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Edited Transcript of YMAB.OQ earnings conference call or presentation 13-Nov-19 9:30pm GMT

Q3 2019 Y-mAbs Therapeutics, Inc Earnings Call

NEW YORK Nov 29, 2019 (Thomson StreetEvents) -- Edited Transcript of Y-mAbs Therapeutics, Inc earnings conference call or presentation Wednesday, November 13, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Bo Kruse

Y-mAbs Therapeutics, Inc. - Executive VP, Secretary, Treasurer & CFO

* Claus Juan Møller San Pedro

Y-mAbs Therapeutics, Inc. - CEO & Director

* Thomas Gad

Y-mAbs Therapeutics, Inc. - Founder, Chairman, President & Head of Business Development

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Conference Call Participants

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* Alec Warren Stranahan

BofA Merrill Lynch, Research Division - Associate

* Boris Peaker

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

* Eunshuk Shim

Canaccord Genuity Corp., Research Division - Associate

* Robert John Burns

H.C. Wainwright & Co, LLC, Research Division - Associate

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Presentation

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Operator [1]

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Good day, and welcome to the Y-mAbs Therapeutics, Inc. 2019 Third Quarter Earnings Conference Call. Today's conference is being recorded. Let me quickly remind you that the following discussion contains certain statements that are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because forward-looking statements involve risks and uncertainties, they are not guarantees of future performance, and actual results may differ materially from those expressed or implied by these forward-looking statements due to a variety of factors, including those risk factors discussed in the company's prospectus supplement dated October 29, 2019, and filed with the SEC on October 31, 2019, and the company's annual report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the SEC on March 22, 2019.

At this time, I'd like to turn the conference over to Thomas Gad, the company's Founder, Chairman and President. Please go ahead, sir.

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Thomas Gad, Y-mAbs Therapeutics, Inc. - Founder, Chairman, President & Head of Business Development [2]

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Thank you, Doug. Hello, everyone, and welcome to our third quarter earnings call. Today, we're going to hear remarks from our Chief Executive Officer, Dr. Claus Møller; and as well as our Chief Financial Officer, Bo Kruse. We ended the third quarter with $98.2 million in cash. As you all know, in late October, we completed an oversubscribed secondary offering, which was led by Morgan Stanley, JPMorgan and BAML, in which we sold approximately 5.1 million shares of our common stock, which included the full exercise of the over-allotment option at $28 per share, raising approximately $135 million in net proceeds to the company.

At the end of the third quarter, this would bring our pro forma cash position to $233 million. The transaction produced a very high-quality demand, enabling us to further expand our excellent shareholder base. The proceeds from the offering further strengthens our balance sheet sufficiently to potentially launch both naxitamab and omburtamab next year. And at the same time, we can advance our pipeline and carrying us through the end of 2022. This doesn't take into consideration any potential product sales or partnership income. Naxitamab and omburtamab have both received rare pediatric disease designation from the FDA. We believe that our overall time lines for submission and potential approval for both naxitamab and omburtamab are on track for completing first quarter BLA filings with potential approvals in 2020. Overall, we are very pleased with our current financial position.

Naxitamab and omburtamab continue to read out very encouraging data, addressing clear unmet medical needs for neuroblastoma patients. And we have now shown we are able to reproduce very encouraging results for both antibodies in multi-center trials. We think this is a very encouraging sign for patients waiting to get access for naxitamab and omburtamab. At this point, we are -- and then naxitamab and omburtamab are being used in clinical trials in Europe, the U.S. and in Hong Kong, and this is a major achievement for Y-mAbs.

For the first 9 months, in '19, we spent $49.7 million. Taking into consideration our achievements, this is a direct result of the highly dedicated teams committed to making both naxitamab and omburtamab available for children everywhere. We're very pleased with our results. We continue to work hard to solidify our position as leaders in pediatric oncology and focus on advancing our therapies to the extent -- to extend and enhance lives of those living with rare pediatric cancers.

And with that, I'm very pleased to turn it over to Claus.

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [3]

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Thank you very much, Thomas, and welcome to the Y-mAbs Therapeutics Third Quarter Conference Call, everybody. We are pleased that you have chosen to join us today. Over the third quarter, we have continued to work hard to make sure our lead product candidates, naxitamab and omburtamab, advance towards BLA submissions, which we plan to initiate in the form of a rolling BLA for naxitamab later this year and omburtamab to follow shortly thereafter. Actually, we expect the first portion of the rolling BLA for naxitamab to be submitted within the next few weeks, and we expect a PDUFA date in the first quarter of 2020 for naxitamab and also for omburtamab. We will continue to keep you posted on our progress.

Omburtamab will have a general guidance meeting with the FDA next week. We expect to complete the omburtamab BLA submission by the end of first quarter 2020, and reconfirm that our projected oral commercialization time line seems to be unchanged for both products. We expect that a PDUFA date for omburtamab would be in the first quarter, also, for omburtamab, of 2020. And we believe that we have continued to demonstrate our ability to execute our planned commercialization time line in the third quarter of this year.

We increased our headcount by approximately 9%, so bringing us to a total of 56 employees during the third quarter. The increase is primarily due to the commercial team ramping up for the potential launch of our 2 products. And we continue to believe that we are well positioned to move naxitamab and omburtamab to FDA approval and commercialization in 2020, and concurrently widen our focus to grasp the growth opportunities represented by the earlier stages of our pipeline products, such as omburtamab-DTPA, the bispecific programs and the GD2-GD3 vaccine as well as the next in line indications for naxitamab and omburtamab.

In June 2019, we had a promising pre-BLA meeting with the FDA in which we reached alignment with the FDA on an accelerated approval pathway for naxitamab, along with the rolling BLA submission I just mentioned. And we have now recruited all patients that we believe will be needed in our Study 201, including naxitamab for our BLA filing and for the treatment in relapsed/refractory high-risk neuroblastoma.

At SIOP, the International Society of Paediatric Oncology conference in October in France in Lyon, a total of 6 presentations by Memorial Sloan Kettering provided significant exposure to naxitamab.

Let me recap a few highlights from the conference. First, we had data from the primary refractory high-risk neuroblastoma patients reflecting patients in Study 12-230. These patients have refractory to intensive induction therapy. And in addition, more than half of the patients were also refractory to second line chemotherapy. Essentially, this is a subset of patients from Study 12-230 that demonstrated better-than-expected outcomes, including a 78% overall response rate. Patients received at least 5 cycles of naxitamab therapy post response and subsequently went on to receive our investigational GD2-GD3 vaccine at MSK.

Overall, in this population of patients that are known to very rapidly relapse and continue to progress relatively, we could see that, after 2 years, a 50% group of the patients were still having progression-free survival. In another subset analysis, consisting of 35 patients with relapsed neuroblastoma resistant to salvage therapy, 30 patients were evaluable for response in Study 12-230. One-third of the patients had 2 or more relapses prior to enrollment, and 89% of the patients had previously received an anti-GD2 therapy to be the murine naxitamab predecessor or it could be the naxitamab. Patients in this subset had a 36% progression-free survival rate at 2 years and an overall response rate of 37%. And please bear in mind, that these 37% is secondary refractory and 78% in primary factory. The FDA's cut off threshold for these patients given to us overall was 30%. So we are reporting substantially more than what was guided by the agency originally.

We also presented data from patients with high-risk neuroblastoma and second or later complete remission. 44 patients with no evidence of disease were treated with naxitamab and GM-CSF at MSK as a maintenance therapy. We know these patients are at high risk of relapsing again. And therefore, we try to keep them in remission with naxitamab treatment. In this population, where 88% of the patients have previously received anti-GD2 therapy and 30% have received 2 or more lines of anti-GD2 therapy previously, a 2-year progression-free survival rate of more than 50% was observed. A subset of these patients also went on to receive our investigational GD2-GD3 vaccine at MSK. We believe these data are very encouraging. I should note that this data set is from a subpopulation in the Study 12-230, and these patients are not a part of the efficacy BLA data set because they are not evaluable performance nor response rating only for the duration of progression-free survival because they have no macroscopic disease to take the bone.

We also had data from patients with disease respective to the bone marrow compartment, which we deemed very interesting as investigators attest 100% curing among the patients in the bone marrow, and I don't think that has ever been seen before in any neuroblastoma trial.

Finally, we had data from a Phase II osteosarcoma study that shows safety data for the 25 patients enrolled in the trial at MSK. Patients were treated with naxitamab and GM-CSF and has recurrent disease, and we know these patients are GD3 positive. And these had a minimum of 2 or more complete remissions. Naxitamab was administrated to the patient in an outpatient setting.

And omburtamab. Turning to this, now we -- which is our second lead compound. Omburtamab is the B7-H3 antibody -- monoclonal antibody that was radiolabeled with Iodine-131. As you may recall, we are developing this compound for CNS/leptomeningeal metastasis from neuroblastoma; diffuse intrinsic pontine glioma, also known as DIPG; and desmoplastic small round cell tumors, known as DSRCT, all of which have B7-H3 positive indication.

In June of this year, we completed the enrollment of patients in the CNS/leptomeningeal metastasis Study 101 that are needed for omburtamab BLA.

In September of this year, we requested a regular pre-BLA meeting with the FDA. But in late October, the agency converted the meeting to a general guidance meeting. The FDA did not indicate a reason for this change or provide any additional information. As a result, we now expect that our rolling pre-BLA submission for omburtamab, which we intended to commence in December 2019, will not begin until after a new pre-BLA meeting has been scheduled, as described in the Form 8-K that we filed with the SEC on November 1, 2019, and this may be rescheduled in the first quarter of 2020.

We remain confident in the content of our pre-BLA meeting submission and do not believe that this change in timing of the pre-BLA meeting with the FDA will impact our previously disclosed and anticipated timing for our complete omburtamab BLA submission, which we still expect to complete by the end of first quarter 2020. As previously disclosed, we expect to have completed all required components of our anticipated BLA by the end of first quarter 2020 and expect to have the flexibility to file our BLA either via a rolling submission or via a single submission ahead of our expected completion date at the end of first quarter 2020. In addition, we believe that the overall commercialization time lines for omburtamab will not be affected.

Now turning to the data generated with omburtamab. At SIOP, we presented an updated omburtamab data readout from Study 03-133 at MSK, where patients with CNS/leptomeningeal metastasis from neuroblastoma received 2 doses of radiolabeled omburtamab. Data showed that, for the 107 evaluable patients, the median survival had increased to 50.8 months with the final median not yet being reached and more than half of the patients being alive. This compares to the median survival of 47.1 months at prior data readout based on the first 93 patients in this study. So we are very happy with this update.

In addition, we had 68 patients diagnosed with other CNS cancers, including metastatic tumors, who had received a total of 201 injections of omburtamab. The injections were routinely administrated (sic) [administered] in an outpatient setting. The patients with primary CNS diagnosis included 8 different cancers, including 27 patients with medulloblastoma and 9 with ependymoma. Patients with metastatic tumors included 4 different primary cancers, including 9 patients with sarcoma and 5 patients with melanoma. As of today, 26 of the 68 patients with these highly lethal disease diagnoses are still alive.

At CTOS, the Connective Tissue Oncology Society's Annual Meeting taking place this week in Tokyo, we are also presenting omburtamab clinical trial data from our DSRCT study. In July of this year, we entered into a development, manufacturing, supply agreement with Spectron in South Bend, Indiana to secure access to clinical and commercial-scale radiolabeling capacity for omburtamab. Under the terms of the agreement, Spectron has agreed to establish a manufacturing unit designed to Y-mAbs within its existing facilities at which both clinical and commercial supply for radiolabeled omburtamab for the U.S. market can be produced.

The work at Spectron is progressing as planned. The facility will also serve as backup for the company's overseas activities. And needless to say, we are in the process of establishing a European radiolabeling facility as well. We believe Spectrum has the necessary expertise within radiolabeling of monoclonal antibodies to be a great partner supporting our launch strategy for omburtamab. We see great potential in radiopharmaceuticals and we are excited to begin our collaboration with Spectrum.

Now let me invite Bo to share his remarks on the third quarter financials. Bo?

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Bo Kruse, Y-mAbs Therapeutics, Inc. - Executive VP, Secretary, Treasurer & CFO [4]

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Thank you, Claus. For the third quarter, we report spending of $24.4 million, representing a 31% increase in our spending compared to last quarter. We ended the third quarter with a cash position of $98.2 million. And as Thomas pointed out, adding the net proceeds from our secondary offering of roughly $135 million, and this leads to a pro forma cash balance of $233 million net of issuance costs as per September 30, 2019.

As our work on the BLA submissions for naxitamab and omburtamab progresses, and we accelerate the commercial ramp up for the potential launch of the 2 lead compounds, we are seeing the burn rate increase, and we expect an additional increase in the fourth quarter of this year. R&D expenses increased by $11 million from $8.7 million for the 3 months ended September 30, 2018 to $19.7 million for the 3 months ended September 30, 2019. This was primarily due to a $7.3 million increase in manufacturing expenses for naxitamab and omburtamab. And in addition, expenses for outsourced research and supply increased by $1.5 million for the 3 months ended September 30, 2019 due to our increased need for clinical trial support. The clinical expenses for personnel increased by $0.7 million for the 3 months ended September 30, 2019 due to an increased level of clinical activities.

G&A expenses increased by $2 million from $2.7 million for the 3 months ended September 30, 2018 to $4.7 million for the 3 months ended September 30, 2019. The increase in general and administrative expenses was primarily attributable to a $0.8 million increase in employee related costs, including salaries, benefits and noncash stock-based compensation for personnel. In addition, costs for setting up commercial infrastructure increased by $0.6 million for the 3 months ended September 30, 2019.

Overall, the increase in G&A expenses primarily relates to the infrastructure and administrative costs of being a public company.

In total, the net loss increased by $12.5 million from $11.4 million for the 3 months period ended September 30, 2018, to $23.9 million for the 3 months ended September 30, 2019. For the 9-month period ended September 30, the net loss increased by $28.7 million to $57.9 million compared to $29.2 million for the corresponding period in 2018. The cash flows from operating activities in the first 9 months of 2019 show that the cash burn increased by $21.2 million from $27.7 million for the 9 months ended September 30, 2018, to $48.9 million for the 9 months ended September 30, 2019. The increase was primarily caused by an increase in the net loss. The net loss increased by $28.7 million for the 9 months ended September 30, 2019, which was primarily offset by a $1.4 million increase in accounts payable and accrued liabilities resulting from increased operations and an increase in noncash expenses, including stock-based compensation of $1.8 million. The net cash flow for the first 9 months of 2019 show a spend of $49.7 million.

In terms of financial guidance, we expect, since the IPO, that the net proceeds would cover our operating expenses and capital expenditures through the fourth quarter of 2020. Now with the proceeds of the secondary offering, which closed on November 1, 2019, we expect the cash to fund our operations through the end of 2022. And this number still does not take into account any potential revenues from commercialization of naxitamab or omburtamab or the proceeds from any potential future partnerships. So we do believe Y-mAbs remains in a healthy financial position.

This concludes the financial update, and I'll now turn the call over to Thomas. Thomas?

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Operator [5]

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It looks like Thomas has dropped his line. One moment. Rejoining Mr. Gad.

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Thomas Gad, Y-mAbs Therapeutics, Inc. - Founder, Chairman, President & Head of Business Development [6]

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Thank you. Thanks, Doug. Sorry for that, just the line dropped. So this concludes our prepared remarks. Thank you, Bo, thank you, Claus. And Doug, if you could open up the call to questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Alec Stranahan with Bank of America.

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Alec Warren Stranahan, BofA Merrill Lynch, Research Division - Associate [2]

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Congrats on the progress. My first question is on the pre-BLA meeting for omburtamab. Have you had any additional interaction with the FDA since the scheduled pre-BLA meeting was delayed? Specifically, any color you can give as to the rationale for converting it to a general meeting? And I guess, also, what gives you confidence that the BLA submission will remain on track for 1Q '20? And I've got one more?

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [3]

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Thank you for the question. And again, it makes good sense to bring this up. First of all, of course, we tried to reach out to the FDA to see if they would be able to provide us with some additional guidance, and that was not the case. They came back to us and said, we should just take it in, and we would receive preliminary responses to the questions that we have raised in the pre-BLA meeting package that we have submitted, and we would be discussing all the topics that we wanted to discuss that had been raised in our pre-BLA meeting package.

My interpretation of the outcome and based on also -- remember, we have a ton of meetings that we have had with the FDA on this program, and the FDA has been very collaborative with us on the program and been very helpful also in those guidance and also in accommodating what is possible. Remember, the first indication is only addressing 80 to 100 patients a year in the U.S. So there's a limit to how much, also, the FDA would even require. They understand that they cannot expect the same as you would for a new diabetes treatment coming to the U.S. market. And they have said numerous times that they will do whatever they can to help us.

And I think, basically, my interpretation is that they're giving us -- remember, when you have breakthrough designations, you're entitled to have as many meetings with the agency as possible, not just the standard pre-IND meeting and the Phase II meeting, pre-Phase III meeting and pre-BLA meeting. With the breakthrough designation, we have our 2 lead compounds. We can have as many meetings with the agency we want to, but we can only have 1 pre-BLA meeting. And after the pre-BLA meeting, we can then, of course, go back if you do not agree, but you cannot have a second pre-BLA meeting.

So the idea, I think, is simply that they say, "Hey, there's a number of things here. You're rendering 1.5 hours of discussion with us to discuss these topics here. And we believe you may need more time for coming to an agreement with us on what needs to be done and kind of like fine-tuned in your filing based on the questions that you have raised." Because we are the one that are asking questions to the agency about the package. So then this way, they can give us this 1.5 hour of discussion next week at the meeting, and then we can go back and ask for a pre-BLA meeting. And then they looked at our timing and said, hey, I mean, this guy has placed out a rolling BLA in December will be first participant in the manufacturing in the pre-clinical package, but they'll do it in the beginning of February. We've got to change our overall time line of having the last part of the CMC and the whole clinical package finished by the end of March.

So overall, it doesn't mean anything else, but we gives us to make the time for the discussion. That's, at least, my interpretation of it, and if that's the case and I still believe that this is in line with what we have discussed with the agency previously, then we should be finished with the entire BLA submission for omburtamab by the end of first quarter.

So -- and again, remember this, I mean, we have just updated the data from the Study 03-133 and seen an increase in regional survival that is still potentially increasing further. We have a patient group where everybody is going to die from their disease and we are curing 50% -- more than 50%. And of those that actually dies, we can see that half of them dies from systemic relapse not from disease in the brain. They're still cured in the brain. So this is a highly efficacious treatment for these cases. And there's nothing else for them. So they have also looked at the safety database now a number of times, where we have no indication of any significant safety issues. We see no grade 4 or grade 5 safety issues and very, very few grade 3 signals in terms of side effects for these patients. So with all that in hand, I'm very comfortable that the FDA, as Y-mAbs, understand the need for bringing this treatment out to patients outside of MSK. And that was exactly what Study 101, was about to show that we can treat patients at other sites and we have done that, and we'll be sharing those data with the agency at the meeting next week. I think that's it. Does that answer your question, Alec.

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Alec Warren Stranahan, BofA Merrill Lynch, Research Division - Associate [4]

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Yes, that was very comprehensive. And I had one more question, actually, on the naxitamab data that was presented at SIOP in osteosarcoma patients. Specifically, the neutralizing antibody, human/anti-human. I noticed in the poster that there was a roughly 37% HAHA positivity, which is higher than, I believe, the previously disclosed 15% in neuroblastoma. And I mean it's roughly in line with what we're seeing with unituxin, but I was hoping to share your thoughts on that.

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [5]

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Yes. One, I mean, the assay used for that evaluation is not a Y-mAbs assay that's validated. It's an old assay developed on non-GLP conditions in MSK's lab. Two, it's not neutralizing antibody. It's just antibodies against human antibodies that we are looking at. So we don't know whether this actually neutralizes the antibody. So there is a lot of uncertainty. We are developing a GLP-validated assay for looking into neutralizing antibodies, but all potential antibodies against human antibodies. But it's not for sure, just because you -- I mean, I remember this whole discussion from many years ago. As you know, I've worked antibodies since the 1980s. And when I was in Genmab for 10 years, we were so proud we were creating these fantastic fully human antibody in a transgenic mouse, and we were certainly would never see any neutralizing for human/antihuman antibodies. And what did we see, human/antihuman antibodies. So it's kind of like, I think, the world's perception of this has probably also changed to -- yes, you may see this thing. If -- in the old days, before naxitamab at MSK, they used a murine antibody. And sometimes, when kids developed neutralizing antibody against the murine antibody, that was like cute thing because that was really neutralizing. But then they would give the patient Rituxan to treat their plasma cells and the B lymphocytes, and then they would re-treat the patients, and then there were no neutralizing antibodies.

So I'm not saying that we will get into a situation like that. I'm just saying that there's a lot of things in our thinking about antibodies against a drug that I can use as an antibody have changed. So I'm not too concerned about this. These are also very heterogeneous at all populations. And I don't think we have seen any indication of this reducing the efficacy in the neuroblastoma patients. So we cannot say that, in neuroblastoma patients, where we see a flare-up after a certain amount of cycles with naxitamab that they do worse than the patients that do not have this. The number of patients with osteosarcoma is so few. I think it's way too early to start guessing whether that could be an issue here, but I doubt it. I think it's a perfectly normal finding that it is a strange protein in the form of an antibody into circulation, but a certain group of your patients will develop antibodies against it. But whether they will be neutralizing, we actually don't know, and they don't know that from that. Did that make sense?

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Alec Warren Stranahan, BofA Merrill Lynch, Research Division - Associate [6]

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Yes. That was great.

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Operator [7]

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Our next question comes from the line of Robert Burns with H.C. Wainwright.

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Robert John Burns, H.C. Wainwright & Co, LLC, Research Division - Associate [8]

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Congratulations on the quarter. Just wanted to follow up regarding the FDA on omburtamab. So we know that the FDA brought on a new dosimetry and PK expert. What sort of additional data do you believe that he could request? And if he does request it, what's -- how confident are you in your ability to furnish it in a relatively expeditious manner?

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [9]

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Well, first of all, I think we need to see what it is that they're actually asking for. Secondly, I think we will be able to provide most of what they could ask for in a timely manner that would not disturb the timing we have for the BLA filing. Secondly, I think it would be very awkward for the FDA to delay the approval of a product like omburtamab for a group of kids that are currently dying. As I told you, we see about 80 to 100 patients with this indication per year in the U.S., and there are only about 15 to 20 have the chance to get into this study. So that means that, meanwhile, waiting for some pharmacokinetic data, we should let another 50% of 80 patients go ahead and die. I don't even think -- I don't see anybody that would be able to justify that unless there were a safety signal, and then FDA has seen something that I have not seen, and I doubt that very much. But as I said, we go into the meeting with an open mind, and I don't think there's going to be any shaking moves. We would, of course, after the meeting next week, as soon as we receive the minutes from the FDA, which typically happens 1 to 2 weeks after early stages of the program, and then we would come out and guide what the outcome of the meeting was and what our expectations for the continued process for BLA filing for omburtamab is.

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Robert John Burns, H.C. Wainwright & Co, LLC, Research Division - Associate [10]

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Okay. That's fair. The second question I have is, can you discuss what sort of interactions you've had with the EMA, if any, with regard to naxitamab and omburtamab?

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [11]

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Yes. So for omburtamab, we have had a very clear dialogue with the EMA. And based on my current expectation, I would say that we would be ready to file a -- not a BLA but a licensing application with the EMA towards the end of next year. So I think what we will try to utilize is kind of like the political momentum following by the fact that U.S. kids have now access to the omburtamab antibody. And I think EMA is not going to require anything that's significantly different from what we put in the BLA filing for the FDA.

In terms of naxitamab, it's a little bit more unclear what actually EMA is requesting. We have had some discussions. We have received the scientific advice. And it's not clear yet. We have, what you call, a PIP agreement with the -- with the EMA, and we have tried to get a verified PIP agreement, and it doesn't seem that we have that yet, and it actually goes for omburtamab also, but I would expect to get the one for omburtamab within the next few months. But for naxitamab, I think it's too early. I think a lot of what will drive this is the additional data that we'll be able to generate. And I would expect that we could file for naxitamab maybe not in 2020 but probably in 2021 in Europe.

But omburtamab, I'm quite confident would be ready for a European filing in 2020. And both products, we are also planning to file for approval in China. We have started our first Chinese site in Hong Kong and started treating patients out there. In addition to that, we have treated more than 50 patients from China in a collaboration between the site in Europe and China. And we are working very much towards trying to get our products available for Chinese kids also. Actually, I think the Chinese market will grow and become even bigger than the European market also in value because of the number of patients that are out there. And that's a tremendous amount of focus of actually getting access to these pediatric cancer treatments in the Chinese markets.

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Robert John Burns, H.C. Wainwright & Co, LLC, Research Division - Associate [12]

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And then my last question is, so I noticed that R&D expenses increased roughly 36% compared to the prior quarter, can you sort of give us some color as to how we should be thinking about the R&D expense over the next 4 quarters?

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [13]

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I think I'll let Bo answer that question, but I think it relates a lot to the PPQ batches and the manufacturing that you need to do up to a BLA filing. But Bo, you may want to give a little bit more light to this.

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Bo Kruse, Y-mAbs Therapeutics, Inc. - Executive VP, Secretary, Treasurer & CFO [14]

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Yes, yes. So it's a very fair assumption that the R&D expenses will continue to increase next year. And then given that the company is growing and the sales and marketing part of the business is also ramping up, we would expect to see a solid increase in the G&A as well. For next year, we do expect to spend more money than we've done in 2019.

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [15]

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Remember, we are still also -- we're expanding the pipeline. We are filing the omburtamab-DTPA IND by the end of this year. We are planning to file our second bispecific antibody IND towards the end of 2020. We are planning to expand on the bispecific antibody program, which is still going tremendously well in our opinion, I mean. We are 10 months into dose escalation, and we have not seen any side effects that give raise to any kind of issues with the study. So it's really looking great from that perspective. But it also means additional cost as to the IND for the R&D side for the new programs. We're expanding the vaccine trials for next year also. So it's -- there's lots of new activities in addition to omburtamab and naxitamab and the additional indications for those 2 assets.

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Operator [16]

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Our next question comes from the line of Boris Peaker with Cowen.

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Boris Peaker, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [17]

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My first question is on the CMC. I'm just curious, what is the timing of the CMC work for both omburtamab and naxitamab? And when will you be ready to submit those parts of the applications?

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [18]

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Most of the CMC work for naxitamab is ready now and will be a part of the first set that goes into the FDA on the rolling BLA for naxitamab. Last part of the naxitamab CMC, which is the drug substance PPQ report, that should be ready by the end of February. And at this time point, we can complete the naxitamab BLA. Of course, these are the time lines I have from my chart. It may rock and roll a few weeks one direction or the other. But that's as precise as I can give this. In terms of -- and I also need to add, we had a separate FDA discussion on the CMC in September, and I'm comfortable that we are in line with the FDA expectations for the CMC package. As for the omburtamab, CMC package, we have large core part of that also available, actually, here in December. The last part, which will be the last PPQ reports for the CMC of omburtamab should be ready by the end of March. At this time point, we can complete the omburtamab CMC packages and the entire BLA.

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Boris Peaker, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [19]

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Got you. And just getting back -- yes, Yes, that's helpful. And just getting back to the conversation regarding the meeting conversion from pre-BLA to general guidance. Just curious, is there any new material that you submitted to the agency over the last month or 2 that potentially could have impacted that decision?

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [20]

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Well, obviously, we submitted an entire pre-BLA meeting package to the FDA. And while reviewing that package, the FDA decided that apparently there were so much to discuss, that they were not sure that we could squeeze it all of it into a pre-BLA meeting and so they gave us some extra time with it.

So there's nothing in there that I find in any way controversial or that keeps me awake during the night or makes me shake on my head. I mean the data is clear. We just provided an update on the 133 -- 133 study. Median survival is still going up in spite of the fact we had another 14 patients to the patient population. In the patients from Study 101, we have way more than 20 patients in that study now, and we have said we would come forward with 18. So for the BLA filing package in March, there will be probably more than 20 in that study. There's nothing that we have seen while treating the 101 patients that give us any concern in this context. So not really -- I mean, I don't think that we have any major issues that can come up, but there's apparently a number of things that we will need to discuss with the agency. And we have put in a ton of questions to the agency. So there's lots of things to talk about.

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Boris Peaker, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [21]

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And just to confirm, most of that data, didn't the FDA see at one point or another? Or it was part of the discussion? Or is most of the data...

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [22]

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No. No. The -- most -- all the data relating to Study 101, the FDA had not seen before, and -- because that was the multicenter study. And as you can imagine, although we have had a separate CMC meeting also for omburtamab in September this year, we still have outstanding issues on the CMC since the PPQ manufacturing batches have not been done at the time point of the filing. So it's in the process of being done. And one PPQ batch will be included as a part of the pre-BLA -- BLA filing, sorry. So -- but again, as we said, we have treated more than 200 patients with omburtamab now with the radiolabeled antibody, including 40 patients with DIPG and 60 patients with DSRCT and 68 patients outside of the 107 patients with CNS/leptomeningeal metastasis from neuroblastoma and more than 20 patients in Study 101. So it's a sizable patient safety test we have. It's a sizable duration of experience in terms of survival outcome. Remember, the first patient in 133 was treated 17 years ago. And nevertheless, we can maintain this 50% cure rate for these patients. So -- but I think we -- I mean, there may be issues that -- and remember also that when you put in these pre-BLA packages, they put additional people on their team. People that have not seen the program before. People that may not pay attention to the fact, "Hey, this is the treatment for 80 to 100 new patients a year in the U.S. This is not for thousands and thousands patients." So there's a limit to how much information you can actually put into a filing because it can simply not be generated.

If you look up the entire literature and set aside the MSK data that's published and just look at what everybody else has published and put together all the publications available and I'm sure you cannot even find a total of 100 patients in papers published with CNS/leptomeningeal metastasis from neuroblastoma. We have 1 single study that contains 107 patients. So it tells you a little bit about the impact that these data should have also with the agency, and the data is looking very strong.

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Operator [23]

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Our next question comes from the line of Arlinda Lee with Canaccord Genuity.

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Eunshuk Shim, Canaccord Genuity Corp., Research Division - Associate [24]

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It's Ben Shim on for Arlinda. My -- I just -- my first question is one, process. And maybe this is a simplistic question. But is there a time limit between the BLA meeting and when you must file the BLA?

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [25]

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No. And the FDA can add a pre-BLA meeting, even tell you that they do not believe you should go ahead and file. If you do that, the FDA may decide to give you a refuse to file. That's why you want to have your pre-BLA meeting, and that's also why you want to make sure that you have a pre-BLA meeting where you come to an agreement with the agency about filing and what efficiencies that eventually may be there that you can lead to and live up to.

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Eunshuk Shim, Canaccord Genuity Corp., Research Division - Associate [26]

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Okay, great. That's very helpful. And secondly, can you maybe give us a little bit more color on commercial prep activity, sales force and maybe it's too soon to think about your marketing strategy around unituxin?

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [27]

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No. I mean we started building our commercial organization in -- by hiring Phil Herman as the Chief Commercial Officer in May 2018, and now the team is up to 9 people. And we are, in parallel with that, also building a medical sales license team, which is, of course, a part of the medical group. But of course, we'll work in close collaboration with the commercial organization.

The total number of sites that are addressing these patients is not more than 70, 80 sites in the U.S. based on our analysis. And these 70 to 80 sites takes about 80% of the entire neuroblastoma patient population. And the remaining is spread out, somebody leaves a hospital where he has been leading his treatment and comes to a new hospital that normally do not treat, and the patient comes in and say, "I can fix this for you. I am used to it." So it is changing a little, but I think a good rule of thumb would be that 80% is treated at 80 hospitals in the U.S.

So it's not that you need 500 sales reps to reach out. Our ballpark information is about 5 sales reps to be able to cover the sites that we have in the U.S., together with a similar number of medical sales liaisons that can help these sites getting used to using our antibody, knowing how to handle the practical implications of giving this infusi, as well as the momentum, and how to deal with side effects and all these kinds of things that are related to the treatment with an antibody like naxitamab. Again, also when we look at the radiolabeled antibody, we're looking at even less sites that will be using this, just like you said, it's fair that we treat 100 patients per year in the U.S. for first indication, that's going to happen probably in less than 15 sites. So it's a relatively small but focused organization.

And of course, a very important part for us will be the interaction with the pediatric oncology societies and with the patient organizations, and we need to have the co-pay setup for those that cannot pay their own share of these treatments. So nobody is not able to get access to this treatment, just because they are making their own co-pay. And we need to set up collaborations with the distribution partners and then the insurance companies and Medicare, so. But we are building this organization, and I think we have a great Chief Commercial to help building this out and make sure we are ready to launch in due time for our potential approval next year.

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Operator [28]

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There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

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Thomas Gad, Y-mAbs Therapeutics, Inc. - Founder, Chairman, President & Head of Business Development [29]

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Thanks, everyone. I think that concludes it. Thanks, Bo. Thank Claus, and thanks everyone for dialing in. Have a great evening.

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Claus Juan Møller San Pedro, Y-mAbs Therapeutics, Inc. - CEO & Director [30]

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Thanks. Take are everybody. Bye.

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Operator [31]

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Ladies and gentleman, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.