Charles Theuer - President and CEO Patricia Bitar - Chief Financial Officer.

Chad Messer - Needham & Company Alex Schwartz - Stifel Jim Birchenough - Wells Fargo Bert Hazlett - BTIG.

Good day, ladies and gentlemen, and welcome to the TRACON Pharmaceuticals Fourth Quarter 2017 Earnings Conference Call. At this time all callers are in a listen-only mode. After the speakers’ prepared remarks, we will conduct a question-and-answer session and instructions will be given at that time.

During today's call, we will be making certain forward-looking statements, including statements regarding expected timing of clinical trials and results, regulatory activities, future expenses and cash runway, and our development plans and strategy.

These statements are subject to various risks that are described in our filings made with Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2016, and subsequent quarterly reports on Form 10-Q.

You are cautioned not to place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements. Now, I would like to turn the call over to Dr. Charles Theuer, President and CEO of TRACON Pharmaceuticals. Dr. Theuer, you may begin..

Good afternoon and thank you for joining TRACON's fourth quarter 2017 financial results and business update conference call. I will begin with an update on our pipeline and recent activities. Following that, our Chief Financial Officer, Patricia Bitar, will review our financial results for the three and year ended December 31, 2017.

Finally, we will conclude by taking your questions. Let's begin with our lead product candidate, TRC105, which has the nonproprietary name, carotuximab. We have initiated 24 sites in the U.S. as well as sites in the UK and France in our randomized Phase 3 TAPPAS trial that continues to enroll angiosarcoma patients.

As a reminder the initial TAPPAS sample size of 124 patients is designed to detect an improvement in PFS from four to seven months and allows us to enroll treatment naïve patients. Updated phase 1, 2 data presented at the CTOS Annual Meeting last November 9, support the phase 3 TAPPAS trial design and treatment effect assumptions.

Notably PFS was 7.8 months in VEGF inhibitor naive angiosarcoma patients treated with TRC 105 and Votrient and the time on treatment with TRC 105 and Votrient exceeded time on treatment of pro chemotherapy in the majority of patients.

In addition, the TAPPAS trial uses an adaptive design that allows for expansion of patient number to provide for more than 80% power to detect a less robust treatment effect while preserving type AR. We expect to conduct interim analysis in the second half of 2018 that should provide substantial insight into the progress of the trial.

We believe TRC2015 has broad potential and TRACON continues to execute on its tier development strategy to address indications with a range of market sizes from orphan indications to markets with block buster potential.

In addition to the pivotal TAPPAS trial in angiosarcoma, TRC105 continues to advance in Phase 2 studies in two mid-market indications.

First, we completed last September we completed accrual of 150 patients into the randomize Phase 2 randomized TRAXAR trial that compares treatment with TRC105 and Inlyta to treatment with single agent Inlyta in patients with clear cell renal cell cancer.

Based on the current rate of events of progression or death that defined the primary endpoint of PFS, we expect to report top line data in mid-2018.This updated time reflects a slower than expected accumulations of events of progression or debt.

We expect to perform the final analysis of PFS upon the current of approximately 80 events confirmed by the independent central review committee which should provide at least 70% power to detect an improvement in PFS from 4.8 months with Inlyta to 7.7 months with the combination of TRC105 and Inlyta.

PFS will also be assessed based on predefined levels of two soluble biomarkers, osteopontin and TGF-β receptor III, which correlated with response in the Phase 1b portion of the trial.

We also continue to enroll the multi-center Phase 2 trial of TRC105 and Nexavar in liver cancer, and we reported initial safety and response data in [GIS] in January 2018. The combination of TRC105 with Nexavar was tolerable and two of the initial eight viable patients or 25% achieve partial responses they remain on going at this time.

These data are consistent with the partial responses by RECIST in 5% of 15% or 33% of lever cancer patients treated at the two highest dose levels of TRC105 with Nexavar in the phase 1, 2 trials conducted by the NCI and publishing clinical cancer research last year.

The response rates of these two trials compare favorably with historical single agent Nexavar pivotal trial data that showed a response rate of 2% to 3% by RECIST. Late last quarter we also initiated dosing in the Phase 1 trial of TRC105 in combination with Opdivo in patients with non-small cell lung cancer.

Investigators from the University of Alabama Birmingham presented the design of this trial at the World Conference on Lung Cancer in Yokohama in October. Opdivo is approved for the treatment of second-line lung cancer and had an overall response rate of approximately 20% in this pivotal trial.

Endoglin is data core receptor expressed on activated fiber and myeloid derived suppressor cells, which are cell type implicated in tumor resistance to immunotherapy.

Two recent preclinical publications in nature indicate [TGFA] signaling in fiber glass and other stromal cells represents a primary means of tumor evasion by promoting T-cell exclusion from the tumor micro environment.

Further, therapeutic co-administration of TGF-beta blocking and PD-1 antibodies reduce TGFA signaling in stromal cells, associated T-cell penetration into tumors and provoke vigorous anti-tumor immunity and tumor regression.

We have observed encouraging activity of our endoglin antibodies in combination with PD-1 inhibitors in preclinical, syngeneic mouse tumor models. And expect to present our preclinical as well as clinical trial data at scientific conferences this year.

In order to broaden our expertise in the checkpoint inhibitor area I am pleased to announced we have recently added Dr. Brian Daniel to our scientific advisory board. Dr. Daniels is the leader in the development of Opdivo, the first PD1 inhibitor approved in oncology when he was at Bristol-Myers and we look forward to his contributions.

Moving on, based on activity observed in preclinical models we continue discussions with pediatric oncologists to design a trial of TRC105 in combination with approved therapeutics in children with neuroblastoma which could be funded through a cooperative group.

We also continue to evaluate the potential for investigation of TRC105 in AML based on data published in the Journal of Blood, demonstrating endoglin expression on the majority of blasts from AML patients and activity of TRC105 on AML in mouse models.

Neuroblastoma and AML are malignancies with high unmet needs that may represent additional development opportunities for TRC105. In December we license, development and commercialization rights to TRC105 outside of ophthalmology in China, Hong Kong, Macau and Taiwan to Ambrx.

Ambrx has offices in both San Diego and Shanghai and has the management team with expertise in oncology drug development in China.

We also have included a $3 million upfront payment up to $140.5 million in development in commercial milestones and potential royalties from the high single digits to the low teens on net sales of TRC105 in the Ambrx territories. We expect Ambrx to file an IND later this year to initiate clinical development on TRC105 in China.

Turning now to DE-122, the ophthalmic formulation of TRC105. Our partner Santen has achieved considerable progress over the past 12 months in the development of this product candidate for the treatment of wet AMD. On February 10th, Dr.

Victor Gonzales presented data from the Phase 1/2 PAVE trial at the Bascom Palmer Eye Institute Conference on angiogenesis, exudation and regeneration.

The open label dose escalating sequential cohort study assess the safety, tolerability and bioactivity of a single intravitreal injection of DE-122 at four dose levels in 12 patients with wet AMD refractory VEGF inhibitors.

Enrolled patients have demonstrated persistent or increasing legion activity despite continuous VEGF inhibitor treatment with the last treatment administered between 30 and 60 days prior to treatment with DE-122. Treatment with the baseline VEGF inhibitor used prior to study entry was allowed one week following DE-122 treatment.

Eight of 12 refractory wet AMD patients demonstrated evidence in bioactivity as evidenced by improved visual acuity or decreased macular edema following treatment with DE-122 and then a single dose of the VEGF inhibitor treatment used prior to study entry.

There were no serious adverse events and a single adverse event of the [indiscernible] deposits vitreous consider to be related to the DE-122 resolved naturally.

Notably following their evaluation of the safety and bioactivity data from the Phase 1/2 PAVE trial, Santen initiated dosing in the randomized Phase 2 AVANTE study that compares treatment with two different doses of DE-122 combined with Lucentis to treatment with single agent Lucentis in patients with wet AMD.

Trial initiation triggered a $7 million milestone payment to TRACON, which we received during the third quarter. We believe there is a substantial opportunity for agents that target essential angiogenic pathways like endoglin to be developed in combination with VEGF inhibitors for wet AMD patients.

We’ll turn now to our second product candidate, TRC102. TRC102 is a novel small molecule inhibitor of the DNA base excision repair pathway that is intended to reverse resistance in certain chemo therapeutics.

Based on positive safety, PK and efficacy data of the combination of TRC102 and Temodar, which were presented at ASCO earlier this year, the NCI continues to enroll patients with ovarian, lung and colorectal cancers, which were the tumor types responded to treatment in the Phase 1 trial.

An additional Phase 2 NCI sponsored trial TRC102 and Temodar in patients with glioblastoma has completed the first stage of accrual.

In addition, a dual arm Phase 1/2 trial consisting of a Phase 2 cohort of TRC102 with Alimta in patients with mesothelioma and the Phase 1 cohort of TRC102 with Alimta and cisplatin in patients with solid tumors is also enrolling.

Finally, our collaboration with Case Western are dosing patients at a Phase 1 trial with TRC102 in combination chemotherapy and radiation therapy in patients with lung cancer.

As part of these studies we will assess patient tumor samples to determine whether preclinical data showing that [indiscernible] expression is associated with tumor sensitivity to TRC102 can be validated in the clinic. Moving on to TRC253 our candidate for treating prostate cancer that we in license from Janssen.

We're studding TRC253 in a Phase 1/2 trial to assess its safety, determine its recommended Phase 2 dose and assess response by PSA levels.

In the Phase 2 portion of the trial, we will incorporate circulating tumor DNA testing in order to allow for biomarker directed therapy of patients who progressed following treatment with an androgen receptor inhibitor.

We expect to complete the Phase 1 dose escalation portion of the trial by mid-2018 and present a detail of the phase 2 trial design at [indiscernible] earlier this month. The Phase 2 design includes two pro-low cohorts of prostate cancer patients resistant to [indiscernible] treatment.

One cohort with the F877L mutation and one cohort with another basis for resistance.

As a reminder if Janssen opts to reacquire the asset prior to or following completion of the Phase 1/2 trial, TRACON will be entitled to receive a $45 million opt-in payment in addition to up to $137.5 million in potential milestones and a low single-digit royalty on any sales.

In addition to TRC253 the Janssen transaction also brought TRC694, a novel small molecule potent inhibitor of NF-kappaB inducing kinase or NIK, that is intended for the treatment of patients with hematological malignancies, including myeloma.

TRACON has an exclusive license to TRC694, and Janssen retains the right of first negotiation should we decide to partner the asset. We continue to perform IND enabling studies with TRC694 and expect to file an IND in 2018.

As you can see, we remain very active on the development front and look forward to a highly productive 2018 with multiple potential bio enhancing events, including a number of key pipeline-related milestones.

Importantly we continue to achieve our progress in a cost-effective manner by leveraging the TRACON product development platform that is managing our international Phase 3 TAPPAS trial for TRC105 in angiosarcoma without the significant cost or complexities associated with outsourcing to global CRO.

We believe that Janssen licensing agreement provides validation of our drug development model, and we continue to evaluate additional assets that can leverage our product development platform with the benefit of TRACON and its shareholders.

From a financial perspective, we believe that our existing cash resources will fund currently planned operations in Q3 2018.

And it will be sufficient to deliver final data from the randomized Phase 2 TRAXAR renal cell cancer trial, allow transition to the Phase 2 portion of the Phase 1/2 trial of TRC253 and prostate cancer, and support planned manufacturing activities at Lonza for TRC105.

In addition, available financing from our agreement with Aspire Capital provides flexibility to further extend our cash runway. At this time, I will turn the call over to Patricia Bitar, our Chief Financial Officer, who will provide an update on our financials..

Thank you, Charles, and good afternoon everyone. TRACON reported no collaboration revenue for the three months ended December 31, 2017 and $8.8 million for the year ended December 31, 2017, compared to $6 million and $3.4 million respectively for the comparable periods of 2016.

The increase in full year the 2017 collaboration revenue compared to 2016 period was primarily attributable to a $7 million milestone earned upon Santen's initiation of their Phase 2 AVANTE trial in July 2017.

Research and development expenses were $4.6 million for the fourth quarter and $19.4 million for the year ended December 31, 2017, compared to $4.8 million and $21.6 million respectively for the comparable periods of 2016. These decreases were primarily the result of decreased manufacturing expenses related to TRC105 in both of the 2017 periods.

General and administrative expenses were $1.7 million for the fourth quarter and $7.6 million for the year ended December 31, 2017, essentially flat when compared to $1.9 million and $7.9 million respectively with comparable periods of 2016.

Our net loss was $6.6 million for the fourth quarter and $19.1 million for the year ended December 31, 2017, compared to $6.3 million and $27 million respectively for the comparable periods of 2016. Turning to the balance sheet.

At December 31, 2017 our cash, cash equivalents, and short-term investments totaled $34.5 million compared to $44.4 million at December 31, 2016. During December we received a $3 million upfront payment from Ambrx in connection with the licensing agreement previously discussed.

We continue to expect our capital resources to be sufficient to fund our currently planned operations in the quarter three 2018. And with that, I will turn the call back over to Charles..

Thank you, Patricia. As we noted, we expect a number of potentially value creating milestones over the next nine months.

For TRC105, we anticipate top line Phase 2 TRAXAR trial results in renal cell cancer in mid-2018, and expect the key interim analysis to determine the final study size of the pivotal Phase 3 TAPPAS trial in angiosarcoma in the second half of 2018.

For TRC253, we expect to advance into the Phase 2 portion of the Phase 1/2 trial in prostate cancer by mid-2018.

We look forward to providing further updates regarding our upcoming key milestones, and remain confident that we have the right strategy in place to deliver on our development and business plans for the benefit of patients and shareholders. With that, we will be happy to answer your questions..

[Operator Instructions] And the first question comes from Chad Messer with Needham & Company. .

Maybe just on TRC253, now the effects of visibility on into the phase one portion and what phase 2 look like.

Any guidance on about how long that might take and I probably [indiscernible] at one time but can you remind me sort of what the clock or gating factor on Janssen is to make that licensing decision?.

Hi Chad appreciate the question, so with 253 it’s a phase 1, 2 trials and we expect to be through with phase 1 by mid this year and we expect to be through with phase 2 but roughly mid-2019.

Now Janssen can opt in and reacquire the asset at any time up until 90 days after the completion of phase two trial and that opt in period or that obtain payment I think as you recall as $45 million so with after milestones and also royalty due. .

Okay great and then on fixed times forward, now that’s just first negotiation they have there, is that any time period or should I just think about that as tax rate [indiscernible] at the front of the line. .

I think that you hit the nail on the head there Chad, this is a wholly owned TRACON asset, we're very excited by it, we have expecting in 2019, should we decide to partner with Janssen to further align to your point and as a way to close negotiation but so very different deal than the 253 opt in cost. .

And maybe one for Patricia, can you just remind us what you have available -- should you need it or want to [Aspire]. .

Sure, the agreement with [Aspire] was up to $21 million and we have filled them about a $1 million in start to date. .

Next question comes from Maury Raycroft with Jefferies. .

Hi this is Michelle on for Maury. We were just wondering, when you're looking or I guess when Santen's looking at the phase II study, how are they going to be able to [cheese] out on treatment naïve patients where the benefit is coming from since that study will be a combination. .

So, the phase two study does allow treatment naïve patients to come on to a trial but it is a randomized trial, so they have three arms, they have patient receiving the Lucentis only and then patients receiving a Lucentis with a low dose of B122 and Lucentis in the high dose of B122, so ideally whether the patients are treatment naive or previously treated with a VEGF inhibitor we will see that the combination will outperform, the control arm of Lucentis only.

And as I look in general at Lucentis' pivotal data, there will clearly be patients who are naïve and about a third dose patients that have great benefit from Lucentis as a single agent and there we may not further benefit that patient that has for instance visual improvement, but that is the minority of patients, about a third of them, the other two thirds of VEGF naïve patients with AMD that start on Lucentis are happy there’s a mild improvement or no improvement whatsoever and so the majority of the treatment naïve patients definitely have enough therapy in order to recover vision and so I think it’ll be useful to have those treatment naïve patients involved and you will be able to compare between the three arms with the expectation of seeing a treatment effect in that group of patients..

And then I also want to talk about the new [keeper] that you talked was 105 mechanisms and specifically maybe on the cross talk between endoglin and the VEGF receptors and why maybe your approach to anti endoglin approach might provide potencies that would be needed to substantiate anti-VEGF angiogenesis FAB?.

We have known from kind of an in vivo perspective and animal models and also cellular perspective that TRC105 potentiates VEGF inhibitors but there is a recent paper from the Duke University that really provided a mechanistic explanation for why we do potentiate VEGF here so nicely in these preclinical models.

and what that group showed is that endoglin actually facilitates VEGF receptor [cross-correlation] in response to binding the ligand VEGF, and that if we target ending with TRC105 we can obviate the potentiation of the nivolumab [ph] actually gives to VEGF cross-correlation VEGF receptor cross-correlation and then further that endoglin stabilizes VEGF receptor on the cell membrane and then if we bind endoglin we destabilize the VEGF receptor and it is internalized in the [greater licezones] [ph] which prevents further VEGF signaling.

so [indiscernible] has a short-term effect to acutely decrease signaling to the VEGF pathway but also longer-term effect to actually downregulate the receptor content on the cell surface. So, it is really nice publication kind of completes the package if you will from a molecular basis of the cellular data we have seen for several years..

Our next question comes from Alex Schwartz with Stifel..

I’d like to continue with DE-122, so your data in refractory with AMD patients, looking at the data you have some patients that had a pretty profound improvement in vascular visual acuity, can you just help with the data and context a little bit more.

in stable disease or rather not having vision worsening meaningful in VEGF refractory patients, or is it really improving that's corrected visual acuity scores, kind of what’s meaningful in this patient population and maybe you can just elaborate more in a particular aspect that [Multiple Speakers] Santen to launch the next trial?.

So these Phase 1 patients much like in oncology Phase 1 trial, these are patients that are end stage with their own VEGF inhibitors just because there’s nothing else to do for the patient unfortunately but the fact that they have persistent evidence of AMD ,in most cases this persistence fluid in the macular and so in that patient population, they are on their VEGF inhibitor, they get a dose of our drug, and then they get whatever VEGF they really want coming onto trial.

and in that case many times the rods and cones may not be salvageable and even if you improve the macular edema you may not improve the vision which is very different than for instance the treatment naïve patients or the patients that may not get the maximum improvement from the VEGF inhibitor that would come into a Phase 2 trial, the vision is recoverable, if you go to rods and cones are still there and you can use slide and you can see if you get rid of the edema.

So that’s why in the refectory phase 1 trial to see an improvement in vision is miraculous in a sense, it's something you wouldn’t expect and to see it is really an encouraging sign. But the more reasonable -- what they look for is seeing decreases in macular edema which in this patient population is probably the best you can get in most cases.

Santen was very encouraged as are we to see the decreases in macular edema in the majority of patients but again on chronic VEGF inhibitor therapy that basically hasn’t some worked in them, so that was a very positive attribute of the study and that’s why they remain very enthusiastic about moving into the phase two portion, the randomized AVANTE study.

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Can you talk more about your responses in liver cancer patients, so I would assume that a response rate and PR will correspond to improve overall survival but are there any historical data you can point to about how PR corresponds to OS improvements, either through your data or may be meta-analysis or may be the few patients in Nexavar trials or in combo trials that achieved a PR response.

Maybe how did their OS look like that achieved a PR relative to the rest of the trial population..

It’s a great question, the problem is these trials have so few responses, you almost don’t even have a sample size sufficient to categories responders versus non-responders.

You had a 2% response rate in the pivotal in the Nexavar, so I assume they probably have better OS but when the sample size is that small it's hard to prove that and even the combo trial, the response rate in that trial and with second line I think was roughly 4%.

The data don’t exist right now that correlates response or survival but I think the real reason is the responses are so few and far between which is again why we’re so encouraged with the data we presented and that the NCI presented today. .

Okay very good and just a follow up, any expectation on when we might see the next round of [HTC] data and how many patients will we see?.

The phase two portion rose 21 patients and we expect to present that publicly GIS in 2019. .

Our next question comes from Jim Birchenough with Wells Fargo. .

In terms of TRAXAR trial, you mentioned you will be looking at osteopontin and I think it was TGF-β receptor III, expressed, what proportion of patients do you expect positive for those biomarkers and if there a clear cut off as what defines positivity or is this something that you are investigating..

Great question, so for purpose of stratifying the PFS with respect to bio markers, our general approach will be to use the median value and to see if patients with higher levels in the median have superior PFS, and initial way to a priority see if there is a coloration.

Beyond though we will do more exploratory analysis to see if there is a better cut off to your point, will be more appropriate for phase 3 study. .

And to think about as opposed to outcome it appears as though there is a decrease in [indiscernible] use is increasing, is it worth looking at the safety of TLC105 with [indiscernible] to give you the option perhaps at doing that combination. .

It's definitely something we talk about Nick, if [indiscernible] becomes standard first line [indiscernible] choice, you combine with that would make sense especially from a commercialization standpoint.

That said the first line trial would take a long time to read out and so we so still do think that in light there may still be the preferred companion VEGF inhibitor chemotherapy so for instance if [indiscernible] stays first line or goes first line in standard of care, if a lighter remains the second line or standard of care or the second VEGF [indiscernible] you use in the disease, that still might be a nice pairing for us just because the PFS readout would not take forever to deliver and the trial could be executed in a lower and shorter time frame.

We continue to set the landscape but we still think combining with the lighter could be a potentially productive Phase 3 strategy mainly for a time specific trial perspective. .

And then on [ATC] did I hear you correctly say that the two partial responses you reported in [indiscernible] are still ongoing?.

They are yes, at this time yes, both patients..

And can you remind me what’s the duration of those responses now?.

Yes, they’re roughly -- one patient roughly passed half a year of therapy and the other patient is probably roughly past three months of therapy in general terms..

And are you looking at exploratory biomarker that are trying identify who make a response?.

We absolutely are, we are doing the exact same panel that we did in the recent protocol which is kind of a standard panel we use, routinely in our responsive trials that we do with Duke University..

And then I know as you started the Opdivo combo trial in lung cancer, can you comment how many patients you treated or when do you expect to be able to determine the recommended Phase 2 dose of [indiscernible]?.

It’s a very rapid Phase 1 dose escalation so we expect to be able to deliver the recommended Phase 2 dose in a very short timeframe and actually to have the majority of the trial enrolled by end of the year and be able to report substantial numbers of patients in the Phase 2 portion for valuable response by end of this year..

Our next question comes from Bert Hazlett with BTIG..

A couple of just trial related questions I guess, with regard to AVANTE and DE-122, could you remind us of the dosing regimen that you are using, in the combination with Lucentis and then are you enriching that trial in any way with regard to patient selection?.

Yes, the dosage, Santen hasn’t released the exact dose per se but as Lucentis [sham] injection, Lucentis is has done a low dose DE-122 and Lucentis in a high dosage DE-122, but I don’t believe Santen has released the exact those levels.

The drugs given on a monthly injection basis basically are based Lucentis schedule so you get a -- as you are getting your standard dose of Lucentis you just get the dose of DE-122 under the same anesthetic which is standard code for the way these combination trials are performed.

In terms of enriching for patients per se there’s no biomarker enrichment per se, it’s taking patients that including treatment naïve patients with wet AMD as the clients by strict criteria into the trial and then treating with one of the three -- into one of the three arms..

And shifting then to the Opdivo plus 105 could you -- I think you described this before but could you discuss a little bit what about the rational for choosing, I think PD1 naive patients, I think that’s the age group you're looking at versus may be PD1 refractory patients. .

Great question, so currently the way to protocol is written we’re currently enrolling PD1 naïve patients that otherwise get Opdivo on label and instead of that to get Opdivo plus TRC105.

that said there is definitely interest in adding a second parallel cohort in the phase two portion that would be Opdivo refractory and that’s something we're definitely considering at the current time. .

Okay thanks and then just quickly, could you describe the gating items for considering 105s move into neuroblastoma or AML, you described something that’s being thought on. .

neuroblastoma it's really been driven though interactions with cooperative groups that would really push these trials forward, I mean there are great corporate groups that are really emphasize new treatments for pediatric and oncology patients like the children's oncology group as an example.

So those are the kind of groups that you can interact with very productively to really advance therapies for children in need.

With respect to AML we're having discussions around really what's the best population to address and also what's best potential combination agent to address whether it be an antimetabolite therapeutic or whether it would be a more intense chemotherapeutic base line regime we have TRC105 on to. So those discussions are ongoing as we speak. .

Our next question comes from [Mathew Cross] with [indiscernible] Trading. .

I was encouraged to see the early response results back in January from the next of our combination study, confirming some of the NCI work and was hoping you could provide some detail on how the [indiscernible] maybe able to play a role in the program given the significant liver cancer population in those geographies.

I guess specifically I'm curious on the split between in terms of clinical involvement and expense for TRACON Ambrx [indiscernible] you say that might be on the current phase 1, 2 results. .

The main focal point of our interest in working with Ambrx is a deep experience in China would be to advance the drug and indications where the populations is not as available in the U.S. as it in China and the poster trial paradigm would be liver cancer.

With respect to our goal to Ambrx this year is to file an IND and they potentially join the Phase III angiosarcoma trial which is one opportunity for advancing TRC105 but we’re not if you're counting on that as necessary to complete the trial.

I think with respect to liver cancer we look at that as a great opportunity to conduct a global study in China and U.S. with the majority of patients being attributable to China given the increase prevalence there and that would also give us cause of TRACON as well and we’re potentially could reach to global approval.

What’s the gating for moving out forward, what we're looking for in our current phase 2 multi-center study is to see response rate that’s similar to what NCI reported which is if we see a 20% response rate of TRC105 in next we will be very encouraged given again its expected 2% response rate in this population, so those are general gating parameters with respect to advancing into the phase 3 global study.

.

Got it okay and then I guess would it be easy IND or would there be another given the number of milestone payments you have as part of that agreement, what would you kind of look of as the next milestone to make sure to one of those. .

We haven't kind of disclosed exactly what milestones trigger to what clinical events but clearly the development of stage milestones is part of the deal which is roughly $10 million, of the 140 that are still unrecognized at this time..

And I am not showing any further questions at this time. I’d like to turn the call back to Charles for closing remarks..

Great, well thank you very much for the time and interest and the great questions, have a nice day and we look forward to speaking with you again soon..

Ladies and gentlemen, that concludes today’s presentation and you may now disconnect and have a wonderful day..