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Edited Transcript of AFMD earnings conference call or presentation 7-Nov-17 1:30pm GMT

Q3 2017 Affimed NV Earnings Call

Heidelberg Nov 7, 2017 (Thomson StreetEvents) -- Edited Transcript of Affimed NV earnings conference call or presentation Tuesday, November 7, 2017 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Adi Hoess

Affimed N.V. - CEO, MD & Member of Management Board

* Anca Alexandru

* Florian H. M. Fischer

Affimed N.V. - MD, CFO & Member of Management Board

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Conference Call Participants

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* Guyn Kim

BMO Capital Markets Equity Research - Analyst

* I-Eh Jen

Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst

* Maurice Thomas Raycroft

Jefferies LLC, Research Division - Equity Associate

* Peter Richard Lawson

SunTrust Robinson Humphrey, Inc., Research Division - Director

* William Robert Quirk

Piper Jaffray Companies, Research Division - MD and Senior Research Analyst

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Presentation

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Operator [1]

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Good day, and welcome to the Affimed Third Quarter 2017 Earnings Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Anca Alexandru. Please go ahead.

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Anca Alexandru, [2]

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Thank you. I'd like to welcome you to our investor and analyst call on the results for the third quarter of 2017. On the call with me today are Adi Hoess, CEO of Affimed, who will present a corporate update; and Florian Fischer, Affimed's CFO, who will walk you through the financials.

Before we start, please note that this call and the Q&A session contain forward-looking statements, including statements regarding our future financial condition, business strategy and our plans and objectives for future operations. These statements represent our beliefs and assumptions only as of the date of this discussion.

Except as required by law, we assume no obligation to update this forward-looking statements publicly or to update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including but not limited to those identified under the section entitled Risk Factors in our filings with the SEC and those identified under the section entitled Cautionary Statements Regarding Forward-Looking Statements in our Form 6-K filed with the SEC earlier today. Thank you for your understanding.

I will now hand the call over to our CEO, Adi Hoess, who will provide a corporate update.

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [3]

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Thank you, Anca, and good morning, all together. And thank you for listening to our third quarter earnings calls.

As you know, Affimed is developing immune-cell engagers that eliminate tumor cells by engaging and activating natural killer and/or T-cells. Our clinical and preclinical pipeline is based on -- is based specifically on molecules with a tetravalent bispecific antibody format.

We are industry-leading in NK-cell engagement, and our lead product candidate, AFM13, is, to our knowledge, the most advanced NK-cell engager in clinical development. We are particularly interested in unlocking the full potential of NK cells in immuno-oncology through suitable combination approaches. Here, we are aiming, on the one hand, to generate a conservative immune response through combinations of synergistic mechanisms -- for instance, by combining our product with checkpoint inhibitors or cytokines; on the other hand, we can increase the number and activity of NK cells available for an immune response via adopted transfer. To this end, we have formed several collaborations with industry and academia.

We also have a well-differentiated T-cell-based approach, which includes our own clinical candidate, AFM11, and we will provide an update on all our community programs, as well as our preclinical programs, today.

Slide 4. We have an unencumbered clinical and preclinical pipeline of NK- and T-cell engagers, with our NK-cell engagers being developed in hematologic diseases and solid tumors. Based on our NK-cell platform, we have 1 clinical and 2 preclinical programs in development, and based on our T-cell platform, we have 1 program in our own clinical development. A second T-cell-engager program based on our platform called AMV564 is being developed by Amphivena Therapeutics, a company of which we own about 18.5% fully diluted. AMV564 has recently entered clinical development in AML.

Slide 5. In September 2017, we made a significant addition to our management team. Dr. Wolfgang Fischer joined Affimed as Chief Operating Officer from the Novartis Group. There, he most recently served as Global Head of Program and Project Management of the Sandoz Biopharmaceuticals division. Wolfgang has over 20 years of R&D experience, with a focus on oncology, immunology and pharmacology. With his proven track record in drug development, he will support us in advancing our programs to address the existing medical need in hematologic and solid-tumor indications. In addition to his role as COO, Wolfgang has been working closely with our clinical team since joining in September, and he will now formally assume responsibility as interim CMO.

Regarding our T-cell-engager programs, we're conducting 2 clinical Phase 1 dose-escalation trials with AFM11, a CD3/CD19-targeting tetravalent bispecific T-cell engager, in patients with relapsed and refractory ALL and with relapsed refractory non-Hodgkin lymphoma, respectively. Those studies are ongoing and recruiting into the 4th dose cohort for ALL and into the 3rd dose cohort for NHL.

Recruitment is also ongoing for a first-in-humans Phase 1 dose-escalation trial of AMV564, conducted by Amphivena, in patients with relapsed/refractory acute myeloid leukemia. AMV564, a CD33/CD3-specific antibody, based on Affimed's technology platform. Preclinical data is planned to be presented on the AMV564 at the upcoming ASH annual meeting.

Slide 6. We have made significant headway in validating our NK-cell-engager approach this quarter, in particular through encouraging data from studies of our lead candidate, AFM13. AFM13 is a CD30/CD16A-targeting tetravalent bispecific molecule, which we're developing as both mono and combination therapy. In our Phase 1b combination study of AFM13, with Merck's Keytruda, in Hodgkin lymphoma, we have completed the dose escalation, and the dose-expansion cohort is open and recruiting. Data analysis of 3-month response rates from the escalation phase is ongoing, and to date, analysis of 9 out of 12 patients has been completed. The highest dose cohort and the 3 patients analyzed to date were reporting 3 partial metabolic responses at first tumor assessment. I will provide more detail on the results of it later on this call, and we plan to present detailed dose-escalation data at ASH in December.

Columbia University is leading the investigator-sponsored translation of Phase 1b/2a study of AFM13 in patients with relapsed/refractory CD30-positive lymphoma with cutaneous manifestations. The first cohort has been fully enrolled and recruitment into further cohorts is ongoing. The first patient, who suffers from anaplastic large-cell lymphoma with cutaneous manifestations, has been analyzed, and he has experienced a complete response of all cutaneous lesions after the first treatment (inaudible). The systemic evaluation is still ongoing. Again, I will provide more detail on the results of it later on this call.

We're also investigating AFM13 in an investigator-sponsored Phase 3 monotherapy study in Hodgkin lymphoma, which is being led by the German Hodgkin Study Group. This study is open to recruit under the new design, which includes patients pretreated with brentuximab vedotin and PD-1. We are also collaborating with the University of Texas, MD Anderson, to evaluate AFM13 in combination with MD Anderson's NK-cell product. Here (inaudible) the recent activities are progressing.

Finally, we continued to coordinate and optimize our technology and have developed new tetravalent bispecific antibody formats in addition to the standard formats. These molecules' comparative (inaudible) bispecific properties aiming at tailoring PK profiles. Based on our platform, we are advancing AFM24, an EGFR-, CD16A-specific NK-cell engager, and AFM26, targeting BCMA through IND-enabling studies. Final candidate testing selected for both programs.

Slide 7. Our platform is differentiated from others. We are developing tetravalent bispecific molecules and the (inaudible) and binding to 2 receptors and 2 different cells enables higher avidity binding through increased avidity while maintaining high specificity. We believe that this is very important in order to obtain favorable safety profiles. Furthermore, our versatile platform allows for development of molecules with multispecificity and tailored PK profiles. Further distinguishing our approach on most immune cells engaging approaches today focus on T-cells. Our platform reliably generates both T- and NK-cell engagers, allowing us to exploit both adoptive and innate immune mechanisms.

Slide 8. We believe that therapeutic use of NK-cell function is a novel and promising approach to eliminate tumor cells. NK cells are crucial in the body's defense against pathogens and malignantly transformed cells, and to -- and the positive correlation between NK-cell infiltration and clinical outcome in patients has been observed. Yet, specific NK-cell engagement remains to be fully exploited for therapeutic use. We believe that we have identified a very promising target to address this. CD16A is a key activating receptor capable of arming NK cells, and high affinity targeting of a specific epitope on CD16A enables killing by NK cells.

General proof of concept of NK-cell-mediated tumor in killing has been generated over the last year. For example, in a Phase 1 study in relapsed/refractory AML published last year, the investigators reported CR in 4 out of 9 patients treated with activated NK cells. Safety and the ability to reduce remission in leukemia patients has also been demonstrated previously. It has -- it was described that NK cells are critical to graft versus leukemia effect, but do not elicit graft (inaudible) cells (inaudible). This has been seen consistently across studies looking at over 100 patients.

Slide 9. The mode of action of our molecules depicted here show that high-affinity binding of CD16A redirects NK cytotoxicity to a specific tumor target. Our tetravalent bispecific format allows efficient binding to both NK cells and tumor cells, bringing them into proximity and therefore overcoming the tumor's ability to invade the immune system. Release of perforins and granzymes can subsequently trigger tumor-cell lysis.

Slide 10 shows you preclinical data demonstrating the superior potency and efficacy of our tetravalent bispecific format. As compared to (inaudible) enhanced IgG or native IgG molecules, our molecules possess a higher potency, as shown on the left. Furthermore, in our in vivo PDX model, our NK-cell engagers, in contrast to control molecules, were able to halt tumor growth, as shown on the right. Our lead candidate, AFM13, has shown a very good safety profile in toxicity studies in cyno monkeys, and this has been supported by our ongoing clinical studies.

Slide 11. Our approach of high-affinity CD16A targeting on NK cells is unique in the industry. CD16A is the only receptor-triggering ADCC and does not require additional costimulatory signals. Importantly, CD16A is constitutively expressed on about 95% of NK cells.

We have optimized CD16A binding to maximize NK-cell-mediated killing with an up-to-1,000-fold greater affinity to CD16A as compared to monoclonal antibodies. In addition, binding to CD16A is largely unaffected by competing IgG, a major (inaudible) for NK-cell activation by IgG-based structures. This is particularly important, as in the drawn state, CD16A on innate immune cells is occupied by polyclonal plasma IgG. This creates a significant threshold of IgG-based therapeutic antibodies, as there is a huge excess of plasma IgG versus therapeutic antibody. However, not for CD16A-targeting antibodies.

The unique epitope recognized (inaudible) NK-cell engagers results in them being virtually unaffected by plasma IgG. Furthermore, CD16A binding is independent of the (inaudible). And finally, our highly specific NK-cell engagers do not bind to CD16B or neutrophils, avoiding the so-called sink effect. We believe that these features are highly important in targeting malignant cells, which is (inaudible) by current therapeutics. For example, cells which show a low target expression.

Slide 12 shows that our NK-cell engagers can kill tumor cells with very low target expression. For AFM13, this demonstrated in vitro tumor cells with CD30 expression of as low as a few hundred receptors and even a few -- a thousand receptors, and even a few hundred receptors per cell. All these unique features result in overall increased potency and efficacy of our NK-cell engagers.

Slide 13. As mentioned earlier, we are generating clinical proof of concept for our NK-cell-engager approach by developing our lead candidate, AFM13, as mono and combination therapy, and I would like to show you now that we have observed clinical activity in both the mono and combination therapeutic setting.

AFM13 has already demonstrated safety and clinical activity in heavily pretreated Hodgkin lymphoma patients in the Phase 1 study, with tumor shrinkage observed in 62% of patients, which was 8 out of 13, and PRs in 23% of patients, which was 3 out of 13. None of the patients experiencing a PR have been previously treated with brentuximab vedotin.

As previously communicated, data from our investigator-sponsored Phase 2a trial for AFM13 in relapsed and refractory Hodgkin lymphoma, which is led by the German Hodgkin Study Group, showed for the first time that AFM13 is active as a single agent in a heavily pretreated group of patients, and in particular, that AFM13 is active post brentuximab vedotin. Partial responses were observed in 2 out of 7 evaluable patients enrolled under the study's original protocol who have been pretreated with BV but not -- but were anti-PD-1-naive.

In our Phase 1b trial in the relapsed/refractory Hodgkin, including initial treatments of Keytruda, we have completed the dose-escalation part of the trial with 3 patients enrolled in 2 dose levels, 1 and 2 respectively, and 6 patients enrolled into both level 3 due to a previously communicated reported grade 2 infusion-related reaction, which will classify it as a (inaudible). The dose expansion cohort is ongoing and the recruiting at the highest dose explored during those escalations.

Data analysis of 3-month response rates from the escalation phase is ongoing, and to date, analysis of 9 out of 12 patients has been completed. Of the 3 patients enrolled into Cohort 1, 2 experienced a PR, while 1 patient progressed. Of the 3 patients enrolled into Cohort 2, 1 patient experienced a CR, 1 patient a PR, and 1 patient progressed. Out of the 6 patients in cohort -- in Dose Cohort 3, 3 were analyzed to date, all of which experienced partial metabolic responses at the first tumor assessment.

We plan to present further data at a poster at the upcoming ASH meeting in December of 2017.

Slide 14. We announced last quarter that Columbia University had initiated a translational study to evaluate AFM13 in patients with relapsed and refractory CD30-positive lymphoma with cutaneous manifestations. Recall that this trial is designed to allow for zero biopsies, thereby enabling (inaudible) of NK-cell biology and tumor cell clearance within the tumor environment. The first cohort has been fully enrolled and recruitment into further cohorts is ongoing.

CD30-positive lymphoma with cutaneous manifestations comprises a number of different (inaudible) patients, and here we present data on the first patient suffering from ALCL with cutaneous manifestations. These images show a skin lesion on the left shoulder of the patient, which was already significantly reduced on Day 3 post-treatment start. By Day 21, post-treatment start, the patient had experienced a CR of all cutaneous lesions. The systemic evaluation is still ongoing, but these results are very encouraging, as this provides first evidence that NK-cell engagers are able to induce tumor regression in this indication. In general, we feel CD30-positive lymphoma is an attractive indication that may broaden the potential of AFM13.

Slide 15. Additional opportunities for our NK-cell engagers into combination with adoptive NK-cell transfer. Exuberant (inaudible) and stimulation of autologous NK cells followed by reinfusion in combination with NK-cell invasion is a novel therapeutic concept. In this combination, a large number of preactivated NK cells can be redirected by our NK-cell engagers to recognize malignant cells. This approach is independent of a patient's own NK-cell count and has potential applicability at the time of or shortly after autologous stem-cell transplant. We are investigating this approach with our partner, MD Anderson.

Initially, we planned to investigate AFM13 with indexed NK-cell product in the transplant setting. Preclinical research activities are on track, and these are intended to be followed by a Phase 1 clinical trial. Proof of concept for this combination with AFM13 in Hodgkin lymphoma may pave the way for combinations in further indications such as multiple myeloma. We have an option to exclude development rights to develop and commercialize any product developed under that collaboration.

In addition to our clinical programs, we have an innovative preclinical pipeline addressing both hematologic indications and solid tumors. Over the last quarter, we have further characterized our 2 most advanced preclinical candidates, AFM24 and AFM26.

Slide 16. Besides several marketed agents such as cetuximab and tyrosine kinase inhibitors, there is a significant medical need for a novel approach to treat EGFR-positive tumors. This requires widening the therapeutic window and addressing treatment resistance. Existing drugs function through blocking the signal and activity of EGFR cells. Our approach is different because we are pursuing EGFR as a target to increase immune-cell killing at the site of the tumor.

Our goal is to (inaudible) the limitations of existing drugs by improving both efficacy and safety. In particular, there is no clear indication of efficacy of EGFR-blocking antibodies in patients with RAS mutations, and severe skin toxicity may impact a physician's willingness to prescribe such a drug. AFM24 offers a differentiated mode of action, functioning through NK-cell killing. The EGFR-, CD16A-targeting molecule offers increased potency when compared to cetuximab, enabling NK-cell-mediated killing of cells expressing low levels of EGF receptors. AFM24 has the potential to address a broad patient population, including patients with a resistance to standard of care. Pilot toxicity studies with our TandAb format have been encouraging, and here AFM24 showed first evidence of a beneficial profile when (inaudible) and repeated dose in cynomolgus monkeys.

Slide 17 shows how AFM24 is differentiated from other therapies. Here you can see that in vitro and in vivo of the NK-cell engager mediates highly potent tumor cell killing in tumors resistant to EGFR-targeting agents.

On Slide 18, we show you the development of novel multiple tetravalent bispecific antibody formats, in addition to our TandAbs, which have novel biophysical properties. Final candidates have been selected for AFM24, and as you can see in this example, this novel antibody confers similar (inaudible) cytotoxicity compared to our TandAb in vitro in A431 cells.

We are currently developing different formats in IND-enabling studies in order to identify the ideal candidate with the best therapeutic window, and which is able to address resistant patients.

Slide 19. Our second preclinical NK-cell engager program represents a novel approach to treatment of multiple myeloma. (inaudible) remaining (inaudible) and medical need to achieve minimal residual disease negativity at or shortly after autologous stem-cell transplant is not yet addressed.

BCMA is a highly promising level target based on early clinical data, for example for in CAR-Ts and antibody drug conjugates. But low expression of BCMA is a significant hurdle to eliminate malignant cells.

NK cells are the first lymphocyte population to recover post-transplant, which leads us to believe that there might be a significant opportunity to exploit AFM26 in the autologous stem-cell transplant setting, alone or in combination with adoptive NK-cell transfer.

AFM26, for which we are investigating a novel tetravalent bispecific antibody format, offers a differentiated mode of action, as it binds to BCMA and CD16A with high affinity. The molecule is distinguished from other approaches such as daratumumab or elotuzumab and allows targeting of self-expressing very low levels of BCMA. In addition, the NK-cell-based approach may offer a beneficial safety profile compared to T-cell engagers. Moreover, AFM26 might have a convenience advantage, as the novel format is designed to confer a significantly better PK profile compared to our TandAb.

Slide 20. These data demonstrate that AFM26 can effectively kill tumor cells with BCMA expression levels as low as a few hundred receptors per cell. AFM26-mediated tumor-cell killing is shown here in different cell lines, including the 3 BCMA-low-expressing cell lines depicted in red. It has been described that such cell lines are resistant to killing by BCMA-targeting antibody drug conjugates, which may require a larger number of receptors for an efficient killing. And this program targeting BCMA may represent a very good tactic for developing an NK-cell engager.

I will now hand over the call to our CFO, Florian Fischer, who will provide further details on the financial figures.

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Florian H. M. Fischer, Affimed N.V. - MD, CFO & Member of Management Board [4]

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Thank you, Adi. Affimed's consolidated financial statement has been prepared in accordance with IFRS as issued by the International Accounting Standards Board, or IASB. The consolidated financial statements are presented in euros, which is the company's functional and presentation currency. Therefore, all financial numbers that I will present here in this call, unless otherwise noted, will be in euros. Any numbers referring to Q3, 2017, and Q3, 2016, are unaudited.

Cash and cash equivalents and financial assets totaled EUR 41.8 million as of September 30, 2017, compared to EUR 44.9 million as of December 31, 2016. Affimed's operational expenses were primarily offset by net proceeds of EUR 16.4 million from a public offering of common shares in the first quarter, and of EUR 2.5 million from the drawdown of the second tranche of the loan from Silicon Valley Bank.

Net cash used in operating activities was EUR 20.7 million for the 9 months ended September 30, 2017, compared to EUR 25.5 million for the 9 months ended September 30, 2016. The decrease was primarily related to lower cash expenditure for research and development in connection with Affimed's development and collaboration programs and to the expiration of the Amphivena collaboration. Affimed expects to have cash to fund our operations at least until the end of 2018. This provides runway for the planned development of our clinical programs, as well as for further discovery and early development activity.

Revenue for the third quarter 2017 was EUR 500,000, compared to EUR 900,000 for the third quarter 2016. Revenue in the 2017 period was derived from [outcheck] services, while revenue in the 2016 period relates predominantly to Affimed's collaboration with Amphivena.

R&D expenses for the third quarter 2017 were at EUR 6 million, compared to EUR 8.8 million for the third quarter 2016. The decrease was primarily related to lower expenses for AFM13 and our discovery and early-stage development activities. G&A expenses for the third quarter 2017 were EUR 1.9 million, compared to EUR 2.2 million for the third quarter in 2016. Net loss for the third quarter 2017 was EUR 8.1 million, or EUR 0.18 per common share, compared to a net loss of EUR 10.3 million, or EUR 0.31 per common share, for the third quarter 2016. The decrease of operating expenses was partially offset by lower revenue and higher finance cost.

I will now turn the call back over to Adi for a summary of our 2 clinical programs and our pipeline. Adi?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [5]

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Thanks a lot, Florian. Our strategy is to maximize the value in our unencumbered clinical and preclinical pipeline of NK- and T-cell engagers, as well as from our platform. We are leveraging our lead product, AFM13, for CD30-positive lymphoma initially focusing on Hodgkin salvage-setting, enabling us a fast development path and allowing the establishment of a cost-efficient marketing and sales infrastructure.

In addition, we believe investigating AFM13, both as monotherapy and in combination with Keytruda, reduces its development (inaudible). Overall, our preclinical and clinical strategy is designed to broaden the scientific leadership of our NK-cell platform.

We are expanding the preclinical and clinical activities of our tetravalent bispecific NK-cell engager platform in solid tumors with our preclinical candidate AFM24. In hematologic diseases, we intend to leverage additional opportunities for AFM13 and AFM26, for example, in combination with adoptive NK-cells, checkpoint inhibitors or immune-activating agents.

We are also developing T-cell engagers, and our lead T-cell engager, AFM11, is being investigated in 2 ongoing ALL and NHL trials. BMV564, a T-cell engager derived from our technology platform, is in clinical development through Amphivena to treat AML.

In addition, as mentioned earlier, moving beyond our standard format, we are developing different tetravalent bispecific antibody formats tailored to specific indications and size. And as outlined in previous earnings calls, we have more projects ongoing at the discovery stage and preclinically, including molecules developed from our MHC peptide-complex-targeting platform.

Thanks very much. Thank you very much for your interest. The call is now open for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

And now we'll take our first person from the queue, Maurice Raycroft from Jefferies.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Associate [2]

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Hi, good morning. Congrats on the progress. For the first question, I'm wondering, for the metabolic PRs and CR that you're seeing with the AFM13-plus-Keytruda combo, can you contextualize those results? Are they on track with the expectations, and do you think you're getting enough NK-cell activity at the highest dose?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [3]

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Well in the meantime, yes, they are in line with our expectations, because we're only seeing responses, even if it's so -- it's only 3 patients. That is what we were expecting, to have an either increased PR or an increased CR rate. So these are the 2 positive outcomes in our mind. Having only 3 patients, it's here far too early for really on track, but as we said, we're analyzing further patients, and at ASH, we should have a better picture on that. But overall, the data are encouraging because you can see a very minimum trend from the lowest to the highest dose of AFM13.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Associate [4]

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Got it. And do you have a sense of the NK-cell activity that you're getting with the different doses? Do you see somewhat of a dose response with that?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [5]

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As I say, it's -- with 3 patients in each cohort, I think it's not possible to make a judgment, and what -- so we haven't analyzed things in that detail to date. But I hope that we can present more of that during our ASH poster.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Associate [6]

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Okay. And for the responses, are those confirmed? And what type of followup data will we see at ASH? I guess, I think you mentioned the followup will go out to 3 months?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [7]

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So indeed, the study is designed that patients are treated until they relapse. So that means that we'll have data that look out into the very distant future. So obviously we're collecting the 3-month data as our first endpoint. This will run into 6-month data, and eventually we're going to have duration of, or durability of, response data. That just will take a while. What we are currently doing is we have expanded the dose -- they're doing the dose-expansion cohort, so we are enrolling further patients, and eventually we're going to see data from over 20 patients treated at the highest dose cohort. So that means that we'll have a collection of different time points where we measure, as I say, at 3 and 6 months, and then we'll also have the durability of response. Initial data, however, look quite, as I said, look quite encouraging, and we'll see on what we can present during the ASH poster.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Associate [8]

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Got it, okay. And then, for the AFM13 complete response you're seeing with -- in the cutaneous lesion, what's the time schedule for the serial biopsies? And can you comment on the changes in infiltrating immune cells and/or decreasing cancer cells that you observed in this patient over time?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [9]

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So, giving you an answer on the last one, this is an ongoing study, and very recent data that we have generated had the readout of the translational (inaudible) hasn't been done yet. So that is still ongoing. In terms of serial biopsies, so we treat the patients over 8 weeks, and we have up to 5 time points when these biopsies can be taken. In this case, as we have seen already, a very substantial response within the first 3 weeks. We only had a limited opportunity to take these samples, so overall, it's basically -- what we will do, so we take a biopsy after 8 weeks also, and this first patient, that hasn't been possible. So you do it pre-dose, first dose, and then within the first weeks, and then at the end of the treatment. This is how the schedule works.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Associate [10]

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Got it. Can you comment on how many patients you have enrolled in that study and when we could see data from those patients?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [11]

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In terms of enrollment, we have enrolled the first -- so what we are doing is we are doing 3 different dose levels. Currently, that's the 1.5 (inaudible) dose level. We'll do one at a higher dose level, and this was given once weekly in this first cohort, and there's always 3 patients in each dose cohort. We can, however, also decide to amend the study and enroll more patients. Currently, the first cohort has been fully enrolled, and patients are currently being treated. So the only patient that we have analyzed is the first one.

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Operator [12]

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And now we'll take our next person from the queue, Guyn Kim from BMO Capital Markets.

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Guyn Kim, BMO Capital Markets Equity Research - Analyst [13]

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First on the combo study of AFM13 plus Keytruda, could you provide a little more detail on the responses that you're observing? What was generally the time to response? And whether the partial responses that you saw were improving at the time of assessment and could they possibly become CRs over time?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [14]

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So currently, we have not analyzed these data to that detail. As I say, we are working on that, to have this presented during ASH. So in that context, I cannot yet give you any answers to your questions.

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Guyn Kim, BMO Capital Markets Equity Research - Analyst [15]

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Okay. And to the responses that you saw in Cohort 2, does that align with AFM13 being a therapeutic dose?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [16]

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Correct. So the first dose cohort was below the effective dose of AFM13. Cohorts 2 and 3 are a dose at the low and the high end of our effective dose. So currently, we're seeing that seemingly, a higher dose can have a better effect. That's what we are seeing in the past also.

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Guyn Kim, BMO Capital Markets Equity Research - Analyst [17]

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Got it. And on the patient with the complete response, with the cutaneous manifestation, did -- could you provide a little more detail on the history of the patient, whether they've had prior therapies, how long the duration of their disease was?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [18]

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Yes. It's a very good question. So I don't have those details at hand here. And so we may be able to do this in a followup call or once we present the data. But as I said, this is a patient that has anaplastic large-cell lymphoma and has been analyzed to be CD30-positive. Technically, the patient has had several pretreatments in that context. I just don't have the details. And we were super excited to see this response, but we were really super excited to see that the patient's already been responding within a couple of days, or, let's say, 3 days. So this speaks to the -- to what we have been reiterating, that NK-cell activity can be quite quick. And that's been a very important data point for us to see that it's really happening.

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Guyn Kim, BMO Capital Markets Equity Research - Analyst [19]

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That's fantastic, yes. And just one final question: Did the patient show any treatment-related side effects, any infusion-related reaction?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [20]

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So in that context, nothing that is reportable. So that means that if we would have it, there would be only grade 1 and grade 2. We have reported that also in the combo. So occasionally these are the -- the outcome IRRs were very mild, and is something they can -- basically, that wouldn't hinder any of the treatment. So to date, we have not seen any impact by IRRs on the treatment of the patients.

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Guyn Kim, BMO Capital Markets Equity Research - Analyst [21]

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Great. Thanks for taking my questions, and congrats on the progress.

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [22]

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Thanks a lot, Guyn.

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Operator [23]

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And now we'll take our next person from the queue, Jim Birchenough from Wells Fargo.

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William Robert Quirk, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [24]

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Good morning, it's Nick on for Jim this morning. First question, Adi, just going back to the combination trial, did these patients have measurable lesions at baseline? And, well, that's the first question.

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [25]

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What do you mean by measurable lesions? Obviously patients have to have . . .

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William Robert Quirk, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [26]

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Well, in terms of the (inaudible) reporting metabolic responses, as opposed to a resist-defined shrinkage of a measurable lesion.

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [27]

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That's (inaudible) the endpoint that it's measured. So these are the new criteria, the Lugano criteria, that are employed. And that explains it. So yes, they do have (inaudible) lesions, and -- but important to measuring the lesions is the activity within the lesion, because in some cases we're seeing lesions being still there; however, there is no activity anymore in the lesions. That's why it's called metabolic response. That is to say, it's not resist -- it's not (inaudible), it's the Lugano criteria that are involved here.

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William Robert Quirk, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [28]

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Okay. Well, thank you for educating me on that. And in terms of the patients that had a partial or a complete metabolic response, have any of those patients progressed?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [29]

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Again, we may show this at ASH in that context, but as I say, unfortunately, I don't have the extensive at hand. We know that these patients are continuing to experience this post the 3-month data, so many have come back for the 6-month data points. But it's too premature for me to give you a good answer yet.

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William Robert Quirk, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [30]

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Okay. And I know the German Hodgkin Study Group trial, obviously they have access to the data, but do you have the ability to sort of compare the responses so you can try and assess what benefit you're getting from Keytruda?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [31]

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So in terms of doing it, it would require us to do biopsies, and they are very rarely employed in the Hodgkin lymphoma setting. So there are not many patients willing to accept a biopsy. This is, however, different for CD30-positive lymphoma with cutaneous manifestation, and this may be a much better indication in (inaudible) to give an answer on that question, because here you can easily access biopsies, and not just the single one, but several one. So in that context, it will be individualized. If we will do that, so -- and comparing data from one study to the other one is always a little bit critical, so we'd rather -- we'd want to do that in the CD30-positive lymphoma setting.

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William Robert Quirk, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [32]

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So just remind me, for the German Hodgkin lymphoma, will they report Lugano criteria in -- of the dose levels you're evaluating in the combo? What dose level are they assessing?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [33]

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So the German Hodgkin Study Group is done at 7 mg/kg, and the Keytruda study is done at 7 mg/kg. The difference, however, is that after the first 8 weeks, the protocol slides will differ, meaning that in the German Hodgkin Study Group we exactly repeat the first 8 weeks by a second cycle, while with Keytruda, after one cycle, we'll continue to co-dose with Keytruda every 3 weeks. So the studies are identical in terms of dose levels, 7 mg/kg, and are identical in the first 8 weeks, but thereafter, they are widely different. So other than that, the German Hodgkin Study Group can just redo the same cycle again while with the combo study, we're giving it every 3 weeks in combination with Keytruda. So it's more like a maintenance setting in the combo setting.

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William Robert Quirk, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [34]

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Okay. And then, in terms of the new candidates, 24 and 26, and I think your comment was, you're looking for a -- what is the best therapeutic window you can achieve with one of the candidate molecules. But you've already shown that the 24 TandAb has a much better therapeutic index than cetuximab, so what is the -- what are the key criteria you're looking for, and what is the timing on picking an IND candidate?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [35]

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Yes. So the background of 24 and looking on how patients are treated would require a drug that is ideally given once weekly or, let's say, twice per month. So that would require a less-frequent dosing, as we may have to do it for a TandAb. So it's still not clear how the TandAb dosing is best done. You may recall, we're doing it 3 times per week for the first 2 weeks and then we continue to do it once weekly. Since -- and that being the reason why we have been developing a novel platform that has a much better PK profile. And we're currently comparing these molecules because they have different biologic features. And you're right, the 24 molecule looks very encouraging. And however, we were saying, if we have a molecule that has an even longer half-life, that has the similar features, why wouldn't we pick that? And that's the stage we're in. So we're carefully comparing the 24 TandAb with 24 immune structure, and eventually we can decide which one to take forth. So it's a lot of biology done with these molecules, and I can't give you, yet, a final timeline on what (inaudible) of, but we're not (inaudible) anymore, so that means that we have identified the final candidates and we're comparing that in IND-enabling studies. Hence, we already have initiated cell-line generation. But as I say, to come back with exact timelines, we have to do further assessments before we can decide on what's the real development candidate. What is very exciting for us is that this novel platform comes back with a very similar, sometimes even superior, cytotoxicity to a TandAb, and it's been crucially important to really pick up these cells that have these very low (inaudible) expression, because part of resistant mechanisms of certain drugs is simply that you cannot eliminate the full cycle of malignant cells, and you may -- especially those that have very low target numbers. This is something where we can (inaudible). We have shown it now in our presentation. It's true for CD30, it's true for EGF receptor, but it's also true for BCMA, which seems to be a really challenging one in that context and into -- we are seeing differences of our molecules versus other antibodies. So there is something where our technology has a significant impact. And this novel structure will help us to optimize that.

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William Robert Quirk, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [36]

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Okay. Thanks, Adi. I look forward to the followup at ASH.

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [37]

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Thank you, Nick.

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Operator [38]

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And now we'll take our next person from the queue, Peter Lawson from SunTrust Robinson and Humphrey.

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Peter Richard Lawson, SunTrust Robinson Humphrey, Inc., Research Division - Director [39]

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Adi, thanks for the kind of the fresh data. I mean, so it sounds like the ASH data isn't cut yet, and it sounds like we're probably going to get, I assume, a pretty late cut of data. What -- could you give us any color on what you're expecting to include? Number of patients, length of followup time, or any color around that would be appreciated.

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [40]

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As I say, I'd rather let that go until we have the data finished for ASH. Metric (inaudible) is already in; we're just sorting it out, and further analyses are done, and as you may know, in some settings we have to go back and do certain confirmations with the sites. So we're in the cleaning-up process in that context. And I think that we can have a very strong poster at ASH.

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Peter Richard Lawson, SunTrust Robinson Humphrey, Inc., Research Division - Director [41]

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Good, thank you. And then, the CD30 lymphoma, the CR you talked about in the press release, you mentioned the cutaneous lesion that was in complete response. Was that for the overall patient as well? Were they in complete response, or was there -- were there additional lymphomas? It was just a little bit confusing by the language.

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [42]

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Yes. So the patient obviously has cutaneous lesions and systemic disease. It's a patient with a T-cell lymphoma, and eventually, both assessments have to be done. And we have just been able to complete the assessment of all cutaneous lesions. The other assessments are still ongoing. And the patients are also further treated, by the way. So what we are seeing, and that's been very encouraging by the data, that we have a visible response in a patient that has -- that had several lesions at different parts of the body, and all these lesions were removed. So this shows us that a) our drug can act in the skin, so a TandAb gets that, and can have a very deep meaningful response. That's how far we have come to date.

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Peter Richard Lawson, SunTrust Robinson Humphrey, Inc., Research Division - Director [43]

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And then, AFM11, when would we see the dose-escalation data for that drug, and is it still on pace for first half of '18, or is that too early?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [44]

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It's very challenging to predict, indeed, because we have, as we said, we are in the 3rd, 4th dose levels. According to what we have seen by in vitro data, we are approaching active dose levels. So with every dose level that we are approaching and treating patients, we may see the activity. I just -- impossible for us to predict if it is the 5th or if it is the 7th dose level. So we feel that we come to proximity of a certain -- of the activity of AFM11, but to date, we're still escalating and see that we can achieve that. As you may recall, T-cell engagers do indeed have a very narrow therapeutic window, so it's known that T-cell engagers don't show activity up until the point where they're really active, and then you may be able to add one more dose level twist. So this is the challenge that the therapeutic window of these T-cell engagers isn't giving you any early (inaudible) activity. That's -- let me say it this way. It either works or it doesn't work, and there's not much in between.

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Operator [45]

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(Operator Instructions)

We'll take our next person, I-Eh Jen from Laidlaw & Company.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [46]

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Just let's start with the combo study, that after the 3rd cohort, the dose-escalating cohort, you have -- you will have additional, I guess, up to 20 patients? And could you give us a little bit of update in terms of the recruitment for that part, and are those mostly treated with a high dose instead of a low therapeutic effective dose?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [47]

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So, yes, the recruitment is ongoing, and we're making good progress. And indeed, yes, it is the highest dose that we're using for AFM13 with a standard dose of Keytruda.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [48]

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And should we anticipate, for example, interim updates sometime in 2018, maybe the first half or second half, or how should we sort of anticipate that data set after the ASH (inaudible)?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [49]

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What we will do is, until the -- so at the time when recruitment of the dose-cohort expansion is completed, we can inform you. And then, that gives us the opportunity to talk about exact timelines.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [50]

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Okay, great, thanks. And last question here is about the Columbia study and AOCC. Congrats on the first patient of data. In total, how many patients -- you may have mentioned already, the -- to be sort of recruited for this study, and did you say that there's a couple of doses, and what the other 2 doses is planned for this study?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [51]

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Yes. So the doses -- we haven't yet mentioned it, but they're all on active dose. So we're also, because of a translational study, we can analyze the influence of NK-cell dosing on NK-cell activation. Currently, we do not want to have that shared in detail. However, we will have a minimum of 9 patients in this study, and depending on the results, we can go and amend the study consequent to include more patients. So if data come back very encouraging, obviously it makes a lot of sense for us to spend more time and effort on the CD30 lymphoma piece. But it has been very important, because for the longest time, we have been treating Hodgkin's patients, which indeed represents a good patient population because they have a high number of CD30 expression, but the CD30-positive lymphoma is not only widening the opportunity, but it may also give us the opportunity to really deal with patients that have different levels of CD30 and see how important CD30 expression is to the efficacy of our drug. And as we've postulated here, our drug seemed to work well on cells that have low target expression, so that could be, again, something quite exciting for us that we are investigating in the CD30-positive lymphoma field.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [52]

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And maybe just this last question on this one, which is that the patient you reported here, and then the picture here, which is a photograph of the -- has had -- the tumor has been removed pretty well on Day 21. Does this patient continue to maintain this status, or was that -- did he or she have any relapse after the later point of the assessment?

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [53]

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Yes, so it's a very good question. His treatment is ongoing. We are -- so presently, this is an ongoing study, and we only have access to data at certain time points. So at the moment, I can't give you an answer on your question.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [54]

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Okay. Thanks a lot, and congrats on the progress.

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [55]

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Thanks a lot.

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Operator [56]

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So, ladies and gentlemen, that will conclude our Q&A session, as there are no further questions. I would like to hand the call back to our host for any additional or closing remarks.

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Adi Hoess, Affimed N.V. - CEO, MD & Member of Management Board [57]

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Thanks a lot for listening to our earnings call. So you're seeing that we are making a good progress with our NK-cell engagers and understanding better where the opportunities are. Engineering higher affinities to CD16A seems to be very important and is highly differentiating, now combined with new structures, can give us molecules that we intend to develop in solid tumors and in multiple myeloma. So this is a novel field. We're dedicated to it, and at the moment, we're very pleased with our progress that we're all seeing with AFM13, demonstrating to us that there is a preclinical activity in patients that otherwise have no options or already have been pretreated. Thanks a lot for listening, and I look forward to all your interactions, seeing you, probably soon, at ASH.

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Operator [58]

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Thank you. So, ladies and gentlemen, that will conclude today's Affimed Third Quarter 2017 Earnings Call. Thank you for your participation. You may now disconnect.