Stephen Yoder - CEO Darlene Deptula-Hicks - SVP and CFO.

Michael King - JMP Christopher Marai - Oppenheimer Elemer Piros - Roth Capital David Bautz - Zacks Investment Research.

Greetings and welcome to the Pieris Pharmaceuticals 2015 year-end conference call. At this time, all participants are in a listen-only mode, a brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to Darlene Deptula-Hicks. Thank you, please go ahead..

Thank you, Brenda and good morning everyone. Thank you for joining us for our 2015 year-end earnings conference call. With me here today is Stephen Yoder, our Chief Executive Officer. We announced financial results yesterday on March 22, 2015 after the market closed for the year ended December 31, 2015.

You can access the press release on the Investor Relations page of our website.

Before we begin to review financial results and business highlights in compliance with the safe harbor provision under the Private Securities Litigation Reform Act of 1995, I would like to caution the comments made during this conference call by management may contain forward-looking statements that involve risks and uncertainties regarding the operations and future results and operations of Pieris including statements relating to the timing and progress of our clinical and pre- clinical trials.

Actual results or events may differ materially from results or events discussed in the forward-looking statements. Factors that might cause such differences include those set forth from time to time in the company filings with the SEC including without limitation the company's Form 10-K, 10-Q and 8-K.

Furthermore, the content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, March 23 2016. Pieris undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

With that I will now hand the call over to Stephen Yoder, CEO..

Thank you Darlene and good morning to everyone, we appreciate you joining us for this year-end update call. Fiscal year 2015 was one of significant progress for Pieris Pharmaceuticals and we ended the year on very solid ground.

Among the several highlights from last year, we signed our first immuno-oncology collaboration which is with Roche, an oncology leader. We completed a public offering of common stock raising more than $28 million in gross proceeds.

We presented positive Phase I data from our lead anticalin therapeutic program PRS-080 which represents the fastest path to achieve clinical proof of concept for the anticalin drug class.

We also made several key personnel appointments as we opened our US headquarters in Boston and increasingly focus on the development of our fully proprietary anticalin pipeline. These appointments include Dr.

Louis Matis, as Senior Vice President and Chief Development Officer, Darlene Deptula-Hicks, as Senior Vice President and Chief Financial Officer and Dr. Jean-Pierre Bizzari as a member of our Board of Directors.

On today's call, we want to provide a more thorough review of our 2015 accomplishments, our key objectives for 2016, an overview of our year-end earnings and this will be followed by a question-and-answer session.

As an intro, I want to remind everyone that Pieris Pharmaceuticals is a clinical stage biotechnology company advancing our fully proprietary next-generation therapeutic protein drug class which we call anticalin.

Our strategy is to deploy anticalin to treat diseases in ways that other drug modalities such as monoclonal antibodies cannot do so well if at all. And there are two key points I’d like you to remember today about anticalin. First, they had excellent drug-like properties as they are derived from non-immunogenic natural human proteins.

Second, they’re differentiated from other drug classes while at the same time being highly synergistic with established drug classes especially monoclonal antibodies as I hope you’ll see in our immuno-oncology franchise. As we continue to develop the anticalin, we are managing risk by diversifying across two fronts.

First, we’re pursuing a diversified pipeline of both proprietary and partner programs together with several large pharma partners who fully fund these novel programs and at the same time have milestone potential of more than $700 million plus royalties on sales of drug products.

Second, we are diversifying within our fully proprietary pipeline focusing on multiple therapeutic areas of major unmet clinical need that we believe will benefit from the unique clinical potential of anticalin this includes our novel multi-specific proteins in the area of immuno-oncology and inhaled biologics for respiratory disorders such as severe allergic asthma.

We made significant progress across our proprietary and partnered pipeline in 2015 and I want to begin by highlighting the key developments in our proprietary pipeline.

Our most advanced program is PRS-080, this is a half-life-optimized anticalin to address anemia by antagonizing hepcidin with a target generally regarded as master negative regulator of iron metabolism.

Hepcidin which can be significantly up-regulated in states of chronic inflammation traps iron in storage cells which hinders the body's ability to create an adequate supply of red blood cells which causes what is called functional iron deficient anemia.

By antagonizing hepcidin, PRS-080 is intended to liberate this trapped iron for use in erythropoiesis.

Importantly, PRS-080 again represents the fastest path to potentially demonstrate clinical proof of concept for our anticalin technology by assessing the ability to increase hemoglobin levels which is an established clinical endpoint in patients with Anemia of Chronic Disease.

We believe we’re on track to asses this endpoint by the middle of 2017 in our targeted patient population mainly patients with chronic kidney disease undergoing hemodialysis many of whom suffer from functional iron deficient anemia. In 2015, we completed a blinded placebo-controlled Phase I clinical trial for PRS-080 in healthy volunteers.

These clinical data were represented last December at the 2015 ASH Conference, the Annual Meeting American Society of Hematology. The data there demonstrated the favorable safety profile of the drug candidate and proof of mechanism. In particular, PRS-080 was well tolerated by the 48 healthy male subjects and had no serious adverse events.

And among all subjects receiving PRS-080 high doses from 1.2 mg/kg or higher in the fixed does study, we observed statistically significant increases in total serum iron mobilization intended mode of action relative to placebo.

As a next step, Pieris is pursuing a first-in-patient trial in end-stage renal disease patients exhibiting functional iron deficient anemia.

This single ascending dose trial is expected to be completed by the end of 2016 followed by a multi-dose trial that involves dosing over four weeks, which we believe is sufficient to assess the ability of PRS-080 to impact hemoglobin levels. Currently, we believe we can complete this multi-dose trial around the middle of 2017.

Next we turn to our inhaled anticalin program PRS-060 to treat uncontrolled asthmatics by antagonizing a clinically validated target IL-4 receptor alpha directly in the lung.

We believe that a local or topical approach may bring a number of advantages over subcutaneous administered antibodies approaches including the potential for a significant lower dose, low systemic target engagement, lower cost of goods and increased convenience.

In September of last year positive preclinical data on the program were prevented at the Annual European Respiratory Society Annual Meeting by Professor Gary Anderson, who is a professor of pharmacology and the Director Of Lung Health Research Center at the University of Melbourne.

In preclinical studies, PRS-060 has demonstrated both time dependent and concentration dependent antagonism of IL-4 receptor alpha mediated signaling in a transgenic mouse model of disease through inhalation, very low in-silico predicted immunogenicity and technical feasibility for inhalation as both a wet aerosol and dry powder.

This program currently is in IND-enabling studies and the initiation of a first-in-man clinical trial as anticipated for first half of 2017.

As previously mentioned, we plan to carry out initial clinical studies with a nebulized anticalin formulation but plan to cross over to a dry powder formulation after demonstrating initial clinical benefit in the first-in-patient study. In terms of project leadership, one of our key management team additions in 2015 was Dr.

Mary Fitzgerald who joined as Vice President of Respiratory Medicine and who is more than 30 years of experience in developing respiratory drugs bringing excellent project leadership for PRS-060. Last but certainly not least is our growing immuno-oncology pipeline which is showcased by our lead program PRS-343.

Pieris is highly committed to developing differentiated multi-specifics in the area of immuno-oncology. It's an area where we make significant progress in 2015 and we believe this can be a key value driver in 2016.

So our lead program PRS-343 is a bivalent, bispecific fusion protein targeted CD137 on T cells and the HER-2 protein expressed on tumor cells. This bispecific fusion protein is comprised of an agonistic CD137 targeted anticalin which is genetically linked at the DNA level to a HER-2 targeting antibody.

As the target, CD137 is a costimulatory immunoreceptor particularly important in the activation of T cells.

We believe CD137 is a promising target in cancer yet it’s one where traditional antibody approaches have struggled to find a therapeutic window through selective activation of tumor specific T cells without having excessive systemic immune activation which has led to high levels of toxicity.

To overcome the limitations of such systemic toxicity that has been observed in patients treated with anti-CD 137 antibody, we designed PRS-343 to promote CD137-based activation of T cells at the side of the tumor in HER-2 positive tumor cells.

We believe our approach will allow for the potent local activation of tumor specific T cells with a manageable systemic toxicity profile.

In 2015, we presented at high profile R&D conferences, a strong body of preclinical data showing both a desired pharmacodynamic effect and excellent drug-like properties for PRS-343 including conferences such as the inaugural CRI Immuno-Oncology Conference last September and the Citi and the Triple Conferences last November.

Importantly, at AACR next month, we will present publicly the first in vivo proof of concept data for PRS-343 in a preclinical mouse modern which we believe shows evidence for both tumor-localized costimulatory T cell activation and enhanced therapeutic index compared to anti-CD137 antibody.

Based on the data we have generated, we are pleased to have nominated a development candidate in the fourth quarter of 2015 for PRS-343 and we are proceeding with IND enabling studies with the objective of initiating the first-in-patient clinical trial under IND in the first-half of 2017.

Last month, we had a positive pre-IND meeting with FDA having aligned with FDA on a toxicology strategy, drug release protocol and general first-in-human trial design.

We plan to investigate the activity of 343 in patient populations having a very high unmet medical need which includes HER-2 positive gastrointestinal cancers, invasive bladder cancer and metastatic breast cancer. But beyond PRS-343, Pieris remains committed to generating a pipeline of unique immuno-oncology multi-specific proteins.

One example of this is PRS-342 which is a bispecific drug candidate currently in preclinical development. PRS-342 contains the same CD137 building block as in PRS-343.

This building block is genetically linked via an FC portion of an antibody to another anticalin that potently targets Glypican 3 or GPC3, a tumor target highly up-regulated in hepatocellular carcinoma as well as other cancers. As with PRS-343, we have confirmed tumor dependent T cell activation with PRS-342 ex vivo.

PRS-342 not only represents another therapeutic opportunity in a cancer where the worldwide unmet need is great but it also demonstrates the platform nature or the repeatability of Pieris tumor localized costimulatory approach.

And we believe that this platform nature of our multi-specific capability is also going to be a valuable driver in the context of partnerships. We remain committed to creating value through partnerships and our December 2015 collaboration agreement with Roche immuno-oncology is a prime example of this commitment.

Under the Roche agreement Pieris received an upfront licensing fee of about $6.5 million plus fully funded research fees for Pieris to discover, characterize and optimize anticalin-based drug candidates against an undisclosed target from Roche.

I want to remind everyone that this undisclosed target is completely independent of the targets Pieris has been pursuing internally including CD137.

Nonetheless in this collaboration Roche and Pieris will evaluate different drug formats against this undisclosed target and advance them through preclinical development with Roche being responsible for IND-enabling activities, clinical development and worldwide marketing of any resulting products.

The collaboration could total for Pieris more than $400 million in milestone payments excluding royalties and the majority of those milestone payments are related to the clinical development of derived candidates.

We believe this partnership represents the first of multiple future IO focused alliances for Pieris as we continue to discover and characterize anticalin against additional high value IO targets as building blocks for bi and multi-specific therapeutic product candidates.

Roche is one of several valued partners that we have and I would also like to mention that our existing partnerships with Big Pharma are continuing to deliver fruitful milestone payments.

In 2015 we received several million dollars from our partnerships with Sanofi and Daiichi Sankyo with three programs now progressing through preclinical and early clinical development.

Another key financial milestone that we achieved in 2015 was the completion of an underwritten offering of common stock that raised $28.3 million in gross proceeds which coincided with the NASDAQ uplisting. Oppenheimer and JMP acted as the joint book-running managers with Roth Capital and Trout Capital acting as co-managers.

So I want to conclude with a summary of Pieris' key objectives for 2016 which includes the completion of our first-in-patient trial for PRS-080 in anemia with the hope of demonstrating iron mobilization in our targeted patient population.

The continued execution of our IND readiness activities for both PRS-060 in asthma and PRS-343 in oncology with the initiation of first-in-human trials for both programs anticipated for the first half of 2017.

We also want to continue generation and rollout a preclinical data for our immuno-oncology multi-specific franchise which demonstrates differentiation over conventional antibody approaches. And then of course there is the potential for additional partnerships as further validation of the anticalin drug class.

So this concludes the corporate update and I would now like to hand over to Darlene to guide you through our financial results for the 2015 fiscal year..

Thank you, Steve, and good morning, again, everyone. Let me begin by saying that the company's financial results for the year ended December 31, 2015 were in line our expectations. We recognized revenue of $2.9 million for the full year 2015 compared with $5.4 million in revenue for the full year 2014.

This $2.5 million decrease in revenue was primarily due to $9.9 million in reduced R&D service revenue from the successful handoff of research programs to our partners in 2014, $0.7 million and $0.5 million in reduced milestone and upfront payments revenue, respectively, year-over-year and $0.4 million reduction in grant revenue.

Research and development expenses were $8.2 million for the year-ended December 31, 2015 as compared to $5.6 million for the 2014 prior year end.

This $2.6 million increase in total R&D expenses year-over-year is primarily due to a $2.3 million increase for consulting expenses, lab supplies and personnel costs associated with our 300 series IO programs in the fiscal year '15. Our PRS-060 asthma program increased by $0.4 million due to increased pre-clinical efforts involving research studies.

Our PRS-080 anemia program increased by $0.2 million due to the Phase I clinical trial activity that began in late 2014 and was completed during 2015 as well as clinical manufacturing costs. Other R&D activities decreased by $0.2 million.

Included in other R&D activities in the 2015 period is $0.6 million of license fee expense associated with the settlement of TUM license arbitration for the period 2004 to 2012 which is offset by an estimated Australian R&D tax credit of $0.3 million and an additional reduction of expenses related to other deemphasized R&D projects.

The full year of 2015 also included $0.4 million in non-cash stock-based compensation expense as compared to approximately $8,000 in stock-based comp for the full year '14. General and administrative expenses were $8.4 million for the year-ended December 31, 2015 as compared to $7 million for the 2014 full year.

The increase of $1.4 million in G&A expense resulted primarily from $1.1 million increased in Investor Relations expense, directors' and officers' insurance premiums and other fees associated with being a public company and $0.1 million in tax related expense.

Personnel and travel related costs increased by $0.6 million and were offset by a decrease of $0.6 million in lower consulting costs. Non-cash stock-based compensation expense increased by $0.2 million to $0.8 million for the full year 2015 as compared to $0.6 million for the full year 2014.

The net loss was $14.1 million or $0.41 per share for the full year ended December 31, 2015 as compared to a net loss of $9.8 million or $0.71 per share for the year-ended December 31, 2014.

Now, turning to the balance sheet, total cash and cash equivalents totaled $29.3 million for the year ended 2015 as compared to $18.5 million for the year-ended December 2014. The cash increase was driven primarily by the company’s common stock offering completed in July 2015 where we raised $25.8 million in net proceeds.

This cash balance does not include the $6.5 million upfront payment from Roche as that was received in January 2016. We believe with the expected revenues and current cash on hand, we have sufficient cash to operate the business and fund our research and development programs well into 2017. With that I will now turn the call back over to Steve..

Thanks again, Darlene. 2015 was a year of significant achievement for Pieris Pharmaceuticals.

We raised substantial capital, expanded our senior team, established another validating large pharma collaboration while progressing our existing partnerships and we announced positive Phase 1 clinical data in one of our lead programs while rapidly advancing our preclinical pipeline of differentiated proprietary therapeutic proteins two of which are in IND-enabling studies and currently forecasted to begin first-in-human trials in the first half of 2017.

Before I conclude, I would like to thank the Pieris team for their outstanding and tireless work throughout the past year and to reiterate my confidence in our management team's ability to execute on our strategic initiatives building value for our shareholders over the long term. Thank you for joining us today and for your interest and your support.

We would now like to open the call up to your questions..

Thank you. [Operator Instructions] Our first question comes from the line of Michael King with JMP. Please go ahead with your questions..

Good morning, guys. Thanks for taking the question. I got just a couple of quick ones.

On 343, Steve, can you just talk about with Holbrook Kohrt’s passing recently, what is the net effect of the management or the relationship between you and Stanford University is that something that's reverted completely back to Pieris, maybe you can give us a little input on that?.

Sure, Mike, happy to do so. So again at the outset, we want to express our condolences to the friends and family of Dr. Holbrook Kohrt who unfortunately passed away after a long term battle with disease. I would like to say that we had the pleasure of working with an IO luminary and leader for several months in 2015.

We announced an advisory relationship with Dr. Kohrt in collaboration with his lab at Stanford University in the spring of 2015. What I can say is that we are very diversified across how we generate data.

We have an amazing team internally and we have multiple service providers and collaborators particularly in immuno-oncology as we are making major investments into this area. And I can say that even to-date although we had taken good counsel from Dr.

Kohrt, all of the data that we have generated and presented on in 2015 at the CRI conference, the Triple Conference at Citi and all the data that we are going to be presenting at AACR come from sources in the tangent of that formal relationship.

And so although it is a very sad development, this in no way impacts our ability to execute on 343 either strategically or operationally. In terms of the collaboration agreement with Stanford, that is something we are discussing with them.

It does not impact our path of the clinic or overall trajectory of the program and that's something that we will discuss in more detail with Stanford in due course. Well, I was just going to say I hope that answers your question..

Yes. And then just one more question on 343.

When you enter the clinic, can you give us some idea of what – how much preclinical data you will have and how long that will translate into when you are able to go into patients as far treatment duration?.

We're not going to reinvent the wheel in terms of first-in-patient oncology trials in IO, so I think the strategy you will see Pieris pursuing in not going to be unlike the traditional biologics approaches in terms of protocol. What I can say is, as I mentioned, we have very positive discussions with FDA.

We are assembling a world class clinical advisory board and that will cover advisories across of course regulatory, but this clinical trial design and obviously then lining up multi-sites for this clinical trial.

So we remain on track to have an IND filed in first-in-patient dosing in HER2 positive tumors on patients who would be refectory to standard of care or non-responsive to standard of care in the first half of 2017.

Alongside of that of course we'll [indiscernible] package that will allow for us to dose to the duration that we think is necessary to achieve - to test response rates in patients with the first-in-patients study. .

Okay. Yeah, that's great because I am sure everyone listening knows that sometimes IO molecules take a while to exert their effect. And then just one quick question on 342.

Can you describe the animal model that was studied in - I am just curious if this was sort of a PDX model with tumor injected in the animal’s flank or whether it was done into the organ site. I am just wondering if the molecule has the ability to appropriately access the tissue micro environment. Thanks very much..

Thanks, Mike. And so on PRS-342 again which is a bi-specific CD137 GPC3 targeting of drug based anticalin almost targets. The data we referenced in this presentation and have disclosed publicly are ex vivo t-cell data not yet in vivo data which are working with GPC3 high tumor cell.

What we're in the midst of doing but haven't disclosed publicly for IP reasons primarily are the in vivo activities that we are commencing.

And I would expect after we receive the data earlier in the year and have an IP, we can have the opportunity potentially in the fall conference season [indiscernible] oncology conferences potentially to disclose those results more openly.

But so far just to confirm we have ex vivo T-cell data which show nonetheless tumor dependent activation of T-cells..

Okay. Our next question comes from the line of Christopher Marai with Oppenheimer. Please go ahead with your questions. Christopher Marai, please check if your line is muted..

Good morning. Thanks for taking the questions. Congratulations, Stephen and Darlene on the year.

Maybe to follow up on some of Mike's questions, I see your AACR abstract here for 343, I was wondering if you could further expand perhaps a little bit on some of the preclinical models that you’ve worked on with respect to autoimmunity and sort of safety in those models with respect to that compound.

Have you done any work in terms of some of those diabetic mouse models, et cetera?.

Yes. So thanks again, Christopher for the questions and for following us. In terms of the data that we are going to be disclosing in the poster session at AACR, we’re not at liberty to talk about it openly until the data are publicly available. But the good news is, it's just around the corner in the middle of April.

To date, we have been focusing on oncology related models as opposed to autoimmune related aspects, I don't know if it directly answers your question, but what we absolutely believe is the differentiated approach that specifically will bring relative to plain vanilla monoclonal antibodies is our ability to have a focused tumor dependent activation of T cells in the tumor bed and that we believe will lead to a high differentiation over the antibodies that have been currently in clinical development..

Okay. Absolutely, so that makes sense. I'm just thinking, I mean the opposite side of that, I guess is non-tumor microenvironment activation of your molecule, which has led, in some cases, to toxicities with those targets.

So I'm just wondering, do we expect to see any preclinical data on that or are we going to kind of just have to wait for human data there?.

Well, one of the things that's important to keep in mind with our drug, which is different than at least one antibody in development is the way we engage CD137 is in a non-competitive manner and that's important because when our drug is down to CD137, we preserve the ability to engage with CD137 ligand and as we know that CD137 is of course involved peripherally in immune surveillance.

What we want to avoid is that our drug, when it is – it will be a systematically administered agent, but it will providentially traffic to the tumor, but until it gets there, and when it is not there, any CD137 engagement we believe will be in a non-competitive manner and as that drug will not be clustered in the periphery, we do not expect to interfere with immune surveillance that is an important homeo aesthetic function.

So what we have confirmed is that our drug is non-competitive and we have confirmed the inability to activate T cells in solution compared to one cluster to the tumor site, we believe that that body of data actually goes a long way to supporting the avoidance of this immune suppression, because it is non-competitive in the periphery..

Okay, great. And then just maybe one last follow-up on the Roche partnership you guys signed earlier this year, and I know it’s a little tough to talk about some of these things, but maybe just some general guidance, I mean this sounds like it's for one compound, if I recall correctly, you received a milestone to initiate this.

Are there other potential compounds Roche might be looking at and would you receive milestones for that? And then two, with respect to the first compound, when do you think the next potential milestone payment could occur and do you include that in your cash guidance? Thank you..

Okay. Thanks, Chris. So on the first question, the scope of programs that can come out of this collaboration, currently it’s a one target -- a defined target collaboration and collaboration activities, discovery activities are already underway, they started in January.

There is a potential because of the multi-specifics capabilities of the anticalin technology to have multi-specific anticalins against different epitopes across that same target, number one and number two, the ability to link up one or more of those anticalins to other therapeutic proteins which could, for example, include antibodies in Roche's pipeline.

Now, we’re not at liberty to talk beyond that -- about those molecules, but I can say that what probably attracted Roche most to this collaboration is our ability to have high hit rates against different epitopes across any given target, the speed with which we do it and the versatility of combining different anticalins through a genetic linkage, either through each other or to other therapeutic proteins and in terms of timelines, well, I’d like to use our CD137 lead program PRS-343 as a good example of our timelines.

We initiated that program in April or May of 2014 from scratch. And we will be first with patient about three years later. So we can go and we believe confident that we can go from idea to patients in three years, and which we can do that, we’ve done it on our own and we plan to do that on our own.

There are preclinical milestone opportunities within the collaboration with Roche.

We haven’t broken those out publicly, so if you can think of very favorable scenario that I believe it's achievable, take off the patients in three years, you can understand where our Phase I milestone payment and maybe classic preclinical milestones payments could become due. And they are not forecasted into our cash projections..

With one exception, the 615 million upfront payment is included in our cash projection..

Yeah. Absolutely, but no contingent milestones..

Got it. Makes a lot of sense. Thanks for the color. Congrats..

Thank you. [Operator Instructions] Our next question comes from the line of Elemer Piros with Roth Capital. Please go ahead with your questions..

Yes, good morning.

Steve, in the AACR abstract, I didn't see that you listed where you compared the anticalin effect of 343 with an anti-HER2 antibody, have you done that?.

We are of course doing that and we have different controls, different isotype controls and different formats of our drug, which have different formats of our CD137 linked to different parts of the HER2-targeting antibody.

The data, I think we have to wait until the abstract -- or the poster comes out to comment in detail on the data and for out of respect to AACR's guidelines.

But we certainly appreciate that that's a very, very important aspect and those are data that of course we are exploring and I understand the nature of the question and I think that what you will find is that our drug will show a differentiated approach over not only CD137 antibodies, but in general over your plain vanilla HER2-targeting antibodies..

Okay, thank you.

And moving onto the 080 anti-hepcidin program, two questions there please, what sort of preclinical tox studies are you undertaking to increase your ability to dose longer than 28 days and when would they mature, would they be in time for when you're ready to expand dosing?.

So currently a longer toxin, a 28-day tox is not on critical path to the long-term development of this program.

What we are seeking to achieve first and foremost is to assess whether this drug at commercially relevant doses can drive hemoglobin levels and we believe we are on path to observe that in a very cost and time efficient manner with the ability to look by the end of this year at iron mobilization in patients as a function of single dosing in a dose and time-dependent manner and that will directly inform the multi dose phase of the trial, which we will then seamlessly plan to enter into and then have in a very, we hope, rapid manner data on hemoglobin, which will be a very good go/no go decision for continuation of this program.

That is a very meaningful clinically relevant endpoint for this program again in the middle of 2017..

So if you make a go decision then, then would you have to catch-up with additional tox if longer dosing is required?.

Well, I think the long-term development of this program will ultimately require an increased tox package or a larger tox package definitely as is normal. As I said, right now, the current tox strategy allows us to do what we want to do and we do not see that longer term tox study is critical path to continue progression of the program..

Okay.

And last question, Steve, where is this single ascending and multiple ascending dose trial takes place, because I couldn't find it on clinicaltrials.gov?.

This is taking place in Germany under the German B Pharm [ph] and we have contracted currently with three sites. We have a significant number of patients identified and the good news is that these are patients who have been coming into the dialysis center for quite some time.

So unlike another type of indication where maybe the cancer patient comes in for the first time, or patients who are the investigators have already identified and so that is actually a very positive aspect in dialysis centers.

The three sites currently in Germany and we may be enrolling more sites, but we don't think it's even required to maintain the timelines that we have set forth..

Okay. Thank you very much, Steve..

Thank you, Elemer..

Our next question comes from the line of David Bautz of Zacks Investment Research. Please go ahead with your questions..

Hi, good morning. I have a question about 343, so I was thinking about when it moves into the clinic, the potential number of patients that could be treated with the compound.

Now I understand the patients are going to be screened for HER2 levels in the tumor, but will there be any type of screening for either T cell levels in the tumor and/or CD137?.

Hi, Dave, that's a great question.

The short answer is that while we will be screening based on HER2 levels, we do not currently expect to screen on T cell or CD137, positive levels of CD137 positive T cells, however, we have been very careful and we’re speaking with the leading medical oncologists across these key tumor types for the drug in real-time and will of course point to the literature and the way we have selected these tumors on our shortlist is not only levels of HER2 and non-responsiveness to standard of care, but also the propensity of an immune component, namely CD137 positive tilts.

And so, although we probably will not screen for CD137 positivity in those actual patients, based on the numbers that are reported in the literature, we are confident that a fair amount of those patients will have that immune component to drive the motive action of our drug and that specifically includes metastatic breast, invasive bladder and HER2 positive gastric cancer.

And there are others, but those are key tumors that fit the profile for this drug in our opinion..

Okay, great. Yeah. That makes sense. Appreciate taking the question..

Yeah. No problem. Thank you, David..

Thank you. And it seems that we have no further questions at this time. I’d like to turn the floor back over to management. Okay. Thank you. So, in conclusion, we look forward to building in the residual 2016 on what we've accomplished in 2015. We’re well positioned financially and we have great drug candidates and partners.

I’d like to lastly thank our talented team without whose experience, intellect and passion, we could not execute on this development journey together. It's a team we do look to expand during 2016 as we continue to grow our team in Boston, which will complement our excellent team of scientists in Germany.

So we look forward to keeping you updated on our progress and we thank you again for joining the call. Have a great day..

Thank you. Ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time and thank you for your participation..