Jan 30, 2015
Executives
Daniel M. Junius - President and CEO Charles Q.
Morris - EVP and Chief Development Officer David B. Johnston - EVP and CFO Carol Hausner - Executive Director of IR and Corporate Communications
Analysts
Christopher Marai - Oppenheimer & Co. Inc.
Matthew Harrison - Morgan Stanley Jonathan Chang - Leerink Partners Jason Kantor - Credit Suisse Simos Simeonidis - RBC Capital Markets Jessica Fye - JPMorgan Securities Brian Klein - Stifel, Nicolaus & Company Thomas Wei - Jefferies & Company, Inc. Mara Goldstein - Cantor Fitzgerald Boris Peaker - Cowen and Company John Sonnier - William Blair & Company John Newman - Canaccord Genuity
Operator
Good day, and welcome everyone to the ImmunoGen Second Quarter Fiscal Year 2015 Financial Results Conference Call. Today's call is being recorded.
At this time, I would like to turn the call over to the Executive Director, Investor Relations and Corporate Communications, Carol Hausner. Please go ahead.
Carol Hausner
Thank you. Good morning.
At 6.30 this morning we issued a press release that summarizes our financial results for the second quarter ended December 31, 2014. I hope you've all had a chance to review it.
If not, it's available on our Web site. During today's call, we will make forward-looking statements.
Our actual results may differ materially from such statements. Descriptions of the risks and uncertainties associated with an investment in ImmunoGen are included in our SEC filings, which also can be accessed through our Web site.
In our call today, our Chief Executive Officer, Dan Junius, will provide an update on ImmunoGen; our Chief Development Officer, Dr. Charlie Morris, will discuss our lead wholly-owned compounds in greater depth; and our Chief Financial Officer, Dave Johnston, will discuss our financial results and guidance.
We'll then open the call to questions. Dan?
Daniel M. Junius
Thank you, Carol, and good morning, everybody. We expect 2015 to be a notable year for ImmunoGen.
We’re preparing to expand the development program for our lead wholly-owned compound, IMGN853, based on the findings we’re seeing in the disease-specific cohorts of our Phase I trial, treatment of patients with platinum-resistant ovarian cancer and those with relapsed refractory endometrial cancer and we plan to move into advanced testing for one or both of these indications this year. We’re targeting ASCO for presentation of our latest findings with 853, so you can see what we’re seeing.
We’re also excited about the activity being reported with our IMGN529 product candidate, particularly among patients with heavily pretreated diffuse large B-cell lymphoma, a significant need. We’ve seen a 40% objective response rate among the evaluable patients with DLBCL as reported at ASH last month and dose escalation is ongoing.
Charlie will discuss 853 and 529 in greater depth in a moment. Turning to our earlier stage programs, IMGN289 continues in dose finding and IMGN779 remains on track for IND filing in the second half of 2015.
IMGN779 is a CD33 targeting compound and it will be the first ADC to use one of our DNA acting payload agents. We also expect considerable partner activity in 2015.
In its quarterly update on Wednesday, Roche reported that Kadcyla sales reached 536 million Swiss francs or approximately $600 million in 2014, up 135% over 2013 and about 10% over the prior quarter from increasing international sales. They also announced that they further expanded the Kadcyla clinical program to include assessing it for second-line treatment of advanced HER2-positive non-small cell lung cancer, its seventh potential use.
And that they’ve maintained their expectations of having regulatory submissions in 2015 for second-line treatment of advanced HER2-positive stomach cancer and for first-line treatment of HER2-positive metastatic breast cancer. Presumably, we’ll all have more insight into why Roche considers such a submission possible on the MARIANNE data reported later this year.
Our partners, Sanofi and Biotest, reported highly encouraging Phase II data at ASH for the CD38 targeting naked antibody SAR650984 and the CD138 targeting ADC BT-062, respectively. As a reminder, ImmunoGen has opt-in rights with Biotest in the U.S.
and Sanofi also has three ADC programs in the clinic through their collaboration with us. Clinical testing is ongoing with the Bayer and Amgen compounds and we’re seeing a high level of activity with our newest partners, Novartis and Lilly.
Over the past two years, Novartis has taken all six licenses allowed under our 2010 agreement while Lilly has taken all three licenses allowed under our 2011 agreement. And earlier this month, Novartis advanced its first ADC LOP628, which targets cKit into the clinic.
This triggered a $5 million milestone payment to ImmunoGen. So there are now 12 novel agents beyond Kadcyla in the clinic through our own programs and those of our partners.
We expect this number to increase by as much as a third this year with the advancement of our IMGN779 product candidate and additional partner compounds to IND filing and potentially even the start of patient dosing for some of these compounds in 2015. So with that, let me turn it over to Charlie to discuss our wholly-owned product programs in more detail.
Charlie?
Charles Q. Morris
Thanks, Dan, and good morning, everyone. I’ll start with lead wholly-owned compound, IMGN853.
This is the first and only ADC to target the folate receptor alpha that has entered clinical testing bringing the benefits of both an antibody-targeting agent and our validated ADC technology. Folate receptor alpha antigen is highly expressed on many ovarian and endometrial cancers as well as on other types of solid tumors.
As you know, we started by assessing IMGN853 administered every three weeks in patients with tumors likely to express this target. And once we establish this recommended Phase II dose, began testing it specifically for the treatment of target positive platinum-resistant ovarian cancer and relapsed refractory endometrial cancer.
We’re seeing encouraging activity with 853 as a single agent with this dosing schedule. These findings and resulting investigator enthusiasm for 853 are leading us to plan a three-way expansion of its clinical program in 2015.
First, owing to [ph] need an interest in 853 we expect to soon fill the expansion cohort of patients with platinum-resistant ovarian cancer. We thus intend to expand this cohort from 20 to 40 patients, which will give us additional efficacy and safety experience with 853 for our discussion of next steps with investigators and potentially with regulatory authorities.
Second, we are planning to initiate Phase II clinical testing with 853 this year for the treatment of platinum-resistant ovarian cancer or relapsed refractory endometrial cancer or both based on the activity we’re seeing with it as a single-agent therapy. We are discussing steady designs with our investigators and opinion leaders and we’ll seek regulatory discussions if we believe there is the opportunity for accelerated approaches to registration.
Third, we intend to initiate the assessment of 853 used as parts of combination regimens that this should further expand the opportunity for 853 to help patients including those with less heavily pretreated disease. I’ll also remind you that we are continuing to explore a modified weekly schedule to understand whether this could provide additional benefits.
Those exploration is ongoing and we’ve been pleased with patients’ accrual. As Dan noted, we would like to have the findings to-date presented at ASCO and abstracts are being readied for submission next week.
I will turn now to our IMGN529 agent for B-cell malignancies. The CD37 targeting ADC is currently in the dose finding portion of a Phase I trial assessing it to a single agent in patients with non-Hodgkin lymphoma.
Data from this trial were presented at the ASH annual meeting in December and include the patients treated at higher doses than the data presented at ASCO in June. The findings report included a 40% four out of the 10 evaluable patients for relapsed/refractory diffuse large B-cell lymphoma have an objective response on 529, including three partial responses and one complete response.
Indeed, among the five patients with DLBCL receiving the 1 kilogram dose, the most recent cohort completed, one had a CR, one had a PR and one had durable stable disease. So we’re seeing what we believe is an interesting level of activity at this early stage of development.
Dose escalation is ongoing. Our best estimation at this time is the maximum tolerated dose and recommended Phase II dose will be established in the first half of 2015.
Once we have this, we will begin assessing 529 at this dose specifically for the treatment of relapsed refractory DLBCL. We will also begin evaluating it for the treatment of chronic lymphocytic leukemia starting with some additional dose finding work.
We plan to next report 529 data in the latter half of 2015, most likely at ASH. As Dan noted, dose finding is ongoing with IMGN289, our EGFR-targeting ADC and our IMGN779 compound remains on track for IND filing in the second half of 2015.
With that, I will turn the call over to Dave to discuss the financials.
David B. Johnston
Thanks, Charlie. As Carol noted, we issued a press release this morning with our financial results for the quarter ended December 31, 2014, which is the second quarter of our fiscal year 2015.
I’ll discuss the highlights and then I will review our guidance. Our revenues in the quarter were $48.3 million as compared to $30.1 million for the same quarter of last year.
The current period includes $41.4 million of revenue from license and milestone fees principally from the amortization of upfront fees received from Novartis and Lilly in 2010 and 2011, respectively, due to their taking licenses in the current period. The prior year had $25.7 million of revenue from license and milestone fees, which included the $5 million cash payment from Roche on the approval of Kadcyla in the EU.
Our second quarter financials also included $4.6 million in royalty revenue earned on sales of Kadcyla compared to $2.3 million in the same period last year. As a reminder, we received and recognized royalties on Kadcyla one quarter in arrears.
Operating expenses in our second quarter of fiscal 2015 were $34.5 million compared with $26.3 million in the second quarter of last year. This change is primarily due to increased third-party costs related to the advancement of our internal products, increased costs associated with manufacturing clinical materials on behalf of our partners and increased personnel and patent expenses.
Breaking out those totals, R&D expenses were $27.6 million in the second quarter this fiscal year compared to $20.9 million in the same period last year. G&A expenses were $6.9 million in the current period compared to $5.4 million in the same quarter of last year.
For the quarter, we had net income of $13.6 million or $0.16 per share compared to a net income of $3.8 million or $0.04 a share for the same quarter of last year. We ended the quarter with $106.6 million of cash and cash equivalents compared with $142.3 million as of June 30, 2014 and we continue to have no debt.
Our cash used in operations was $34.4 million for the first six months of fiscal 2015 compared to $21.6 million in the same period last year, reflecting our increased investment in advancing our wholly-owned programs. Capital expenditures were $2.6 million in the second quarter, which was consistent with $2.3 million in the same quarter last year.
Our guidance for fiscal year 2015 remains unchanged from that previously provided, specifically revenues are expected to be between $100 million and $105 million, operating expenses to be between $160 million to $165 million, net loss between $60 million and $65 million, cash used in operations between $55 million and $60 million, capital expenses to total between $7 million and $9 million and we expect to end the fiscal year between $75 million and $85 million in cash. We continue to advance our two-prong strategy of investing in the development of our wholly-owned product candidates and utilizing partnerships to advance therapies, which we believe have the potential to make meaningful difference in the lives of patients with cancer.
So with that, let me turn the call back over to Dan.
Daniel M. Junius
Thank you, Dave. We look forward to providing updates on our wholly-owned programs as well as partner events over the course of 2015.
So let me give you a recap of those starting with our programs. In April, we expect to have a number of presentations at AACR on additions to our state-of-the-art technology portfolio, our product candidates and research done in collaboration with the partners.
For the lead compound IMGN853, we expect to report the latest clinical findings at the ASCO annual meeting in June. We plan to initiate Phase II testing in 853 and the treatment of platinum-resistant ovarian cancer or relapsed refractory endometrial cancer or both in the second half of 2015.
If the data warrants, we would explore with the regulators and accelerate a pathway for one or both of these indications. We plan to initiate assessment of 853 used in combination regimens for ovarian cancer in 2015.
For IMGN529, we expect to have its recommended Phase II dose in the first half of the year and to then initiate assessment of it specifically for the treatment of relapsed refractory diffuse large B-cell lymphoma and chronic lymphocytic leukemia. We intend to report updated clinical findings with it at a major medical meeting in the latter part of 2015, most likely ASH.
We expect to submit the IND for IMGN779 product candidate in the second half of 2015 and to continue dose finding work with our IMGN289 product candidate. Turning now to partner compounds, we expect global sales of Kadcyla to continue to increase in 2015, as it gains broader use for its approved indication.
We expect the MARIANNE data to be presented and for Roche to provide insight on the outcome of its discussion with regulators sometime over the course of this year. Further, we expect the readout from the GATSBY gastric cancer trial and if positive for Roche to apply in 2015 for Kadcyla approval for the use of study.
Beyond Kadcyla, we expect data disclosures and/or development events for several of the nine other product candidates in the clinic through our partnerships. And we expect two to three more partner compounds in addition to LOP628 with Novartis to advance into the clinic this year.
So, all-in-all, we would expect to see a very active 2015. With that, let me turn it back to Carol and we can then move to the question-and-answer session.
Carol Hausner
Thanks, Dan. We’re about ready to open the call to questions.
We ask that each person limit their questions to one to two per person until everyone has had a chance to ask their questions and then you can get back into the queue and ask additional questions. Operator, we are ready to open the line for questions.
Operator
Thank you. [Operator Instructions].
We’ll go first to Chris Marai with Oppenheimer.
Christopher Marai
Hi. Good morning, guys, and thanks for taking my questions.
First question really on 853. I’m wondering if you could help elaborate a little bit about the dose schedule that you picked and why you’re not looking at also a modified weekly schedule for that therapy?
Then number two on the 529, CD37, obviously we have seen some folks in DLBCL want to combine therapies with PD-1s. Could you maybe comment on the potential for combining with any checkpoint inhibitors now that you’ve got some initial safety data and dosing data there?
Thanks.
Carol Hausner
Charlie?
Charles Q. Morris
Hi, Chris. For the dose schedule, we haven’t made the final selection yet.
To just reiterate what I said in the latter part of my piece of the pad notes, we are continuing to explore the weekly schedule. Obviously, we currently have more information with the three weekly schedule and we’re very encouraged by what we’re seeing with it.
But we continue to explore the other dose schedule as well and we’ll make final decisions on that as we go through the year and have more information. But we still have not established a recommended Phase II dose on the weekly schedule.
For 529, yes. Certainly PD-1 and checkpoint inhibitors I think are of interest broadly speaking, but at this stage we continue – yes, we’ve got some interesting activity.
I think we’d like to establish more knowledge about a final dose, more information in terms of safety and efficacy. But certainly checkpoint inhibitors and the combinations of course are things that we will look into as we go forward.
Christopher Marai
Okay, great. And then just real quick on 853 dosing, is it ultimately being limited by toxicity?
Is that at the end of the day what’s guiding that decision? And I’ll jump back in the queue.
Thanks.
Charles Q. Morris
If the major way for selecting doses for oncology agents has been based around establishing the maximum tolerated dose and then from there moving forward. We are looking – as we look at the weekly schedule, we are looking at both the potential to have good tolerability and perhaps equal or better efficacy than we have seen with the three weekly schedule.
If we believe that we can improve on either end of that, we will select that dose and schedule. If not, we like what we see.
But it’s always that balance of tolerability and efficacy that we’re looking for. And at the moment with both schedules, we believe that we’re doing well and establishing that we can dose tolerably and effectively.
Operator
We’ll go next to Matthew Harrison with Morgan Stanley.
Matthew Harrison
Great. Thanks for taking the question.
So two for me; so first on 529, maybe you could just help us think about the competitive landscape there. There are obviously a lot of agents in development and where you see the right place for 529 in that landscape?
And then secondly on 853, I know you have characterized the data as demonstrating enough I think to move into some of these expansion cohorts. Can you maybe characterize what the bar was for you to move ahead or what you see as even across the landscape as clinically meaningful data that would allow you to move ahead?
Thanks.
Daniel M. Junius
So 529, obviously the – I think B-cell malignancies broadly speaking is clearly competitive at the moment with the new entrance, as you know. I think BLBCL clearly there is competition but I think it is less active.
There certainly have not been any approved agents for a very long time. And I think in the relapsed refractory space where obviously we have started to see activity for 529, it remains considerable in that need both for single agents and for combinations.
So I think with DLBCL, although there are other things coming into this space, the fact that we have started to see an interesting level of activity encourages us to be very interested in pursuing that as an area where there continues to be a need for new agents. For 853, I think where we are is that we started the initial expansion cohorts as we’d already planned to do.
We are working towards completing the original intent there. The original intent was to include 20 patients.
We have decided because of the sort of safety and efficacy profile that we’re seeing to expand that to take that to 40 patients. I think to go deeper into development – to develop it as a single agent.
I think if you start to see response rates in the 30% to 40% rate or higher, you’d be interested in developing it to the single agent. We haven’t made all of those decisions yet.
Obviously, we’ve gotten the information that we have to-date but we’re encouraged and that’s what’s encouraged us to both expand the cohort and be talking publicly about the notion of going into the next level and the more advanced stages of development.
Operator
We’ll go next to Michael Schmidt with Leerink Partners New York.
Jonathan Chang
Hi. It’s actually Jonathan Chang stepping in for Michael.
Thanks for taking my questions. First question, can you walk us through what your thinking is on the neutropenia seen with IMGN529?
Charles Q. Morris
Yes. As you know, we saw some early neutropenia in the early dosing.
We felt that that was – as that happened so early after dosing that it was most likely related to some redistribution because of cytokines and that’s why we added corticosteroids over the first couple of days of therapy. That seemed to reduce that.
We’ve also then saw some neutropenia a little later and we used and have been using Neupogen to try and overcome that. That seems to be being effective as well.
So, we’re now at the point where we have still seen some neutropenia but it’s less and this is short duration, and we’ve been able to continue dose escalation beyond where we were when we first presented data at ASCO last year. So that is something which we feel is manageable, it is under control and it is certainly not been something which has stopped us from being able to escalate the dose and to find efficacy as well.
Jonathan Chang
Great. Thanks.
And second question, can you provide some color on the commitment that Biotest has in developing BT-062 especially in light of the recent management change there?
Carol Hausner
Dan?
Daniel M. Junius
We really don’t like to get into sort of stating a position on behalf of our partners, Jonathan. BT-062 has shown very good data in the clinic.
As you probably know, the ASH data was very impressive with their combination study in multiple myeloma. The management change I think was an orderly succession.
I think it’s interesting, it bought in a CEO out of the pharmaceutical area as opposed to blood products but beyond that, I’ll let Biotest speak to what their intentions are around development of BT-062.
Jonathan Chang
All right. Thank you.
Operator
We’ll go next to Jason Kantor with Credit Suisse.
Jason Kantor
Thanks for taking my question. A couple of them have already been asked, but I’m just curious on 853.
You’ve spoken about possibly approaching regulators if you have good single agent activity in ovarian cancer. I’m just not aware that the FDA has been willing to accept response rate for accelerated approval for other drugs, so I’m just wondering if you’ve had any interactions with the FDA that would change that view?
And also you mentioned that you are looking to advance that program in one or both of ovarian and endometrial. I’m just wondering what exactly are we waiting on to make that decision?
Carol Hausner
Charlie?
Charles Q. Morris
Hi, Jason. No, we haven’t had any conversations with the FDA at the moment.
I just think we’re trying to signal that if the data continues to be interesting. We saw high levels of response with durability at those responses and we believe it’s conversation that is of value.
But obviously when we get to that point, we will let it be known. In terms of what are we waiting for?
We’re waiting for completing the accrual and getting more data out of our expansion cohorts. But clearly this is part of the plan.
Those expansion cohorts are going on. They’re providing us information.
I think we always want just a little bit more on both the safety and efficacy side to pull the trigger on the next level of investment. But clearly we are seeing signals from both sides which encourages.
And we’ve also got that little bit of dose work that’s going on at the same time as well. So, it’s just a few factors coming together, but we’re confident that we will be able to move this forward during this year.
Operator
We’ll go next to Simos Simeonidis with RBC Capital Markets.
Simos Simeonidis
Hi. Thanks for taking my questions.
A question for Dan. Kadcyla sales in the U.S.
have been flat for a number of quarters, Dan. Do you have any sense why the drug has not been able to break through any further past the 7 million [ph] a quarter it’s been at the past few quarters?
What are your medical oncologists you’re talking to telling you?
Daniel M. Junius
Good morning, Simos. The only insight that we have would be that that was provided by Roche.
I don’t know that they reinforced it this quarter, but had been seen in earlier quarters. They still have what they view to be a penetration rate in second-line HER2 positive metastatic breast cancer above 40%.
I think what they indicated I think would still hold true and that there’s been a shift in first-line therapy as they’ve added PERJETA to a Herceptin plus taxane therapy. The data that we saw suggested a long duration benefit to patients and so I think that we’re continuing to see some impact of first-line patients staying on that triple combination for an extended period of time and being slower to migrate into second-line therapy.
I don’t know that there is anything else taking place from a therapeutic standpoint that would suggest otherwise. All the feedback that we hear from the oncology community is that they have very good views of Kadcyla but as long as first-line patients are getting benefit out of the triple combination that simply defers to the patients benefit, obviously the point in time when Kadcyla would be an appropriate therapy.
Simos Simeonidis
Okay. And then I’m not sure I got all of Charlie’s answer to an earlier question on 529.
CLL is a very crowded space and not only is it crowded but it’s dominated by IMBRUVICA that seems to have very good efficacy and safety. Where exactly do you think 529 might find a place there?
Charles Q. Morris
Okay. So, Simos, my response early was really focused around DLBCL because that’s where the initial focus has been.
That’s where we have the signal at the moment. Based on preclinical information we have, we’re very encouraged by some early data – some preclinical data around CLL that was seen in appropriate models there.
We don’t have any clinical data in that setting at the moment, but that’s something that we do plan to include in some early studies. IMBRUVICA is clearly doing very well but I think that we’ll continue to be – there will obviously be patients who will progress after IMBRUVICA.
There will be combination opportunities down the line. So I think there’s always a need for new approaches for a disease, as you say, it’s very busy but I think our initial focus will be much more on DLBCL but we do plan some exploratory work in that CLL space.
Operator
We’ll go next to Jessica Fye with JPMorgan.
Jessica Fye
Hi. Thanks for taking the questions.
Maybe just digging into one of the earlier questions a little more; with respect to 853 and potentially pursuing an accelerated development pathway there, can you just elaborate on whether there is any potential to design those Phase IIs in a way that could allow them to represent registrational studies either in ovarian or endometrial? And then also just with respect to beginning combination work for that asset, can you talk about what agents you’re considering studying it with?
Thanks.
Charles Q. Morris
In terms of designs for accelerated programs, I mean clearly that’s something that will depend on the data itself and negotiations with authorities. I think if we look at endometrial carcinoma, an area where there’s been really no new effective agents for many, many years, we believe that with good response rates that there may be – a single agent study may be possible, but obviously that needs to be a regulatory discussion.
Or there could be relatively small randomized studies against some of the agents currently used such as doxorubicin but obviously those are pretty unsatisfactory comparatives from an efficacy point of view, so for things that we believe we would have an opportunity to compete with and when. I think on the ovarian side, again, it would take high response rates and durability of those responses to be able to have a serious conversation about single arm studies, but I think we don’t rule anything out at this particular point.
And if that’s not there, then there’s still opportunities for using single agent compared to current standards of care and studies based around progression free survival. I think in terms of combination, we look as anybody would at what’s the current standards, what’s being used in the space.
This is in the platinum-resistant opportunity and we combine with those. We haven’t disclosed exactly what the design of those studies would be but there’s agents there which are available and which are used and which we believe we will be able to safely combine with.
And so we’re looking to begin those explorations this year.
Jessica Fye
Okay, understood. And then maybe just one follow up on the dosing schedule recognizing that you’re still evaluating the newer dosing schedule for 853.
Can you just talk about whether getting more data on that dosing regimen will represent a gating factor as to when you can start [ph] Phase II? And will you have that data in time or if you’re seeing sufficiently good results with the current regimen, will you just press forward with that dosing schedule?
Charles Q. Morris
I think you probably answered the question for me with the question. If we start to see things with the weekly schedule, which make us believe that there is something about it that’s a significant improvement, we will push ahead.
Obviously, the most expeditious way of moving forward would be to use the three weekly schedule on which we have the greater amount of information. So we’re going to continue those in parallel.
If things begin to emerge from the weekly then we will make the switch, but there is no compelling reason then clearly the greater amount of safety and efficacy information to put in front of investigators, opinion leaders and regulators will be from the three weekly and we’ll go ahead with that. The three weekly we would base on what we currently know, we would be very happy to take forward but we need to also be giving that modified weekly the opportunity.
So, at this point, it’s not necessarily a gating decision.
Operator
We’ll go next to Brian Klein with Stifel.
Brian Klein
Great. Thank you for taking my question.
Just one financial question. You’ve laid out I think a fairly ambitious clinical program for all your candidates and I’m just wondering if you could comment on how you might think about financing the company beyond calendar year '15?
And if you feel that you’ll need to partner or license out for 853 to advance into late stage development? Thank you.
David B. Johnston
Sure, Brian. Dave Johnston here.
Yes, so the current cash guidance that we have takes us into calendar year '16. We haven’t said specifically how far but that’s even with the kind of a development program that we’re talking about.
But you’re question is valid in terms of eventually, especially as these move into a later stage clinical trials, we’re going to want to top up the tanks here a bit. So we do have options and some of those options are as you said.
Let’s say that as these programs move forward, they’ll move forward with the kind of data that makes it interesting. At that point, it might make sense to consider doing a partnership, particularly a geographic-based partnership where ImmunoGen retains North American or U.S.
rights but there could be a loss of interest with ex-U.S. rights.
Another option would be a potential monetization as part of the Kadcyla royalty. And I think lastly as these programs move forward, it would be our hope and expectation that the market would recognize the value and that would change our equity value and that would then open up further options as well.
Brian Klein
Great. Thank you.
Operator
We’ll go next to Andrew Peters with UBS.
Unidentified Analyst
Good morning, guys. This is Charles [ph] calling for Andrew Peters.
Thank you very much for taking my questions. So, my question is that when you speak to KOLs or the regulatory about 853 or other ADCs, how do they view the ocular toxicity from maybe a clinic or a regulatory perspective?
And I’m just wondering, is there a level of Grade 3 that would be acceptable provided the efficacy benefits is significant and overweight?
Charles Q. Morris
I think generally talking to our investigators or opinion leaders, adjusting to any new therapy and any new type of therapy takes a little bit of learning. But certainly as we look at the rate of recruitment of patients into our studies, it suggest to us that investigators are comfortable with the tolerability profile and encouraged by what they’re seeing from an efficacy perspective.
Now we haven’t gone deep in discussions with regulatory authorities at this point, but clearly without major toxicities dominating the picture here, clearly nothing is – there are tolerability aspects that we continue to work on but I think the overall profile people are comfortable with and becoming very accustomed to. So there’s not really – not seeing it at this point is a real limiting factor in being able to push our lead programs 853, 529 forward.
Unidentified Analyst
And also for 853, since you have mentioned the potential combination with other compound, do you perceive this like concurrent treatment or like a sequential treatment in that case?
Daniel M. Junius
I think we’ll be looking for concurrent therapies. I think we’re pleased with the activity that we’re seeing as a single agent, but most oncology agents at some point combine with other agents with different mechanisms of action to try and improve the outcomes for patients.
And the ultimate aim and the ultimate way for us to be successful will be to improve outcomes for patients. So we will continue the development as a single agent but believe that with combinations as well we have the opportunity to further improve and further enhance the opportunity for the product.
Operator
We’ll go next to Thomas Wei with Jefferies.
Thomas Wei
Thanks. I wanted to clarify a couple of things that you’ve said just trying to piece together some of the 853 commentary.
So you had mentioned in response to an earlier question that to go deeper into development as a single agent, you would want to see response rates in the 30% to 40% range. I just wanted to clarify.
So if you do not see a 30% to 40% response rate, that means that you wouldn’t move forward with another trial? Maybe you would wait for one of these combination studies to report out or is that threshold the trigger for pursuing a single agent study versus the randomized PFS study?
I didn’t quite understand that.
Charles Q. Morris
I think part of the challenge, Thomas, is that we’re sort of talking in a sort of a speculative way, okay. It’s always going to be about the totality of the information.
I think generally speaking, I think for an agent to have compelling opportunities as a single agent, you’re probably talking about a 30% range and higher, but with outstanding PFS, with outstanding duration of response, maybe there are different levels. So that’s sort of a more general statement.
If you don’t get to those levels where you think it’s active but perhaps not active enough to cross the line for registration as a single agent, then I think having combination data also helps you to have a secondary approach where you can take an active agent, combine it with another agent and perhaps provide those additional benefits. So I don’t want to suggest that we’ve got numbers, which are cast in stone and those are it.
We’ve got to see the totality of the information at the time. The message is that we are looking at all of these things because we believe that we have an interesting level of activity.
And if we can maintain that type of level of activity, then we’ll be encouraged to be taking the product deeper into development.
Thomas Wei
That’s helpful. And my second question was just that 30% to 40% hurdle, was that kind of with platinum-resistant ovarian cancer in mind or does that also apply to the endometrial setting?
Charles Q. Morris
The 30% and the higher range, that’s really platinum-resistant ovarian cancer. I think the number is probably lower for endometrial carcinoma.
Sadly, the second-line and later therapies for relapsed refractory endometrial cancer got very low response rates, very short progression free survival and I think the bar there is perhaps lower though obviously we will also have ambitions to be as high as we can be. Though I think there will be a pass forward even in the sort of 20% range there.
Operator
We’ll go next to Mara Goldstein with Cantor Fitzgerald.
Mara Goldstein
Thanks very much for taking the question. I have two.
The first one is on 529 and the use of steroids in that trial. Is it prophylactic at the outset of treatment or is it at the beginning of symptoms that steroids are deployed?
And can you speak to the dose on that?
Charles Q. Morris
In terms of the corticosteroids what we’re doing is we dose, pre-dose and two days after for all patients. So this is to prevent that early drop that we were seeing in the neutrophils rather than keep going.
And I would actually have to get back to you with exactly how we’re – what the dose is there, because I don’t have that at my fingertips.
Mara Goldstein
Okay. And the second question is more a financial modeling question on Kadcyla and forward revenues.
If you look at sort of the landscape of the clinical trials from Roche and how you think about modeling, are the forward projections incorporating the trials that have yet to read out and any part of MARIANNE, or are they solely based on Kadcyla and the approval today?
David B. Johnston
Hi, Mara. Dave here.
Mara Goldstein
Hi, Dave.
David B. Johnston
When we model forward, we have generally modeled with the approved indications and then we risk-adjust for any other indications that are still in development. But, I have to say that we generally don’t look in too much detail beyond three years out.
And so even the other indications would just be ramping up. So they wouldn’t have I think much impact on the next two or three years when you look at the impact on our near-term royalty stream.
Operator
We’ll go next to Boris Peaker with Cowen and Company.
Boris Peaker
Good morning. Just a few questions, more on 853.
Just curious if you’re comparing the two different doses; the weekly and the three weekly dose, what fraction of patients require dose reductions in each one of those dosing schedules? And also are you giving these patients any supporting drugs like steroids and growth factors?
Daniel M. Junius
We’ll disclose the information that we have about the two doses when we present data, which as we said early we’re hoping to submit to ASCO. So that level of information has not been disclosed at this point.
In terms of – and obviously the experience with the weekly being in dose escalation right now is relatively low as well. In terms of any supporting materials, no, we have been – the only additional thing for 853 is using some measures to try and minimize the symptoms that we saw on the ocular side, so people are using lubricating eye drops and some other things.
But no additional medication on the steroid or Neupogen type point of view.
Boris Peaker
Got you. Thank you very much for taking my questions.
Operator
We’ll go next to John Sonnier with William Blair.
John Sonnier
Hi. Thanks for taking the questions.
Two for Charlie; first, with 853 I think – just to clarify, the discussion has been and all the commentary around platinum-resistant disease. Is there a strategy where you might go into platinum-refractory in combination with Doxil or even into Doxil refractory where there is greater unmet medical need as a rapid to market strategy?
Charles Q. Morris
I think if you were looking at single agent development to take it forward, then I suspect those will be patients who would have had experience of Doxil prior to going on to the study; Doxil, obviously being an improved population there. The platinum-refractory population, incredibly tough population as you know and thankfully for the patients, a relatively small population.
So while I agree that if you had an agent which could be successful there that may be a faster market path. I think it’s a very, very tough population and not one that we’ve been choosing to pursue in the same extent that we’re choosing to pursue platinum-resistant.
John Sonnier
Okay, that’s helpful. I hate to ask the question, but I get asked the question a lot.
How do – the question I get is how do I think about ADCs in a world where immuno-oncology will play an increasingly prominent role? And I guess I’ll pass it on to you.
How has the emergence of a lot of the data over the past couple of years shaped your thinking I guess across the spectrum from target selection to design and development? Thanks.
Charles Q. Morris
The emergence of immuno-oncology is a very exciting thing. A lot of patients are benefiting and it’s great to see these successors occurring.
But no treatment is ever been able to just stand on its own and be the only thing that’s required to treat cancer. I think in that case, there remains – there will also be a role for additional agents.
I think ADCs will hopefully continue to fulfill their promise as well. I think there will be opportunities to combine checkpoint inhibitors with ADCs and I think that will become a part of the success as well.
So I don’t think we should regard that it’s all over because checkpoint inhibitors exists, they’re doing well but there’s still a lot more to do to treat this particular disease. And we continue to think about that extensively about how these things are going to fit together and therefore how we maximize the opportunity for ADCs with all of these new things going on.
But clearly we still have a great opportunity to bring forward active agents as well for targeted populations of patients and we will continue to understand and explore that.
Daniel M. Junius
It’s Dan, John, if I can add to that. And while I’m not trying to feed anyone about anything on the business development side but having just been out of JPMorgan a few weeks ago and the dialogue that took place with various parties around this space, our technology, et cetera, you still are seeing – I think that the players in the field, large pharma or other people who have a significant position – you see people in this space who continue to show a significant interest in ADCs both current technology and additional innovations that are being brought into the portfolio.
I think you could also point to the licenses taken by Novartis, by Lilly of looking to continue to advance ADCs as another tool in their toolkit to be able to potentially combine with other agents that are evolving. So, clearly, immuno-oncology has garnered a lot of attention for a number of very good reasons but I think that key players recognize that complementary agents are going to be able to take the field of cancer therapy farther than checkpoint inhibitors or other immuno-oncology agents can on their own.
So we’re very encouraged. We think there continues to be quite a bit of interest in this space with both our own compounds as well as what our partners are doing, we think that it’s getting very good support.
Operator
We’ll go next to John Newman with Canaccord Genuity.
John Newman
Hi, guys. Thanks for taking the question.
So just a follow up on Thomas' question earlier. Can you give us a sense as to sort of the range of response rate that would prompt you to take 853 forward in combination versus sort of the level of response where you’d be comfortable pushing it forward as a single agent?
And would you say at this point in time that you’re closer to single agent moving forward or closer to combination moving forward? Thanks.
Charles Q. Morris
I think I’m going to have to refer people to the data that we’ll present at ASCO when we get to ASCO to see where we are. Clearly, from what you’re hearing from us we believe that single agent is in play.
I think to go forward just in combination, you still need an active agent. I think if you couldn’t cross a 20% response rate line, then you would probably think that you are not actively enough in platinum-resistant ovarian carcinoma to be able to go forward.
But I think the conversation will be much easier and much clearer when we’re able to get the data out in the public domain and we can really frame the conversation with the reality of the numbers rather than sort of the speculation around the numbers. As I said earlier, I think north of 30% you’re probably interested as a single agent but somewhere a little less than that still interested as a combination agent.
But I think the conversation becomes much clearer when we’re able to present the data and discuss the reality of where we can go at that point.
John Newman
And do you suspect that you might be able to present some data on the durability of response as well?
Charles Q. Morris
Sorry, the question is on the durability.
John Newman
Yes.
Charles Q. Morris
Yes. We’ve been in the expansion cohorts for a little while now, so certainly we will start to see some – have some sense of durability by the time we’re presenting data in the middle of the year.
Obviously, that always takes longer to get through but I think we’ll have a good – we’ll begin to have some sense of the durability by the time we are able to present data. And as we said, we intend to submit that data to ASCO.
John Newman
Great. Thank you very much.
Operator
We’ll go next to Thomas Wei with Jefferies.
Thomas Wei
Thanks for taking the follow up. So just on the durability front, I had wanted to ask – I don’t know plan numbers in ovarian cancer that well but what would be a durable response in that setting?
Charles Q. Morris
I think if you started to see six months of a response then you would consider it durable. Remember, the definition for platinum-resistant disease means that the patient even though they’ve had a response, it has progressed within six months.
So, there’s clearly – from the way that we have defined this disease over the years, we see six months as being an important duration for patients with this disease.
Thomas Wei
And can you just remind, you said that the expansion cohorts have been going on for a little while. When exactly did you start each one?
Daniel M. Junius
They started round about the middle of last year.
Charles Q. Morris
Third quarter of last year.
Thomas Wei
Okay. And then I was curious, so you’re expanding the ovarian cohort only or were you expanding both ovarian and endometrial?
Charles Q. Morris
At this point, we’re expanding the – we’re further expanding the ovarian. I mean that’s sort of a mathematical thing if you like.
There are more patients with platinum-resistant ovarian cancer than there are patients with relapsed refractory endometrial cancer and they’re more likely to express the folate receptor target. So that one at this point is recurring as you would expect more quickly and therefore the decision to expand is easier to make for ovarian at this point than it is for endometrial, but we don’t rule out doing the same thing for endometrial.
Daniel M. Junius
I just wanted to be clear, it’s Dan. Both endometrial and ovarian are in the planned expansion cohorts.
So we have more stringent inclusion criteria for patients. We’re looking for certain expression levels.
So both of those are recruiting today. What Charlie has referenced is that for ovarian, we’re going to go beyond the planned 20 patient expansion cohort and bring in an additional 20 patients.
We have not made that decision for endometrial at this point. So I just wanted to be clear.
When we talk about expansion cohorts and expansion of the expansion, I don’t want people to be confused.
Thomas Wei
Okay. But ultimately expanding a cohort, isn’t it more – wouldn’t it be more important to expand the one where the response rate is more difficult to interpret.
So if you only have 20 patients with endometrial and the bar is a 20% response rate, it might be more helpful to have 40 rather than 20 there?
Charles Q. Morris
Yes. As we say that as we continue the accrual of patients into that particular cohort that we will look at that and certainly that’s something that we may do.
If we’re encouraged by what we see, as I said, the reason for talking about this for ovarian at the moment is because the accrual of patients for that cohort has been quicker because it’s a larger population that’s more likely to express the target. So that’s a decision that we’re ready to make.
It’s not a decision that we get ready to make for the endometrial side.
Operator
That concludes today’s question-and-answer session, Carol Hausner. At this time, I will turn the call back to you for any additional or closing remarks.
Carol Hausner
Thank you. I want to thank everyone for their interest in ImmunoGen, and just as a reminder if you have subsequent questions, don't hesitate to call.
Have a very good weekend. Take care.
Bye.
Operator
That does conclude today's conference. We thank you for your participation.