Oct 27, 2017
Executives
Elizabeth Goodwin - IR Onno van de Stolpe - CEO Walid Abi Saad - CMO Piet Wigerinck - CSO Bart Filius - CFO and COO
Analysts
Brian Abrahams - RBC Capital Markets Dane Leone - BTIG Phil Nadeau - Cowen and Company Christopher Marai - Nomura Instinet Matthew Harrison - Morgan Stanley Anastasia Karpova - Kempen Peter Welford - Jefferies
Operator
Good day, and welcome to the Galapagos Q3 Reporting Webcast. Today's conference is being recorded.
At this time, I would like to turn the conference over to Elizabeth Goodwin. Please go ahead, ma'am.
Elizabeth Goodwin
Thank you, and welcome all to the audio webcast of Galapagos's Third Quarter 2017 Results. I am Elizabeth Goodwin, Investor Relations, and I will be hosting today's event.
This recorded webcast is accessible via the Galapagos Web site homepage and will be available for replay later on today. So that your questions can be included, we request that you call in to the following telephone number, which is also to be found on our homepage.
The number is 32 for Belgium, 24-04-59, and there's an access code, 2890376. I would like to remind everyone that we will be making forward-looking statements during today's webcast.
These forward-looking statements include remarks concerning future developments of the pipeline and our company and possible changes in the industry and competitive environment. Because these forward-looking statements involve risks and uncertainties, Galapagos's actual results may differ materially from the results expressed or implied in these statements.
Today's speakers will be Onno van de Stolpe, CEO; Walid Abi Saad, our CMO; Piet Wigerinck, CSO; and Bart Filius, CFO and COO. Onno will lead, and Piet will go through the operational highlights, Bart will explain the financial results.
Onno will then close with the outlook for 2017. You will see a PowerPoint presentation on screen.
We estimate that the presentation will take approximately 20 minutes, and then this will be followed by a Q&A session. So, with that, I would now like to hand over to Onno to start the presentation.
Onno van de Stolpe
Thank you, Elizabeth, and thank you for attending the webcast. Q3 clearly has been a very exciting quarter for us with two new model actions showing activity in patients.
It is a big complement to our discovery platform. We started this back in 2000 building our identifiable library to come up with novel targets.
And the JAK1 filgotinib is clearly the first one that made it to the patients, but now with 1690 in idiopathic pulmonary fibrosis and MOR106 in atopic dermatitis, we have three programs where we have shown activity against a novel target that we discovered, and that's quite unique, and that is the basis of Galapagos, and where we made the basis of Galapagos, with many more programs to come. In the meantime, filgotinib is continuing its strong path forward with multiple trials, the Phase 3 trial is underway, eight trials already in proof-of-concept states, and more to come.
Cystic Fibrosis, very competitive area where Galapagos is pushing ahead together with FB, we just got to go ahead from the Scientific Advisory Committee from the U.K. to file for the trials in the U.K.
and other countries. And we hope to start dosing the triple study by the end of the year.
So, exciting times there to come. All that within fantastic cash position €1.2 billion in the [technical difficulty] and we are actually preparing for the next phase in the evolutionary model of the company, where after discovery and development, we are now starting to prepare for commercial operations, and we were very pleased to hire Michele Manto as our Senior VP Commercial Operations, and he will be at the basis of creating the commercial operations for Galapagos.
So, if you look at the filgotinib pipeline, that is quite a number of different diseases, these are all inflammatory diseases that we believe have a good chance to be treated with filgotinib. The three main programs that Phase 3 are running in rheumatoid arthritis, ulcerative colitis, and Crohn's disease are running its course, but then we are now testing it together with our partner Gilead in eight other diseases.
So, a very impressive number, and that's actually more to come we are preparing more proof-of-concept studies with the filgotinib, so blanketing the whole -- this inflammatory disease area. And Galapagos is clearly much more than just filgotinib.
Here you see the pipeline of molecules that have past the candidate states and are now in preclinical Phase 1 or Phase 2, and you see in idiopathic pulmonary fibrosis, where we have at the moment the two different mechanisms, the autotaxin 1690 [indiscernible] show you the data today. But we also have a number of other numerous actions, some partners, some proprietary, that are moving forward to our in an undisclosed area, we will shed some more light not so far from here, but at the moment we still remain that in undisclosed.
In cystic fibrosis, we're preparing for three different triples to move into patients; the first one as I said starting by the end of the year, the other two plans for next year. In our arthritis program, we have a collaboration with [indiscernible] where we're moving ahead with our 1972 and molecule that hits the target, the LMTS5, and we are planning on full Phase 2 study worldwide to get a bit more process -- to start next year, and in the meantime, we are awaiting the data for Phase 1B study.
Then we have programs in atopic dermatitis, it's a small molecule program that's proprietary to Galapagos in preclinical, and then the antibody program, we are collaborated with MorphoSys that we released the Phase 1B data a couple of weeks ago. [Indiscernible] programs and inflammation and pain are still early, but extremely promising, especially the information program 3121.
I want you to keep that number in your mind, because that will be quite exciting when we are going to show the data at a later point in time. Well, with all that information and excitement, I want to hand it over to Walid to talk us through our clinical programs.
Walid Abi Saad
Thank you, Onno. So as you can see, filgotinib is really building up a consistently strong profile around safety and rheumatoid arthritis.
Here you see a comparative overview of safety that we showed at our R&D update back in June. I would like to highlight a few points here.
First, you see that we compare filgotinib in the green column with multiple JAK plus tocilizumab and adalimumab you should always exercise caution when comparing the cross study. Secondly, you see that patient year exposure involved in the first row filgotinib already has an extensive safety database with more than 1,300 patient years in RA.
These results that we are showing here are based on the 16-week safety cutoff from our ongoing DARWIN 3 Study. Consistently across all programs that are shown here filgotinib exhibited a superior safety profile, regarding thrombotic events such as DVT or PEE in this dataset, I remind you there was only one patient to experience DVT followed by PEE in the study.
This puts the rate of thrombotic events at a very low level considering the background rate in this patient population. Lastly, I would like to highlight that at ACR in San Diego Dr.
Janavese [ph] will report on more than 1700 patient years exposre on filgotinib from the same DARWIN 3 Study based on the 84-week safety cutoff and we invite you to listen in on his talk there. From the abstract for his talk, you can already see that continued experience with filgotinib reinforces its solid positioning on safety in RA.
Moving onto next slide, we turn to our autotaxin inhibitor 1690. Here we show data from the proof-of-concept study FLORA in patient with IPF.
IPF is a serious orphan disease with high unmet medical needs on this slide you can see the steep reduction in plasma LPA levels during the course of the study. This confirms target engagement in patient and is consistent with the results we showed in Phase 1 program.
I remind you that FLORA was a double-blind placebo controlled trial in 23 IPF patients who are naïve to treatment. These patients were randomized in a 3:1 ration into 1690 or placebo for 12-weeks, next slide.
Here we see that patients who receive placebo lost approximately 19 mls in force vital capacity after 12-weeks in the study which is consistent with what has been observed in similar trial. While we were excited to see is that patients who are randomized to 1690 manage to show no progress of their disease over the 12-week period as evidence by no loss in FVC.
In fact the mean change from baseline was an increase of 8ML, next slide. Using Functional Respiratory Imaging or FRI for short, a more sensitive technology combining high resolution CT and fluid dynamics, we showed a statistically significant difference between 1690 and placebo whereby patient on placebo continue to show progression of the disease as evidenced by an increase in airway volume and a drop in airway resistance, in contrast disease progression appears to have been stopped in patient with on 1690.
For these data demonstrate that 1690 is the first autotaxin inhibitor to show promise in patients in IPF. These exciting results coupled with a benign safety and tolerability profile strongly supports moving 1690 into late stage development.
And with that I will turn the presentation to Piet Wigerinck, Piet.
Piet Wigerinck
Thank you, Walid. During Q3 we also obtained first patient data with MOR106 our antibody against IL-17C.
IL-17C is a cytokine we picked up as a target using our drug discovery platform, and together with MorphoSys we decided to generate an antibody to block the cytokine. So IL-17C work is in progress and that points to dual mechanism of action, meaning when there is IL-17C somewhere in the skin, it will activate TH 17 cells and those cells will give more IL-17A and on its own direct action as well on the [indiscernible] 17C will activate the immune reaction.
So we believe we are the first company and so this is the first in class that we develop in the auto immune space, IL-17C in all models really behaves other than local amplifier of the immune response. So independent of stage 1 or stage 2 IL-17 for both of the trails will locally amplify so its non-action growth we have a potential growth application.
Next slide, so in September we released as part of the press data the Phase 1b patient data, so we did an SAD in healthy volunteers than went over 24 patients in three different cohorts. So, patients got four weekly infusions in a dose escalating mode.
So, what we saw was very, very nice efficacy data in the sense that we saw a fast onset of action and after top dose off to the loss in infusion, we want so that the activity remains visible for over two months and secondly more than 80% of the patient showed a 50% improvement of the disease score. So, over 2018 we together with MorphoSys will start up a phase 2 study IV and in parallel develop a subcu formulation in Phase 1 allowing us to bridge into a late stage subcu program for IL-17C.
Let's now move to CS as you will know we're developing multiple triple and plan is to bring three triples in patients over the coming 12 months. So on this slide, I have depicted it again, in grey you see how the dual platform of Vertex compares with our in-vitro assays and for each of our triple infect, we expect a significantly stronger activity compared to the dual platform of Vertex.
So, the first one that we will move into patients is 2222, 2737, 2451. During Q3 we went for scientific advice to MHRA discussed with them our design for the first into patients study, discussed with them all our pre-clinical and clinical data and they agreed that we can move forward and submit the trial application in the coming days.
So the second triple that we will move to patient is one with 2222, 2737 and 3067, so that triple currently we are doing, we've completed dual in healthy volunteers in Q4 we will move do the triple in healthy volunteers and early next year, this will move into patient and finally 3221 is a use two type of compound that will move into Phase 1 in Q4 as well. If you now look to patient studies, we have in total, six studies on the books, so ALBATROSS is a Phase 2 study where we dosed 2222 on top of [indiscernible] patients.
And those data will result over the coming weeks. So also the second Phase 2 study, which is a more mono study of 2222 in delta five patients, we will have all the data around year-end.
Then the first triple 2737 on top of our Orkambi, we got approval in the countries where we have submitted and that study has started in the meanwhile and then you see the first of our fully in-hospital 2222-2451 we will file the application in the coming days and then start that study, 3067 base triple will move into patient early next year and then the triple based on 3231 will move later second half of next year into patient as well. So that's the overview of our CF patient study up to now.
Then in Q3 as well we moved forward in the field of osteoarthritis, there 9072 during Q3, the option on the this program ex-U.S. we own all of the U.S.
rights in the meanwhile we had a Phase 1B study running in the U.S. in that study we have included for the first time patients, we have included for the first time female adult and third is that we have extended the typical dose range beyond the age of 65 because of the weight patients we wanted to test in Phase 2 will be around that age.
So those data as well that study is fully recruited and that study will readout early next year and will allow us to move then in Phase 2, that will be Phase 2 proof-of-concept study, we will do together on a global scale with [indiscernible] kicking-off early next year. So it's compound blocking atom, which as well one of those novel targets we have discovered in our platform and we as well believe, we're the first oral compound now moving into the clinic in Phase 2 against RMPS.
And with this, I have done the overview of the clinical studies, and I hand over to Bart for the operational highlights.
Bart Filius
Thank you Piet, and good afternoon everyone in Europe, good morning in the U.S. I will take you through couple of slides on the financials for those of you who would be tracking the company they look familiar to you in terms of set-up and formats.
First, I would like to talk about cash position and cash burn at the end of September we were in a comfortable position of $1.2 billion of cash coming from end of December $980 million as you see on this slide, as a reminder we did an follow-on offering of €350 million in April this year which is the big driver for the increase obviously in the first nine months, there is a currency translation effect I have showed this also at the end of June, dollar to euro as we keep part of our cash position roughly 20% in dollars for future dollar expenses. But those are translated in euros, so this is unrealized but are translated in the euros in our balance sheet and flow through our P&L to the tune of €25 million in the first nine months then we get to the actual cash burn which is almost €90 million this is increasing quarter-on-quarter where we're reflecting the many programs that we are running that have just been described by Walid and by Piet and we are tracking also the increase in expenses that will continue for a little while longer as these trials get broader and the patient inclusion especially in filgotinib is also increasing, so €89 million for the first nine months anticipating for the full year to be at the lower end of our previous guidance, the guidance was €135 million to €155 million so we anticipate to be at the lower end of that range.
Then to the P&L revenues healthy increase of 64% to €106 million over the first nine months really two drivers, on one end there is milestones in blue, here on the slide that is cash income that's being generated over the first nine months but the main increase is the recognition of deferred revenues, so these are revenues that have been from a cash point of view generated when we signed up with Gilead in 2016 early 2016, but the recognition thereof in proportion of the cost that we are making is going over the entire development period so this is something we see before but is driving a big chunk of the increase, compared to the first nine months of last year. Then in operating expenses as a result we see the same evolution, so the increase there as well mainly on the development front as there is more and more programs in late stage development and the programs around filgotinib get more and more mature, so €100 million of the first nine months in development and total expenses from the company are closing to €117 million over nine months, net result are a combination of two above, so increase in revenues but also an increase in expenses, the operational evolution on the slide here is €14 million negative so that's the combination of those two drivers that I was referring to before there are two other comparators that are important in our numbers if you compare this to the first nine months of 2016.
One is the non-cash financial asset adjustment that we had as a result of the Gilead deal I have explained it quite a few times on the phone but this is in the numbers as a positive in 2016 and obviously non-recurring in 2017 for $57.5 million and then there is the FX fluctuation, the translation effect that I was describing previously for €22 million that is also negatively affecting our net results bringing the total net result to €85 million negative. So all-in-all financials in line with expectations on our perspective and with that I hand it over back to Onno.
Onno van de Stolpe
Thank you, Bart. If we go to the outlook, it's clear that our programs are on track and are delivering; filgonitib in a number of different inflammatory diseases, the CF triple combo going into patients, 1690 going in a late-stage program in idiopathic pulmonary fibrosis, MorphoSys in atopic dermatitis, MOR106 very interesting program as well.
And of course osteoarthritis program 9072 which will go in the Phase 2 of which Galapagos will run the full Phase 2 study in the U.S. More proprietary clinical programs moving forward and that we will announce more data on that at the latest stage and at the meantime we have initiated building the commercial organization, so all in all I'm very pleased with how things are going into company both on the science side as well as on the development side and this is all backed by a solid balance sheet, so we can actually finance the programs to what they need and make the best choices to get the most value for the shareholders long term.
With that I will turn it back to Elizabeth for the Q&A. Thank you.
Elizabeth Goodwin
All right, thank you gentlemen. That concludes the presentation portion of our audio conference call.
I would now like to ask operator Helia to connect us to any callers who may have questions for our team.
Operator
Thank you. [Operator Instructions] We will go first to Brian Abrahams with RBC Capital Markets.
Brian Abrahams
Hey, thanks very much for taking my questions, and congrats on all the continued progress. First question is on MOR106, I was wondering if you could maybe expand on any new learnings that you have on the IL17C mechanism and really where you see the most potential for differentiation there given kind of the competitive bar and where this could be novel?
And also curious if you could talk a little bit more about the status of the subcu form? Any estimates for frequency volume, viscosity or needle size for administration there?
And then I have a follow-up after on, see you [ph]. Thanks.
Onno van de Stolpe
Okay, thank you Brian for the question, MOR106, so we are investigating MOR106 broadly in a number of annual models of inflammatory conditions. It really continuously pops up only in those disease model, where a local epithelial process is ongoing.
So that is in the different skin model -- skin diseases pops up as a very promising option for a therapy. We have done psoriasis disease [indiscernible] quite high, so we will not move there immediately.
Atopic dermatitis the second as well in different models shows very nice results. Having gone yet or didn't see a model yet where we can fairly compare it to the [indiscernible] today.
So, we haven't done a comparison but, it is completely novel, and in fact it works independently of the pathway, so and that's where we think it could have a broad application. Asthma is on our agenda of course, but we will announce further studies the movement we engage on them.
But it's more effect that it's local amplifier, so we expect and we don't see any systemic side effects, infects or it should be a very safe way of inhibiting inflammatory responses in the skin broadly, and so, [indiscernible] tackled on. And then [indiscernible], we are currently running the talks with subcu formulation we have developed, and that will moving to Phase 1 next year, and then as soon as we have the data from that we will inform you, but we are confident that we will have a patient-friendly system to administer locally as a subcu into future.
Thank you.
Brian Abrahams
Got it. That's very helpful.
Thanks. And then, just one other question on the CF program, it sounds like you have the clearance and regulatory buy in to proceed into -- with the triple combo, wonder if you could talk a little bit more about sort of the nature of the discussions that this regulatory comfort in testing multiple new drugs together, and how this might apply kind of going forward, best ways to assess the safety PK and follow-up of the long acting metabolite that you're seeing with 2451?
And how you guys are thinking about the design of that study? How we should think about what the next specific steps would be for that initial trial?
Thanks so much.
Walid Abi Saad
On CF [indiscernible] compounds together is not an easy task, it is a complex task. And so, we spent most of the time explaining them the data we had the coverage we had, the way you calculate safety margins, the similarities between the single component and the combo study in the package and as such they felt comfortable that we now move into patient study, they did not give any comment on the long acting nature of the metabolite that was discussed extensively, that did not seem for them I think an issue at the moment.
So it was a very constructive meeting of focusing on what patients really need and these are novel triple treatments and we have one of the promising there and they were very supportive of us moving forward into a combo study, which will be triple agent study high dose in patients and we will disclose the full nature as soon as that is coming on line, thank you.
Brian Abrahams
Thanks again, and congrats again on all the progress.
Operator
We will go next to Dane Leone with BTIG.
Dave Leone
Hi, thank you for taking the questions and congratulations on all your progress. So could I follow-up actually on the last question from here to get the triple study started what are the remaining steps to get the trial up and running and can you just remind us of the different trial sites and the general logistics of the study?
Piet Wigernick
Okay, thank you. So it will be multi country study, so we're now finalizing based on the input from the meeting the protocol addressing whether it is total is the most important making that clear in the text and so it's a clinical trial application which we then expect, we will get approval quickly that's our experience in general if you discuss those complex trials upfront with the authorities, if they see major issues in the package then they make it clear, it doesn't make sense neither for them, neither for us that we submit a trial application for them to turn it down because according to them, some major things are missing, so we discuss that and everything what needed is there and so we're finalizing the text we will submit and then that will get approved we hope somewhere in November so that we can start the study this year, these are the steps and so we will have two, three countries in Europe involved in this study probably.
Dave Leone
And how do you think about I guess two thoughts on that, how do you think about the study design and the data generation that will come from this study and how that would be applicable to a potential U.S. study and then after this first triplet study that you are planning to run on, is Abbvie then in-charge of the next steps, the next clinical steps in the program.
Piet Wigernick
Okay, so what we will do is a proof-of-concept study and there will be separate cohorts for the [indiscernible] patients and as soon as we have gone through a proof-of-concept because then that the proof-of-concept of our in-house triple we will do a Phase 2 dose range of study and at that moment probably we will need to decide whether it's 3067 base of 2051 base study but that will then be based on the day and we will do that study and then it depends a bit on how the regulatory landscape ends up, if it's the classic ways to Phase 3 then normally then Abbvie will perform the Phase 3. So, second question relates to the U.S.
part of the program, we have an open IND for 2222 and we will open the other INDs next year so we will after this proof-of-concept open studies in U.S. as well, thank you.
Dave Leone
Okay, great. And then if I could squeeze in one last one actually on filgotinib that program is extending quite rapidly after some great data, competitively and some developments that seem to work in your favor quite recently, I was curious as the indications keep building for what you are looking at with filgotinib does all, do all these new indications that you are starting to layout still fall-in the master agreement with Gilead or are there potentially different economics as you continue to build out different indications of interest under that program.
Onno van de Stolpe
Thank you. It is Onno, I will take that question.
Yes, this was all in the agreements that we agreed with Gilead, we agreed to pay 20% of all further development cost actually kept to max and if we get above that max then further contribution of the 20% will be taken out of future late stage milestone that we expect from Gilead at some point.
Dave Leone
Okay, thank you.
Operator
We will go next to Phil Nadeau with Cowen and Company.
Phil Nadeau
Good morning, congratulations on the progress and thanks also for taking my questions. Just one follow up on the Cystic Fibrosis trials, I know you mentioned it to be super cohorts for homozygous and Hepman patients in the studies, can you give us some sense of some more sense of the design how long will the patients be dose for how many dose levels will be tested and will all patients be given the triple or will there some patients in trial be given some subset of the candidates?
Onno van de Stolpe
Well, it's a proof of concept, thank you for the question, it's a proof of concept this all patients will get access to the triple therapy that instead of cohorts and we will include typically to those levels, so that we have an idea and an early view on whether we quickly pick up in the dose response. So normally we expect to see quite solid -- bought on that and on every reason that will be the end point.
And patients will be dosed for four weeks in this proof of concept. Thank you.
Phil Nadeau
Great, and in the past you've guided to data from the study around mid-year 2018, is that still your expectation, that's for consultation with the regulators?
Onno van de Stolpe
Yes, that's quite -- that's still the plan. Thank you.
Phil Nadeau
Okay. And then one last question for me on filgotinib, we've seen great data from other JAKs in atopic dermatitis, it doesn't seem like that's an area that Gilead is planning to do proof of concept studies, is that correct, is filgotinib not going to be investigating atopic dermatitis and if so why is that?
Onno van de Stolpe
Well, thanks for the question, Phil. So yes, I mean I think we always look at this data and evaluate and react to what's happening out there, I think there is good reason to believe that filgotinib like other JAX could work in this and this would be part of our evolution as to whether we want to test it going forward.
So that's what we are today.
Phil Nadeau
Okay, so no decision has formally been made yes or no?
Onno van de Stolpe
There is no decision now to access the study no but it's on the radar screen as you can imagine.
Phil Nadeau
Okay. Thanks for taking my questions and congratulations again.
Onno van de Stolpe
Okay.
Operator
We will go next to Christopher Marai with Nomura Instinet.
Christopher Marai
Hi, good morning, thanks for taking the questions. I was wondering if you could quickly touch upon 16.90 in IPS, you studied it over 12 weeks if I recall earlier in the study, I was wondering if you had further follow up or a long term extension study for [indiscernible] and when you might share that data?
And then, secondarily, if you can maybe comment on any potential toxicities you would be looking at with longer term dosing monotherapy inhibitors and some of the studies suggested that there is some CMS side effects that might crop up later in dosing for longer term dosing of taxanes. So we would love to hear your commentary on that and can you remind us of the path forward there, thank you.
Onno van de Stolpe
Thanks, good, this is Onno, I will take the call this question. So at the time when we conducted Flora we had the tox package that would allow us to dose for three months, so as a result we did not having a longer term expansion for that trial.
In the trial we have seen no signs of any CMS side effects that would be a concern to us. Now since then we have conducted the pre-clinical package that would allow us to build chronically and again it could confirm in those studies we see again nothing that would make us concern about CMS toxicity.
Christopher Marai
Okay, thank you.
Operator
We will go next to Matthew Harrison with Morgan Stanley.
Matthew Harrison
Great, good afternoon, thanks for taking the questions. I have two, so first on MOR106, can you just talk about what the pass forward there is, what kind of studies we should expect next and what sort of timeline we can think about and then can you just confirm in terms of when you went for scientific advise on the CF program are there any monitoring or longer follow up or any conditions that they place related to the long live metabolite?
Thanks.
Onno van de Stolpe
Thank you much for the questions, I will take them. So first on MOR106, so we have no longer tox coverage next study will be in dose range Phase 2 study, IV dosing which will dose every other week, not weekly, every other week or bigger intervals and that study will start quickly, so we are finalizing protocols, there we will submit and then keep that early next year.
So that will keep us busy full of 2018, we will be more than 100 patients as well, so will be quite large study and in the meanwhile as I said before soon we have secured from combination already that is in preclinical talks right now and that will move into Phase 1. First of PK and eventually we'll do some multiple dosing in patients as well, so the dose data come together with outcome of the dose ranges and then see whether we can move to Phase 3 immediately.
On CF such advise no they have not implied any long term monitoring that was we do what is required to do in this field of CF. We filed patients as we have done before in the Phase 1 and was no question to add any extra measure today.
Thank you.
Operator
We will go next to Adam Walsh with Stifel.
Unidentified Analyst
Good morning, guys, this is Neil on for Adam. On MOR106 could you guys given the differentiation safety profile, could you guys share on some color on how you think it fits within the current treatment paradigm?
Onno van de Stolpe
Well, in field of action, there is no reason why we think there should be any restrictions currently on patients we can include, so we don't see any restrictions there, clinically this will pan and compare to that that is a bit early but from what we've seen by the fact that we haven't seen anything in straight line that we feel comfortable that safety will not be a limiting factor for MOR106 as well if you look to how innovate R17 -- issue the paperwork it's one of the safest targets we have ever seen, so we are quite comfortable that she spends out wasn't in the first study we will have high rate of combined we've an excellent safety and however that will be competitive profile whether we can be combined through that or not that' still needs to be worked out. Thank you.
Operator
We will go next to Anastasia Karpova with Kempen.
Anastasia Karpova
Good afternoon, and thank you for taking my questions. Three if I may initially on IPF program, can you update where you are in the discussions whether regulators considering Phase 2, Phase 3 trials and would you consider for the combination or monetize as well and do you need to do any bridging studies to open up the R&D in the U.S.
given that the trial, the floor was conducted in Europe, second question is regarding dose given that Phase 3 in a similar population did not demonstrate improvements and as we move on in contrast to Phase 2 trials, have your expectations thick in the ALBATROSS change and what to expect to learn from there and finally what magnitude of biomarker movements would you consider compelling in the OA trial that is reporting early next year?
Walid Abi Saad
This is Walid. I'm going to take the IPF question first and then turn it over to Pete.
So regarding the IPF we would initiate a placebo controlled study on top of the standard of care in the first quarter of 2018. As the study design has already been discussed previously with both the FDA and EMA.
In addition we will be discussing additional studies with both agencies in order to complete our registration programs. And specifically whether we need to do any bridging before we go to the yes the answer is no we can go straight in the U.S.
with the package that we have now. Pete.
Piet Wigernick
Thank you, and I'll start the question from CS. So we designed the Phase 2 study on top of lighting hoping to see you to right single and in as single clearly that was based on the Phase 2 results of projects secure positive in an meanwhile their phase these negative I think anything we can show there in terms of efficacy illustrates there at least we will have a very active 22 compounds.
But we should not hope for extreme high activity because if the larger fails the window to see clinical efficacy is probably limited there but we are still hopeful that both spent and every will read out in a positive way there. That for Albatross study and then are so what is new there as I said is we for the first time include female patients interested.
We've extended H range and also we've dose not two weeks to four weeks. The biomarker seen in healthy volunteers who are still in an ascending phase while we were stopping study so, we hope that we now are we will see we have the maximum effect isn't in terms of the biomarker and hope that between one month in fact we should see the maximal efficacy in plasma.
So it will be the same biomarkers but over the dose range and for longer and then both in males and females for that should give us nice complimentary data to then move further into Phase 2. Thank you.
Anastasia Karpova
Thank you.
Operator
We'll go next to Nick [indiscernible] with Citi.
Unidentified Analyst
Hi, guys. Thanks for taking my questions about three please The first one is how is the development 16, 90 impact your planned cash burns next year and has it change the scale of the commercial organization you're building.
And second one is we still expect analysis and mass burn to the selection study in Q4 this year and thirdly what did marked on payments to look like with regard to the CS program would be an initiation of the triple combination over the next few months. Thank you.
Bart Filius
Nick, it's Bart speaking, let me take a couple of those questions maybe first almost 16, 90 so indeed if we are expanding the program into registrational files and next year we will dissipate at the cash burn. Next year we'll go up I said that previously I think I'm on other calls as well already.
I will give precise guidance by the time we get through the to the full year results in February but once should expect indeed a meaningful increase in cash burn compared to this year driven by one had forgotten is accelerating and on the other hand 16, 90 is adding to that as well and CF is continuing. I mean terms of commercial indeed we have decided and articulate that we want to be the its owner of this drug including the commercial opportunity so, make it a month though he joined us to build out a commercial organization in our company is also looking at the opportunity in IPF and evaluating our options there, for commercialization of the drug and as well.
Then secondly your question was only you see a transition we anticipate that in the first half of 2018. And indeed there it should be some financial compensation associated with that as well and then thirdly on CF your milestone question on CF.
I think you've seen several announcements of milestones all to the tune of let's say $10 million over the past 12 months for different trial initiations. And as this program continues with additional Phase ones but also with something more advanced patient studies you'll see a couple more announcements coming up to that same level as no major increases suddenly but there will be some smaller milestones from the associated to development in the CF program.
Unidentified Analyst
Great. Thank you.
Operator
We'll go next to Peter Welford with Jefferies.
Peter Welford
Hi, yes, thanks for taking my questions. I think the three little ones last.
Firstly on 19,72 I wonder which is confirm all the dose levels those in the Phase 1 are you investigating different doses than a similar vein question in CS. You mentioned there were two dose levels that were going to be studied over four weeks given the dosing work that's been done that is more extensive with the correct to one to DTT2 and I guess a little bit more is down about 24, 51 is the plan just to flex the dose of one of the correctors or is the plan to have a low and high dose of all three components as part of that triple.
And then finally on the 1690 and you mentioned a little bit about the -- into Phase 3 combo trial or Phase 2, 3 combo trial I guess first in the early part of '18 and I should just discuss when you had a discussion with the regulator authorities about what duration of dosing the regulator looking for in an IPF pivotal study. And also what endpoint they'd like to look at in that combo study.
Thank you.
Onno van de Stolpe
Okay, Peter thank you. I'll go first on 9, 72 so those numbers in detail the ones we have tested before in as part of the Phase 1 so we will have now 100, 200, 300 milligram doses evaluated for one month and as we did choose to go lower because we did not have the dose we've separate them of biomarker response so that's why we decided to explore as part of the study the lower end here to receive it where we pick up a dose response on the biomarker but it is within the safety expiration as what we've done before, then more on the dosage for CFs so we will escalate one.
We will keep fixed two out of the three components in the combo and have one component which will have a lower and a high dose included there but it's not going to be a triple high dose and then for each of the three a lot of those now we will keep two of them constant and only very one. Thank you.
Over to Walid
Walid Abi Saad
Now, I'll take the question. I'll take a question on 16, 90.
This is Walid. So regarding the study in the double blind placebo controlled study that we that I discussed duration of dosing will be one year long and this will be, there will be also a long term open label extension that the patients can roll into and be followed for longer term for safety as well as we can monitor obviously efficacy as well.
With regards to endpoint, we will be looking at the usual primary endpoint of a change in IFC and your last rate but also we will be looking at other major event hospitalization that the usual and the functional end point of six minute walk test but the primary will be the first part of capacity change.
Peter Welford
Great. Thank you.
Operator
And we have no further questions at this time.
Elizabeth Goodwin
Okay, I think that we've had a great question and answer session this morning and so will wrap it up. I look forward to seeing many of you at our IR event at NACS see in Indianapolis on the 2 of November and also at ACR the week after.
You can reach out to me directly for more details on that. Our next financial results webcast will be on the 23 of 2018 when we present our full year 2018 results.
So, we thank all callers today for their support and participation and thank you very much. Bye-bye.