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Edited Transcript of IMMU earnings conference call or presentation 25-Feb-19 10:00pm GMT

Q2 2019 Immunomedics Inc Earnings Call

MORRIS PLAINS Mar 1, 2019 (Thomson StreetEvents) -- Edited Transcript of Immunomedics Inc earnings conference call or presentation Monday, February 25, 2019 at 10:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Behzad Aghazadeh

Immunomedics, Inc. - Executive Chairman

* Chau Cheng

Immunomedics, Inc. - Senior Director of IR & Corporate Secretary

* Robert Iannone

Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development

* Scott A. Canute

Immunomedics, Inc. - Executive Director

* Usama Malik

Immunomedics, Inc. - CFO

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Conference Call Participants

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* Christopher Lawrence Howerton

Jefferies LLC, Research Division - Equity Analyst

* Kyuwon Choi

Goldman Sachs Group Inc., Research Division - Equity Analyst

* Matthew Kelsey Harrison

Morgan Stanley, Research Division - Executive Director

* Michael Werner Schmidt

Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD

* Nicholas M. Abbott

Wells Fargo Securities, LLC, Research Division - Associate Analyst

* Philip M. Nadeau

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

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Presentation

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Operator [1]

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Good afternoon, ladies and gentlemen, and thank you for standing by. As a reminder, this call is being recorded. Today is Monday, February 25, 2019.

At this time, I'd like to turn the conference over to Chau Cheng, Senior Director of Investor Relations at Immunomedics.

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Chau Cheng, Immunomedics, Inc. - Senior Director of IR & Corporate Secretary [2]

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Thank you, Jamie.

On December 14, 2018, the company's Board of Directors approved a change in the company's fiscal year-end from June 30 to December 31, effective immediately. During this earnings call, the reporting period for the 6 months ended December 31, 2018, is referred to as the transition period.

Before we begin, I'd like to remind everyone that during this call, we will be making forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Such statements may involve significant risks and uncertainties, and therefore, actual results could differ materially from those expressed or implied on this call.

For factors that could cause such differences, please refer to our regulatory filings with the Securities and Exchange Commission most recently, our transition report on Form 10-K for the transition period ended December 31, 2018. The earnings report is available on our website at immunomedics.com.

With us on the call today with prepared remarks are Dr. Behzad Aghazadeh, Executive Chairman; Usama Malik, Chief Financial Officer; and Dr. Robert Iannone, Head of Research and Development and Chief Medical Officer. Also on the call for Q&A is Scott Canute, Executive Director. Following the prepared remarks, we will open up the call for questions.

One housekeeping item before I turn the call over to Behzad. While clearly of high importance, we ask for your understanding that we are currently limited in our ability to provide substantial additional details on the CRL activity or speculate on time line. And as such, I ask that you take this into account when posing your questions. Thank you.

Behzad?

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [3]

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Thank you, Chau.

Good afternoon, everyone, and thank you for joining us.

Along with our earnings release this afternoon, we made a number of organizational announcements that I will walk through in a moment. After that, I'll briefly touch on our progress with respect to the CRL response before turning it over to Usama for an overview of our financials and Rob for a brief update on our clinical development programs.

Today, we announced that Michael Pehl is leaving the organization and returning to Europe to spend more time with his family. Michael was instrumental in building the leadership team at Immunomedics and reshaping the culture of the organization. I would like to thank Michael for his service over the past 15 months, and we wish him well in his future endeavors.

The Board of Directors has appointed me Executive Chairman, and I'll be working closely with the leadership team to drive our corporate objectives. The board has also appointed Scott Canute, current member of the board, to Executive Director. He will be leading our organizational response to the Complete Response Letter.

As you know, Scott is a leading expert in manufacturing and quality with more than 36 years of experience in the biopharmaceutical industry. He has an excellent track record of leading, managing and turning around manufacturing organizations, first at Eli Lilly, where he last served as the President of Global manufacturing operations, and later at Genzyme, where he was the President of Manufacturing and Corporate Operations. We're fortunate to have Scott at the helm to lead this critical initiative.

Let me provide a short overview of our CRL initiatives. Upon receipt of the CRL in mid-January, we assessed the contents and, as previously communicated, determined that they were solely focused on CMC-related matters. We quickly assembled a CRL response team under Scott's leadership to develop our response strategy. And over the past 5 weeks, this team has systematically reviewed all concerns raised by the agency and is mapping out our response to each of the items. The team is close to finalizing a response strategy in advance of the meeting request with the FDA. We have high confidence in our ability to respond to the issues and resubmit our BLA in a timely fashion, and that confidence has only increased since the CRL team began their work. Nevertheless, we eagerly await the opportunity to discuss the plans with the FDA before we can firmly commit the specific resubmission time lines.

In the meantime, my appointment as well as Scott's, gives this company the ability to maintain focus on the key task at hand while also providing us the flexibility and time to attract the highest-caliber candidate to lead the company as CEO.

Finally, I'm pleased to announce the addition of Dr. Charles Baum to our Board of Directors. Chuck has been President, CEO and board member of Mirati Therapeutics since November 2012. Prior to joining Mirati, he was Senior Vice President for Biotherapeutic Clinical Research at Pfizer and served as the Head of Oncology Development and as Chief Medical Officer for Pfizer's Biotherapeutics and Bioinnovation Center. Chuck's impressive drug development accomplishments include major breakthroughs in cancer treatment, Axitinib, Crizotinib and Sunitinib, to just name a few.

Chuck brings a strong scientific, drug development executive management perspective that will be invaluable to the company as we continue to execute and expand on our development priorities.

Before I turn it over for an overview of our financials, it is also my pleasure to announce that Usama Malik has been appointed from interim CFO role to CFO. Usama has been a critical member of the leadership team since our board assumed control of the company, and most recently has been dedicating himself to prepare the organization for the next stage of growth from a finance and infrastructure perspective. We are pleased to have him in this role.

Usama, over to you for the discussion of the financials.

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Usama Malik, Immunomedics, Inc. - CFO [4]

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Thank you, Behzad.

We have no revenues in the transition period, due primarily to the discontinued sale of LeukoScan during the quarter ended March 31, 2018, in order for us to focus on our ADT business.

Revenues in the comparable period ended December 31, 2017, were approximately $1.3 million. Total costs and expenses were $144.5 million for the transition period compared to $52.3 million for the comparable period ended December 31, 2017, due primarily to a $51.1 million increase in research and development expenses, $23.3 million increase in G&A expenses, and $18.4 million increase in sales and marketing expenses.

Most of these increases were attributable to activities related to preparations for the potential approval and commercial launch of sacituzumab govetican for patients with at least 2 prior lines of treatment for metastatic triple-negative breast cancer in the United States, to expand clinical development of sacituzumab into other indications, and to continue to evolve our global supply chain.

We recognized a $1.4 million noncash income for the transition period compared to a $59.6 million noncash expense for the comparable period ended December 31, 2017, due to the net appreciation fair value of outstanding warrants and the exercise of warrants. There were no outstanding -- there were no warrants outstanding as of December 31, 2018.

Interest expense was $20 million for the transition period compared to $2.9 million for the comparable period ended December 31, 2017. The increase was due primarily to increased debt balances as a result of the agreement with Royalty Pharma.

Net loss attributable to stockholders was $157.7 million or $0.84 per share for the transition period compared to $121.3 million or $0.88 per share for the comparable period ended December 31, 2017.

As of December 31, 2018, we had approximately $500 million in cash, cash equivalents and marketable securities. The number of outstanding shares was 190 million, and the fully diluted count was 204 million.

We believe our projected financial resources are adequate to support our clinical development plan for sacituzumab govetican, further build our clinical and manufacturing infrastructure, and fund operations through 2020.

Rob is now going to highlight some of our clinical progress.

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [5]

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Thank you, Usama.

Earlier this month, we reported updated results with sacituzumab govetican in triple-negative breast cancer and urothelial cancer. The TNBC update was published in the New England Journal of Medicine, which demonstrates in greater detail the favorable benefit-risk profile, including additional safety information on 420 patients with epithelial cancers, which showed a favorable safety profile consistent with prior publications.

In urothelial cancer, an update on this cohort from study 01 was recently provided by Dr. Scott Tagawa at an oral presentation at the 2019 Genitourinary Cancers Symposium. Sacituzumab govetican produced an objective response rate of 31% in 45 heavily pretreated patients, including encouraging activity in patients with lymphatic metastases and those who had received prior immune checkpoint inhibitors.

This subgroup of patients with 2 or fewer prior lines of treatment, the ORR was 39%. For patients with liver mets and patients with prior checkpoint inhibitors and platinum-based treatments, ORR was 33% and 27%, respectively. Notably, patients with prior checkpoint inhibitor treatment have been more heavily pretreated with a median of 3 prior therapies. Importantly, responses were durable, with a median duration of response of 12.9 months. Median PFS and OS was 7.3 and 16.3 months, respectively.

At the time of the data cut off on September 1, 2018, 5 patients remained on treatment and 9 patients had treatment duration of more than 1 year.

Despite repeated dosing, sacituzumab govetican was well tolerated with a manageable and predictable safety profile. The most common treatment-emergent adverse events were neutropenia and gastrointestinal in nature which were manageable with routine supportive care. Only 5 patients out of the 45 discontinued due to treatment-related adverse events.

There were no treatment-related deaths.

Given the favorable benefit-risk profile of sacituzumab govetican, we are committed to broaden the potential use of sacituzumab for the benefit of cancer patients by evaluating it in a number of refractory solid cancers beyond TNBC. This includes urothelial cancer, hormone receptor positive metastatic breast cancer, non-small-cell lung cancer and other hard-to-treat solid tumor indications, either as monotherapy or in combination with immune checkpoint inhibitors or PARP inhibitors.

As previously communicated, we plan to initiate the Phase III pivotal study in HR-Positive HER2 negative metastatic breast cancer in the second quarter, and our basket study in non-small cell lung cancer and our Trop-2 high expressing tumors by the end -- sorry, by second half of 2019.

With that, I'll turn it back to Behzad.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [6]

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Thank you, Rob. So in summary, we have clear priorities, the right expertise to tackle these priorities and are well capitalized to execute on our business objectives.

Thank you for your continued interest and support, and with that, operator, please open up the call to questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Matthew Harrison with Morgan Stanley.

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Matthew Kelsey Harrison, Morgan Stanley, Research Division - Executive Director [2]

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I guess, 2 for me, if I may. So the first one, is it -- it looks like on the FDA website, they've classified the EAR as a VAI. I'm just wondering if you guys can comment on what your interpretation of that is or what our interpretation of that should be. And then I have a follow-up.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [3]

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Okay. Scott Canute's on the call, so maybe you want to take that call.

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Scott A. Canute, Immunomedics, Inc. - Executive Director [4]

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Yes, sure. In terms of the time line, we're obviously not getting into specifics at this point. But voluntary action indicated -- it is self-explanatory, really. It's voluntary action indicated, which means there's a time window, the time window that the FDA can choose from. Our time line basically is going to be around our reinspection time line. The way we look at it right now -- again, ultimately it's the FDA's decision. It's not ours. But with reinspection, it's probably trending towards a type 2, type of submission, which could give them up to 6 months upon resubmission. However, they don't have to take that full time line clearly. In this case, we've got label. We've got -- significantly on a number of issues. And we have -- the clinical data looks good. There's still safety issues. It's predominantly, exclusively relates to CMC issues at this 1 site that we have here. And so they could choose to do it sooner rather than later on that one.

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Matthew Kelsey Harrison, Morgan Stanley, Research Division - Executive Director [5]

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Great. And then the second question is just on ASCENT. Any update you can give us on enrollment of that study and how that's progressing?

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [6]

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Yes, we haven't provided any guidance. We said we expect it to be completed by the first half of this year.

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Operator [7]

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And our next question comes from Michael Schmidt with Guggenheim Securities.

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [8]

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I had a couple as well. Maybe the first one regarding the commercial team, the commercial infrastructure. I recall, prior to the PDUFA date, you already hired the full commercial team, and I was just wondering what your plans are for, I guess, maintaining that full sales force during the whole CRL and resubmission process. And then I have a second question as well.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [9]

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Yes, sure, Michael. This is Behzad. So with respect to the commercial organization, obviously, there's some internal resources in hiring that we made, as you pointed out. But they're all thanks to an internal spend that was ongoing. So anything that was external, we immediately cut off as soon as practical upon receiving the CRL. With respect to the internal organization, we have not made substantial changes as of yet as we're still awaiting clarity around the resubmission time line. As I'm sure you can appreciate, there will be substantial costs. If we can turn this in an expedited fashion, we may choose to go down 1 path versus something that would be -- take a little longer. And so while we are waiting to gain that final clarity, we have not made any further changes.

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [10]

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Makes sense. And then I understand you don't want to talk about potential time lines for resubmission before meeting with the FDA. But could you maybe give us some sense of -- at what -- within what time frame an actual FDA meeting might happen?

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [11]

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Yes, that's, to some extent, in our court, and to some extent, in their court. So as we sort of laid out in our opening remarks, we're in the sort of final throes of putting together our response strategy, and we want to go to them with a complete view of what we need to undertake based on our understanding of what's in the CRL. At that point, and as we sort of get very close to that, we would request the meeting. Now under FDA guidelines, they have a certain period to respond to grant that meeting. But that response could also happen really at their discretion sooner. Given we have breakthrough designation, it might come earlier. And so as a result, it's really hard to exactly nail down when that meeting will take place.

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [12]

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And maybe one more for Rob. I know in the past, you've talked about a potential interim analysis of the Phase II study in urothelial cancer around mid-year. I was just wondering if that is still being planned. And if so, what investor expectation should be in terms of patient numbers potentially at that update, and maybe a follow-up as well.

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [13]

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Yes, we haven't guided the exact timing, actually. And what we have said is that we've built in an interim analysis after a number of patients that would give us a good enough read and also give us enough patients to have a meaningful conversation with the FDA about the results and the potential for a breakthrough designation if they're promising.

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [14]

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Okay. And is that still a 2019 sort of event?

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [15]

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Yes, we expect it will be.

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Operator [16]

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And our next question comes from Paul Choi with Goldman Sachs.

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [17]

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Maybe just to help us to sort of understand maybe the spend level in 2019 and 2020. I appreciate that part of the ramp-up and the tail end of last year was the addition of the sales force. But can you maybe directionally, or in rough numbers, give us a sense of how much of the current -- the recent uptick in spend is ongoing -- will be ongoing versus one time? And is that the sort of level of cash burn we should think about for 2019 because I think you indicated you have enough cash to go to 2020?

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [18]

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Yes, I think the 3 primary drivers for the bump up in the spend, one is commercial, as you pointed out. But there's also expanded in our clinical programs as well as manufacturing investments as we scale up. Some of that is ongoing. Obviously, I discussed some of the commercial. I don't think we've broken down the line items. But as you pointed out, we've guided broadly to the cash runway. So I think it's probably useful bumpers to be able to use to get a sense of what the burn might look like.

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [19]

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Okay. And then maybe, one for Rob regarding the ASCO-GI data. In the -- with the incremental patients, we did see an uptick in PFS and OS. They trended up somewhat versus the last update you gave. I guess, in terms of the representativeness of this data, as we think about a potential interim later this year or the final readouts for this, what is the sort of, I guess, implications from these trends with regard to sort of the competitive landscape in this later-line population in your opinion?

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [20]

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So my opinion is this was a pretty heavily pretreated patient population and poor prognostic population when you look overall at the frequency of additional meds, especially hepatic meds. And I think it's encouraging that we had 5 patients at the data cut-off who were still receiving treatment. And those patients and others who were still in response are really driving the extension of the PFS, as you noted. Overall duration of response of 12.9 months. So it's a reasonably sized data set, and it continues to be very encouraging. Obviously, we've designed TROPHY so that we have a cohort that is explicitly the highest unmet need, having failed platinum double and a PD-L1 inhibitor and would, therefore, be a population that you could go to the FDA with -- after single-arm data. And so we're eager to see those results.

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [21]

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And last question is you said you affirmed the start of the hormone receptor positive breast cancer trial for the second half of this year. But how flexible is that timing on resource demands to address that to the CRL?

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [22]

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Could you mind clarifying? What do you mean by how flexible is it?

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [23]

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Is that -- I guess, what I'm asking is was there any chance that, that timing would be pushed off in order to focus resources on the CRL? Or would this still be full steam ahead?

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [24]

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Oh, now I got you.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [25]

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Yes, maybe I can just answer. Just to clarify, I think the intent is to start that trial by the end of the second quarter or during the second quarter, not second half. And the CRL response is pretty much independent of any clinical development priorities that we have. And we believe we can accomplish both at the same time.

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [26]

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Yes, absolutely.

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Operator [27]

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And our next question comes from Phil Nadeau with Cowen and Company.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [28]

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First, a question on the FDA meeting on the Complete Response Letter. What's your disclosure strategy following that meeting? Will you disclose the results of the meeting immediately? Or will you wait for the FDA meeting minutes?

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [29]

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I think, Phil -- this is Behzad here. I think it's pretty reasonable to assume that once we have clarity, we'll convey the key sort of takeaways. In particular, I think the most important aspect is the timing of the resubmission. Whether that requires us to wait for the minutes or not is really probably a function of how clear that message is received from us by the FDA. In the past, what I would also point out is that perhaps given our breakthrough designation, these minutes tend to -- on occasion also come pretty quickly, and occasion, they take longer. So it's really hard to predict what we'll need to do. We'll just -- once we have clarity, we'll provide that clarity, I think, is the key message here.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [30]

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Got it, fair enough. And then second of the urothelial interim analysis, appreciating that the goal of the interim analysis is actually maybe to have a discussion with the FDA. What's your disclosure strategy around that interim? Is that something that you're going to -- that investors see or will it be presented at a medical meeting subsequently? Will we see that interim when it happens?

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [31]

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Yes. So the interim is formally built into the trial design. We've said that in the past, and so that allows us to then publish the data at the appropriate time.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [32]

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Okay, got it. And then last question on the confirmatory study in triple-negative breast cancer. Appreciating that the trial's going to finish enrollment by the mid-part of this year. When can we expect to see data from it? I guess I'm not looking for specific guidance, but how would we, as investors, think through when that data is likely? Do we simply add the expected PFS to the end of the enrollment and that's when the data comes out? Or is it a more complicated time line in that?

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [33]

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Yes, I would say it's a little more complicated. We haven't re-guided yet because it's still early in the course of that study in terms of the events that are accumulating here. What we'll do is to look at the events, of course, in a blinded way and do projections so that we time the analysis to match what's in the protocol. I guess the only thing I could say is that in the past, we have said that the PFS analysis will be accompanied by an interim OS analysis. And you can imagine that the analysis plan takes that into account so that the ultimate time lines will be driven by both of those endpoints.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [34]

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Got it. Okay, and maybe a follow-up. clinicaltrials.gov calls the primary completion of the trial mid-2020. Is that a reasonable expectation or a reasonable time for us to use today?

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [35]

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It's just that it's too soon to do any re-guiding in terms of the -- our modeling. And so once we're able to model something that's more precise, then we'll update CT.gov, and we'll communicate that externally as well. But we just haven't made any changes from the initial projections.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [36]

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Yes, I think, Phil, what's probably worthwhile to capture is -- going back to the way you phrased your question which is sort of tack on some PFS to the end of the trial and -- as a readout. Again, I think it's important to factor in what Rob said about OS is also a consideration here as the authorities would presumably want to see something that has sort of value, if you will. And so some level of maturity in that readout would be also helpful. And so that might also factor in, rather than just tacking on the PFS, the time lines for the OS events, which are probably substantially earlier versus at the progression event itself. That might also factor in to how and when this trial reads out.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [37]

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Is see. Do you -- is the OS analysis -- is the number of events required for that, is that in the statistical analysis point? Or is that something that management has a discretion as to when to trigger it?

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Robert Iannone, Immunomedics, Inc. - Chief Medical Officer and Head of Research & Development [38]

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What I would say is the analysis plan will drive the trigger in this. But we've stopped short of sharing those kinds of detailed analysis plans, which should be pretty uncommon to do so. I don't think I have anything to add to what we've already said.

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Operator [39]

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And our next question comes from Chris Howerton with Jefferies.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [40]

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I don't think there's too much more to ask at this point, but I guess, one thing that we observed was that there was several positions opened up in the quality group. And I'm just curious what the personnel status is of your quality group and how specifically that relates to the CRL subgroup that you described at the beginning of the call. Are there additional personnel that are required to address these issues? Or how should we be thinking about the internal quality group and -- with respect to resolution of the CRL?

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [41]

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Let me start that, off and then I'll hand it to Scott, maybe. But just to be clear, the CRL team is more just organizationally how we, if you will, organize ourselves around how we're going to go out responding. That group is being led by Scott Canute. And into that group, we'll -- the regulatory team reports into group the quality, the manufacturing, just to be very coordinated across functions. It has really nothing to do with additional resources. Now with respect to your question of job openings, I presume it's referring to maybe our website. That, I'll ask Scott to comment on, where company is, with respect to building up the organization.

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Scott A. Canute, Immunomedics, Inc. - Executive Director [42]

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Yes, there's some key positions we're obviously looking for, but you would, in any situation, similar to this as well. To be quite honest, relative to everything I've seen in the past, I've been involved in before, we're actually staffed pretty well at this point. Actually, surprisingly well. And we've got people that are firmly committed to the mission. Everyone is passionate about getting this done and making a sustainable and stronger-quality manufacturing organization. We'll get -- once we get the CRL taken care of in the appropriate time here, ultimately -- the FDA is the arbitrator clearly, but we're also going to have a stronger organization as a part and people are having fun.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [43]

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Good. Okay. And so I guess, it sounds like you have the human resources to address the problem. I guess, the obvious question in my mind in response to that is that if you have the right personnel, the right resources to do this, why was there a CRL in the first place? And how will, whatever activities you're doing with the same people, be able to address something that will get it to a commercial stage?

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Scott A. Canute, Immunomedics, Inc. - Executive Director [44]

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Yes -- no, it's fair. It's a fair question. It's a good question as well. But we -- I don't want to imply that we haven't made changes. We certainly have made some changes. There's people that are not up to snuff, if you will, in a situation like this. But most people are pretty solid, and we can work with them and use them. We've made some changes in our leadership position, and we brought in some of the best consultants that we know of, that I know of, that I've used in previous assignments as well. There's a standard way of approaching these types of situations. It's not particularly exotic. I've been here 5 weeks now or so, looking at a lot of detail at all levels of the organization. And I've not seen anything that I've not seen before. Not seen anything that isn't inherently fixable at all. And our plan will be in place, and we'll get the job done.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [45]

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Okay. Okay that's totally fair. And then the last thing in terms of additional manufacturing capacity had talked about that Samsung BioLogics will also be able to produce this antibody and that tech transfer has been complete, and that there was working on engineering runs. Is there any incremental updates in terms their status and time lines for them to be able to produce antibody for a commercial product?

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Scott A. Canute, Immunomedics, Inc. - Executive Director [46]

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I prefer not to go into too many specifics around that. Samsung is a quality partner, a valued partner. We're very pleased with the progress that we're seeing there, and we'll continue to work closely with them to integrate their supply capability with the capability of the site as well here.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [47]

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I think I would add, perhaps that it's still our intention, as it has been all along that this will be the primary source of commercial material until we've made that switch over. That switch is on its own time line, and it's progressing, as Scott just said, quite well. But it's really not a strategy to have them step in here.

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Scott A. Canute, Immunomedics, Inc. - Executive Director [48]

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No, absolutely.

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Operator [49]

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And our next question comes from Jim Birchenough with Wells Fargo.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [50]

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It's Nick in for Jim this afternoon. First question and that relates to the Complete Response Letter rule where it says, when possible, FDA recommends actions that the applicant might take to place the application in condition for approval. I know it doesn't read particularly well, but I think it's fairly clear that if FDA identifies an issue then, where possible, they try and state what the remedy is. Can you comment on how many of the issues they raised that the FDA has provided you with guidance as to what they want?

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [51]

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Yes, I'll turn it to Scott. I think just from a high level and based on our assessment of the CRL and the team that's been on the ground, I think we have pretty good understanding of what they're asking for and are just putting together, as I said, the strategy to go back to them with our sort of overview and the responses. But Scott, is there details they've provided as to the changes?

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Scott A. Canute, Immunomedics, Inc. - Executive Director [52]

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No, I mean, nothing certainly that we'd want to go on any kind of detail here. I've hinted this a long time and getting into specific detail is just a no-win situation. It's hard to take things out of context. But we understand what they said very clearly. We've incorporated those into our plans comprehensively. We're just finalizing our strategy in order to approach the meeting with the FDA.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [53]

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And so the meeting with the FDA then, just make sure you're on the same page, here are the issues, here's how we plan to address them. Is that it?

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Scott A. Canute, Immunomedics, Inc. - Executive Director [54]

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Yes, that's essentially it. We're not expecting any big, earth-shattering insights during that meeting.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [55]

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And maybe the sequence of how, when everything is completed.

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Scott A. Canute, Immunomedics, Inc. - Executive Director [56]

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Yes, exactly. The thing I want to emphasize here, what we're striving towards and we're assuming that reinspection is most likely the critical path here. It's not to get the reinspection done quickly, it's to get it done well. So if the review process is very mixed -- it's very easy for the FDA to review, review it well and make their ultimate decision on the products. So that's what we're really focused on here. So we're not overly focused on any particular meeting up to that point. We want to proceed with good haste, but we want to do it well and do it right.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [57]

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Okay. And then just a final one for me. You have this commercial team, a group of sales reps, is there any thought that if the time line for this extends that you might be looking to in-license a product or offer your sales force to another company to help co-detail a product?

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [58]

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Nick, those, I think, are all good ideas. And I think what I would say is we're not leaving any idea sort of untouched, but at the same time, we're also very focused on getting sort of the clarity that we need because that might resolve all our questions. But those are good ideas.

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Operator [59]

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At this time, I'd like to hand the conference back over to Chau Cheng for any closing remarks.

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Chau Cheng, Immunomedics, Inc. - Senior Director of IR & Corporate Secretary [60]

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On behalf of the entire leadership team, I'd like to thank you very much for joining us this afternoon. We look forward to updating you in the future on our ongoing progress.

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Operator [61]

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That does conclude today's conference call. You may now disconnect. Thank you, and have a great day.