regarding to clinical protocol or the SPA?.

I guess it’s more along the protocol..

Yes. In the protocol the primary endpoint of this study is obviously survival, but the secondary and tertiary endpoints will have PSS and additional immunological data as characterization of data and we will continue to do that..

Great. Thank you very much..

I just wanted to add a note on that question, Eric. The protocol was conducted obviously under SPA with the FDA. The proportional log rank analysis will be conducted. However, as we have previously stated at the final announcement other statistical methods maybe employed as well..

Thank you. I am showing no further questions at this time. I would like to turn the conference back over to Dr. Charles Link, CEO for any closing comments..

Thank you everyone for joining us on this call this morning. We are making good progress across the business and we look forward to updating you on our additional achievements over the coming months. In the meantime we hope to see you at one of the several upcoming conferences.

Nic and Jack will be at the Citi One-on-One Conference this Thursday and we will all beat Stifel on November 17th, Jefferies Healthcare Conference in London on November 19th and the Piper Jaffray Healthcare Conference on December 1st. Thank you very much..

Thank you..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone have a great day..