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Edited Transcript of IMMU earnings conference call or presentation 9-May-19 12:00pm GMT

Q1 2019 Immunomedics Inc Earnings Call

MORRIS PLAINS May 15, 2019 (Thomson StreetEvents) -- Edited Transcript of Immunomedics Inc earnings conference call or presentation Thursday, May 9, 2019 at 12:00:00pm 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

* Robert Iannone

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

* Scott A. Canute

Immunomedics, Inc. - Executive Director

* Usama Malik

Immunomedics, Inc. - CFO & Chief Business Officer

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Conference Call Participants

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* Christopher Lawrence Howerton

Jefferies LLC, Research Division - Equity Analyst

* Joseph Michael Catanzaro

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

* Kyuwon Choi

Goldman Sachs Group Inc., Research Division - Equity Analyst

* Maxwell Skor

Morgan Stanley - Biotechnology Equity Research Associate

* 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

* Shanshan Xu

Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst

* Yige Guo

Guggenheim Securities, LLC, Research Division - Associate

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Presentation

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Operator [1]

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Good morning, ladies and gentlemen, thank you for standing by. As a reminder, this call is being recorded. Today is Thursday, May 9, 2019. At this time, I would like to turn the conference over to Chau Cheng, Senior Director of Investor Relations. Sir, you may now begin.

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

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Thank you. Thank you. Before we begin I would 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.

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

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

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Thank you, Chau. Good morning, everyone, and thank you for joining us. I'm pleased to report that we have made significant progress in all business areas during the past 3 months. As a reminder, I stepped into the role of the Executive Chair on February 23, 2019, provide day-to-day strategic leadership while Scott Canute stepped into the role of Executive Director to lead the complete response letter program, including oversight of manufacturing and quality operations.

Under this new construct that Immunomedics leadership team continues to make progress on our strategic priorities. While we have initiated search for a permanent CEO, this is not a role that we need to fill with high urgency. It is important to find the right candidate with the relevant experience and a necessary fit, and we will continue to evaluate applications with an acute sense of diligence.

With Robbie Iannone's recent announcement that he will be leaving Immunomedics to pursue an attractive professional opportunity minutes away from his home, allowing him to also tend to personal obligation family needs, we have put in place a thoughtful transition plan that includes an executive search agency to recruit a new CMO bringing on industry-leading advisers to continue to provide strategic thought leadership. Leveraging Rob in a consultative role after his last day at the company and elevating the role of the strong clinical leadership team that we have put in place over the last year in regulatory, safety, clinical development, clinical operations, project management and medical affairs.

And the most pressing topic of interest to us, our investors and most importantly patients, I am pleased to report that in late Q1, we successfully conducted our Clinical Type A meeting and agreed upon the content of the safety update for the resubmission, which is standard for any resubmission. And just within the past few days, we had our CMC Type A meeting with the FDA. It was a very constructive and collaborative dialogue, and we gave broad alignment on the plan for resubmission.

Based on this meeting, we expect to resubmit our BLA in early fourth quarter 2019 for the accelerated approval of sacituzumab govitecan for the treatment of patients with metastatic triple-negative breast cancer who have received 2 prior therapies for metastatic disease. In a few moments, Scott will provide you with more detail on our work leading to the FDA meeting. While our work to gain U.S. approval for sacituzumab in metastatic triple-negative breast cancer continues, we've entered into a creative arrangement with Janssen to leverage our commercial team and copromote Janssen's recently approved urothelial cancer drug, Balversa. The agreement lasts until the end of March 2020 with regards to our sales activities, however, if sacituzumab is approved before that time, we're only required to support Balversa in the second position detail.

In terms of revenue from this arrangement, we are eligible to receive low double-digit royalties and milestone payments from Janssen based on U.S. Balversa sales throughout 2019 and 2020. In business development, Usama and his executive team have done a tremendous job in consummating the exclusive licensing agreement with Everest Medicines for Greater China and certain Asian countries. The deal terms have been broadly recognized to be highly favorable compared to other partnerships for that region, and I will leave it to Usama to provide you with more details on the transaction.

We set out to consummate a deal that expands the global reach and brings this important medicine to regions that we do not believe we will have the means to execute on our own, but also to do so on the right terms. Beyond ensuring that we maximize shareholder value, it was also important to us that we identify a partner that is committed to working closely with us and pursuing the breadth of opportunities that this important medicine has shown promising activity in.

With the Everest partnership, we have accomplished all of these objectives. Furthermore, and importantly, we continue to maintain the strategic optionality of our organization in the core established global markets. A number of updates on the clinical front. We have launched a registrational Phase III TROPICS-02 study in late-line HR-Positive HER2-negative metastatic breast cancer to potentially address a large unmet need. This study builds on the Phase II reported results of 31% confirmed response rate in 54 heavily pretreated patients with a 6-month clinical benefit rate of 48%.

Responses were durable, median DoR and PFS were 7.4 months and 6.8 months respectively. TROPICS-02 is expected is enroll approximately 400 patients with HR-Positive HER2-negative metastatic breast cancer, who have failed at least 2 prior chemotherapy regimens for metastatic disease. Patients are randomized to receive either sacituzumab govitecan or treatment of physicians choice. The primary endpoint will be PFS with OS serving as the secondary endpoint. Recognizing the unmet needs and in agreement with the FDA, we have included an interim analysis for ORR and DoR, which could support an accelerated approval submission should the results warranted.

Our other Phase III trial, the confirmatory ASCENT study in third-line metastatic triple-negative breast cancer is expected to complete patient enrollment by the end of June 2019. We currently do not have an updated view on when the triggering PFS event will occur. Keep in mind, however, that the given the large size and geographic scope of the study, once we have reached the required PFS events, it may require significant time to clean and lock the database ahead of any top line results. We will communicate with you once we have clarity on such timeline. For the pivotal Phase II TROPHY-U01 study in metastatic urothelial cancer, we are on track to compete enrolling 100 patients who have received prior platinum base and immune checkpoint inhibitor treatments by the end of this year. Once we have sufficient follow up, we will conduct an interim readout later this year for a potential breakthrough therapy designation application.

In addition to breast and urothelial cancers, our focus in 2019 will be to further characterize the utility of sacituzumab in other cancer types with late-stage disease as part of Trop-2-enriched basket study to be initiated in the second half of this year. And with that, I will turn it over to Scott.

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

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Thank you, Behzad. In planning for the resubmission, we knew that the quickest way to approval was to ensure we have a high-quality resubmission and a clean reinspection. We undertook an in-depth and methodical review of our manufacturing and quality operations upon the receipt of the CRL. With the guidance of Bryan Ball, our new Chief Quality Officer and our outside expert consultants. This enabled us to lay out a robust plan that we are executing on in the months to come. In some cases, we've accelerated the implementation of parts of our quality improvement plan that were originally intended as post-marketing commitments. In other cases, we have made organizational changes to ensure robust capability development. Ultimately, our goal for refiling is to ensure that the submission package is very clear and well laid out to minimize the review process and to ensure that we're fully prepared for a PAI that can be conducted with ease and efficiency. Based on this thorough review on planning, we then prepared the briefing book and requested the Type A meeting. The meeting was very collaborative and constructive. The FDA expressed their willingness to work with us as we work through the process. With the agreement with the FDA and our plan and the work that we've done since receiving the CRL, we're confident that we can meet an early Q4 resubmission time line. At this juncture, beyond the resubmission time line, we cannot opine on the anticipated duration of the review cycle other than to reiterate that none of the approvability issues are related to clinical data. The collaborative dialogue with the FDA continues to extend us, suggest a desire by the agency to continue to be supportive in the submission and review period.

I'll now turn it over to Usama to go over the financials.

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Usama Malik, Immunomedics, Inc. - CFO & Chief Business Officer [5]

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Thank you, Scott. Let me begin with the Everest Licensing agreement. As Behzad stated moments ago, this partnership culminates the deliberate process that began 18 months ago to expedite regional expansion of sacituzumab for the benefit of cancer patients in the world's fastest-growing pharmaceutical market and to significantly enhance shareholder value. Pursuant to the agreement, Everest will be responsible for all costs associated with the clinical development and commercialization of sacituzumab in Greater China that includes Taiwan, Hong Kong and Macau as well as South Korea, Mongolia and some ASEAN countries. A joint steering committee will be established between the 2 companies to oversee the overall strategy and priorities. We look forward to working closely with Everest to not only pursue the breast and urothelial cancer trials that Behzad just updated but also develop sacituzumab in additional indication such as lung, esophageal and gastric cancers that are more prevalent in that part of the world. We will receive a nonrefundable upfront payment of $65 million and an additional $60 million based on the FDA approval of sacituzumab in metastatic triple-negative breast cancer in the United States.

We're also eligible to receive development milestone payments of up to $180 million and sales milestone payments of up to $530 million as well as royalty payments based upon percentages of net sales in the territory ranging from 14% to 20%. We had a very competitive process and received multiple term sheets from organizations ranging from multinational conglomerates to startups. While the financial terms set a new benchmark for a single asset licensing deal for regional China, we are most impressed with the team that Everest has assembled and the talent they were able to attract both in China and in the United States.

In our view, Everest has the experience, focus and commitment to be the preeminent biopharmaceutical company in Greater China and other emerging Asia-Pacific markets. They have already demonstrated their ability to execute through numerous innovative in-licensing agreements, they've entered over the last 2 years while building one of the most talented teams in the industry including U.S. oncology CMO Eric Rowinsky and China Oncology CMO Yang Shi. We believe that Everest are the right fit for us given their stated desire to allocate significant resources to develop and commercialize the product and the license territory with speed, flexibility and a sense of urgency.

Switching to the quarterly results. I will provide top line results and refer everyone to the quarterly earnings report as well as this morning's press release for additional details. Total cost and expenses were $79.6 million for the 3 months ended March 31, 2019, compared to $38.1 million for the comparable quarter ended March 31, 2018, due primarily to a $29.3 million increase in R&D expenses, a $6.7 million increase in G&A and $5.5 million increase in sales and marketing expenses. As of March 31, 2019, we had approximately $443 million cash, cash equivalents and marketable securities. The number of outstanding shares was 191 million and the fully diluted count was 205 million. We believe our projected financial resources are adequate to support our clinical development plan for sacituzumab, further build out our clinical and manufacturing infrastructure and fund our operations through 2020.

This concludes our first quarter 2019 financial results. Before I turn the call back to Behzad, I wanted to address the ATM facility, which we established to provide us with another management tool at our disposal to allow for flexibility and optionality. We're not obligated to make any sales under the ATM, but we will use it strategically in the context of our business. Importantly, this option does not preclude us from considering other financing alternatives such as the nondilutive deal with Everest. With that, I'll pass it back to Behzad.

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

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Thank you, Usama. I'd like to take this opportunity to formally welcome Barbara Duncan to the board. Barbara brings with her decades of experience in financial and enterprise risk management. She was most recently CFO of Intercept Pharmaceuticals. Previously, she served as CFO and then the CEO of DOV Pharmaceutical. She also currently sits on multiple boards of public biotech companies.

Barbara is joining Immunomedics at an inflection point where there are tremendous opportunities for the company to grow and deliver a new paradigm for treating complex cancers that will transform patient lives.

Finally, I would like to take this opportunity to thank Rob for his significant contributions to the launch of a clinical program and then building a strong clinical and medical affairs team for the company. I'm also deeply grateful for the dedication and diligence of all of our colleagues at Immunomedics and consultants who are committed to bringing sacituzumab to market each and every day. We thank you for your continued interest and support. And with that operator, please open the call up for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) First question comes from Matthew Harrison from Morgan Stanley.

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Maxwell Skor, Morgan Stanley - Biotechnology Equity Research Associate [2]

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This is Maxwell Skor on for Matthew Harrison. I have 2 questions. Do you need to produce new material? Or produce any new stability data for the FDA resubmission? And regarding the UC trial, can you talk about the bar to stop the study for overwhelming efficacy?

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

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Sure. Scott, do you want to take that?

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

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Yes. I'll take the first question. We really prefer not to get into any kind of specific details about what we need to do for the resubmission. There's a lot of things that go into this. We've had great conversation with the FDA last week, and we've got a plan in place that we're pretty comfortable. I'm actually quite comfortable that we'll be able to meet our early Q4 resubmission time line.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [5]

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I mean I think it's fair to say that we are in manufacturing mode and the FDA would as a result of possibly in reinspection be observing the manufacturing the extent that answers your question as well. Rob, on the question of the bar for early stoppage of urothelial.

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

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On the bar for early stoppage mean?

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [7]

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I think the question is, is there a efficacy bar that if we hit we would stop the study earlier, is that the question?

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Maxwell Skor, Morgan Stanley - Biotechnology Equity Research Associate [8]

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Yes, that's the question.

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [9]

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Yes. Thanks for clarifying that. So on the TROPHY-U01, the interim analysis is on a subset of patients, so we would continue to enroll through that subset to get the full number of patients. The interim would be used potentially to discuss breakthrough designation with the agency, but we will continue to enroll through that.

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Operator [10]

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Our next question comes from Paul Choi from Goldman Sachs.

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [11]

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Congratulations on the progress. I'd like to maybe start with a commercial question, please. With regard to your copromote with J&J, could you maybe give us a sense as to maybe what potential portion of the market -- there could be overlap with regard to promoting within the bladder cancer market versus your, the TNBC market and I'll start with that.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [12]

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Yes. Thanks for the question. What I would say is that in the community setting, there is generally expected to be quite significant overlap. In the tertiary -- in the sort of more academic setting, I would say that with the breast cancer indication there probably be lesser overlap, however, as you likely also know that our drug has utility hopefully in the urothelial setting. So in that regard also those connections are going to be important, but again in the community setting, we expect to be essentially 100% overlap in certain regions.

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [13]

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Got it. Thank you for that. And then maybe just returning to the subject of TROPHY-U01 and potential timing for the interim look with the subset of patients. Can you maybe provide any updated thoughts as to when you might top line that data? And would that be something you'd want to present at a medical meeting in possibly in the second half of 2019?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [14]

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We haven't commented yet on the timing because as you know, we're not only looking for a certain number of patients to give us kind of a robust early read, but also wanting to ensure that there's adequate follow up to estimate to not only have a full appreciation of the response rate but also to estimate the duration of response. And certainly, when we achieve that, we'll look to publish as appropriate in a medical meeting, but we don't have a time line or meeting target at this point.

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Operator [15]

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Next question comes from Philip Nadeau from Cowen & Company.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [16]

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Just a few first on the resubmission. Scott, in your prepared remarks, you said you couldn't handicap or couldn't predict the time line for the FDA's review of the resubmission. Based on our read of the statute because a reinspection is going to be needed, it seems like you're going to either get a 6-month PDUFA date. Is that your understanding too? Is there any reason why you wouldn't get a 6-month PDUFA date?

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Scott A. Canute, Immunomedics, Inc. - Executive Director [17]

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Yes, that's -- ultimately, it's the FDA's decision. I mean, it's reasonable to assume because of the reinspection that 6-month PDUFA date may be something that they go with, but I can't speak on behalf of the FDA. We would say though that because we have -- there are no clinical issues between us and approvability. And we have a label, and we really had a really productive meeting with the FDA as well. And people realize the significance of the structure, the patients that are out there and -- but it would not be unreasonable to assume the FDA would be motivated to label to shorten that review period, but ultimately, it's the FDA's decision.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [18]

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Got it. Okay. And then second, I can imagine the concerns around here for investors today around the timing of the expected PDUFA versus the potential for the read out from the confirmatory ASCENT trial. I think people are going to be nervous. ASCENT is going to come close to the PDUFA date and therefore, the FDA is going to want to wait for that data before issuing an approval for sacituzumab. Could you comment on that? How likely is it that the FDA waits for the confirmatory data before issuing an approval?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [19]

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This is Rob. So what I can say is the FDA, to this point, has no outstanding questions on the strength of the clinical data and that was not part of the approvability issues of the CRL. And in all of our discussions with them, the intent is for the resubmission to be based on the data that we already presented. Having said that at this point, ASCENT is still accruing. We don't yet have an estimate of when that last event will come in that would trigger data cleaning and ultimately, work toward a top line missile. And so at this point, the resubmission will be based on clinical data, and we assume that our view will be solely on the clinical data from 01.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [20]

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Got it. Okay. And then another question. I think we've all seen that EIR post the inspection in August of the manufacturing facility. I think the part of EIR that has investors curious or concern is the part where there was some falsification about records and the documentation wasn't given to the FDA because of -- because Immunomedics claimed attorney-client privilege. Would you be willing to talk a bit more about that incident? And what could be done to cure it? Are you now able to -- if the FDA still needs the documentation turn it over to the FDA? Or is there some way -- some other way to answer those particular issues, those other Form 483 observations?

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Scott A. Canute, Immunomedics, Inc. - Executive Director [21]

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Yes, I mean, we -- last year actually, we provided everything -- we waived the attorney-client privilege. We provided all the data the FDA asked for. The FDA has not asked for any more information since that time and data integrity was not even brought up as a topic during our Type A meeting at all.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [22]

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Phil, let me just add one thing to this because I know it's been repeatedly brought up. It's just sort of an overarching statement that everyone is obviously working off of a document that was ultimately furnished as a result of activity that occurred almost a year ago now. And I think people should take some comfort, confidence in the fact that we had essentially a year of collaborative dialogue with the FDA to address and work through any item that was raised. You're sort of looking a little bit into a history book and trying to predict what happens when we already know what is happening in some of these events.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [23]

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So would you be willing to give us any color on what you do need to do to resubmit in the next 5 months? What -- any broad flavor of the CMC issues that remain to be resolved?

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Scott A. Canute, Immunomedics, Inc. - Executive Director [24]

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I mean, it's just working through the items that were brought up in the CRL. And we mentioned, we did it because we had some things we wanted to do to work on the process that were originally post-marketing commitments. When we got the CRL, we decided to pull those things forward. And we clearly want to make sure we get this right, right because it's important to patients, it's important to the company and clearly that we do so. And so we look for R&D across the board.

I would say that in our view and I think this is accurate that we -- the quickest way to get a quick approval is to have a very robust BLAs resubmission and a very clean reinspection that shortens the review time, again, ultimately, it's up to the FDA. While we make the quickest review on that standpoint, and we've reflected that into all of our time lines and into our resubmission time line as well.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [25]

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Got it. Okay. One last question just on the upcoming ASCO meeting, there's a title for the -- for urothelial date at ASCO. It sounds like that date is not going to be the interim analysis, is that correct? What...

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

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Yes, it's not TROPHY. That's study 01. It's basically an encore presentation. And what was presented at the February meeting.

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Operator [27]

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Our next question comes from Chris Howerton from Jefferies.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [28]

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I think most of them had been asked, maybe just a couple for me. With respect to Samsung Biologics, is there any update in terms of the tech transferring them, getting their operations ready for potential commercialization?

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Scott A. Canute, Immunomedics, Inc. - Executive Director [29]

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I mean, at a very high level, we're working with Samsung. We find them to be a very good partner. Recently manufactured material there that have gone well to date. And as we deem appropriately after we receive approval here, we're most likely -- we submit for approval there in a later time line, but we're not dependent on that in terms of approval here. Our ability to supply clinical or commercial product upon approval.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [30]

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Okay. Okay. Good. And then maybe this question would be for Rob for the metastatic breast cancer for HR-positive, what would be a reasonable expectation for accelerated approval with respect to ORR or DoR?

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

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Yes. So we think the literature shows that response rate in that population is about 15%, somewhere in that range with a pretty short duration of response. PFS is being median less than 3 months, remember these are patients who have already failed 2 chemotherapies. This is a randomized trial, so using response rate, we'll have a triple arm in the study for a comparison of response rate.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [32]

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Okay. Got it. And then I guess just a last one. For the TROPICS-02 study for the 400 patients, how many sites are you expecting to activate for that trial?

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

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We haven't said specifically how many sites. What I can say is that in terms of regions, it'll be a little bit broader than ASCENT. We're wanting to include Asian countries as well sort of be more representative of a true global trial. And overall size is similar to ASCENT, so we're certainly leveraging what we learned from ASCENT about which is the best -- takes the use in best regions, et cetera.

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Operator [34]

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Our next question comes from Shanshan Xu from Berenberg Capital.

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Shanshan Xu, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [35]

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I have 2 questions if I may. And the first one is congratulations on publishing the Phase II of IMMU-132 in New England Journal of Medicine. We understand that biologically triple-negative breast cancer is a mix basket of various heterogeneous diseases. Can you please talk about the concordance between ORR, PFS and OS to help us handicap upcoming ASCENT better. You especially -- you enrolled 15% patients with brain mets, which is not the case for your Phase II study?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [36]

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Sure. So we know that from our interactions with health authorities both in U.S. and Europe that PFS is an acceptable endpoint for this population and for this study. And part of that is related to the fact that there is a correlation between PFS and OS in this context. We also know that if you look at other drugs that are approved and used commonly in this space, but the response rates that we observed in our BLA population exceeding 30% is significantly greater than those comparative therapies. And furthermore because sacituzumab is so well-tolerated impart. Patients tend to stay on the drug, and we're seeing very strong durations of response that I think differentiate from other chemotherapies out.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [37]

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And then, Shan, just to clarify on the topic of the brain mets that patient population while it is enrolled in the ASCENT study, it's going to be excluded from the primary endpoint and that was in consultation with the FDA. They wanted us to enroll those patients just to generate the data, but it is not going to be basis of the primary endpoint. They will be excluded.

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Shanshan Xu, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [38]

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Yes. That was clear to me. My second question is that, can you please share a little bit about your non-small-cell lung cancer clinical strategy? When do you expect to initiate a proof-of-concept study? Or you consider the preexisting data is already a proof of concept? And your next step, is it going to be a randomized fashion or not? Which lines of lung cancer patients are you considering? And with Rob leaving us, would it cause any delay in advancing IMMU-132 in lung cancer?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [39]

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Yes. So this is Rob answering the question. I certainly do consider the Phase I data that we have to be proof of concept to non-small-cell lung cancer. We had about a 15% to 20% response rate with very good durability. And if you look at that advance population, you'd expect really 10-or-less percent with single-agent taxanes. So it's certainly proof of concept to me. Our strategy is to study this further in the context of a biomarker enriched population. In the basket trial that Behzad referred to earlier, we're including non-small-cell lung cancer, both squamous and adeno histologies. And the strategy will be to enrich using a Trop-2 IHC to see if we can improve that response rate and overall efficacy even further. And then the rest of the development will be based on what we see in that study.

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Operator [40]

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Our next question comes from Michael Schmidt from Guggenheim.

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Yige Guo, Guggenheim Securities, LLC, Research Division - Associate [41]

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This is Yige on for Michael. We have a question on urothelial cancer. So sacituzumab is being evaluated in combination with Rubraca in a Phase I trial. The recent setback of Rubraca's Atlas study, is there any potential change to this study for example, to -- focused on the patient with a certain genetic mutation? Was there any change of sacituzumab govitecan study?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [42]

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So we haven't changed based on the emerging data and there's a couple reasons for that. One, the principal purpose of the study is to establish a safe and effective dose for the combination, which is the first step. But we also know that there's a strong rationale for combining PARP inhibitors with the topo I inhibitor and that hasn't really been possible, doing that with just straight chemotherapy. That has a triple-arm mechanism because of the overlapping toxicities with the targeted topo I like sacituzumab, we think will have a better therapeutic index. And based on preclinical data, we expect there's going to be synergy, so we don't know at this point whether that's going to be dependent on say BRCA status or other HRM mutations and we -- so we want to enroll a broader population to really begin to understand that.

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Operator [43]

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Our next question comes from Jim Birchenough from Wells Fargo.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [44]

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It's Nick on for Jim this morning and congratulations on the progress. The first question is, you mentioned also a safety update. Will that include data from the ASCENT trial?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [45]

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No or not, so just to clarify. We've said this before that there were no clinical issues, approvability issues in the CRL because it was understood that there'd be some time before the resubmission would occur, and we have patients who are continuing to receive drug. Is a good thing right? On study 01, that it would only be appropriate to update the safety at the time of the resubmission, so that's essentially what we're doing is using a later data cutoff to refresh the safety data for the resubmission from 01.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [46]

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Okay. And then with your new partner in Asia, Everest. Are they going to be contributing patients to any of the ongoing and soon-to-be-started studies? And what is the -- what's gauging on them filing for approval in their territories?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [47]

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So let me answer the second part first, which is the overall strategy is to progress the clinical development program in China quickly enough so that we can begin to include Chinese patients in the global program wherever possible. And we think the timing is such that, that certainly could occur even for the HR-positive (inaudible) we do beyond that. And then in terms of what's gating in terms of getting the rest of the program started, it's really just moving from agreement to implementation which as you know, will include some consultation with the health authority in China as well as standing up new clinical trials. But we're highly motivated to move quickly so that we can begin to generate data in Chinese patients and begin to include Chinese patients in the global trials.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [48]

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So the registration there would be based on trials that include Chinese patients?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [49]

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It would. And so as you know things have changed quite a bit in terms of what the requirements are in China. So we're eager to have a conversation with the healthy authority there to understand, could there be a bridging strategy for TNBC that wouldn't necessarily require a randomized trial with TNBC because as you know a sample before him enrolled by the time we bring China online. And then pair that with a broader global strategy where subsequently then patients from China are included in the global program, but we have to have that dialogue with the health authority. I just think that a lot more seems possible now than even a year ago in terms of what requirements would be, not only the speed with which studies are started but the requirements for breakthrough therapies such as this one.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [50]

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And Nick, just to add to that, an excited approval in the U.S. could serve Everest a good amount of to advance our agenda to get this drug quickly approved in China as well. And that's why to some extent the deal was structured the way it was because they would benefit from an approval.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [51]

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And then what are the plans for studying sacituzumab in earlier lines of patients? I feel like a big pharma would already be putting out a broad swath of studies in earlier lines and talking about adjuvant studies, neoadjuvant studies. What are your plans there?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [52]

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It's something we're actively considering and discussing with academic partners and cooperative groups on, I'll say that much. And as you know in TNBC, there's a big need there still. There's still an unmet need for patients with TNBC who after neoadjuvant therapy have residual disease who don't achieve a path response. Right now, capecitabine is the only approved therapy in that space, and it's not regardless being highly effective. And so it's an area of strong interest for us certainly, in TNBC for starters, but potentially in other areas as well. So we're working on it.

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

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And it was great to hear that Eric Rowinsky is going to be involved. He certainly has a long track record in oncology drug development.

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Operator [54]

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Our next question comes from Joe Catanzaro from Piper Jaffray.

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Joseph Michael Catanzaro, Piper Jaffray Companies, Research Division - VP & Senior Biotech Analyst [55]

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Maybe first, just following up on the last question. I feel like I previously remember you guys discussing opening up single-arm cohorts in first, second line TNBC. Are those plans on hold at the moment? Are you still expected to progress with that?

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Robert Iannone, Immunomedics, Inc. - Former Chief Medical Officer and Head of Research & Development [56]

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We still expect to progress there. So -- again, the earlier question was about early stage disease like limited-stage receptible disease, so neoadjuvant, adjuvant or post neoadjuvant for those who failed neoadjuvant. And so that's of interest, but certainly earlier lines of therapy in advanced disease we think is also important, especially if you consider one line earlier like second line, where the available therapies are not particularly good, again, it's sort of single-agent chemotherapy. We also think even in the first line setting, there's a possibility of monotherapy being effective perhaps in a biomarker enriched subgroup. We certainly think that some combinations with sacituzumab could be effective of first line beyond what's currently available, so combinations with PARP inhibitor, combinations with PD-1, and these are also part of the plan.

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Joseph Michael Catanzaro, Piper Jaffray Companies, Research Division - VP & Senior Biotech Analyst [57]

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Okay. Great. That's helpful. So my next questions and I realized that after the resubmission the time line is contingent on the FDA's decision, but previously you guys had speculated that if they choose a 6-month review period, there's the opportunity that the reinspection happens very quickly after resubmission and I'm wondering if in your recent interactions with the FDA whether they've indicated that. Or -- and whether that's still your hope that, that may occur?

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Scott A. Canute, Immunomedics, Inc. - Executive Director [58]

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I mean, it's a great question. The -- and the FDA has not indicated nor would we expect them to indicate that until they do it actually. We'll have conversations where we'll be able to have a pre-BLA submission meeting, where we'll discuss our time line and our production schedule. When they decide to come in, they most likely want to see us what we're manufacturing, so we can align those. So there's no surprises on that because obviously we would like an inspection as quickly as we can get it. We will be inspection-ready at the time of resubmission. There's no question about that. And it's really up to the FDA at the end of the day. One of the reasons we mentioned about having the BLA so clean -- as clean as we can get it is that it will allow them to coming quicker. And again, it's ultimately up to the FDA. We're hopeful they'll come in earlier, but it's their decision at the end of the day.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [59]

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And if I might add. Just the nature of the conversation, the FDA was quite interested in understanding our time lines and pleased to hear that we're moving as fast as possible. They're generally trying to very supportive of this. So they're aware of the situation but at this point, it would have been too early to commit to anything that would go to that level of detail.

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Joseph Michael Catanzaro, Piper Jaffray Companies, Research Division - VP & Senior Biotech Analyst [60]

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Okay. Got it. And then just one last one. So we've seen some other companies publicly disclose when their reinspection has happened, are you guys thinking about doing the same?

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [61]

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It's something we might consider. I think it's just too early to judge and I don't necessarily think it's all that beneficial, but let's see where we are when that occurs.

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Scott A. Canute, Immunomedics, Inc. - Executive Director [62]

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Just a clarification on the way the process works is when we resubmit the FDA needs to accept the resubmission which down -- goes always to within 14 days and they can come in immediately at that point in time, so again it's their decision but they could come in quite quickly.

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Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [63]

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I mean our policy generally has meant to provide updates that are meaningful and sort of updates for the sake of an update which doesn't really provide real content is perhaps not all that important or creates confusion and that would probably not be a strategy, we would be interested in pursuing. But if it's something meaningful that investors would need to know we would certainly share that.

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Operator [64]

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At this time, I would like to hand the conference back over to Chau Cheng for his closing remarks.

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Chau Cheng, Immunomedics, Inc. - Senior Director of IR [65]

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

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Operator [66]

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This does conclude today's conference. You all may disconnect. Thank you, and have a great day.