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Edited Transcript of MEIP earnings conference call or presentation 28-Aug-19 9:00pm GMT

Q4 2019 MEI Pharma Inc Earnings Call

SAN DIEGO Sep 14, 2019 (Thomson StreetEvents) -- Edited Transcript of MEI Pharma Inc earnings conference call or presentation Wednesday, August 28, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Brian G. Drazba

MEI Pharma, Inc. - Secretary & CFO

* Daniel P. Gold

MEI Pharma, Inc. - CEO, President & Director

* David A. Walsey

MEI Pharma, Inc. - VP of IR & Corporate Communications

* David M. Urso

MEI Pharma, Inc. - COO, Senior VP of Corporate Development & General Counsel

* Karen E. Potts

MEI Pharma, Inc. - SVP of Regulatory Affairs

* Richard G. Ghalie

MEI Pharma, Inc. - SVP of Clinical Development

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Conference Call Participants

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* Adam Gerald Evertts

LifeSci Capital, LLC, Research Division - Senior Research Analyst

* I-Eh Jen

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

* Minh Vong

SunTrust Robinson Humphrey, Inc., Research Division - Associate

* Nicholas M. Abbott

Wells Fargo Securities, LLC, Research Division - Associate Analyst

* Stephen Douglas Willey

Stifel, Nicolaus & Company, Incorporated, Research Division - Director

* Thomas Eugene Shrader

BTIG, LLC, Research Division - MD & Healthcare Analyst

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Presentation

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Operator [1]

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Good afternoon and welcome to the MEI Pharma 2019 Fiscal Year-End Conference Call. Please be advised that this conference call is being recorded at the company's request. (Operator Instructions) At this time, I would like to turn the call over to Mr. David Walsey, MEI's Vice President, Investor Relations and Corporate Communications. Please proceed.

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David A. Walsey, MEI Pharma, Inc. - VP of IR & Corporate Communications [2]

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Thank you. Good afternoon, everyone, and thank you for joining us. After the market closed today, we filed our Form 10-K for the fiscal year ended June 30, 2019, with the Securities and Exchange Commission and issued our final results and corporate highlights press release, both of which are available in the Investors section of our website at www.meipharma.com.

On our call today, we will provide a summary of financials from the fiscal year ended June 30, 2019, and then review progress in our programs and business over the last year. We will then open the call up to your questions.

Before we get started, I want to call your attention to the fact that this conference call may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in any forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties as discussed in our SEC filings, including our most recent annual report on Form 10-K filed earlier today. A replay of this call will be available on our website approximately an hour after its conclusion.

I'd now like to introduce you to our speakers for today. With me are Dan Gold, our President and Chief Executive Officer; Brian Drazba, our Chief Financial Officer; and David Urso, our Chief Operating Officer. Additionally, Richard Ghalie, our Senior Vice President of Clinical Development; and Karen Potts, our Senior Vice President of Regulatory Affairs, are also with us today. Brian will start with a summary of our financial results, after which Dan and David will provide remarks. After that, we will open the line for your questions. I'll now turn the call over to Brian.

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Brian G. Drazba, MEI Pharma, Inc. - Secretary & CFO [3]

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Thank you, David. I'll provide a brief overview of our financial results. For more detailed information regarding our results, I invite you to review our Form 10-K that was filed earlier today.

I'm pleased to report that we finished the year with $79.8 million in cash, cash equivalents, short-term investments and common stock proceeds receivable with no outstanding debt. Additionally, for the year ended June 30, we -- cash used in operations was $39.4 million compared to $21 million in the last year. Research and development expenses were $32.3 million for the year ended compared to $17 million last year. The increase was primarily related to increased activities in all clinical programs, including development costs associated with ME-401 and voruciclib. General and administrative expenses were $14.6 million for the year compared to $9.8 million last year. The increase primarily relates to professional services expenses, share-based compensation and general corporate expenses.

We recognized revenues of $4.9 million for the year ended June 30 compared to $1.6 million for the year ended June 30 last year. Revenues resulted from the recognition of fees allocated to research and the development activities related to the Helsinn and Kyowa Kirin license agreements. Revenue increased due to higher levels of research and development activities during this year.

Net loss was $16.8 million or $0.24 per share for the fiscal year ended compared to a net loss of $40.1 million or $0.97 per share for 2018. The company had 73.5 million shares of common stock outstanding at June 30, 2019, compared with 70.4 million shares at June 30, 2018. The adjusted net loss for the fiscal year ended June 30, 2019, excluding noncash expenses related to changes in the fair value of warrants issued in connection with the May 2000 (sic) [2018] financing, a non-GAAP measure, was $44.5 million.

In summary, we started fiscal year 2020 in a strong position to continue advancing our programs. With that, I'll turn the call over to Dan.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [4]

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Thanks, Brian, and thanks to everyone for joining us this afternoon. Over the last year, we've executed on a straightforward, purposeful strategy to advance our pipeline of 4 clinical-stage oncology candidates while building a strong foundation to deliver value to our stakeholders and importantly, to continue our ultimate mission of delivering patient benefit beyond what is currently achieved through existing therapies. As I go through my prepared remarks, I'll update you on each of our programs, including the upcoming milestones and plans for the next few quarters.

Let's start with ME-401, which we believe, based on the clinical evidence so far, is emerging as the potential best-in-class PI3 delta inhibitor for the treatment of B-cell malignancies. Please recall that we have 2 ongoing studies: a Phase II clinical trial evaluating patients with relapsed/refractory follicular lymphoma intended to support the strategy for an accelerated approval of a marketing application with FDA; as well as a Phase Ib study that currently is evaluating ME-401 primarily in combination with agents such as Rituxan or zanubrutinib, an investigational BTK inhibitor being developed by BeiGene.

PI3 delta inhibitors are clinically validated for the treatment of B-cell malignancies. This is not surprising given that PI3 delta is found at the crossroads of several B-cell signaling pathways. And as such, PI3 delta is a target for treating B-cell disease, in general, holds significant potential that matches and, I believe, may actually exceed the potential of other drug classes targeting these other B-cell pathways even the BTK inhibitors. However, historically, PI3 delta inhibitor class has been challenged by dose-limiting toxicities, restricting their clinical utility. This presents an opportunity for the development of a next-generation candidate with pharmaceutical properties that can better maximize the biologic potential of PI3 delta inhibition while limiting toxicities that hinder their clinical utility.

With ME-401, we believe we have the opportunity to open a new chapter in the utility of PI3 delta inhibitors, particularly in combination with other therapies to treat B-cell malignancies. This is in large part because of the unique molecular structure of ME-401 that results in pharmacodynamic characteristics which are distinct from FDA-approved delta inhibitors and others in development. ME-401 is characterized by prolonged target binding, preferential cellular accumulation, significant distribution throughout the body tissues and a 28-hour half-life suitable for once-daily oral administration.

We believe these attributes are important to the potential differentiation and clinical utility within the class of PI3K inhibitors. Specifically, we believe ME-401's properties allow exploration of flexible dosing regimens such as an intermittent dosing schedule, which has the potential to maintain clinical benefit while minimizing immune-related toxicities common to the other PI3 delta agents, either as a monotherapy or in combination with other therapies or investigational agents.

On the intermittent schedule, ME-401 is administered once daily for 2 cycles or 8 weeks, followed by administration once daily for the first 7 days of a 28-day cycle, followed by 21 days of placebo versus the continuous schedule where 401 is administered daily. Based on the maturation of our data to date, which now includes over 100 patients treated with ME-401 either in -- on the continuous or intermittent schedules, we believe there's strong evidence for this view of ME-401 as a potentially differentiated next-generation PI3K delta inhibitor.

Recently, we presented data at the ASCO 2019 and ICML 2019 meetings demonstrating that follicular and CLL patients on the intermittent schedule achieved an overall response rate similar to that in patients on the continuous schedule but with nearly a 2/3 reduction in the adverse events of special interest such as diarrhea and colitis to levels of 10% or less. This highlights the importance of the intermittent dosing schedule as a key part of this development program, and we believe a key factor in the emerging clinical profile is observed in the ASCO and ICML data. In this data, we see strong clinical support for the intermittent schedule, consistent with the scientific basis for PI3K delta as an important B-cell target and the rationale for the intermittent dosing schedule, that being intermittent schedule provides sufficient delta inhibition in B-cell tumors while potentially allowing the recovery of T regulatory cells, the likely catalyst for the adverse events of special interest in the periphery.

Based on this data, around the beginning of calendar 2019, we initiated a Phase II clinical trial evaluating ME-401 as monotherapy for the treatment of adults with relapsed/refractory follicular lymphoma after failure of at least 2 prior systemic therapies, including chemotherapy and an anti-CD20 antibody. We intend to submit the results to support an accelerated approval of a marketing application with the FDA. We anticipate completing enrollment in this trial sometime around this time next year.

The Phase II is evaluating both the continuous and intermittent dosing regimens. Approximately 166 patients will be randomized in the trial, and the primary efficacy end point will be the rate of the objective response to therapy. The Phase II study represents an opportunity for an expedited regulatory path to marketing approval for third-line follicular lymphoma through the FDA's accelerated approval mechanism.

While third-line follicular lymphoma represents an important opportunity to meet an unmet medical need and is an attractive -- and is attractive commercially, we are targeting a broader opportunity. As such, in the Phase Ib study, we are continuing to further explore the intermittent schedule as part of a combination approach for the treatment of other B-cell malignancy indications. David Urso, our Chief Operating Officer, who leads our business development efforts will speak to some of our work around these combination treatments with ME-401 since they are related to the expanded opportunity and our strategic partnering activities over the last year and our plans moving forward.

And with that, I'll turn it over to David.

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David M. Urso, MEI Pharma, Inc. - COO, Senior VP of Corporate Development & General Counsel [5]

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Thanks, Dan. As Dan mentioned, the Phase Ib is ongoing and of particular interest to our program's clinical and commercial value are potential combinations of ME-401 with other therapies. To that end, the Phase Ib has already evaluated ME-401 in combination with rituximab. This arm was primarily to evaluate safety since general -- since in general, the patients in the study were rituximab-experienced. As presented in June of this year at ICML, we observed no change in the safety profile of the combination compared to monotherapy with ME-401 and again, a very high response rate.

In the second arm of the Ib study, we are evaluating the safety and efficacy of ME-401 in combination with zanubrutinib, an investigational BTK inhibitor being developed by our partner, BeiGene. This is being done under a collaboration finalized with BeiGene in October of 2018. This arm of the study is evaluating the combination in patients with mantle cell lymphoma, diffuse large B-cell lymphoma and second-line follicular lymphoma. The cost of the combination trial is being equally shared with BeiGene, with each company supplying its own compound. We retain all commercial rights to ME-401, and BeiGene retains all commercial rights to zanubrutinib.

The collaboration with BeiGene is an example of our efforts to be mindful of deploying resources efficiently and to make decisions to develop and commercialize our drug candidates strategically, either independently or via partnerships, to most effectively leverage the potential of our candidates and resources. In this past year, we also licensed Japanese rights to ME-401 to Kyowa Kirin Company in a transaction completed last October. This is another example from the recently completed fiscal year of a strategic transaction that effectively leverages a partner's resources while advancing the development of one of our candidates.

As we continue to develop ME-401 as a next-generation PI3K delta inhibitor, we believe that there is significant potential to treat a range of B-cell malignancies in combination with other therapies, including not only rituximab and BTK inhibitors like zanubrutinib but also BCL-2 inhibitors, such as venetoclax, and potentially agents with other mechanisms of action as well. Where practical, we are exploring additional clinical collaborations to advance evaluation of combinations of ME-401 and other agents in various B-cell malignancies. We anticipate having an update on the zanubrutinib combination potentially around mid-2020. And we will also look forward for -- to other opportunities to update on the Phase Ib data as it matures, including publication of the data in a peer-reviewed journal.

In short, taking a combination approach to development across multiple B-cell indications may open opportunities in earlier lines of treatment for follicular lymphoma as well as opportunities to treat select, significant, addressable markets with unmet medical needs in multiple treatment paradigms, including CLL, SLL, mantle cell lymphoma, marginal zone lymphoma and DLBCL. Overall, we estimate the addressable market in these B-cell malignancies represents roughly 50,000 patients in the United States.

We also see this program as an opportunity for MEI to transition to a commercial organization, either independently or via relationship with a strategic partner. While the nature of the indications allows MEI to pursue commercialization independently, we believe there may be value and strategic benefits to partnering. To that end, we have regular discussions with potential strategic partners. We're pursuing opportunities and avenues of development and commercialization both independently and with partners that we believe will best build the clinical utility of ME-401 for patients and realize value for MEI stakeholders.

I'll now turn the call back to Dan to review our other 3 clinical programs. Dan?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [6]

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Thanks, David. I'd now like to update you on our remaining programs, starting with our CDK inhibitor, voruciclib, another exciting program that we believe has tremendous potential to improve on existing treatments for B-cell malignancies and AML, particularly in combination setting with venetoclax, an FDA-approved BCL-2 inhibitor.

Voruciclib is an orally available CDK inhibitor differentiated by potent inhibition of CDK9 in addition to CDK6, 4 and 1. As you may know, CDK9 regulates the myeloid leukemia cell differentiation protein, or MCL-1, a member of the family of anti-apoptotic proteins which, when elevated, may prevent cells from undergoing cell death. Inhibition of CDK9 blocks the production of MCL-1, which is an established resistance mechanism to BCL-2 inhibitor, venetoclax. CDK9 also regulates MYC, a transcription factor regulating cell proliferation and growth, which contributes to many human cancers and is frequently associated with poor prognosis and unfavorable patient survival.

Last year, at ASH, in 2018, we presented preclinical data demonstrating that voruciclib synergizes with venetoclax to induce apoptosis in both venetoclax-sensitive and resistant AML cells and cell lines. The preclinical data further demonstrate that voruciclib transiently downregulates MCL-1 and that MCL-1 downregulation is likely responsible for much of the synergies seen with voruciclib and venetoclax. These data add to earlier studies demonstrating voruciclib dose-dependently suppresses MCL-1 and that the combination of voruciclib and venetoclax was capable of inhibiting MCL-1 and BCL-2 and achieve synergistic antitumor efficacy in other B-cell malignancies, including aggressive subsets of DLBCL in preclinical models.

Currently, we are evaluating patients with hematologic malignancies in a dose-ranging Phase I clinical trial of voruciclib in which we started treating patients this past year. The trial is initially intended to evaluate voruciclib primarily for safety as a monotherapy in patients with relapsed/refractory B-cell malignancies or AML after failure of prior standard therapies. In parallel, we have submitted an amended protocol to the FDA to evaluate voruciclib in combination with venetoclax to confirm the synergies and the opportunity for combination treatments across multiple indications. We look forward to updating you on this program likely around a medical meeting in the first half of the calendar year 2020.

Next up is ME-344, our novel and tumor-selective mitochondrial inhibitor targeting the oxidative phosphorylation complex in the mitochondria. As reported at ASCO 2019, ME-344 recently completed a multicentered, investigator-initiated, randomized, open-label clinical trial evaluating the combination of ME-344 and the VEGF inhibitor bevacizumab, or Avastin, much easier to say, in 42 patients with early HER2-negative breast cancer. Patients were randomized 1:1 to receive either ME-344 in combination with Avastin or saline in combination with Avastin.

This study was designed based on the observation that while anti-angiogenics like Avastin or the small molecule kinase inhibitors are able to reduce the rate of glycolysis in tumors as a mechanism to block cell growth, tumor metabolism will shift to mitochondrial metabolism to continue energy production and support continued tumor proliferation. In such cases of tumor plasticity in the presence of treatment of anti-angiogenics, it was hypothesized that simultaneously targeting the alternative medical source with -- metabolic source with ME-344 may open an important therapeutic opportunity.

The primary objective of the trial was to show proof of ME-344 biologic activity as measured by Ki67 reductions, a measure of cell proliferation that is highly correlated with tumor response. The data from this study demonstrate significant biologic activity in the ME-344-treated group as measured by the mean relative Ki67 reduction compared to patients from the Avastin monotherapy group. Treatment was generally well tolerated. There were just 2 grade 3 adverse events of high blood pressure, 1 in each arm. The next step for ME-344 is to evaluate it in combination with an anti-angiogenic and look at more meaningful clinical end points. This is a very exciting tumor metabolism approach and program, and we're evaluating the best path forward, including the potential for collaboration.

Now moving to our final and fourth clinical candidate, pracinostat, the oral HDAC inhibitor being evaluated in a pivotal Phase III global registration clinical trial for the treatment of adults with newly diagnosed AML who are unfit to receive intensive chemotherapy. Pracinostat is also being evaluated in a Phase II trial in patients with high or very high risk MDS. Recall, we received breakthrough designation from the FDA in 2016 for pracinostat in the treatment of AML, and in January 2018, the EMA granted orphan drug designation also for the treatment of AML.

Pracinostat is fully partnered under an exclusive worldwide license, development, manufacturing, commercialization agreement with Helsinn Healthcare. Helsinn is primarily responsible for funding global development and commercialization costs for pracinostat. We're responsible for conducting the Phase II MDS trial, the cost of which is being shared equally with Helsinn. Upon successful completion of the Phase II study, all future development and commercialization costs will be the responsibility of Helsinn.

The Phase II study completed enrollment earlier this year, and patients are now being followed for survival. The data from this study are encouraging, and in discussions with our partner Helsinn, we are targeting to report 12-month survival data possibly at a medical meeting in the first half of calendar 2020 after we have 12-month follow-up on every patient.

In summary, we are very encouraged with the progress we've made over this last year. We have a diverse clinical-stage pipeline. We have 2 candidates in global studies to support marketing authorization, a pipeline that we expect to continue to generate exciting data over the coming quarters and a healthy balance sheet. We are in a strong position to continue building value for our shareholders as we work diligently to advance our clinical candidates towards approval for our patients.

With that update, I think we're now ready for questions. Operator, could you open the line to questions, please?

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question in the queue comes from Tom Shrader with BTIG.

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Thomas Eugene Shrader, BTIG, LLC, Research Division - MD & Healthcare Analyst [2]

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I just had a little bit of a philosophical question about the zanubrutinib combinations. Just your thought process there, this drug is -- neither is a simple drug to dose. Do you think you're back to square one with dosing your drug? Or are you only interested if you can sort of use what you've learned in the intermediate dosing? Just your thoughts about where that stands in dosing. And similarly, your thoughts on the diseases. You gave a list of diseases, which CLL isn't on, which I find interesting, and I'd just love to get your thoughts.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [3]

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Yes. Thanks, Tom. Good questions. About the dosing, so we feel from the safety profile of the drugs that -- we're starting at the recommended Phase II dose of both agents. We had a lot of discussions with BeiGene about this, and we both felt there was no reason to go down. We have the option, of course, to go down. And there are always dose modification predefined in the protocol. The first part of the study actually is, and it is fully enrolled now, is specifically addresses your question about the safety. We're looking at -- to make sure there are no issues with that, and we should know that answer relatively soon. And assuming that, that is the case, we will then proceed to doing the dose expansion cohorts that David mentioned in his remarks.

You are correct, we specifically, at this time, are not looking at CLL. That doesn't mean that, that isn't a target for us in the future. I think this question may come up in -- with others. CLL is an interesting disease that we've given a lot of thought to. As you know, Tom, the -- our response rate with 401 is extraordinarily high. We have 100% response rate so far. CLL is not one of those diseases where there is a lot of white space currently. It is very well served by the BTK inhibitors, ibrutinib as a model. And as such, we felt that it would probably be difficult to discern in a timely fashion an effect of the combination because you're really then looking at prolonged progression-free survival end point or MRD negativity. And therefore, we decided to look at the other indications where BTK has some indication of activity, although not as strong as it does in CLL.

That said, of course, if it turns out that there is good indication in some of the other indications that the combination is potent, we obviously could revisit CLL. But I think with the data that have been presented most recently at ASH and ASCO with the various BTKs, it would be a very long protracted development plan to look at, especially in a frontline or second-line setting with the combination.

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Thomas Eugene Shrader, BTIG, LLC, Research Division - MD & Healthcare Analyst [4]

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All right. And just to make sure I got you, this first cohort with the BeiGene drug, that's -- we really should be looking for efficacy there. That's designed to be an active combination.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [5]

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Oh, yes, totally. Yes, absolutely. It's just -- for the first, I think, half dozen patients, it was really a quick look at safety to make sure there's no acute safety issues in the first month, and then we will do the expansion cohorts. And it is an efficacy as well, yes.

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David M. Urso, MEI Pharma, Inc. - COO, Senior VP of Corporate Development & General Counsel [6]

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Just to finish up on CLL. As BTK -- this is David. As BTK gets used more and more upfront, we do think that in the future that there is a place to play with BTK progression, whether as a single agent or potentially in combination with venetoclax.

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Operator [7]

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The next question in the queue comes from Peter Lawson with SunTrust.

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Minh Vong, SunTrust Robinson Humphrey, Inc., Research Division - Associate [8]

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Congrats on the progress this quarter. This is Minh Vong on for Peter Lawson. Just really quick. I might have missed this. Can we expect an update from 401 around December or ASH time this year? And if so, how many more patients do you think we may get?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [9]

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Yes. I think there -- because we have been putting all of our efforts in the registration study, the accelerated approval intended study, we -- any patient who would have typically been enrolled in the Phase Ib for follicular -- for relapsed/refractory follicular, we're encouraging and are going on to the registration study. So we really don't have a lot more -- we tend not to want to just continue to dribble out information. So I think for this upcoming ASH, there won't be any significant updates in the patients that we reported on. I mean we've kind of had a pretty comprehensive response rate update at ASCO and ICML. The only thing that would be new would be continued look at the duration of those responses. And I think we're going to probably -- the thinking is right now, we might incorporate that into a manuscript rather than continuing to just dribble out new information in small amount of new information.

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Minh Vong, SunTrust Robinson Humphrey, Inc., Research Division - Associate [10]

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Great. Super helpful. And then I guess around the registrational kind of Phase II with enrollment expected to be completed around sometime next year, are you waiting for all the patients to have a 6-month follow-up before presenting the data? So it's probably early 2020 and then the filing -- sorry, early 2020 and then -- I mean, sorry, early 2021 and then filing afterwards?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [11]

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Compound question there. Yes. So working backwards, yes, the intention is to file sometime late 2021. In terms of the data presentation, recall, this is being run as a blinded study. The patients don't -- they know that they're receiving continual dosing for the first 2 cycles. And then they've been already randomized, and they're receiving blinded drug from then on either on the intermittent or continuous schedule. So the only data that we would know for sure would be after 2 months of -- the response rates at 2 months. And then whatever blended response rates, only from the investigators, this is -- this will be done by independent radiology as well. So whether we will talk about the 2-month dose -- response rates or not, we haven't decided that yet. But you're correct that once the last patient is in and has a 2-month evaluation, it would be a 6-month clock from there before we would report top line data.

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Minh Vong, SunTrust Robinson Humphrey, Inc., Research Division - Associate [12]

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Okay. Great. I guess last question. With all your talks in looking into possible combinations, can we expect initiation of the new combo arm in sometime this year or anytime soon then?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [13]

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Yes. So I think as David was alluding to, we're -- currently, we're exploring -- we've explored Rituxan, and as we've mentioned, that was primarily a safety question and the responses are very good because we're dealing with a drug that has very high responses, anyway. The zanubrutinib is really the one we're focusing on right now. And as David alluded to, we have received interest from investigators to consider looking at combinations with venetoclax, and we're looking at that very carefully. If we decide to go down that road, it probably wouldn't be a 2019. It'd probably be more in the early 2020 time frame just because once we've made the decision to write the protocol and get it to the FDA and all that good stuff takes some time. So I think I wouldn't look for a new combination study starting this year but quite possibly in the beginning of next year.

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Operator [14]

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The next question in the queue comes from Stephen Willey with Stifel.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [15]

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Dan, I was just wondering if you could maybe speak a little bit to enrollment within the Phase II registration right now and kind of what the 12-month guidance currently contemplates with respect to any additional sites that will either be opened and activated. I guess whether or not there is any kind of wiggle room built into that guidance to accommodate some of the other competitive therapies that now seem to be moving into the end of the space as well.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [16]

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Yes. Good question, Steve. So first off, I'll just say just flat out, we will not be giving regular enrollment updates. It's a slippery slope, and we just decided we're not going to go down there. We've spent a lot of time since we decided -- since we had our discussions with the agency and got the blessing and -- to initiate this study. We've done a lot of work with the CRO and the sites in evaluating their patient turnovers, their expected enrollment. And based on everything they say, just like my golf score is scratch, right, they always overestimate the number of patients. So we discounted that, and we came up with the calculation that we needed to open about 100 sites internationally. And that is what our goal is. We're well on our way to doing that. And based on that calculation, we feel that currently, from where we sit and what we've said, that sometime midyear to around now, we should be able to enroll the 166 patients that we've said we would.

And in terms of wiggle room, there's no wiggle room until there is wiggle room. Well, if it looks like we're falling far short, we will update you as appropriate. But from where we're sitting now with the pace of opening sites and the pace of enrollment, I think we're still comfortable with making that guidance. And as I said, if that should change, we'll let you know.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [17]

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Okay. That's actually helpful commentary. And just with respect to the discussions regarding 401 partnering, it sounds like you guys are kind of still evaluating the strategy to go forward there. And presumably, any strategy would probably incorporate some level of the next U.S. partner. Have you guys given any additional thought to what an EU registrational strategy looks like at this point for 401? Just any commentary around what trial design there might look like in terms of supporting the Phase II that's sampled.

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David M. Urso, MEI Pharma, Inc. - COO, Senior VP of Corporate Development & General Counsel [18]

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Yes. As far as the -- this is David. As far as the partnering strategy goes, we are thinking about regional strategies as well as a global partner and the go it alone scenario. Obviously, we don't have the capability to commercialize the drug ex U.S. I think our preferred partnering strategy would be to have one global partner if we go down that route and to do, I think we've talked about this before, it's kind of co-promotional arrangement where you have profit and loss sharing in the United States and then basically just milestones and royalties outside of the United States and let the partner do the heavy lifting on the -- whatever incremental development there might be ex U.S. and certainly the commercialization.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [19]

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Yes. And in terms of the EU strategy, I think what we're currently -- obviously, since we're going down an accelerated path, we have to be already planning or considering planning our confirmatory strategy. And we've kicked around a lot of things. We've bounced them off of a lot of our advisers. We are having an important discussion with our steering committee shortly. And I think at that point, we will have as much clarity as we can in how we're going to proceed in Phase III. I mean I think the choices are obviously limited based on what's approved and what's used in second-line follicular. Obviously, it will incorporate some sort of a CD20 treatment, that's why we did the Rituxan arm just to be sure. And then the question is, is it a doublet/triplet? Or is it other potential combinations?

And I think we will have a lot more to be -- we'll be able to say a lot more to that, Steve, in the coming months. But right now, I think it is fairly obvious what the possibilities are. And we're exploring all of them, both from medical feasibility as well as truly just operational feasibility in terms of which combinations would be more or less received by the investigators.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [20]

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Okay. That's helpful. And then just for clarification, on the voruciclib update, I think you mentioned that there's a chance we could see some data in the first half of '20 at a medical meeting. Is that the dose-ranging monotherapy results that we could see and not the medical (inaudible)?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [21]

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Yes. Yes, I think that obviously, since that trial has been up and running, that would be the most data we have in terms of the monotherapy. And hopefully, we'll start to get some early looks at the combination, certainly in terms of safety and PK and that kind of stuff. But in terms of efficacy, I think it would be a stretch to imagine we'd have something within the next 6 to 9 months.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [22]

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Okay. And then are there monotherapy expansion cohorts that are specified in the Phase I? Or is this just still all dose-ranging work that's being...

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [23]

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Yes. I'll let Richard answer that.

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Richard G. Ghalie, MEI Pharma, Inc. - SVP of Clinical Development [24]

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Yes, Steve, it's -- following the dose escalation, the protocol contemplates expansion cohort in B-cell malignancies. And we have specific B-cell malignancies that are described as well as in AML where we could also look at monotherapy and all the combination with venetoclax.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [25]

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Steve, I think that from -- our -- we would love to be surprised that we get a very good monotherapy response. And obviously, if we do, we would go running with that very quickly. The -- when we acquired this agent and when we looked at the development plans for it, we really felt like just like the CDK4/6 is in breast cancer, the monotherapy effects are not nearly as high as the combinations. And I think that's really sort of what our focus is, but we would love to be wrong.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [26]

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Okay. And should we assume that you guys would have announced that there has been a dose declared for dose expansion purposes within the trial? Or...

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [27]

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Yes. Yes. I mean in the future, you mean?

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [28]

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Yes. Correct.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [29]

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Is that -- yes, yes, absolutely. Yes. Yes. We're still doing a dose escalation for safety and looking for hints of efficacy, if there are any.

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Operator [30]

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The next question comes from Yale Jen with Laidlaw & Company.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [31]

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Just first one, to be clear that the 401 combination with BTK, is that in the intermittent dosing, even it's dose-ranging? Or it's continuous dosing?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [32]

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Yes, Yale, all of our combination work is done in the intermittent schedule.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [33]

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Okay. Great. That's very helpful. One other question is about the pracinostat in AML. Is that -- anticipate the patient recruitment will be completed by end of this year?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [34]

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I'm going to let Richard handle that.

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Richard G. Ghalie, MEI Pharma, Inc. - SVP of Clinical Development [35]

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Helsinn, who is running the study, is not making any public statements on when it is, but the intent is to complete enrollment in the next 12 months, I would say. That's based on my best judgment based on what I'm seeing the study. But again, there is no public information made from Helsinn on that completion of enrollment.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [36]

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Okay. That's fine. And would you guys in this call giving any kind of financial guidance in terms of the next fiscal year's sort of top line, maybe a little bit on the bottom line type of suggestions?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [37]

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Right. So Yale, we typically don't make forward-looking statements beyond the year. And we clearly have more than enough cash, a year's worth of cash. You can see pretty consistently over the past several quarters, going back a year or more, that our burn is fairly consistent somewhere between $9 million to $11 million per quarter. And it's just hard because it all depends on the clinical activities we have ongoing. We've had a lot of clinical activity that's slowing down. And now with the registration study, we have more and new clinical activity. So it's a little hard to judge from quarter-to-quarter, but I think historically we've been in that $10 million per quarter. And that's about as best as we're -- that we're willing to speculate on.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [38]

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Okay. That's helpful. And maybe final one is for 344. I know you mentioned you will provide more color in terms of the future development. But could you just give us a general framework as how you think about sort of next steps of development might be?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [39]

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Yes, Yale, we really love this drug. The data that we presented at ASCO, that were presented at ASCO, was very encouraging. And it's the culmination of several years of a lot of hard work and trying to understand how this drug could be best used. And it does appear that the hypothesis-driven study was fulfilled that if you block one source of energy, the tumors in vivo will use the other source interchangeably and that the only true way of getting a tumor metabolism is to block both avenues.

We've, over the years, given a lot of thought on how to best develop this drug. And I think with the anti-angiogenics, we're really looking at spaces where these drugs have been shown to have activity that obviously is less than optimal and there's still a lot of space. We -- our preclinical work that was done in Spain was actually done both with the -- mostly with the small molecules, so the tyrosine-kinase receptor inhibitors. And I think the -- so we are looking at the whole gamut of what's possible. There are clearly advantages with an antibody like Avastin compared to the small molecules and the context in which they're used with or without chemotherapy.

So there's a lot of moving parts that we're trying to get our arms around. And as we've said, we would ideally like to do it with a potential collaboration with another entity that has one of these agents, whether it's small molecule or antibody, so we can really best explore the full potential of the combination. So right now, we're really focusing our energy and resources on 401 and voruciclib for the most part. But that's not to say that we're ignoring 344. We're just trying to really understand where the opportunities are and what our partners -- potential collaborators would have interest as well.

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Operator [40]

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The next question in the queue comes from Jim Birchenough with Wells Fargo.

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Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Associate Analyst [41]

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It's Nick on for Jim this afternoon. Maybe the first question on cash runway. So is the sort of aspiration of a 401 partnership to extend the cash rate -- runway beyond data readout, which is mid-2021?

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David M. Urso, MEI Pharma, Inc. - COO, Senior VP of Corporate Development & General Counsel [42]

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I mean I don't think that's the rationale for doing the deal. The rationale for doing the deal is to optimize the development, leverage resources of a bigger partner so that we can go broader within B-cell malignancies and potentially have more muscle behind a launch. That would be the rationale for the partnership. I mean obviously there would be an upfront payment. There would have non-dilutive capital in it if we did a deal like that.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [43]

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Yes and yes. I mean, Nick, I mean I don't mean to be [antithesis]. I think the -- we always look at what's really best in the long run for the company and for the shareholders. And if bringing in non-dilutive cash in a powerhouse partner would be much better in the long term, we would definitely do that. And if we don't think there's a good deal, then we would look at other sources of capital. But we always take this very seriously. We're not -- I'm not trying to make a joke and neither is David. We always look at it very -- both aspects very carefully.

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

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And then, Dan, at one time I think you talked about opening some 20-patient Rituxan-401 combinations. Is that still part of the plan? Or has that sort of shifted now more towards zanubrutinib?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [45]

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Well, I think we've pretty much done that, Nick. We've -- I'm not -- yes, we've kind of completed our evaluation. As we said before and I think to echo what our investigators said to us is, "Guys, you're working with a drug that's showing you 80% response rate. What do you expect to see from an efficacy?" What we really wanted to see was the safety aspect, and we've kind of done that. I'm not sure if it's 15 or 20 patients that we've treated collectively. It's in that ballpark. We've not seen any safety issues. We see very high response rates.

And now the question is I think -- and really the purpose, getting to an earlier question, I think, from Steve, was how do you incorporate your thinking into confirmatory studies, and obviously, CD20 will be an important part of that. So I think in terms of continuing down the road with CD20 for right now, we've accomplished what we wanted to. We know it's safe. We know that the drugs work well together. And we will just incorporate that knowledge into future planning with various combinations, whether it's doublets or triplets, down the road.

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

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Okay. And then does that BeiGene agreement, call it, more advanced studies? And would there be an opportunity, for example, to do studies in China that could really drive expansion, particularly in indications, such as CLL, that are obviously challenging...

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David M. Urso, MEI Pharma, Inc. - COO, Senior VP of Corporate Development & General Counsel [47]

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Yes, so the original scope of the agreement is to -- part of the attractiveness of doing it was to be able to leverage the ongoing Ib study that we're conducting. So we just opened up another arm with a quick amendment to the study, and we're in the same sites. Then if -- where we see a signal in one of those initial cohorts, I think then you would move forward into an accelerated approval study and more than likely, that would be a global study. But we'd have to get back together with BeiGene and both strategize on how to execute that trial. But that's beyond the initial scope of our agreement.

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

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Okay. And then just last one for me in terms of the voruciclib amendment, is that expected to be a 30-day turnaround time from FDA?

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Karen E. Potts, MEI Pharma, Inc. - SVP of Regulatory Affairs [49]

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Yes.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [50]

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Yes. The clock is ticking.

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Operator [51]

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And the next question in the queue comes from Adam Evertts with LifeSci Capital.

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Adam Gerald Evertts, LifeSci Capital, LLC, Research Division - Senior Research Analyst [52]

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Just going back to the indication choice for the zanubrutinib arm of the Phase Ib. I think it seems clear why you're not including CLL. But maybe anything else you can say on why you chose mantle cell lymphoma, DLBCL and second-line follicular? Was it based on unmet need...

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [53]

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Did we lose Adam? Or operator, are we still on?

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Operator [54]

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Adam, are you there sir?

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Adam Gerald Evertts, LifeSci Capital, LLC, Research Division - Senior Research Analyst [55]

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Can you hear me?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [56]

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Yes, I think we understood the question, Adam. So the rationale was really to look at settings where there is clear activity with the BTK and with a delta, but that you could hopefully improve on them with the combination. So for mantle cell, for example, responses are quite good with BTKs, but they're not as deep as they could be and probably not as durable as you would like. DLBCL, clearly, they're not nearly as good as one would expect. And I think that the decision in follicular in second line was to see if you could come up with a chemo alternative combination that was safe and rather durable.

So we did put thought into each and every one of those indications. And it really was a question of looking at potential synergies where the agents had activity would it -- could be better or perhaps providing clinical alternatives for physicians where there is existing therapies but then maybe you could replace the use of chemotherapy as an example.

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Adam Gerald Evertts, LifeSci Capital, LLC, Research Division - Senior Research Analyst [57]

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Great. And then I guess considering that zanubrutinib and 401 are both targeting proteins in the B-cell receptor pathway, are we expecting, in terms of response rates, deepening of responses, more durable responses, both of those? What is the sort of baseline expectation there?

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [58]

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Yes. I think that you hit it on the head. The hope is that we will get deeper and more durable responses. I mean I think as we understand those pathways, they do overlap but they are distinct. So PI3 signals through Akt. I think BTK probably signals more through NF-kappa B. And so there are reasons to think that there should be additivity or even synergies. Certainly, the preclinical work in the knockout mice suggest that the double knockouts are much more depleted than either the single knockouts. So I think there is reason to believe that the combination should be better than either the agents by themselves. And so we clearly are looking for deeper, more durable responses.

I mean after all, I think it's important that we hear the message loud and strong from a lot of investigators that they're looking for the ability to get their patients into a deep remission and stop treating them. Patients don't want to be treated forever. And that's really our goal too because that's what we hear back from the community. And that's what our goal is, is to get these patients into a very deep, durable remission and give them a break, let them go about their lives fruitfully. And so that is really a lot of the motivation of trying of these various combinations.

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Operator [59]

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I'll now turn the call back over to Mr. Dan Gold for any closing remarks.

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Daniel P. Gold, MEI Pharma, Inc. - CEO, President & Director [60]

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Thank you. Again, I just want to thank you all for joining us today. We're beginning our new fiscal year in a very strong position with the continuing record of success in our execution on the development programs and our business strategy. We look forward to reporting on our progress across our entire portfolio in the coming quarters and wish you all the best in the waning days of summer. Thanks again for joining.

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Operator [61]

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Ladies and gentlemen, this concludes today's teleconference. Thank you for participating. You may now disconnect.