Thank you for standing by. This is the conference operator. Welcome to the Y-mAbs' First Quarter 2020 Earnings Conference Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.

[Operator Instructions] I would now like to turn the conference over to Thomas Gad, the Chairman and President. Please go ahead..

Thank you. And thank you, everyone, for joining this call this morning. I assume most of us are still virtual, hopefully not for long. So despite of the extraordinary circumstances that we have been through in this first quarter, Y-mAbs actually had a great quarter of 2020.

We believe we've made significant progress on executing our strategy and taking additional steps that will position us very well for our potential product launch of both naxitamab and omburtamab. We completed the submission of naxitamab BLA to the FDA in March as you know, and expect to complete the rolling BLA submission for omburtamab next month.

We are also working very hard on our GD2-GD3 vaccine, which should also expand from a single-center trial into a global multicenter trial. From our Y-BICLONE bispecific platform, our first humanized GD2-CD3 bispecific continues to recruit in a dose-escalation single-center Phase I trial.

And here, we could potentially see data at SIOP in 2020, and that is in October. We are working on our second bispecific construct from our platform, which is the humanized CD33-CD3, and here we are planning for a multicenter pediatric AML trial in 2021. As you know, we filed an IND for our lutetium-conjugated next-generation omburtamab.

And here, the plan is to open a basket trial for all brain metastases coming from primary solid tumors that are B7-H3 positive. We ended the first quarter 2020 with approximately $186 million in cash.

So we believe we have a very strong balance sheet to support the potential launch of both naxitamab and omburtamab while still being able to advancing our development pipeline. Our cash position should carry us through the end of 2022 without taking into consideration any product sales or any potential partnership income.

We are very pleased with our financial position, but Bo will elaborate on that a little later in this call. Hopefully, you saw by now, on April 15, we entered into a new licensing agreement with MSK and MIT to expand our antibody platform with the SADA technology. And here, I would like to refer you to our presentation on our corporate website.

We believe the tumor-to-blood ratios obtained in the animal models based on this SADA technology has never been seen before and may have the potential to improve the current treatment landscape in oncology, opening up to a much broader usage range than any other radiolabeling technology in the antibody area.

But Claus will talk much more about this exciting new technology in a few minutes. As a company, we continue to work hard to stay true to our position as a leader in pediatric oncology, addressing clear unmet medical needs and focus on advancing our therapies to reach the lives of children living with these rare cancers.

It is starting to see at the same time our pipeline and technology platform begin to widen its reach into the adult patient population. And with that, I would like to hand it over to Claus, who will give us a great overview. Thank you..

Thank you, Thomas. And welcome to Y-mAbs Therapeutics first quarter 2020 earnings call. We're pleased that you have chosen to join us today. Let me start by saying that we continue to closely monitor the impact of the COVID-19 on our business.

We have implemented a number of measures to protect the health and safety of our employees while also taking steps to advance our operations. These include efforts to mitigate disruption to our supply chain and continue clinical trials and planning of commercial activities.

While we expect some near-term impact on clinical trial site initiations and patient enrollment due to the unprecedented challenges posed by the COVID-19 pandemic, we have not changed our major guidelines for key anticipated 2020 clinical trial data readouts.

To date, we are pleased with the continuity of our business and in our ability to support the critical need of cancer patients in ongoing trials. However, COVID-19 has created a dynamic environment that may impact the company over time. We will keep investors updated as appropriate going forward.

During the first quarter, we have continued to work hard to ensure that our 2 lead product candidates, naxitamab and omburtamab, advance towards the market.

In March as Thomas just mentioned, we submitted the final portion of our rolling BLA for naxitamab in relapsed/refractory neuroblastoma, and we are now awaiting the potential PDUFA date from the FDA. The BLA is for the treatment of patients with relapsed/refractory high-risk neuroblastoma in bone and/or bone marrow.

The BLA submission is based on safety and efficacy results from the pivotal Phase II studies 201 and 12-230, which we expect to present a suitable – present at a suitable venue later this year.

We believe that we have continued to demonstrate our ability to execute on our commercialization plans during the quarter and are excited to submit the company's first-ever BLA in less than five years after inception of the company.

In addition to the BLA for naxitamab, we have trials for first-line neuroblastoma as well as chemo combination trials for refractory neuroblastoma patients at MSK and in Barcelona. During the remainder of 2020, we expect to initiate international Phase II multicenter trials both in frontline and in chemo combination treatment.

Now turning to omburtamab, our second lead compound. Omburtamab is an immunoglobulin antibody radiolabeled with Iodine-131. For omburtamab, we had the pre-BLA meeting with the FDA in February this year, and we have – we're very pleased with our – having our plans confirmed by the agency.

We expect to complete our rolling omburtamab BLA submission next month for the treatment of patients with CNS/leptomeningeal metastasis from neuroblastoma. This is just a few weeks later than we had originally anticipated back in February after the pre-BLA meeting and before the COVID-19 started to affect our activities.

We will continue to keep you posted on our progress. We're very pleased to have in-house competence to work on and coordinate the submissions of another rolling BLA only two to three months after completing the submission of the naxitamab BLA. In addition to the U.S. development, we are making good progress in Europe also.

In December, EMA agreed to our proposed Pediatric Investigation Plan for omburtamab. As a part of the regulatory process for registration of new medicines in Europe, companies are required to provide a PIP outlining their strategy for investigation of the new product in the pediatric population.

An approved PIP is prerequisite for filing a Marketing Authorization Application for any new product in Europe. And we believe that we now have a clear path for registration in Europe for omburtamab for the treatment of pediatric patients with CNS/leptomeningeal metastases from neuroblastoma.

We plan to submit a Marketing Authorization Application in November this year in Europe. This is a vital step forward in our efforts to bring omburtamab to the market in Europe in 2021. As previously disclosed, we are also developing omburtamab for diffuse intrinsic pontine glioma, known as DIPG, in a Phase I study at MSK.

And we're planning to open a multicenter Phase II study for DIPG study in 2020. For desmoplastic small round cell tumors known as DSRCT, we have recently opened a Phase II study at MSK.

For our lutetium-177 radiolabeled omburtamab-DTPA construct, we filed the IND back in December 2019, and we expect to open two multicenter Phase I/II studies later this year. One study is in pediatric with neuroblastoma, and the other study is a basket study for B7-H3 positive CNS/leptomeningeal metastases in adults.

For both studies, we hope to utilize our prior experience treating patients with these indications with the iodinized version of omburtamab. Turning to the commercial path. From our commercial standpoint, we believe we are very much on track to build the right-sized, best-in-class commercial organization.

Given the small universe of pediatric cancer centers that treat the majority of the neuroblastoma patients, we believe we can build a lean and highly targeted commercialization organization to launch both naxitamab and omburtamab at approximately the same time.

In terms of launch planning, we are very focused on the execution and intend to drive a rapid uptake of those products upon approval and to ensure that we get optimal pricing and reimbursement coverage. Our commercial team is largely in place.

As many of you know, we hired our Chief Commercial Officer, Phil Herman, about two years ago, and we have been building his team ever since. In addition, we have the medical science liaisons in place in the medical affairs group, so we believe we are positioned very well for the potential launch of naxitamab and omburtamab in the U.S.

So that takes us to the SADA technology as Thomas also briefly mentioned.

On April 15, we announced that we had entered into an agreement with Memorial Sloan Kettering Cancer Center and the Massachusetts Institute of Technology, also known as MIT, for a worldwide exclusive license and research collaboration to develop and commercialize antibody construct based on what we call SADA, self-assembling/disassembling antibody constructs, a radioimmunotherapy platform we also describe as Liquid Radiation.

The SADA platform operates in a two-step manner. In the first step, a large saturating dose of the tumor-targeted unlabeled bispecific fragments of antibodies are injected.

These bispecific antibody fragments are self-assembled with a linker in vitro prior to injection and creates tetramers and subsequently binds very strongly to the targeted tumor cells.

After a few hours, excess tumor-targeted antibody tetramers that haven't bound to the targeted tumor cells disassemble into smaller antibody fragments and are excreted quickly through the kidneys.

In the second step when the concentration of antibody in the tumors is at its peak and much higher than normal organs, a radiolabeled compound that binds to the pre-localized tumor-targeted antibody is injected and rapidly reaches the tumor, where it specifically binds to the pre-localized bispecific antibodies DOTA finding path.

And published papers utilizing similar approaches, but with three steps, data indicate that such processes result in much higher tumor, non-tumor concentration ratios, which we believe is favorable for radiolabeled therapies and it substantially minimizes the radiation damage to normal tissues, which has been the limiting step and utilization of radiolabeled constructs with antibodies in the past.

We believe this approach could improve the efficacy of radiolabeled therapeutics in tumors that have not historically demonstrated meaningful responses to the radiolabeled agents, i.e.

tumors with multiple macroscopic lesions larger than three to four centimeters in diameter as it subsequently allows a higher radioactivity level to be injected without impairing hematological toxicity.

We intend to initiate development of a number of SADA-based constructs created by MSK, including a GD2 SADA for GD2 positive solid tumors, a GPA33 SADA for potential use in colon cancer, and a HER2 SADA for potential use in breast cancer and other HER2 positive cancers.

We expect to advance a series of proprietary constructs as well against other targets. And we are targeting to file our first IND next year for a SADA construct and hope to start treating patients with this exciting technology shortly thereafter.

These bispecific antibodies are basically small constructs, about 60 to 70 kilodaltons for each of the four arms of the tetramer, and they consist of two single-chain Fvs. So in many ways, each of the arms is like a pipe that many of you may know from Amgen's binoside.

But obviously, the end that's not binding the tumor is binding to the radioactive payload instead of directing the T cells to the tumor. We believe the SADA technology platform makes tremendous sense for Y-mAbs.

And it could potentially allow us to unlock even further potential in the field of radiolabeled antibodies both for specialty oncology indications but definitely also in larger indications.

The platform is also available for sublicensing, and we hope to see the SADA technology make a significant contribution to improve the treatment landscape in radioimmunotherapy in the coming years. To support our growth plans, we increased our head count by approximately 30% during the quarter from 65 to a total of 85 employees.

The increase is primarily due to addition to the development team as well as the commercial team that is ramping up for the potential launch of naxitamab and omburtamab.

We continue to believe that we are well positioned to move naxitamab and omburtamab to FDA approval and commercialization in late 2020 and concurrently increase our focus on the SADA technology and the earlier-stage product candidates in our pipeline, including the lutetium-labeled omburtamab, the bispecific programs that Thomas just mentioned and our GD2, GD3 vaccine as well as the next in line indications for naxitamab and omburtamab.

So now let me invite Bo to share his remarks on the first quarter financial results.

Bo?.

Thank you, Claus. We reported a net loss for the quarter ended March 31, 2020, of $26.2 million or $0.66 per share, basic and diluted, compared to a net loss of $15.9 million or $0.47 per share, basic and diluted, for the quarter ended March 31, 2019.

We ended the first quarter with a cash position of $185.8 million compared with the year-end 2019 cash position of $207 million.

As our work on the BLA submission for naxitamab was completed and the omburtamab BLA submission has progressed and as we continue to accelerate the commercial ramp-up for the potential launch of these two product candidates, we've seen our cash burn increase.

And we expect the cash burn from operating expenses for the remaining quarter of 2020 to increase slightly but remain roughly in line with the last couple of quarters. With respect to the recent announcement of the SADA license, we do not expect this agreement to have material impact on our spending in 2020.

As we take a closer look at the operating expenses for the first quarter, we note that R&D expenses have increased by $6.1 million from $12.5 million for the quarter ended March 31, 2019, to $18.6 million for the quarter ended March 31, 2020.

This increase was primarily attributable to a $2.8 million increase in outsourced research and supplies to support the expanding development activities, a $2.1 million increase in personnel costs and a $0.9 million increase in outsourced manufacturing costs primarily related to our two lead product candidates.

G&A expenses increased by $4.4 million from $3.7 million for the quarter ended March 31, 2019, to $8.1 million for the quarter ended March 31, 2020.

The increase in G&A expenses primarily reflects a $1.6 million increase in personnel costs, a $1.6 million increase in the building of our commercial infrastructure related to the potential launch of our two lead product candidates of naxitamab and omburtamab.

Cash flows from operating activities in the first quarter of 2020 show that cash burn increased by $8.3 million from $13.5 million for the quarter ended March 31, 2019, to $21.8 million for the quarter ended March 31, 2020. The increase was primarily caused by the increase in the net loss for the year.

The net loss itself increased by $10.2 million for the quarter ended March 31, 2020, and was partially offset by increase in non-cash expenses, including depreciation and stock-based compensation of $1.4 million.

In terms of financial guidance, we've said since the secondary offering in November last year that cash on hand plus the net proceeds from the offering would cover our operating activities and capital expenditures through the fourth quarter of 2022.

And this still does not take into account any potential revenues from commercialization of naxitamab and omburtamab or the proceeds from any potential future partnerships. So we continue to believe Y-mAbs remains in a very healthy financial position. This concludes the financial update, and I'll now turn the call over to Thomas..

Thank you, Bo, and thank you, Claus. And yes, thank you, Bo. Thank you, Claus. This marks the end of our prepared remarks. And thank you very much, everyone, for being available and spending time on Y-mAbs' call. And I'll turn it over to the operator for Q&A. Thank you..

[Operator Instructions] Our first question comes from Alec Stranahan with Bank of America. Please go ahead..

Hey, guys. Thanks for taking my questions and glad to hear you're all doing well –and everything that's going on with COVID. So on that note, thanks for the color on the COVID impact to your business.

We've been hearing from companies across the industry that COVID-19 isn't really impacting FDA review of NDAs that much at this time, but it is affecting how quickly clinical studies accrue. But of course, this depends on disease area.

So could you provide any insights you've gotten from recent interactions with the FDA that could inform review time lines? And do you think your close relationship with MSK and the need within second- and third-line oncology could help you be a bit more insulated in terms of impacts to your clinical studies due to COVID? That's my first question, then I have a follow-up..

Thank you, Alec, and thanks for joining in. In terms of the FDA interaction, I have to say they are extremely open and collaborative still and seems to be definitely open for business. We have had a number of interactions with them in the last couple of months also on a telephone basis and written basis.

So the only thing you can say that potentially could impact BLA filings, and they have said that they are not doing – oversee PLIs, and I think that's for now until the end of this month. However, they will have for naxitamab, two additional possibilities. We're having batch manufacturing plan in May, August and October this year.

So it should be possible for the FDA to do the PLI either in August or October if they do not do the PLI here late submitting our plan. So I'm quite comfortable, and as soon as that they could do a virtual PLI where they just sit on a videoconference with the staff and then get all the documentation.

So I have to say I agree, the FDA interactions are continuing in a more virtual manner but definitely continuing at full speed.

On the clinical impact side, I mean for the regulatory purpose of getting approval for omburtamab and naxitamab, I don't think it's being impacted by the, you can say, reduced clinical trial activity that's definitely happening at the sites. But it doesn't mean we are not seeing patients coming into our studies.

We've definitely seen patients coming into our studies every month. But it's more difficult to initiate new clinical trials because sending people out doing site initiation visits and things like that, that's a bit more tricky these days, i.e. it's not possible. So that part of the development will be affected.

So some clinical trials may start a little later than we had hoped for. But a continued data collection and these things will continue as planned.

Did that answer the question?.

Yes. That's very helpful. And then just one follow-up, if I may. I believe you touched on this on your R&D Day last year, which seems like ages ago at this point.

But could you give us a sense of the extent of GD2 expression in different tissues in the body and maybe the hurdles that need to be overcome to target GD2 in tissues outside of neuroblastoma? Thanks..

Well, I mean there's no doubt neuroblastoma seems to be several forms higher in GD2 expression on average. I would say it's in the ballpark of five- to tenfold higher than other tumors such as small cell lung cancer and sarcomas. So for a naked antibody to have activity outside of neuroblastoma and eventually osteosarcoma, it could be a gallant.

Whereas if you have a bispecific antibody like the GD2-GD3 antibody we have, that is much more potent in its activity in our in vitro assays. Our bispecific GD2-CD3 in the presence of T cells is about a 10,000-fold more potent than the naxitamab antibody is in the presence of NK cells.

So I think for those kind of constructs or for a GD2-SADA construct, I don't think the lower expression level really matters. But for a naked IgG1 antibody that's intended to initiate ADCC, I think it matters.

Did that make sense?.

Yes. That’s perfect. Thanks a lot..

Our next question comes from Etzer Darout with Guggenheim Securities. Please go ahead..

So a couple for me. It sounds like the delay for omburtamab was mainly driven by COVID dynamics. I just wondered if you had any other interactions with the agency since your BLA meeting? And the SADA technology is obviously very, very interesting.

And just wondered in terms of sort of the constructs that could potentially IND in 2021, is the sort of the GD2-SADA the frontrunner here for the next – for the first IND? And I have a follow-up..

Okay, sure. So just to summarize, the omburtamab FDA interaction after the pre-BLA meeting, the only interaction, to the best of my recollection, is that when you do a rolling BLA, you inform the FDA that you are starting it and that you are having this plan for when you will submit the various documents, so they have the resources available.

And that interaction has been submitted and accepted by the agency. So they are pretty clear on what to expect from our side. And besides that, there has been nothing – I think the things that have taken a little longer than anticipated has been external vendor delivery of some of the reports we need for the BLA.

I have to say the team – the regulatory team here at Y-mAbs has been tremendously efficient working on it from remote places. And fortunately, in the last couple of weeks out of the Danish office, we have been able to start working some days per week and getting back to a little more normal situation here.

In terms of the SADA construct, the first one that most likely will go in the clinic, again depending on toxicology, et cetera, would be the GD2-SADA, which is the one that actually started out all of this.

And since we already had a license with MSK to all the GD2 constructs, they were kind of like, "Hey, you guys wouldn't be interested in a SADA construct." And then the discussion started that we ended up making this license. So yes, that's the most advanced one. And I would definitely expect to have an IND ready next year.

And I would definitely also cross my fingers and do whatever I can to see this coming into patients already next year. This is, for me, probably the most exciting technology that I've seen in the last 35 years in terms of cancer therapy.

This is the type of golden bullets that we have been looking for since Kohler and Milstein published their paper in the '70s about how to create monoclonal antibodies before we were really paying attention to immunology and immunogenicity and all these things that turned out.

This could really be a serious game-changer in oncology not just in the pediatric setting but basically for everything.

To have a solid tumor target that is well validated, that is selectively expressed on the cancer, you can get ranges of up to 100 for more radiation, maybe even 500 for more radiation to the tumor target than received by normal issues at risk. But this could be a fantastic breakthrough in cancer therapy in my personal opinion.

Do you had a follow-up to that?.

Yes. Thank you. It sounds like the bispecific data or the dose-escalation update would be at SIOP. But just wondered if we're still planning to move forward with the Phase II programs later this year with the frontrunner bispecific..

Absolutely. Definitely. Clear, yes. So even if they don't close on where we are, I think we are still – we're already now at a dose level where I'm comfortable putting it into Phase II studies..

Great. Thank you. Congrats on the update..

Thank you..

Our next question comes from Robert Burns with H.C. Wainwright & Co. Please go ahead..

Hi guys. Thanks for taking my questions and congrats on all the phenomenal progress you guys are making. Two questions from me, if I may. First one being obviously we know the extensive collaboration that you have with MSK. And in the context of neuroblastoma, I was curious as to how many other Tier 1 prescribers outside of MSK there are within the U.S.

And how fast do you believe you can actually target them upon approval of naxitamab? And then my second question is in regard to some of the stuff that we're going to see at ASCO 2020. I noticed that there's a naxitamab poster being presented.

And I was curious, what sort of incremental updates can we expect to see within that data set at ASCO?.

Okay. Great. The first one, MSK sees about 15% of all the neuroblastoma patients as far as we can figure out. In total, I would say that 80% of all the neuroblastoma patients are treated in less than 80 sites in the U.S. How quickly we can penetrate into these sites, I mean we will probably have about 10 sales representatives available.

And we have four and we'll have five medical sales liaisons out there to work with the sites. I think we would be able to penetrate that pretty quickly. I mean there's a limit to how many times during a month you can visit the same site as a sales representative or as a medical science liaison.

So I think we are definitely capable of getting through to everybody in the first six months after launch. Will they then start using it? I mean time will show. There's of course no guarantees anywhere, but I think we have so many good advantages.

We've been over this a number of times about the shorter infusion time, less side effects than dinutuximab and no need for using IL-2 and so forth and so on. So that's pretty clear. In terms of what to say about the ASCO data, I think we have disclosed the titles and as soon as the full data set becomes available, we will disclose that.

But it will be investigator evaluated information from the pivotal study 12-230, so there's an update on that but – and then Dr. Mora's study also. But we haven't said any more – given any more details about that yet. We'll definitely – as soon as the data is available, we will press release it, and that should take very quickly. Yes..

Thank you, guys..

Our next question comes from David Lebowitz with Morgan Stanley. Please go ahead..

Thank you very much for taking my question.

When you look at the naxitamab submission, given that's positioned practically for refractory, but frontline data has been available and given the population is still small, how do you think the FDA is going to look at the frontline data, especially given that there will be more updates and there's another frontline trial under way? And I guess what do you think the time line for something happening on the frontline side might be?.

Thanks, David, for joining us and for the question. It's a good question. So the frontline data as you correctly said, we presented the first set of data from 37 patients in front line treated by Dr. Mora in Barcelona. There's a second single-center study ongoing at MSK that has more than 50 patients included.

And I certainly hope that you'll have those data available later this year. The strategy in terms of getting naxitamab approved in front line formally by the FDA is to wait until they have approved it in second line and then ask the agency for a type B pre-BLA or whatever strategy advisory meeting and present to them the data from Dr.

Mora's study in Spain, the data from the single-center study at MSK. And the design of the protocol that we are currently in preparation for, that should start recruiting patients in the second half of this year.

And we'll be starting to recruit patients when we go to the FDA because – let's say, the FDA approve naxitamab in November, and then we ask for a meeting to discuss the front line. And that means that if we ask for that in November, we will get the meeting 60 days later, which will be in January.

So at that time point, we can also share with the agency. We have this multicenter protocol in front line ongoing. And here, we can provide this sort of data later this year. So I think with those three studies at hand, I think the discussion with the agency should possibly generate a clear path for a supplementary BLA in front line.

But that's my strategy. I'm not going to rock the boat in frontline discussions with the FDA before they have approved the second line. It's still going to confuse the picture.

And I think two single-center studies and a multicenter study – and the two single-center study is already basically being finished and the multicenter study to start in the next six months. We should be in a strong position to discuss with the agency.

And we will definitely have sufficient kind of data out there for compendia listing and potential off-label use. I would guess that's a possibility..

That was actually going to be my next question.

So you would anticipate that physicians are probably, just given the comparison of dinutuximab, will probably just on their own – make their own adjustments, irrespective of approval?.

Well, MSK have never, to the best of my knowledge, used dinutuximab neither in front line nor in second line. It would be hard for me to see why they would suddenly start doing that just because their own product came to the market. So – and they are by far the biggest neuroblastoma center in the U.S.

Having said that, and it's also – naxitamab, if it was your own kit and you saw the two compounds next to each other and you could see there was data from two separate clinical trials that's out there and a multicenter study ongoing, then you could pick and choose between which one that your own kid would get, I wouldn't hesitate.

I mean I would give my son or daughter definitely the naxitamab treatment. Remember also the kids that we are treating, almost none of them gets a bone marrow transplantation. And then pending presentation, et cetera, there should be some update on that also at ASCO coming up next week.

I don't see why these kids' bone marrow transplant but that's a very sensitive discussion in the neuroblastoma pediatric oncology..

And I guess one other question would be on the license agreement with SADA.

Do you see over the long haul, I guess, displacing the omburtamab radiolabeled technology? Or is this something that would be supplemental to?.

I think it's going to be extremely difficult to supplement or to substitute omburtamab in the first indications because you would have to do studies in patients. And when you give compartmental treatment of a radiolabeled antibody, the local toxicity doesn't seem to be an issue.

So I think it's probably not going to be the case that they will replace compartmental use of omburtamab. But – and like for anything else, I mean that's one of the big challenges I've had to learn through my 35 years plus in the pharmaceutical industry.

You always come up with something that's smarter than what you already have and that may not even have reached the market yet. And if you don't continue developing and get the product that you're already working on finished, get it to the market and start selling it, you're bankrupt before the – much better worse than ever comes anywhere.

So you know as well as I do that although the SADA constructs may come into patients already next year, if we can get even one of them approved in the following eight years, we are extremely fast, extremely fast. And eight years from now, that's 2029 or eight years from next year.

So I think as enthusiastic I can be about these constructs, it would never make me abandon any of the stuff that we're working on already that is in patients, that is in clinic, that is close to BLA filings or already BLA filed. That is the future, and it takes time to read the future..

Okay. Thank you for answering my questions..

Sure..

Our next question comes from Boris Peaker with Cowen. Please go ahead..

Hi, good morning.

First, just want to now from the market perspective, what fraction of pediatric neuroblastoma patients are treated with Unituxin? And how do you see your message being kind of what competitive marketing could Unituxin manufacture to – as you get things approved?.

Well, I mean if you take the sales number, it looks like they are giving about 600 almost full patient treatments per year. And per year in the U.S., there's about 800 patients diagnosed for high-risk neuroblastoma.

Those that are standard patients for, you can say, for frontline treatment with dinutuximab that would be about 70% of the 800, which would take you to 160. And then as we also have started seeing they're using it in combination with chemotherapy sometimes in second line.

So I think they are pretty much exposing dinutuximab to all patients with neuroblastoma and even starting to use it in some second-line settings in combination with chemo also. So I mean in terms of what they could do, I mean I have no clue what the strategy from United Therapeutics will be.

I think what's important to us is that you want to give the best treatment to these patients, to help them best possible with the least side effects.

And again, as I've said before, if you have to pick and choose between a dosing of antibody that typically takes even 10 to 20 hours on the Monday infusion of dinutuximab in combination with IL-2 and the M-CSF versus a 30-minute infusion in an outpatient setting.

Let's call it that the kids have same amount of pain level, but our kids have the pain level for 30 minutes and dinutuximab kids have it for hours, which means that based on the data we have from Dr. Mora, it seems that we can reduce the need for pain medication morphine with about 75% to 80% during a course of therapy.

I mean it's hard for me to see how you would argue to utilize dinutuximab in the second-line setting with those constraints when naxitamab as a naked antibody is exceeding the response rate that has been seen with dinutuximab in second line in combination with two types of chemotherapy, irinotecan and temozolomide.

It's just a much better antibody, and it's much safer for the patient. And it's just much easier for the hospital to handle, and it saves hospitalization time.

So for the parents also, it's a huge benefit to be able to bring a kid home and have him or her sleep in her own bed or his own bed at home and then come back to the hospital on Wednesday rather than staying in the intensive care unit in the hospital.

So I think in front line, time will show how we will be able to penetrate and when the FDA potentially could approve naxitamab in front line. But as I outlined a little bit earlier, we are definitely having a clear strategy towards front-line potential supplementary BLA approval from the FDA.

Does that answer your question?.

Yes. That's definitely helpful, yes.

And then just a follow-up on the front line, what's the status of discussion with the FDA overall?.

The status of the discussion is that we are not discussing with the FDA until they have approved the product in second line. So as I said, we have two studies – single-center studies ongoing. We are starting a multicenter study in the next six months.

And then the plan is to go to the FDA as soon as they have approved naxitamab in second line and say, "Hey, here are the data from our two single-center studies. Here is the design of our multicenter study. This is where it's ongoing. This is the number of patients we have planned.

Would you propose to amend this anyway, and what is needed for a supplementary BLA?" But that discussion will take with the FDA, and as I said, the earliest I could imagine would be first quarter next year..

Great. Thank you very much for taking the questions..

Sure..

Our next question comes from Anupam Rama with JPMorgan. Please go ahead..

Hey guys. This is Tessa on the call this morning for Anupam. Glad to hear you're all doing well.

So one on DIPG and DSRCT, can you just remind us of what the cadence might be here for data flow? Can we expect to see additional data this year? And maybe more broadly, how are you thinking about scope of data you will need to potentially file in both indications, especially in the context of the high unmet needs?.

Sure. Let's start out with the DIPG. I mean, again, I don't know for sure if we will be able to present additional data. We had a presentation at ASCO last year, and since then, we have had additional patients coming into the single-center study at MSK. I think the key thing, again, for DIPG is that we start a multicenter protocol.

And that, as I said in my presentation, earlier as planned to happen second half of this year. Again, taking into consideration all the thresholds of initiating new protocols in this environment, but it's definitely our objective to start treating patients in the multicenter DIPG study later this year.

And again, the strategy would be the same when – as for front-line neuroblastoma.

When the FDA has approved omburtamab for CNS/leptomeningeal metastasis from neuroblastoma, I'm going to take the data from the single-canter study at MSK and the protocol for the multicenter study, and whatever I have of data from that and go to the FDA and say, hey, look, these patients, they have median overall survival of 8 months.

They have 10% two-year survival probability and 0% five-year survival probability. Look here, we have 40-some patients treated at MSK. We have a number of patients that have exceeded those three, four and five years of survival.

And you can see that despite of the fact this being a dose-escalation study, you can see a clear trend towards better efficacy in higher dose levels, in particular in patients that have not too extensive size of the tumor. What would be needed for getting a supplementary BLA? And I think such a meeting could take place in the first half of next year.

After that, we could come out and guide and say, hey, we talked with the FDA. The strategy is to do this. We expect it to take this amount of time before we will be ready for a supplementary BLA. And all the data will be out there. So potential use of the product in those indications will definitely be there for the doctors that may want to do that.

Did that answer the question?.

That’s great..

Oh, the DSRCT. Yes, the DSCRT, we are going to have a similar approach, of course. And there, we have data from – that's even more rare. That's as rare as the – as I said, it's 150 patients a year in the U.S. We have data from a study with about 50 patients, and we just started a Phase II study.

So again, we'll go and have a similar type of discussion with the agency at that time point..

Okay, great. Thank you for taking our question. Thank you..

Sure..

Our next question comes from Peter Lawson with Barclays. Please go ahead..

Hi. Thanks for taking the questions. Just dead-setting on the GD2 expression question.

Where do you think it would take the bispecific antibody and the data that we could see in October for the bispecific? What could we potentially see?.

If I knew what you could see, I would publish it. So I haven't seen the data, but of course, we will be presenting safety data on the bispecific antibody at SIOP. And hopefully, we will also be able to present whatever we have seen in terms of potential antitumor activity. But right now, it's too early for me to say what you could expect positions are.

I haven't seen any data. It's still in the database. So there's no poster available, no submitted abstract, which was the same that was submitted to ANR that was canceled..

And we're going to see response rates, right?.

Well, I mean I would definitely hope that we can see some responses in these patients and also – I mean, especially since we are now at a dose level where I would expect the dose to be high enough to actually being able to induce some clinical activity. But again, as I said, I haven't seen any clear data or gotten any direct information.

I stay away from that as long as we don't have a data set. Otherwise, things gets a little bit too complicated. But the plan is still that we – based on our knowledge of expression of GD2, we'll continue in a Phase II study in neuroblastoma, third-line patients that are osteosarcoma progressing patients, not the ones that we treat with naxitamab.

These are patients that are NED, but patients with progressing osteosarcoma. And then we would start a separate multicenter study in small cell lung cancer also with potential IND start end of this year. So those are the three....

Sorry.

And then just dovetailing on the kind of number of centers you could potentially target when you get commercial, could you talk to that build-out and number of salespeople, how we should think about SG&A?.

Yes. I mean what we have done is that we have looked into where did dinutuximab ever get sold? Which centers actually ordered dinutuximab? And we came up with about 200 different hospital pharmacies that had ordered dinutuximab throughout the United States.

We also found out that more than 80% of all the vials that were sold had gone – been going to 80 sites. And actually, 50 sites took the vast majority of the 80%. So it's pretty clear to us that we need to focus on these 50 to 80 sites, and then you can make your own calculation.

But I think a good guess would be that we will have about 10 salespeople out there in addition to the medical science liaisons. So we have a relatively, you can say, decent-sized customer group. And when it comes to omburtamab, it's even less because that also takes that the site has a radiopharmacy that can actually handle the radiolabeled antibody.

I think omburtamab will be used at less than 20 sites in the U.S. initially. Then as it starts spreading out to DIPG and DSRCT and other indications, you see it spreading out to more hospitals.

Did that answer the question?.

Yes, perfect. Thanks for taking the question..

Thanks, Peter..

Our next question comes from David Nierengarten with Wedbush Securities. Please go ahead..

Hey, thanks for taking the question.

Just two quick ones first on omburtamab lutetium DTPA, with the virus going on, have there any updated time lines on opening sites and getting patients recruited to that? And then the second one, on the SADA technology, it would seem from the dynamics that you've presented that the amount of radioisotope dose might be higher and lead to a higher cost of goods.

Is that a fair assumption? I know it's early, but I'm just curious when you think about relative isotope dose in there. Thanks..

Right. So in terms of omburtamab lutetium-177, that construct, I would guess that we are ready to recruit patients next quarter for the medulloblastoma study, the pediatric one. And the adult protocol will follow shortly after that. Maybe fourth quarter, it will start recruiting patients.

But again, opening the sites, doing initiation visits may be pushing things a little bit. But I don't foresee any significant delays there. In terms of SADA and the dosing, I'm a little bit uncertain where we will end up.

The great thing here is that the radiation, even if I inject 100 millicurie of radioactive lutetium that is caked in the DOTA molecule. You could easily tolerate that because it's just going into the bloodstream.

And the only place it will accumulate, that's where the tetrameric antibody has bound on the tumor because that's where the bispecific part that expresses the GD2 binding site is sitting. So when DOTA passes, it's going to be grabbed by the water-binding part of the antibody, and the tumor is going to accumulate a lot of radiation.

All the lutetium that doesn't get grabbed and passes by the kidneys is going to be excreted, so it's quickly out of the body again. And I could potentially give another dose the following week and another dose the following week and another dose the following week.

So normally, we are limited when giving radioisotope because the radioisotope stays too long a time in the body. And it doesn't get – for instance, if you give – I think a good example could be the LUTATHERA product, which is a 25 amino acid peptide that has a DOTA binding that also carries radiolabeled lutetium.

But the whole construct is being injected at the same time. And therefore, because it's much larger molecule, it stays longer time in circulation. And therefore, there's a – you can say, a lower level of how much you can actually get into the patient and bind to the neuroendocrine somatostatin receptors. So I hope that made sense.

It's a little bit long. I had discussion about the....

Yes. Okay. Appreciate it..

Yes..

Our next question comes from Yun Zhong with Janney Montgomery Scott. Please go ahead..

Hi. Thank you for taking the question. So the first one is on omburtamab, I believe you already have a good number of patients with CNS metastasis from other type of tumor treated with 131-labeled omburtamab. Just wondering, are those data going to be included in the BLA submission? And I believe you said that will support adult basket approach.

And I know that the other concept takes much shorter time to label.

But in terms of efficacy and safety, do you expect improvement when you switch to a different labeling?.

It's right that we have, I think, almost 30 patients – adult patients that have been exposed to omburtamab-Iodine 131. The safety data from these patients is a part of the BLA filing, but we have not included any efficacy data from these patients because it's going to, again, disturb the discussion.

But anybody that has been exposed to the omburtamab radiolabeled antibody is in the safety package of the omburtamab filing. In terms of safety, I don't think we'll see any major difference between the lutetium-177 and the Iodine-131. Both of them emits what's called beta radiation. And it's, in those cases, electrons.

And the energy in the electrons from the lutetium molecule is about 80% to 85% of the energy of the electrons being thrown off the Iodine-131. So you can say that the penetration of an electron from lutetium, it may be like 15% shorter than the penetration of the electrons from the iodine. But that's the difference.

So – and that's also why in the adult basket trial we are starting with the omburtamab-DTPA-lutetium construct, we are including a dose-escalation part of the study to see if we, in the adults, can dose up to maybe 70, 80, maybe 100 millicurie of lutetium construct from the CNS. So there will be an investigation into that also in the basket trial.

Did that answer your question, Yun?.

Yes, it does. And so the second question, I know that it's on naxitamab in the EU. I know that you talked about that the filing will not be possible until probably towards the end of 2021.

Is there – are you able to give any details regarding what will need to be done for you to get the PIP, P-I-P?.

Well, I mean we are planning a discussion with EMA on the PIP. So that should take place in the next three months. When we have an agreement on the PIP with EMA, we will definitely disclose it.

And I expect that we will be starting the necessary study for the European filing probably in the next three to six months, again considering COVID and everything. But we do need to treat some additional patients in a combination with chemotherapy and naxitamab for the European filing..

Great. Thank you very much..

We will disclose it..

Absolutely..

Our next question comes from Arlinda Lee with Canaccord Genuity. Please go ahead..

Hi, Arlinda..

Hi, guys. Thanks for taking my question. I had a couple of them on the bispecific antibody that you guys were supposed to present at ANR. I was curious about if I guess at the end of last year, you had talked about having six patients enrolled.

I'm wondering what the scope of what we might see later this year might look like, and if there's a particular medical meeting you've targeted? And then on the GD2-GD3 vaccine, you've talked about expanding that patient – or sorry, that trial.

Curious whether that requires another IND or any other gating factors like that? And maybe – and then, sorry, back to the bispecific, what your plans are on expanding that trial in additional indications..

Yes, sure. On the bispecific, right, we had about, I think, six or seven patients at the end of last year. We – I mean the only thing I can say is that we're planning to present at SIOP in October whatever we have at that time. And honestly, I don't know. I haven't gotten any specific follow-up.

But we are still planning to move on with the three Phase II studies, third-line neuroblastoma, osteosarcoma patients progressing and small cell lung cancer. In terms of the vaccine, GD2, GD3, correct, we will be filing a separate IND for the multicenter study outside of the MSK investigator IND.

And we are still planning to do that in the second half of this year. So we are practically collecting data to put together investigator brochures and all kinds of stuff to get the protocol and everything ready for the IND for the multicenter vaccine study in second remission patients..

Okay.

And then on the bispecific, the Phase II initiations, do you think that's going to happen this year? Or is it more a next year event?.

Yes. Yes. This year for – definitely for the neuroblastoma and osteosarcoma, which is legacy studies continuing the Phase I/II protocol. The small cell lung cancer will be finished this year, the protocol and IND filing. I don't think you'll see patient recruitment in small cell lung cancer starting on the first quarter next year..

Okay. Thank you very much..

This concludes the question-and-answer session. I would like to turn the conference back over to Thomas Gad for any closing remarks..

Yes. Well, thank you, everyone, and thank you for your questions and being available today. And hopefully, we will all be out there soon and everyone, stay well. Thanks..

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day..