Jack Henneman - CFO Charles Link - Chairman, CEO Chief Scientific Officer Nicholas Vahanian - President and Chief Medical Officer.

Stephen Willey - Stifel Nicolaus Mara Goldstein - Cantor Fitzgerald Peter Lawson - SunTrust Robinson Humphrey.

Good day, ladies and gentlemen. And welcome to the NewLink Genetics Fourth Quarter 2016 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. As a reminder, this conference call is being recorded.

I would now turn the call over to Mr. Jack Henneman, Chief Financial Officer..

Good morning, and thank you for joining me, Dr. Charles Link, Chairman, Chief Executive Officer and Chief Scientific Officer and Dr. Nicholas Vahanian, President and Chief Medical Officer for the NewLink Genetics’ fourth quarter and year-end 2016 financial conference call.

Earlier this morning, we issued a press release announcing our financial and operational results. Dr. Link will review our clinic and scientific priorities for 2017, Dr. Vahanian will highlight our clinical progress and our IDO programs, and I will wrap up with the fourth quarter and year-end 2016 financial results.

Certain statements made during this call are forward-looking statements under U.S. Federal Securities Laws. These statements are subject to risk and uncertainties that could cause actual results to differ materially from historical experience or present expectations.

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 made during this call speak only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements.

Information presented on this call as contained in the earnings release we issued this morning and in our Form-8K dated February 28, 2017, which maybe access from the Investor's pages of the Company's Web site. I will now turn the call over to Chuck..

Thank you, Jack. Thank you for joining us today. 2017 is an important year for NewLink Genetics. As many of you heard at our Investor Day this past October and in presentations, in 2017, we’re shaping up as a big year for the clinical validation of the IDO pathway as an immuno-oncology target with data coming from NewLink Genetics and others.

IDO is central to immune escape and interrelated with other IO target, such as PD1 and PDL1. IDO pathway inhibitors are most likely to be used in combination with other agents. We expect and are excited to publish data on our IDO pathway inhibitor programs in 2017.

NewLink Genetics has two separate and distinct IDO pathway inhibitors in current clinical development. GDC-0919 is our direct enzyme inhibitor of IDO that we have partnered in a large ongoing collaboration with Genentech/Roche which was launched in late 2014. Indoximod is our proprietary IDO pathway inhibitor.

Evolving data suggest that indoximod’s primary method of action is to inhibit the IDO pathway by providing a tryptase efficiency signal to T-cell. Thus, although both GDC-0919 and indoximod inhibits the IDO pathway, they appear to have quite distinct mechanism of actions, and therefore, represent two different opportunities for NewLink.

Additionally, our basic research collaboration with Genentech has also made solid progress over the past two years. Our joint research agreement that involves novel chemistry has made progress on the discovery side, although, we are not able to comment further at this time.

Indoximod, is an multiple Phase 2 trials in patients with various cancer types, including melanoma, prostate cancer, AML and pancreatic cancer. The GDC-0919 Phase 1b study includes expansion cohorts in combination with the atezolizumab, and currently has a target enrollment of 305 patients.

This combination is being studied in multiple solid tumor types, including non-small cell lung, renal, triple negative breast and bladder cancer.

In 2017, we have clear business priorities for our GDC-0919 partnership with Genentech/Roche, as mentioned earlier we anticipate continued progress in the clinic of this program and look forward to sharing more information in 2017.

For indoximod, we have two goals in 2017; the first goal is to provide more clinical validation from our ongoing trials; the second goal is our reformulation program to both optimize the commercial opportunity and the lifecycle potential of indoximod.

We believe the combination of clinical validation and evidence of improvement based upon the novel formulation may provide the basis for considering large-scale randomized trials of indoximod.

We believe these data, which we hope to obtain and present in 2017, may demonstrate that indoximod represents a separate and distinct opportunity that stands alone from our GDC-0919 program. Dr. Vahanian will provide more detail in a minute.

But with summary, we are pleased to announce that we have submitted two abstracts for indoximod to the AACR Annual Meeting being held in Washington DC, the first weekend of April.

The first abstract contained updated data from our ongoing study of patients with advanced melanoma and the second abstract is on our pre-clinical program of NLG802, our prodrug of indoximod. NewLink Genetics remained focused on advancing immuno-oncology therapies in order to improve the lives of patients with cancer.

In summary, our IDO pathway inhibitors disrupt the mechanism by which tumors evade immune system, and we are in the clinic across multiple cancer types.

Our vision and the consensus in the immuno-oncology world is that immune-based combination therapies will eventually be the standard of care in treating patients suffering from a wide range of cancers. Now, I turn the call over to Dr. Vahanian to update you on our clinical programs..

Thank you, Chuck. I will spend most of my time reviewing 2017, because as Chuck explained, we have an exciting path forward as we focus on our two IDO pathway inhibitors, including data maturity and formulation improvements.

As we said in October, our expectation was that we’ll provide more detail on the timing of data for indoximod as 2017 will go on, and we are now ready to do so. We have submitted an abstract to the AACR on a cohort from our Phase 2 combination study of indoximod plus under atezolizumab for patients with advanced melanoma.

This interim analysis will include substantially more patients than previously presented. The status of the abstract will be released tomorrow on March 1st at 3:30 PM Central Time, when the titles of the abstracts are released.

We also expect to complete enrollment in the Phase 1b, dose-escalation study of indoximod and standard of care for patients with newly diagnosed amount in the first half of 2017. We anticipate updates on this program will occur in the second half of 2017.

We expect to present additional data from our trial of indoximod in combination with gemcitabine/nab-paclitaxel for patients with metastatic pancreatic cancer in the second half of the year.

Finally, we anticipate an update from the Genentech/Roche on preliminary results of a dose escalation Phase 1b study of GDC-0919 and atezolizumab for patients with solid tumors.

To sum up, in 2017, we are excited to be presenting clinical data for indoximod at upcoming scientific meetings, beginning at AACR next month and look forward to continue progress. Now, I would like to turn the call back over to Jack..

Thank you, Nick. Before we move to the Q&A, I want to provide a quick overview of key financials for 2016 and guidance for 2017. We continue to remain well capitalized with a strong balance sheet. We finished 2016 with a $131.5 million in cash and equivalents compared to $197.8 million at the end of 2015.

Research and development expenses in 2016 were $93 million compared to $71 million in 2015. The increase is primarily due to $11.1 million in the restructuring charges incurred and completed during 2016, which included $4 million impairment charge along with increases in clinical trial and manufacturing expenses.

As previously mentioned, we have significantly increased our clinical programs with indoximod. NewLink Genetics reported a net loss of $85 million or a loss of $2.94 per diluted share for 2016 compared to a net loss of $40.4 million or a loss of $1.41 per diluted share in 2015.

We expect to end '17 with approximately $75 million in cash and equivalents, which excludes any proceeds that maybe received from partners or financings. With that, we’ll open up for questions..

[Operator Instruction] And our first question comes from the line of Stephen Willey from Stifel. Your line is now open..

So maybe just one on the upcoming AACR data presentation in combination with pembro just wanted to confirm that; A, we’ll be seeing some comprehensive base-line patient characteristics, which is something that we actually haven't seen from other studies looking at similar combinations; and then B, that you guys weren’t able to obtain any biopsy samples from patients?.

So, the abstract titles for the clinical abstracts will be coming out tomorrow as I mentioned during the discussion. We will be presenting the patient base line characteristics that’s our intent of meeting as much information as we can provide and available. But there will be patients based on characteristics that we will provide.

And what was the second part of your question, on biopsies. We are in the process of modifying the clinical to add additional patients for a biopsy, but at this time, they will not -- there is not any data to report on that yet..

And then just on the pancreatic trial with indoximod in combination with gemcitabine and Abraxane. I think at the R&D Day, three-four months ago, you guys were characterizing that as a first half event.

Just wondering if there anything that has caused a little bit of slippage here from a time lines perspective?.

No, just sequencing events and making -- data collection, and looking for the right meeting and right scientific form to present the data. So, it's normal course of events as we sequence these things..

And then just lastly you have indoximod in a variety of Phase 2 studies, you’re now bringing forth a novel salt formulation, I think some IP around a novel pro-drug formulation.

Should we expect to get some clarity as to how the strategic decision making will unfold here over the course for the next six to 12 months with respect to how each of these assets gets prioritized for longer term development purposes?.

Once we have the novel formulation of the salt in the clinic that will be use in all of the indoximod studies on a go forward basis, with the exception of one pediatric trial.

The indoximod pro-drug, NLG802, is a new chemical entity; and so all go through standard rigorous Phase 1 development process before it would be available to move into Phase 2 testing..

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

Just a follow-up on the melanoma on the interim data at AACR, are you able to share with us how many patients will be in that data set?.

Mara, there is a black-outs before the abstracts and subs, I believe. So, we won’t be providing any other detail other than what comes out in the abstract. As we said at 3:30 Central tomorrow, you’ll see an announcement about the abstracts release..

And then just on the pancreatic -- on the biopsy data.

Would you anticipate also having pancreatic biopsy data, because I think that was also expected this half?.

Part of the amendments in the total, we expanded that study to collect biopsies, and we will include as much of update as possible as we move forward..

And then just lastly I would think you recall that there were plans to for Roche do a combination study with 919 and their OX40, do you guys haven’t had any update on that?.

As you know, Mara, they are basically responsible for communication about their programs, and which I will not comment on any Genentech programs, including OX40 or others..

And just for Jack now a left out of the call, just Jack, on the commentary about the significant ramp in R&D for indoximod.

Can you just provide any color as to how you think that layers in through the year?.

Yes. I mean, I’d say as good as any other estimate to straight line it through the year, that’s probably going to be as accurate aggregate as we can do on this call. But it is a measurable increase from last year understanding for indoximod taking or account the increased clinical activity and so forth..

Thank you. And our next question comes from the line of Peter Lawson from SunTrust Robinson Humphrey. Your line is now open..

Just a follow-up on the last question about R&D, I didn’t understand that.

How should we think about R&D for this year, some measurable increase you’re saying straight line it through the year?.

So obviously we’re a development stage Company, which means that a very large proportion of our aggregate expenses are reported in the R&D line. And that’s just the nature of our stage as a company from an accounting perspective. We’re expecting roughly a double on the spending for indoximod clinical work during the year.

We will revise that as we go, as I think you’ve heard, not only on this call but in presentations in the last couple of months. This is going to be a very dynamic year for indoximod, and we will update our spending plans as we update the rest of our clinical planning and development planning for the drug candidate..

And then just any updates around the IO asset you think you’re acquiring -- I think a couple of quarters ago?.

We have continued, this is Chuck, we’ve continued to look at external assets, particularly things that might be able to enhance the indoximod franchise, things that have potential synergy in combination. And obviously haven't done any such in licensing yet.

We have been actually looking at assets, but haven't found something that we’ve decided to bring in as yet unannounced..

And then just look on the reformulated IDO, how does it affect, so how does that extend your IT?.

So, as you know, reformulation of drugs is a typical process that occurs as you move forward in advanced clinical developments as part of the CMC process. As that occurs, novel recipients, novel formulations, novel methods of manufacture, the novel salts can be incorporated basically into evolving formulation modification of the existing drugs.

And depending on the characteristics of those modifications, they can achieve new intellectual property status. And certainly we are hoping to extend intellectual property status and we’ve filed patents related to that. It will take overtimes to see which are the patents issue and which don’t, to provide those potential protections or not.

But certainly our strategy we think that being able to improve the life-cycle of the drugs through improved and lengthened intellectual property and more international protection, and being able to prove all of the opportunities in the clinic are both through reasons that we’ve done a tremendous amount of work in the last several years on this new formulation and this new salt formulation of indoximod..

Thank you. I am showing no further question in the queue at this time. I’ll hand the call back over to Dr. Link for closing remarks..

Thank you everyone for joining us on this call this morning. I also wanted to take a moment and thank all the patients who have participated on the medical clinical trials this year, their efforts and those of our investigators have been very important. It is a step forward we’ve been taking on the IDO program.

We are making solid progress and we really look forward to updating you on additional achievements over the coming months..

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may now disconnect. Everyone, have a great day..