TG Therapeutics Inc
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Earnings Call Transcript

Earnings Call Transcript
2019-Q2

from 0
Operator

Greetings and welcome to the TG Therapeutics Q2 2019 Earnings Conference Call. At this time, all participants will be in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Jenna Bosco, Senior Vice President, Corporate Communications. Please go ahead.

J
Jenna Bosco
SVP of Corporate Communications

Thank you. Good morning and welcome to our conference call regarding TG Therapeutics second quarter 2019 financial results and business update. I'm Jenna Bosco, TG's Senior Vice President of Corporate Communications, and I welcome you to our conference call today.

Following our Safe Harbor statements, Sean Power, TG's Chief Financial Officer will provide a brief overview of our financial results and then, turn the call over to Michael Weiss, the company's Executive Chairman and Chief Executive Officer, who will provide an update on the ongoing development of our lead compounds ublituximab and umbralisib, as well as an overview of our overall company's standing.

Before we begin, I would like to remind everyone that various remarks that we make about our future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. TG cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated. Factors that may affect TG Therapeutics operations include various risk factors that can be found in our SEC filings.

This conference call is being recorded for audio rebroadcast on TG's website, www.tgtherapeutics.com, where it will be available for the next 30 days. All participants on this call will be on a listen-only mode.

Now, I would like to turn the call over to Sean Power, our Chief Financial Officer, to briefly discuss the financial results for the second quarter of 2019, as well as the company's overall financial conditions.

S
Sean Power
CFO

Thank you, Jenna and thanks everyone for joining us. As you may be aware, our financial results were released earlier this morning and can be viewed on the Investors & Media section of our website.

Our net loss for the second quarter of 2019 excluding noncash items was approximately $34.4 million. The growth net loss for the second quarter of 2019 was $36.2 million or $0.42 per share, compared to a net loss of $44.1 million or $0.59 per share during the comparable quarter in 2018.

As we had expected, our R&D spend continues to taper as a registration director trials in both oncology and MS progressed into 2019, thus contributing to our decrease in net loss versus the comparable period in 2018. We expect this trend to continue through the remainder of 2019.

Our net loss for the six months ended June 30, 2019, excluding noncash items was approximately $67.6 million. The GAAP net loss for the six months ended June 30, 2019 was $71.4 million or $0.85 per share compared to a net loss of $85.7 million, or $1.18 per share for the six months ended June 30, 2018, which included a decrease in clinical trial expenses of approximately $10.4 million over the comparable period in 2018, primarily related to our clinical programs for a ublituximab and umbralisib having completed enrollment during 2018.

Partially offset by an increase in manufacturing and CMC expenses of approximately $4.7 million related to Phase 3 clinical trials and in preparation for commercialization.

Moving on to our cash position, at June 30, we had cash, cash equivalents and investment securities of $85 million. To ensure that we remain well positioned to execute on our goals, subsequent to the quarter-end, we continue to opportunistically utilize our ATM sales facility to raise additional proceeds of $11.6 million for a pro forma cash position as of June 30 of approximately $97 million.

We have continued to streamline our spending and focus resources on our critical clinical programs. And for the remainder of 2019, we expect our quarterly cash burn to average roughly $25 million.

With that said, we believe our current cash position inclusive of those proceeds raised during the third quarter and future availability under the ATM will be sufficient to fund our operations through the third quarter of 2020.

With that, I will now turn the call over to Mike Weiss, our Executive Chairman and CEO.

M
Michael Weiss
Chairman and CEO

Thank you, Sean. And thank you, Jenna. And thank you all for joining us this morning. It's exciting times here at TG, as we prepare to initiate our first NDA filing around year-end. And as we start to build our commercial team, we see many important value creation milestones, all of which are now within approximately 12 months from today, including final Marginal Zone Lymphoma data and Marginal Zone NDA filing, UNITY-CLL data and NDA MBLE filing associated with that study. And finally, our ultimate MS Phase 3 readout, it's nice to see the years of hard work by so many at TG heading toward fruition.

Let me now briefly review some of this year's major accomplishments. Most notably, we announced confirmation following our meeting with the FDA that we believe we have a registration path forward to submit umbralisib for accelerated approval, and we are now anticipating the initiation of an NDA submission around year end. We also have the opportunity to present positive interim results from the Marginal Zone Lymphoma cohort in oral presentations at ASCO as well as that ICML receiving positive feedback from many key opinion leaders in the US and abroad.

At ICML -- at the ICML meeting, we also presented data from our study of single agent umbralisib in 51 CLO patients who are intolerant to that is to say they discontinued due to toxicity from a prior BTK inhibitor or a prior PI3K delta inhibitor.

We were very pleased to report that in those patients, umbralisib was well tolerated with only 12% of the patients discontinuing due to an adverse event, which is significantly below what has been reported for other PI3K deltas, especially in patients who already demonstrated an inability to continue on a prior BTK or PI3K delta treatment.

Additionally, for patients on the study, we reported an estimated meeting progression free survival of 23.5 months. For those of you who have been following the UNITY-CLL trial, you may recall that we're targeting approximately 24 to 30 months of progression free survival for the YouTube combination of umbralisib plus ublituximab in patients with relapsed refractory CLL. So, it's encouraging to see single agent umbralisib perform at around that level.

At ICML we also presented data from our U2 combination with the PD-1 inhibitor, and patients with relapsed refractory CLL. And in patients with Richter's transformation. In the relapsed refractory CLL patients, we saw an overall response rate of 91%.

And notably, four of the six BTK refractory patients responded to U2 alone prior to any introduction of the PD-1 inhibitor and a fifth patient that was refractory to BTK responded upon triple therapy for an overall 83% response rate amongst BTK refractory CLL patients.

Patients with BTK refractory disease with or without BTK mutations represented challenging patient population. So, it is encouraging to see U2 working in those patients.

It also gives us further confidence in the activity of U2 in relapsed or refractory CLL again a patient population in our UNITY-CLL trial. In the Richter’s patients, another particularly challenging disease to treat. Three of eight patients responded to triple therapy, including Carty failures, Richter's is a very aggressive transformed type of CLL, which nothing is currently approved.

On the MSI, we've presented long-term follow-up data from the Phase two trial of ublituximab in patients with relapsing forms of MS, showing Ublituximab continue to be well tolerated, with a median duration of follow-up of 97.5 weeks, which is just a little bit longer than the 96 weeks in the ultimate MS phase three trials, so nice to see the continued tolerability of the drug through that time point.

Now, let me quickly provide some updates from our ongoing pivotal trials. Let's start with the Marginal Zone Lymphoma cohort from our UNITY-NHL study, where 69 patients were treated with single agent umbralisib, and the primary endpoint for this single arm study is overall response rate, as confirmed by an independent review committee.

We've previously announced that the study met its primary endpoint of a targeted 40% to 50% overall response rate for all 69 patients enrolled, and we presented interim data on the first 42 patients during oral presentations at three major medical meetings showing a 50% 52% overall response rate.

Additionally, we have received breakthrough therapy designation and orphan drug designation from the FDA for a umbralisib in the treatment of margin zone lymphoma. Most recently in June, as alluded to earlier we met with the FDA and confirmed our path forward to submit on umbralisib for accelerated approval in patients with relapse or refractory margins zone lymphoma. We anticipate the initiation of rolling NDA submission around year end.

It is extremely exciting for us as we move closer and closer to bring umbralisib to patients with marginal zone lymphoma. The second largest form of in the lymphomas was with approximately 75 new cases each year in the U.S. alone, and with an estimated approximately 3000 patients relapsing each year in need of treatment. This represents a sizable patient population. And we are currently building our commercial medical teams to ensure broaden awareness and adoption of umbralisib, if approved.

Next, let me provide a quick update on our UNITY-CLL trial, which is a randomized study of U2 in patients with both treatment naive and relapse to refractory chronic lymphocytic leukemia.

The primary endpoint for this trial has and continues to be progression free survival. As we've said previously, we hope to have results from this study around year end or into early next year. But as this is an event driven trial, it's challenging to accurately predict the timing.

We remain extremely optimistic about this study and the prospects for successful outcome. We think it is extremely important to note that the DSMB regularly needs to review safety from this study. And to date no safety issues requiring modification of the trial have been noted.

Since there are no currently approved PI3K delta's in first line CLL in large part due to safety concerns. This is highly encouraging to us.

Next, let's review our MS program. We have now presented final 48-week data from our Phase 2 MS trial, as well as long-term follow-up data from this trial's open label extension.

Highlights from the final Phase 2 data set include, annualized relapse rate of 0.07, as well as 100% reduction in Gd-enhancing legends as measured by MRI. Data from the open label extension continues to show that it was ublituximab was well tolerated. Again, with immediate follow up of 97.5 weeks.

We believe the Phase 2 results are highly supportive of our fully enrolled ultimate Phase 3 program and our belief that ublituximab can deliver a best in class profile that includes comparable to better efficacy, comparable safety, convenience and price over anti-CD-20 MS therapies.

Ublituximab and is the only anti-CD-20 approved for MS. And is anticipated to generate approximately $4 billion in revenues in 2019 only in its second full year following launch.

As we've mentioned before, this is a large market, and one in which we believe we can provide significant value to patients with MS.

And finally, I wanted to briefly mention our early development pipeline, which continues to progress the three compounds now in Phase 1 and dose expansion cohorts. We have previously discussed early activity, with our BTK inhibitor and hope to present more data from these studies later this year. Dose escalation continues for our novel anti-CD-47 CD-19 bispecific antibody with the hope that we can identify a dose to begin expansion cohorts early next year.

With that, I'd like to turn the call over the conference operator to begin the Q&A session following which I will return and provide some concluding remarks.

Operator

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question today is from Alethia Young of Cantor Fitzgerald. Please go ahead.

A
Alethia Young
Cantor Fitzgerald

Guys thanks for taking my questions and congrats on all the progress, just a couple. One is why you do the comment how you're thinking about timelines with follicular kind of the third thing and you have a lot going on but just wanted to get an update on that thinking.

And then the second question I had is, can you little bit about how to think about kind of control arms comparisons for ublituximab and chlorambucil on your CLL study, whether it be key comps or refractory key comp.

And then my last question is just kind of how much data we expect to have for venetoclax and U2, ASH and kind of how do we think about what might be a good response rate in that population. Thanks.

M
Michael Weiss
Chairman and CEO

So, start at the top, so timelines with respect to follicular given what we know now about the FDA's expectations for follow-up. The expected follow-up for the follicular as per what FDA would be looking for would land us some time, probably in the late first quarter and then so again I think data perhaps maybe sometime in the second quarter is about the early assessment again,

And that will be a function of capacity and resources that time to process that data will be hopefully very deep into CLL preparation for filing and completed the Marginal Zone Filing for umbralisib single agent. But we know that they want to enhance follow-up and so for sure no earlier than 2Q is expected.

In terms of the control arms for the CLL study, or data on the control arm from the CLL study, so GC has been used in several frontline trials recently. The most recently completed comparable trial would be the ELIMINATE [ph] trial that that has read out with a use GC for six months, which is what they use in the label and what they use in CLL11.

In the ELIMINATE trial, GC and frontline patients had a 19-month progression free survival. In CL11 which is in the label for GC or for G for sure, they have about 27 months of 28-month PFS and frontline.

The difference between the two studies, I believe, is that for the CLL11 trial that they did not require regular scans. So, patients were only a suspected progression with a broader for scan and even in some cases they want broad run for scans. They were just physician determined progression. I would illuminate and believe they continue to have regular scheduled confirmation scans and so more likely to pick up progression and I think that's much more similar to how we run our trial.

But our current estimate is somewhere between 19 to 27 months is a likely PFS for the GCR in frontline patients. And remember, we have a blended we've included both frontline and lots refractory so the PFS for the GC is going to be somewhat low, one might expect in frontline patients.

There is not a whole lot of data on GC in relapse patients, but we think a reasonable comp is looking at BR in the patient population and BR whether it was in the HELIOS [ph] trial or MORANO [ph] it's the approximate 12 to 15 month up progression free survival for chemo immunotherapy, which would be GC or BR in relapsed patients.

So, on a blended basis, you have about 40% of the patients were relapsed refractory trial about 60% were frontline, so we've got a range of 12 to 15 months for the relapsed patients and the control arm 19 to 27 or 28 months in the frontline.

I think that leaves us; we've done the blended - we think it's - control arm should be somewhere maybe 20 to 22 months of the PFS is how we're thinking about it. And as you as you sort of ICML and heard in my prepared remarks in our most recent Phase 2, where we treated 50 patients with the CLL, pretty tough population is all these patients had previously seen BTK or PI3K delta.

All of them were predisposed to having tolerability issues. Very few of them actually came off study for tolerability on our drug. But also, we were able to show about a 24-month progression free survival for single agent umbralisib, which again, we think is a good, a good indication. And we've always been saying we think 24 to 30 months for you to in relapse patients is about where we would hope to see it.

Obviously, we think that'll be proportional improvement in frontline. But if you look at you know, 24 to 30 months in relapse patients versus 12 to 15 months, for GC sighs BR in, in relapse patients, we think we've got a pretty good cushion to be successful in both in relapse patients and in frontline patients, and most importantly, in the entire population, which is the primary endpoint for the trial.

And then to the third question, the data on U2 plus, venetoclax, we have an ongoing Phase I trial of U2 plus, venetoclax, we do think that, you know, in the future, that is a regiment that has some importance, and because we do think at some point in the future, that the market is going to move toward fixed duration treatments.

We think U2 plus, venetoclax, is a great alternative to any BTK based treatment plus venetoclax, or any CD-20 based treatment plus venetoclax. And in terms of the amount of data, I think we'll see probably around 10 patients with at least a year of follow-up, which, again, is the mark that you're looking for.

These are heavily pre-treated patients; I think anywhere in and around 50% CR and or MRD negative rate would be quite impressive. Again, these are relapsed patients. Of course, once we get a chance to do frontline patients, we'd expect that to be higher, but I think if we have 50% CR and or MRD negative that would be pretty impressive.

A
Alethia Young
Cantor Fitzgerald

And then one follows up on the first comment you made. When you say on follicular enhanced follow up is that a year that the FDA is looking for is a longer?

M
Michael Weiss
Chairman and CEO

We haven't disclosed exactly what that is. But suffice it to say it's more than a year.

A
Alethia Young
Cantor Fitzgerald

Okay, great. Thanks for all the color.

M
Michael Weiss
Chairman and CEO

Yes, you've got it.

Operator

The next question is from Matt Kaplan of Ladenburg Thalmann. Please go ahead.

M
Matt Kaplan
Ladenburg Thalmann

Hey, guys, thanks for taking the questions and, on the progress. Wanted to just dig into the right running steps for the marginal zone, NBA filing. And then if you could talk about really kind of marginal zone, the marginal zone opportunity and then competitive landscape for umbralisib, as well?

M
Michael Weiss
Chairman and CEO

Sure. So, in terms of…

M
Matt Kaplan
Ladenburg Thalmann

Other questions as well?

M
Michael Weiss
Chairman and CEO

Should I answer these now and wait for the next question, you want to keep hitting me with questions?

M
Matt Kaplan
Ladenburg Thalmann

No, why don't you these first?

M
Michael Weiss
Chairman and CEO

Sure. So, the rate limiting step for Marginal Zone Lymphoma filing. Essentially, again, as I sort of alluded to earlier, the FDA is definitely looking for enhanced follow-up, which puts our clinical data towards the end of the year, which gives us a short time window to get the final data cleaned and prepped and put into a filing. So, I think most of the other section that should be done in the clinical section will probably be the last section that goes into to the package.

In terms of the margins on market and competitors out there. There are two approved agents one or two per regiments, one is an ibrutinib, which was approved, based on accelerator approval, they had about a 45%, 46% overall response rate, and I think a 2% complete response rate.

So, it's a good treatment option for patients with Marginal Zone Lymphoma, it is obviously not a cure for the disease, nor is it as robust as it is in CLL. Duration of response, I think is in the 12 to 15 months range, but it's a good drug. It's far from a cure, and then you have R-squared, which was recently approved and received full approval. They're thinking the data is somewhat mixed in terms of what happened in that trial,

I think the response rates were in excess of the Rituxan control arm, but the PFS and overall survival PFS, I think was equivalent and overall survival, I think was inverted in some way.

So, there was some interesting effects, R-squared, having said that R-squared has been available to patients with Marginal Zone and follicular lymphoma for many years, obviously, Celgene was unable to promote it during that time. But I think from an awareness standpoint, folks who had an interest in using R-squared for Marginal Zone have been well aware that that's an option for them.

So, I think that R-squared approval, my guess is that the teams that are going to be promoting that will be focused heavily on follicular lymphoma and Marginal Zone, because of I think the interesting parts of that data set are less likely to be heavily promoting into Marginal Zone.

So, having said all that, we think that Marginal Zone is a relatively open field for us. Obviously, there is other agents, but we don't think that they're the focal points for promotion of those drugs and we think we have the best option for those patients.

We think in comparison to ibrutinib-based therapy, we have the ability to induce responses more quickly in terms of meeting time to response so far in the interim is about 2.5 months, versus 4.5 months for ibrutinib. Our CR rate is nearing 20%, versus a 2% CR rate for ibrutinib.

And we have a keen interest in building a Marginal Zone franchise. I don't think that any other company in the world has as much interest in building that franchise. We think that, not only are we going to be focused on Marginal Zone with umbralisib, but our next step is Marginal Zone with umbralisib plus, ublituximab in the U2 regimen, which we think is a really should be very strong option for those patients.

And then we plan to build even further with U2 plus or BTK inhibitor. So, I think we plan on really focusing and building out a presence in the Marginal Zone community. We think with that promotion and with the best treatment option available for patients, that that's a market that we can really see a major impact in.

M
Matt Kaplan
Ladenburg Thalmann

That's very helpful. Thanks for the detail. And then just with UNITY-CLL, I know you're talking about the timeline there with respect to read out data late this year, early next year. Do you -- I guess you have visibility to the event right there. So that it allows you to fine tune and predict readout?

M
Michael Weiss
Chairman and CEO

Yes, I mean, periodically, we do get updates on the total events in the trial. And, I think it's -- it is a bit like enrollment curves. You think you know what's happening and you hope you have a good visibility, but things can change.

And again, when events, it's kind of the inverse of an enrollment curve, right, where you see this hockey stick, and toward the end of those trials, they keep rolling in an event-based trial.

You've got a big goal, and then you don't know exactly when you're going to start to see that curve flatten out. So that that creates more of the mystery here, which is when that curve flattens out, and you start to trickle in events.

So again, I think we have good visibility that we feel like we can get to the events towards the end of the year into early next year. But we could hit a point where we get a flat curve, and then things start to trickle in. And it takes a little bit longer.

So, at this point, we feel pretty good about where we are based on what we're looking at in terms of the events. But we still want to be cautious.

M
Matt Kaplan
Ladenburg Thalmann

Okay, that's very helpful. And then with respect to your pipeline, can you talk a little bit about the competitive landscape in the BTK space, so I guess, some companies are getting attention for their non-covalent BTK data, and a few handfuls and patients. I guess, what's your perspective here on the given your internal BTK program?

M
Michael Weiss
Chairman and CEO

Yes, so I think the, two parts of that one is our own BTK program and we were we see a fitting in and then where we see non-covalent inhibitors fitting in. I'll start with the non-covalent. And then I'll talk about and how we're viewing our BTK program, which I think is somewhat unique, and again, it just goes to the whole culture philosophy of TG and our combination approach.

But, you know, with respect to the non-covalent inhibitors, you know, obviously, we've watched, you know, closely what's, what's happening there. And, you know, the interest by investors in that area, you know, to us, it is an interesting academic exercise to try to identify patients with the mutation and then treat them with a drug specifically for that mutation certainly is something that you can see the marketing and an intuitive neatness of that.

However, U2, as we described in, in that pembro, or PD1, our poster, and the six BTK refractor patients, four of them responded to U2 alone in the first three months before they even saw him, pembro.

So, I think, you know, when we think about the market, and how these patients are actually going to be treated, versus this academic exercise of thinking about these mutations, they're going to be treated with whatever in front of them, which will be U2 before people start testing, I mean recall, again CLL is a market that is driven by community practices, 85% of these patients are treated locally, because this is a chronic condition.

And you may recall from all our genuine goals in the old days when they just weren't even testing for mutations, or for genetic risk factors.

The community is very unlikely to be focused on this mutational stuff, they're much more focused on, I have U2, it works in patients that I have already seen BTK, where they have a mutation, or no mutation, no one really cares all that much. They're going to treat them with the easy, effective treatment that's sitting in front of them.

And again, I think in academic centers, you'll see more people, in working off of the genetic information and making them feel like that's an interesting tie into the treatment. But that's going to be just literally a handful of patients in our view.

So, I think it's interesting, but commercially, I don't see that as a major competitor to what we're doing. And then that will circle back to our pipeline and our BTK. And why we chose covalent binder versus a non-covalent. We do think that covalently bound drugs inherently have better activity.

So, they're stronger tighter bonds. And seem to overall across different diseases where you've had covalent, non-covalent, covalent just appear to be more active agents. So that's why we chose that, because we view U2 as a first line and second line treatment option. And ultimately, we were reviewing U2 plus BTK as a great first line or second line treatment option.

And whether we end up treating patients who have seen BTK before where we think U2 will be a great option, and U2 plus venetoclax will be a great option. And patients have already seen BTK inhibitors. We think that's - someday be the certainly in the academic centers, the first line of defense after you come off your BTK. And I think there has been what 50,000-ish patients in the U.S. that have treated with the BTK inhibitor, that patient pool is growing.

So, we expect that when we hit the market, they'll be a lot of patients coming up BTK inhibitors, they're going to go on to -- we would expect they would go on to U2 and an academic centers, we would think they would consider U2 plus venetoclax.

So, for us our BTK is part of a program to build on to U2, like I mentioned earlier, U2 plus our BTK marginal zone, we think we'll be very active treatment option. I think we would be somewhat disappointed if we didn't use that triple regimen and see 85% to 90% overall response rates with 30%, 40% and 50% complete response rates in Marginal Zone Lymphoma.

We think will see extremely high we did do 17, 18, 19 patients with U2 plus BTK and CLL patients that of course was 100% response rate with also close to I think a 30% CR rate. So, we know that putting these three drugs, these three drugs or three mechanisms together will have a great outcome for patients. And the goal is to get there early. Give them a deep response and get them off therapy if you can.

Operator

The next question is from Ed White of H.C. Wainwright. Please go ahead.

E
Ed White
H.C. Wainwright

Hi, guys. Thanks for taking my question.

M
Michael Weiss
Chairman and CEO

Hi Ed. You there?

E
Ed White
H.C. Wainwright

Mike. Yes, I'm here. Can you hear me?

M
Michael Weiss
Chairman and CEO

Ed is being a little guy?

E
Ed White
H.C. Wainwright

Can you hear me now?

S
Sean Power
CFO

Yes, we can hear you. Okay.

E
Ed White
H.C. Wainwright

So just the first question. For you, Mike. You gave us an update on 1801 and 1701. I was just wondering if you can give us an update on 1501. Your PDL-1 inhibitor?

M
Michael Weiss
Chairman and CEO

Yes, so 1501, we've got a Phase I study that's now open in the US and hem malignancies, so we inherited a dose from our good friends from checkpoint who did it in solid tumors. And we're basically using that now that same dose in hem patients and we're building you know, a database of patients just to make sure that that's a good safe dose for those patients.

Simultaneously, we have 1501 plus U2 that is tuned to be open. And now open. Apparently, in the last five. One second is open at Memorial Sloan Kettering, for patients who are BTK refractory and for patients with Richter's transformation. That is the current status of 1501.

E
Ed White
H.C. Wainwright

Okay, thanks. And, do you know, when we will see data from either of those two the Phase I or the combo study?

M
Michael Weiss
Chairman and CEO

The earliest would be next year, probably late next year, my guess is more like an ash. This point for that.

E
Ed White
H.C. Wainwright

Okay, Thanks, Mike. And then maybe just a question for Sean. Just on the ATM. How much left do you have in the ATM after what you did so far in the third quarter?

S
Sean Power
CFO

That's a good question. I think it's in the neighborhood of 80 million or so.

E
Ed White
H.C. Wainwright

Okay. Thanks for taking my questions, guys.

M
Michael Weiss
Chairman and CEO

Yes. Thanks, Ed.

Operator

The next question is from Peter Lawson of SunTrust Robinson Humphrey. Please go ahead.

P
Peter Lawson
SunTrust Robinson Humphrey

Thanks for taking the questions. Just on the final MZL data. Is that on old 69 patients and what’s the discontinuation rates?

M
Michael Weiss
Chairman and CEO

Yes, so it will be on the full 69 patients and we think discontinuation to toxicities. I think the bars getting the 10% to 15% range. What do we have 12% in the CLL and tolerance we had about 14% in the in the original?

So, and that was on all 69 patients? I mean, the safety's always been reported on all 69 patients. So yes, we think in the 10 to 15, well, can’t be 10. Now, because it's already 14, so 14% to 15%, around there around 15% would be will be good. Again, we're traveling to stations for pretty extended amount of time.

P
Peter Lawson
SunTrust Robinson Humphrey

Okay, thank you. And then the last, the same the meeting. What was -- when was that for CLL?

M
Michael Weiss
Chairman and CEO

The last TSMV meeting was not that long ago. I don't have the exact date, but it was in the last 30 days. And as you as noted in the in the prepared remarks, they still have found no safety concerns that would require modification of the trial.

P
Peter Lawson
SunTrust Robinson Humphrey

Again, any details you can share about the June FDA meeting of MZL?

M
Michael Weiss
Chairman and CEO

I don't think we can really say much more than what we've said. I mean, it was a very productive meeting, we left the meeting extremely excited about the prospects of getting the margins on filing in as quickly as we can

And like I said that the goal is to get it started around year end, and probably finished the rolling submission about three months after that. So yeah, we left very excited. The team is focused aggressively on getting everything put together for that finally.

P
Peter Lawson
SunTrust Robinson Humphrey

Thank you. And then -- thanks for the color around R&D for the year. Where's that going to shake out for next year? Do you think the R&D spend, and then kind of a follow-up just on the other line item just around management ants and build down for MZL, plus the kind of the follow-on indications? How should we be thinking about that?

M
Michael Weiss
Chairman and CEO

I didn't quite get the second half of the question. But in terms of the R&D spend into next year, same basically applies, as we get into the first quarter for sure, we're really winding down on this CLL and the ultimate trials, obviously, no new enrollment has been for a while, and we've paid a lot of the bigger expenses, certainly on the MS side. So that's starting to wind and again, continues to wind down into 1Q.

As we head into 2Q again, I think, again, the clinical side is still continuing to decline. And that's where we'll start to think about giving some nice resources to our good friends on a commercial team to start their ramp.

And again, I think that's going to be based on the application for Marginal Zone and the timing, again, assuming our timelines are locked in as they are today, we think, the commercial spend, leading up to that second quarter is reasonably modest.

The plan is to bring on people, but not so many people, we don't want to hire sales force. And obviously, we're going to start some promotion, but in that promotion, that's not the right word.

Some commercial activities, but it's all pretty modest, I think as we get closer to the second quarter, that's when we start to really think about when we pull the trigger. So, I think next three quarters should be pretty modest on commercial and clinical trial costs will continue to drop, which again is why I think Sean is comfortable with his projections.

P
Peter Lawson
SunTrust Robinson Humphrey

Got you. Thank you. And then how should we think about any management over the next I guess 12 to 18 months?

M
Michael Weiss
Chairman and CEO

You know, I think the major hires are underneath, Adam, in terms of key commercial players, and he's been working on putting his lineup together. I've got a picture of what's to come, I've met a bunch of great people through him. And I think that's where most of the focus, I think that's where the most the focus is right now.

P
Peter Lawson
SunTrust Robinson Humphrey

Great, thanks, so much.

Operator

The next question is from Chris Howerton of Jefferies, please go ahead.

C
Chris Howerton
Jefferies

Hey, good morning. Thanks for taking the question. So, I’m pretty sure the majority of them asked at this point. But in terms of the post approval, confirmatory study for Marginal Zone, what have you thought about that, or maybe what can you tell us about what you think that might look like?

M
Michael Weiss
Chairman and CEO

Yeah, so we're trying to be creative about that trial design. So, we're thinking about a number of studies that can be run. But I think the base case trial is essentially umbralisib plus chemotherapy, versus chemotherapy, amino chemotherapy.

So, it's umbralisib plus immuno chemotherapy versus amino chemotherapy in basically relapsed or refractory CLL which is first relapse and beyond is the basic design of those of the trials that are currently running for confirmation of either Marginal Zone or follicular, the studies are the same, they include a mixed population and that's the design of those two arms

We haven't given too much detail, but we’d like to do but obviously, if we could, we'd like to do something more with U2 in that setting, we think that would be more interesting to us and provide additional benefit to patients. So, we're just going to work through some of those details both internally and obviously we're going have to work that out with the FDA.

C
Chris Howerton
Jefferies

Got it. Okay. And then maybe just a question on MS, what are your expectations for an ARR rate and what do you think would be important to be competitive in that space with the greatest?

M
Michael Weiss
Chairman and CEO

Yeah, so ublituximab [ph] in their Phase three trial had about 0.155 ARR, we think anything around that would be competitive and we don't -- our value to patients doesn't hinge upon whether we have an efficacy advantage.

If we have an efficacy advantage that obviously increases the value that will be bringing to patients. But the base case has always been on a comparable activity, comparable safety a more convenient infusion schedule.

So, one hour every six months and we feel that we can strategically price ublituximab to avoid as many steps there is possible creating, better access to patients. So despite the fact that ublituximab [ph] has achieved 4 billion and sale run rate in its second year, they still have to step through multiple therapies in many cases, which again does restrict access to patients the importance of getting a CD22 patient as early as possible in our opinion can't be stressed enough.

So, we think that the key to providing value to patients is to impart strategically price in a way that they can get it as early as possible and also give them the convenience that one-hour fusion.

C
Chris Howerton
Jefferies

Got it. Okay, great. Well I think that's what I had and look forward to the next exciting 12 months for your company. Thank you very much appreciated.

Operator

There are no additional questions at this time, I would like to turn the call back over to Michael Weiss for closing remarks.

M
Michael Weiss
Chairman and CEO

Thank you very much. So, again thanks everyone for joining us on today's call. Let me just finish by reviewing some of the remaining goals and objectives, I think we actually covered them in pretty good detail in the prepared remarks and the Q&A, but just to hammer home the point, in case anyone wasn’t listening carefully.

We are in the next remainder of 2019 and into early 2020, what we’re looking for driving toward the initiation of that rolling, NDA submission for patients with previously treated Marginal Zone Lymphoma and presenting the final data from this cohort, we're targeting top line PFS results as we discussed, hopefully by year end into early next year for the UNITY-CLL Phase 3 trial.

And we do expect to present updated data from our pipeline products and combination studies. So again, hopefully we'll get some BTK information out around year-end, some U2 plus venetoclax around year end. I think we have some upcoming MS data at ECTRIMS. So, we have some I think additional information that will come but we got a lot of big things coming as well.

So, with that, let me just and behalf of all TG always of course we like to thank investigators and patients who participate in our trials without their support it would not be possible. And of course, for the great employees at TG and the great shareholders who have been supporting us. Thanks everyone and have a great day.

Operator

This concludes today's conference. You may now disconnect your lines. Thank you for your participation.