U.S. Markets close in 6 hrs 25 mins

Edited Transcript of IMGN earnings conference call or presentation 2-Nov-18 12:00pm GMT

Q3 2018 ImmunoGen Inc Earnings Call

WALTHAM Nov 19, 2018 (Thomson StreetEvents) -- Edited Transcript of ImmunoGen Inc earnings conference call or presentation Friday, November 2, 2018 at 12:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Anna Berkenblit

ImmunoGen, Inc. - VP & Chief Medical Officer

* David B. Johnston

ImmunoGen, Inc. - Executive VP & CFO

* Mark J. Enyedy

ImmunoGen, Inc. - President, CEO & Director

* Richard J. Gregory

ImmunoGen, Inc. - Executive VP & Chief Scientific Officer

* Sarah Cue Kiely

ImmunoGen, Inc. - IR & Corporate Communications Officer

================================================================================

Conference Call Participants

================================================================================

* Boris Peaker

Cowen and Company, LLC, Research Division - MD and Senior Research Analyst

* Debjit D. Chattopadhyay

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* John Lawrence Newman

Canaccord Genuity Limited, Research Division - Principal & Senior Healthcare Analyst

* Joseph Michael Catanzaro

Piper Jaffray Companies, Research Division - VP & Senior Biotech Analyst

* Kennen B. MacKay

RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research

* Tsan-Yu Hsieh

William Blair & Company L.L.C., Research Division - Senior Research Analyst

* Wei Ji Chang

Leerink Partners LLC, Research Division - Director of Biotechnology & Senior Research Analyst

* Yuko Oku

JP Morgan Chase & Co, Research Division - Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good day, and welcome, everyone, to this ImmunoGen Third Quarter 2018 Financial Results Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Sarah Kiely, Investor Relations and Corporate Communications. Please go ahead.

--------------------------------------------------------------------------------

Sarah Cue Kiely, ImmunoGen, Inc. - IR & Corporate Communications Officer [2]

--------------------------------------------------------------------------------

Good morning, and thank you for joining today's call. Earlier today, we issued a press release that includes a summary of our recent progress and third quarter 2018 operating results. This press release and a recording of the call can be found under the Investors and Media section of our website at immunogen.com.

On the call today are our President and CEO, Mark Enyedy; our Chief Medical Officer, Anna Berkenblit; and our CFO, Dave Johnston. Rich Gregory, our Chief Scientific Officer, will join the team for the Q&A session.

During today's call, we will highlight key recent accomplishments and review third quarter financial results and upcoming milestones. During the discussion, we will use forward-looking statements and our actual results may differ materially from such statements. Descriptions of the risks and uncertainties associated with an investment in ImmunoGen are included in our SEC filings.

With that, I'll now turn the call over to Mark.

--------------------------------------------------------------------------------

Mark J. Enyedy, ImmunoGen, Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

Thank you, Sarah. Good morning, everyone, and thank you for joining us today. With the completion of enrollment in our pivotal FORWARD I study, ImmunoGen entered the next stage in our transition to a fully integrated biopharmaceutical company. In particular, during the third quarter, we initiated the activities required to support a BLA filing and launch mirvetuximab to treat patients with platinum-resistant ovarian cancer. These efforts have included completing the product validation runs for drug substance, with drug product anticipated for stability testing before year-end; establishing the operational metrics and resources necessary to ensure a timely readout on the primary endpoint of FORWARD I; and moving ahead with prelaunch commercial planning to drive market uptake post approval.

In parallel, we continue to execute towards our other strategic objectives. Beyond the anticipated monotherapy indications, we plan to position mirvetuximab as a preferred partner for combination therapy in ovarian and other cancers. Last month, we presented favorable tolerability and encouraging antitumor activity from the FORWARD II expansion cohort of mirvetuximab in combination with Merck’s anti-PD-1 therapy, KEYTRUDA, in platinum-resistant disease at ESMO.

With these latest results in hand, we've now reported data this year on more than 100 patients, who received mirvetuximab in combination with Avastin, carboplatin or KEYTRUDA. Our investigator community has expressed a high degree of enthusiasm for these mirvetuximab combinations, and we will use their input and our data to guide the next steps to expand the label for mirvetuximab in multiple treatment settings.

We're also evaluating our novel IGN ADCs, IMGN779 and IMGN632, in patients with hematological malignancies. Data from both of these Phase I programs have been accepted for oral presentations at ASH next month, and preclinical data from 632 will also be presented during poster sessions at the meeting.

Looking beyond our clinical assets, we are making rapid progress with our research portfolio. We have initiated IND-enabling activities for IMGC936, our novel ADAM9-targeting ADC program being developed in collaboration with MacroGenics. ADAM9 is expressed on a range of solid tumors, including non-small cell lung, triple-negative breast, gastric and pancreatic cancers, and we expect this program to be the next product candidate that we advance into the clinic. In addition, we presented preclinical data relating to our epithelial cell adhesion molecule or EpCAM-targeting Probody drug conjugate at the European Antibody Congress in October. This EpCAM-targeting PDC integrates CytomX's Probody technology, which enables the selection of targets previously thought to be incompatible with ADC development due to high normal tissue expression. We look forward to sharing more details on this program as it advances. So significant progress with the business over the last quarter, and an exciting moment in ImmunoGen's evolution as we prepare for our pivotal readout in the first half of 2019.

With that, I'll turn the call over to Anna to review our clinical progress in more detail. Anna?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [4]

--------------------------------------------------------------------------------

Thank you, Mark. In addition to our primary objective of bringing mirvetuximab to market as a single-agent therapy for women with platinum-resistant ovarian cancer, we are evaluating mirvetuximab combination regimens in our FORWARD II study to expand the eligible patient population and move mirvetuximab into earlier lines of treatment for ovarian cancer.

As a reminder, FORWARD II is our Phase Ib/II study of mirvetuximab in combination with Avastin or KEYTRUDA in patients with folate receptor alpha-positive platinum-resistant ovarian cancer. As part of FORWARD II, we are also enrolling a triplet combination cohort of mirvetuximab plus carboplatin and Avastin in patients with recurrent platinum-sensitive ovarian cancer. We are making excellent progress with the triplet cohort and expect to complete enrollment of this cohort by the end of the year with initial data in mid-2019.

Earlier this year at ASCO, we reported data demonstrating encouraging activity from the expansion cohort evaluating mirvetuximab in combination with Avastin in over 50 patients with folate receptor alpha-positive platinum-resistant ovarian cancer. Based on these promising results, we are planning to initiate a new expansion cohort in the FORWARD II study to evaluate mirvetuximab plus Avastin further in patients with recurrent ovarian cancer. We expect to open this cohort in the first quarter of 2019.

Most recently at ESMO this October, we presented initial safety data and encouraging preliminary antitumor activity from the FORWARD II expansion cohort, assessing mirvetuximab in combination with KEYTRUDA. The goal of this evaluation is to prolong the clinical benefit of the ADC in later-line patients through concomitant activation of the immune system. Checkpoint inhibitors haven't done much in ovarian cancer as monotherapy, with response rates around 10% to 15%. But for those patients who do respond, the response can be quite durable. So the idea here is to harness a mirv-like response and see if the addition of KEYTRUDA adds anything to the durability of the clinical response.

Initial activity findings show that 83% of patients experienced tumor shrinkage of target lesions in response to treatment with mirvetuximab and KEYTRUDA, with more robust reductions observed in patients with medium or high folate receptor alpha expression. The initial antitumor activity reported is consistent with the broader mirvetuximab monotherapy experience in heavily pretreated platinum-resistant ovarian cancer patients, and encouraging when considering outcomes reported for other KEYTRUDA-based combinations evaluated to date in platinum-resistant ovarian cancer.

Notably, the confirmed overall response rate in this heavily pretreated population of platinum-resistant ovarian cancer in FORWARD II compared favorably to that observed for other KEYTRUDA combinations in less heavily pretreated platinum-resistant patients where published response rates have been below 20%.

There was also a suggestion that in patients with a response to mirvetuximab plus KEYTRUDA, the duration of response may be longer with the combination than what would be expected with mirvetuximab alone in this heavily pretreated population. The mirvetuximab plus KEYTRUDA combination continues to demonstrate favorable tolerability consistent with the known safety profiles of each agent. As this cohort continues to mature, we will use data from it to guide further development of this novel combination as part of our broader strategy to establish mirvetuximab as the preferred combination therapy in ovarian cancer. We look forward to sharing updated data from this cohort when the data are mature.

In addition to FORWARD II, we remain on track for the top line readout from our Phase III FORWARD I registration trial of mirvetuximab as a single agent for platinum-resistant ovarian cancer in the first half of 2019. As a reminder, the primary endpoint in FORWARD I is progression-free survival in the entire study population, which includes patients with both folate receptor alpha medium and high expression as well as in the subset of patients with high folate receptor alpha expression. Based on the encouraging and consistent safety and activity profile observed in clinical studies to date, we believe that mirvetuximab has the potential to displace chemotherapy as a single-agent treatment in the platinum-resistant setting and also to combine well with multiple agents facilitating label expansion in additional treatment settings.

Turning now to our heme-focused ADCs. At ASH next month, we will have 2 oral presentations; one from our Phase I dose-finding study of IMGN779, targeting CD33 in patients with acute myeloid leukemia, or AML; and a second one with initial data from our Phase I dose-finding study of IMGN632, targeting CD123-positive AML and blastic plasmacytoid dendritic cell neoplasm, or BPDCN. IMGN779 and IMGN632 are the first clinical assets from our new IGN pipeline.

As a reminder, our IGNs are a novel class of DNA-acting payloads that we are developing. We've demonstrated preclinically that they are as active in terms of killing tumor cells as other DNA-acting agents that crosslink, for example PBDs. But because the IGNs alkylate or damage one strand of DNA, it is easier for normal cells to repair this damage, and therefore there is a potential for a better therapeutic window, the ability to repeat dose and to dose higher. We believe these programs have strong potential in a range of hematologic malignancies, and the FDA recently granted orphan drug status to IMGN632 for the treatment of AML. We are encouraged by what we've seen thus far with IMGN779 and IMGN632 and look forward to updating you at ASH next month.

Now I'll turn the call over to Dave to review our financials.

--------------------------------------------------------------------------------

David B. Johnston, ImmunoGen, Inc. - Executive VP & CFO [5]

--------------------------------------------------------------------------------

Thanks, Anna. Our financial results were detailed in this morning's press release, so I'll review just the highlights. We ended the third quarter with approximately $303 million in cash and cash equivalents, which we expect to fund our operations at least a year beyond the top line FORWARD I readout, which is expected in the first half of 2019.

Revenues for the third quarter were approximately $11 million, which were largely noncash related to the Kadcyla royalty. Operating expenses in the third quarter were $56.5 million, which included approximately $47 million in R&D expenses that were driven by mirvetuximab clinical trial costs in precommercial activities.

We've updated our cash and revenue guidance as a result of licensing revenue that we now expect in 2019. We now expect revenues to be between $50 million and $55 million and cash and cash equivalents at year-end to be between $250 million and $255 million. This change has no impact on our projected cash runway. Guidance remains unchanged for 2018 operating expenses, which we expect to be between $215 million and $220 million. We continue to operate with financial discipline, focusing our resources on our top strategic objective, which is advancing mirvetuximab towards the market.

So with that, let me now hand the call back over to Mark.

--------------------------------------------------------------------------------

Mark J. Enyedy, ImmunoGen, Inc. - President, CEO & Director [6]

--------------------------------------------------------------------------------

Thanks, Dave. It's been an exciting and productive year so far at ImmunoGen. We have a number of upcoming milestones and activities in the fourth quarter and heading into 2019. ImmunoGen today is well positioned to execute on its strategic priorities, and we look forward to providing additional updates on our clinical programs and commercial planning activities in the coming months.

With that, we'll open the line for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) We will now take our first question from Michael Schmidt of Guggenheim Partners.

--------------------------------------------------------------------------------

Unidentified Analyst, [2]

--------------------------------------------------------------------------------

This is [Eig Yi] on for Michael. I have two questions on IMGN632. The first one is on the ASH abstract released yesterday. Have you guys seen a dose response in this study? And the second one is a more general question. Now that 632 looks very potent, you guys actually have 2 agents, both having activity in AML. Just wondering if you guys can tell us a bit more how do you balance your development strategy for these 2 agents? And when will it be a good point to decide our next steps?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [3]

--------------------------------------------------------------------------------

So regarding dose response, as we mentioned in the abstract, we had 12 patients over 4 dose-escalation cohorts, and we had 4 with an objective response. Since then, the study has continued to dose escalate, and we will present all of the safety efficacy and PK data that we have at ASH in an oral presentation. So we're quite encouraged with the data that we have thus far. Regarding your broader question about development strategy for both compounds, at this point, we are quite encouraged about both 779 and 632. Our primary goal in the near term is to identify the dose and schedule for each of these compounds in terms of monotherapy and then consider combination strategies. AML has a high unmet need, both in the initial setting and then in the relapsed and refractory setting, and so we are thinking quite carefully with our partner at Jazz around how to develop both of these compounds in AML. And when we have identified the dosing schedule for monotherapy and have initial safety data for combinations, we will be able to nail down a combination strategy and monotherapy strategy for both of these in AML.

--------------------------------------------------------------------------------

Operator [4]

--------------------------------------------------------------------------------

(Operator Instructions) We will now take our next question from Jonathan Chang of Leerink Partners.

--------------------------------------------------------------------------------

Wei Ji Chang, Leerink Partners LLC, Research Division - Director of Biotechnology & Senior Research Analyst [5]

--------------------------------------------------------------------------------

First question, can you help set investor expectations with regards to how much more data we could see in the ASH presentations versus what was disclosed in the abstracts for both 779 and 632?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [6]

--------------------------------------------------------------------------------

Sure. So both of these abstracts were submitted to ASH around the end of July this year, and these are based on 2 ongoing dose-escalation studies. These are 3+3 studies, and each cycle you need to get through one -- the first cycle to assess each cohort for safety from a dose-limiting toxicity perspective. So IMGN779, the cycles are essentially 4 weeks because we're dosing on a weekly schedule and then every-other-week schedule. And for IMGN632, the cycles are on a q.3-week schedule. Both studies are still open and enrolling. So therefore, you can kind of figure out that we will have additional patient data at ASH for both of these compounds.

--------------------------------------------------------------------------------

Wei Ji Chang, Leerink Partners LLC, Research Division - Director of Biotechnology & Senior Research Analyst [7]

--------------------------------------------------------------------------------

Great. And just as a follow-up to the ASH presentations, how are you thinking about the CD123 competitive landscape with data from other early-stage CD123 programs expected at ASH? What will you guys be looking for in the competitor datasets?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [8]

--------------------------------------------------------------------------------

Right. So the competitors are basically in a couple different camps, the bispecifics and the CAR Ts. And right now, we are the only ADC, that I am aware of, targeting CD123 actively in the clinic. And so from my perspective, each of these strategies has potential strengths and weaknesses. The bispecifics, they have demonstrated some antitumor activity. They also have cytokine release syndrome as a potential concern. So I think, the safety profile of those as they dose escalate is going to be important. The CAR Ts also, while they can be quite effective, they do require a patient to be healthy enough to receive the CAR T and be able to -- be stable enough to get the CAR T. And so I don't think that each of these strategies is going to be appropriate for all AML patients. The potential advantage of a well-tolerated antibody drug conjugate, like the ones that we're developing, is that once the patient is stabilized, it could be given as an outpatient in the clinic once every 3 or 4 weeks and that could really have an advantage from a patient tolerability perspective. So it's clear, at least, for -- well, for both targets, CD33 and CD123, they're validated targets. And I think there's a variety of strategies to address the unmet need.

--------------------------------------------------------------------------------

Wei Ji Chang, Leerink Partners LLC, Research Division - Director of Biotechnology & Senior Research Analyst [9]

--------------------------------------------------------------------------------

Right. Thank you. And just one more, if I may, for mirvetuximab. Can you talk about your thoughts on how much the FORWARD II KEYTRUDA combination data could evolve with longer follow-up?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [10]

--------------------------------------------------------------------------------

So the question is really around durability of response. And in terms of how much the data could evolve with longer follow-up, it's really about the tail of the curve. And so I think it's going to take us several more months, so into 2019, before we have a sense of whether or not the patients with confirmed responses have durable responses. And also if the patients with stable disease, who don't technically meet the criteria for a confirmed response by RECIST, also stay on study drug much longer than would have been expected with single-agent chemotherapy or even with mirvetuximab monotherapy. So I think, in 2019, we'll be able to make some decisions about further steps for that combination.

--------------------------------------------------------------------------------

Operator [11]

--------------------------------------------------------------------------------

We will now take our next question from Debjit Chattopadhyay of H.C. Wainwright.

--------------------------------------------------------------------------------

Debjit D. Chattopadhyay, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [12]

--------------------------------------------------------------------------------

Just to confirm, you did mention in the prepared remarks a new study with mirvetuximab plus Avastin in recurrent ovarian cancer. Should we understand that this is specifically focused on platinum-sensitive patients?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [13]

--------------------------------------------------------------------------------

So the next cohort combining mirvetuximab with Avastin will be in previously treated patients. The initial cohort showed very nice activity and safety in patients who meet our classical platinum-resistant criteria. However, we know that the ovarian cancer landscape is evolving, with addition of PARPs as maintenance, which is prolonging the platinum-free interval by sort of tagging along at the end the PARP. And while there are potential cross resistance mechanisms, it's going to make it difficult down the road to exactly pin down, who is a platinum-resistant patient. And therefore, our next cohort will really focus on a bit of a broader population of patients, who have already seen platinum, who very well likely will have seen a PARP, and are appropriate for an Avastin-based combination regimen that does not contain a platinum. So the criteria will be looser, if you will, than our initial cohort. And therefore, we hope that the data that we generate from the second quarter will be generalizable to the future ovarian cancer populations' needs.

--------------------------------------------------------------------------------

Debjit D. Chattopadhyay, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [14]

--------------------------------------------------------------------------------

And then as you start thinking about the KEYTRUDA combination cohort and assuming that you see a durability of response north of the 8 months kind of threshold, when do you start to kind of -- maybe start thinking about platinum-sensitive patients because, obviously, these patients are probably less beat-up. So from an immune landscape kind of perspective these patients are probably going to do better off. So from a positioning perspective, when do you start thinking about platinum-sensitive patients? When do you reach out to the agency with the mature data? And how do you position the KEYTRUDA combo? Is it in later lines of therapy or do you move this upfront?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [15]

--------------------------------------------------------------------------------

Thank you, Debjit. Yes, I think what you're referring to is there is a thought that immunotherapy, particularly in ovarian cancer, could work better in earlier lines of therapy when patients have more of an intact immune system and are a little bit less beat-up from prior lines of cytotoxic chemotherapy. So there is definitely interest in moving up checkpoint inhibitors into earlier lines of therapy in ovarian cancer. And certainly, there are many trials ongoing now that will read out in the coming years. So I think that there's a couple of strategies that we could take. The initial proof-of-concept data, if you will, that we're generating in later-line patients with mirvetuximab plus pembrolizumab, if it continues to hold up to be really the best combination regimen with a checkpoint inhibitor in platinum-resistant disease, we will proceed with potential further development opportunities there. Moving up into the platinum-sensitive space, I think, would require a triplet, actually, of carboplatin plus mirvetuximab plus pembrolizumab. Certainly, in lung cancer, that type of strategy has been quite successful with pembrolizumab plus carboplatin and pemetrexed as well as other triplets of 2 cytotoxics plus a checkpoint inhibitor. So at this point, our focus is on completing enrollment in the ongoing triplet of carboplatin, mirvetuximab and Avastin. And I think it will be a good problem for us to have to have 2 very active triplets in the platinum-sensitive space. We're not there yet, but that is one potential outcome if our mirvetuximab plus pembrolizumab data continue to be encouraging from a durability perspective.

--------------------------------------------------------------------------------

Operator [16]

--------------------------------------------------------------------------------

We will now take our next question from John Newman of Canaccord.

--------------------------------------------------------------------------------

John Lawrence Newman, Canaccord Genuity Limited, Research Division - Principal & Senior Healthcare Analyst [17]

--------------------------------------------------------------------------------

I just had two questions. So Anna, in the new Avastin cohort, would there be any different criteria regarding prior exposure to Avastin? I can't recall if you may have had a few patients in the original Avastin cohort that have been dosed previously? My second question is on 779. Just curious if at this point you are satisfied with a dose range and you will look to maybe narrow down the dose that you take forward? Or do you think that there's still some additional room to go on the dose escalation there?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [18]

--------------------------------------------------------------------------------

Yes. So the first question about prior Avastin. In the cohort that we -- in the dataset that we presented at ASCO this past year, we did have patients who had prior Avastin, and we had patients who were Avastin naive. And it doesn't really look like prior Avastin matters. Certainly, in the platinum-sensitive setting, the MITO/MANGO study that was presented, showed that prior Avastin doesn't limit the impact of a subsequent Avastin-containing regimen. So philosophically, we are moving forward with that strategy allowing patients with prior Avastin to enroll in our upcoming new mirvetuximab plus Avastin cohort because we believe that patients will continue to get benefits with retreatment with Avastin. Moving to your second question about 779 and whether or not we're satisfied with the dose range, what I can tell you is, 779 is still in dose escalation. We are looking at the q.2-week schedule and the weekly schedule, and we'll share the data that we have at ASH and then we'll be in a position to discuss next steps.

--------------------------------------------------------------------------------

Operator [19]

--------------------------------------------------------------------------------

We will now take our next question from Andy Hsieh of William Blair.

--------------------------------------------------------------------------------

Tsan-Yu Hsieh, William Blair & Company L.L.C., Research Division - Senior Research Analyst [20]

--------------------------------------------------------------------------------

I guess, the first question is for Dave. Since you guys have been talking about commercial preparation, maybe provide us with a framework in terms of what you're doing? And in the event of a positive readout in the first half of next year, what is the commercial ramp going to look like?

--------------------------------------------------------------------------------

Mark J. Enyedy, ImmunoGen, Inc. - President, CEO & Director [21]

--------------------------------------------------------------------------------

Yes, maybe I can tackle that, Andy, this is Mark, from an operational perspective and Dave can talk about the spending part of it. So right now, we're focused on a couple of key activities, the first of which is ensuring that we can secure drug supply, and so we have completed the drug substance runs. The drug product runs are nearing completion. We'll put that drug up on stability and that will position us well for a second half 2019 BLA filing. So we'll have the requisite data there. In addition to that, operationally, we're gearing up for coming to the final event. And so process wise, we've got operational metrics that are out to the sites in terms of data collection, cleaning and validation and all of that is on track. And then finally, it's around commercial planning. Right now it's looking at go-to-market models, it's looking at physician targets and segmentations and matching that back against our go-to-market model, all with a view that with benefit of a positive readout in the first half of 2019, we would hire in a Chief Commercial Officer and then begin recruiting our sales management, and then that would be followed by the sales force in some period of time prelaunch, so that we're ready to go when we've got an approval. So operationally, right now, we're not adding heads, but we are engaged with outside support around some of these key commercial questions. And I'm going to talk to -- ask Dave to kind of comment on what that would look like from an expense perspective.

--------------------------------------------------------------------------------

David B. Johnston, ImmunoGen, Inc. - Executive VP & CFO [22]

--------------------------------------------------------------------------------

Thanks, Mark. As Mark highlighted, there is some activity going on right now pre Phase III readout. It's -- in terms of the financial scale, relatively modest. I think that our plan is to -- once we have positive Phase III readout, that's when we would really start to see the ramp up of both activities. And then along with that, you'll see an increase in spending. Now it's important to understand that in the cash runway projection that we provided, that's already been contemplated for the second half of 2019. So it wouldn't be incremental to what we've already said. So in terms of a quarter-on-quarter spend, you'll see, I think, fairly consistent for the next couple of quarters, and then in the second half of '19, you'll see a ramp up towards our commercialization watch.

--------------------------------------------------------------------------------

Tsan-Yu Hsieh, William Blair & Company L.L.C., Research Division - Senior Research Analyst [23]

--------------------------------------------------------------------------------

Great. For me the second question is for Anna. In the 779 abstract that was released yesterday, there were some adverse events. I mean just wondering if these are treatment-related or basically just very common baseline patient characteristics in AML? In particular, I'm looking at 22% bacteremia and pneumonia, 20%.

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [24]

--------------------------------------------------------------------------------

Yes, so, Andy, these are patients with relapsed/refractory AML, who've been through some very tough chemotherapy regimens, and their immune system is quite compromised because of their underlying AML. And AML patients, the way they die is they die of infection or bleeding because they don't have an immune system and they don't have platelets. So this is actually quite common in AML patients. And in dose-escalation Phase I first-in-human trial in relapse/refractory AML, there is a pretty well-known underlying rate of adverse events that are disease-related and not drug-related. And so one of the things that we have done to make sure we are protecting patient's safety and assessing the profile of our drug is to choose our centers quite wisely. So investigators that we are working with on both of our AML compounds are experienced AML investigators, who take care of a lot of AML patients on trial and off trial. And they are really best positioned to work with us to help us understand when we are seeing adverse events if they're drug-related or disease-related. And at this point, as we had said in the abstract, no dose-limiting toxicities have been observed on either schedule for 779 thus far.

--------------------------------------------------------------------------------

Operator [25]

--------------------------------------------------------------------------------

We will now take our next question from Kennen MacKay of RBC Capital Markets.

--------------------------------------------------------------------------------

Kennen B. MacKay, RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research [26]

--------------------------------------------------------------------------------

Congrats on the execution. Maybe for David, just a quick compliment, I think that was one of the most concise, but still comprehensive financial reportings I have ever heard on an earnings call I've been on. And then maybe a real follow up for Anna here. Revisiting some of the data that we saw at ASCO and ESMO from FORWARD II's perspective mirv plus Avastin and mirv plus pembro cohorts, it's sort of been hard to definitively say that there is additive or synergistic benefit, at least, on the overall response rate level in FR alpha-positive patients. On the call and at these events, you've brought up durability really being focus here for additive or synergistic benefits. Wondering if you could maybe elaborate a little bit as to any rationale for why sort of antitumor benefit would be seen on duration versus magnitude of tumor shrinkage? And then if there are any sort of I-O combination correlates out there or biomarkers we should be looking to? Or even sort of biological rationale that supports this type of synergistic duration benefit, but not necessarily in terms of magnitude of tumor shrinkage?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [27]

--------------------------------------------------------------------------------

Okay. So let me answer your question for each combination separately because the biology, I think, is quite different. Let me start with Avastin. So we already knew that with standard single-agent chemotherapy, you get a pretty modest response rate, 10% to 20%. And then if you add Avastin to it, you increase the response rate, you increase duration of response and progression-free survival. So Avastin really helps when you're combining with pretty mediocre chemotherapy. With mirvetuximab, we're already starting at baseline without a much higher response rate, and so I think from an immediate antitumor shrinkage perspective, we're already focused on the medium to high patients who seem to have the deeper tumor shrinkage. And then I think Avastin may be adding durability to that in terms of the integrity of the vasculature allowing for deeper tumor penetration into the tumor. So I think that may be underlying the mechanism that we're seeing for enhanced benefit. So I think we're pleased with the data that we've seen, combining mirvetuximab with Avastin, both from an efficacy perspective and also a tolerability perspective because with mirvetuximab, patients don't lose their hair and the neuropathy appears to be not as profound as with paclitaxel. So let me pivot now to the checkpoint inhibitor combination. So I think what we've seen across tumor types with checkpoint inhibitors is that there is a tail. There is a tail on the curve, and I think lung cancer is probably the best tumor type for us to learn from. So when checkpoint inhibitors are given as monotherapy or in combination with chemotherapy in a variety of lung cancer settings, there is always a tail. And it's really frustrating for lung cancer physicians when they start treating a patient because they can't yet predict which patients are going to have that durable benefit from the addition of a checkpoint inhibitor. So I think the same can be said for ovarian cancer, where checkpoint inhibitors are just beginning to be utilized in clinical trials and, I would argue, have not achieved proof of concept yet. So I think, we're watching the field closely, so that if a biomarker does emerge for patient selection that really is robust enough, we'll be in a position to incorporate that. PD-L1 selection is sort of helpful, but it's a pretty complicated field, and I don't think that's the be-all end-all answer. So all I can say is, we've incorporated tumor biopsies in our KEYTRUDA combination, so that hopefully we will be able to interrogate the tumors if it turns out that there's a marker that's helpful. We're just not aware of one right now that's really going to identify those patients who are going to be those with the most durable benefit.

--------------------------------------------------------------------------------

Operator [28]

--------------------------------------------------------------------------------

We will now take our next question from Jessica Fye of JP Morgan.

--------------------------------------------------------------------------------

Yuko Oku, JP Morgan Chase & Co, Research Division - Analyst [29]

--------------------------------------------------------------------------------

This is Yuko on the call for Jessica. Just one question for you. Following initial FORWARD II KEYTRUDA/mirvetuximab combo data at ESMO, what do you think investors can or cannot read into that data for FORWARD I?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [30]

--------------------------------------------------------------------------------

So investors can read into the data from the mirvetuximab plus KEYTRUDA combination that mirvetuximab is an active monotherapy in heavily pretreated ovarian cancer, and it is entirely consistent with what we have demonstrated in the initial first in-human study across 3 separate ovarian cancer cohorts. So that's what we can say now. The Phase III population in FORWARD I is restricted to platinum-resistant disease with 1 to 3 prior lines of therapy. As a reminder, the mirvetuximab plus KEYTRUDA expansion cohort excluded patients with 1 prior and focused on 2 to 4 prior lines of therapy. In the dataset that we presented, 37% of the patients had 4 or greater lines of therapy, so they wouldn't even be included in our Phase III trial. And we know that with additional lines of therapy, benefit from any next subsequent therapy is less and less. So in summary, the data from mirvetuximab plus KEYTRUDA confirmed the activity of mirvetuximab, and it's just too soon to tell whether or not pembrolizumab is adding anything.

--------------------------------------------------------------------------------

Operator [31]

--------------------------------------------------------------------------------

We will now take our next question from Boris Peaker of Cowen.

--------------------------------------------------------------------------------

Boris Peaker, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [32]

--------------------------------------------------------------------------------

For planning the pivotal combo study, I'm just curious, do you have to wait until this new Avastin combo reads out? Or would you have enough data from the combo studies you have ongoing right now?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [33]

--------------------------------------------------------------------------------

So Boris, when you say the pivotal combo study, are you referring to KEYTRUDA or Avastin or the triplet or just the setting...

--------------------------------------------------------------------------------

Boris Peaker, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [34]

--------------------------------------------------------------------------------

Whichever you decide to do. The first -- whatever you decide to do.

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [35]

--------------------------------------------------------------------------------

Okay, all right. So we need more durable data from the KEYTRUDA combination to see whether or not there is a path for accelerated approval in heavily pretreated BRCA wild-type patients, number one. Number two, we need additional data from mirvetuximab plus Avastin that if it confirms the initial data that we've already generated, that could support a registration trial then for platinum-resistant disease or, again, sort of platinum-agnostic disease in previously treated patients for that doublet. But the other piece of data that we will have in 2019 is triplet data from carboplatin plus mirvetuximab plus Avastin. And so we won't be able to start 3 pivotal trials all at once, but we're going to have the data that we need from these different combinations to help us prioritize them and figure out, which will be the next registration trial we proceed with.

--------------------------------------------------------------------------------

Boris Peaker, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [36]

--------------------------------------------------------------------------------

Got you. And lastly on 632. How many BPDCN patients do you think we'll see at ASH?

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [37]

--------------------------------------------------------------------------------

The trial is open to AML and BPDCN, and we are enrolling AML and BPDCN patients, and we look forward to sharing the data at ASH.

--------------------------------------------------------------------------------

Operator [38]

--------------------------------------------------------------------------------

We will now take our next question from Joe Catanzaro of Piper Jaffray.

--------------------------------------------------------------------------------

Joseph Michael Catanzaro, Piper Jaffray Companies, Research Division - VP & Senior Biotech Analyst [39]

--------------------------------------------------------------------------------

Just one quick one from me. I was hoping if you could remind us whether there is any difference in the IGN payloads between 779 and 632? And then along those lines, is there anything in your 779 experience that will allow you to sort of move a bit quicker in dose escalation and reach an MTD for 632?

--------------------------------------------------------------------------------

Richard J. Gregory, ImmunoGen, Inc. - Executive VP & Chief Scientific Officer [40]

--------------------------------------------------------------------------------

So, this is Rich Gregory. I'll take the first question, and I'll let Anna handle the second one. So in terms of the payloads mechanism of action, they're entirely the same. They're both drugs that bind in the DNA minor groove and then chemically modify one strand of the DNA or alkylate it. However, the payload in 632 is about a 10 folds more potent. It's a result of several years more structure-related design, and we have optimized the payload in terms of its potency and its bystander effect such that it is, in our view, a next-generation or superior payload.

--------------------------------------------------------------------------------

Anna Berkenblit, ImmunoGen, Inc. - VP & Chief Medical Officer [41]

--------------------------------------------------------------------------------

And then to the question of learnings applied from 779 to 632 to allow us to go faster, that's exactly right. So 779 was the first ADC with its novel class of payloads to enter human testing. So we were very conservative in our selection of starting dose and in the dose escalation schedule in terms of the increments. Based on the very nice safety profile that we see with 779, that enabled us to start at a relatively higher dose. Again, you have to account for the fact that 632 is more potent, but conceptually a relatively higher starting dose for 632 and also a more aggressive dose escalation schema. So for example, from dose level 1 to dose level 2, we actually were able to do a tripling of the dose for 632. So yes, it should enable us to move faster with 632 than with 779. We're applying all the lessons learned.

--------------------------------------------------------------------------------

Mark J. Enyedy, ImmunoGen, Inc. - President, CEO & Director [42]

--------------------------------------------------------------------------------

Great. I think that's the end of the questions. So I want to thank everybody for their time today, and we look forward to seeing you all at ASH.

--------------------------------------------------------------------------------

Operator [43]

--------------------------------------------------------------------------------

Thank you. This concludes today's call. You may now disconnect.