Bergenbio ASA

OSE:BGBIO

Earnings Call Transcript 2019-Q4

[Richard Godfrey, Chief Executive Officer]

Good morning. My name is Richard Godfrey. I'd like to welcome you to the BerGenBio Quarter 4 Presentation and also Year-end for 2019. I'm also accompanied here with Rune Skeie, our CFO.As you know, we're a publicly traded company, so just to draw your attention to this disclaimer and safe harbor notice. And maybe I should start off with just an introduction to BerGenBio for those that are not very familiar with it.We're a biotech company focused on oncology, developing drugs against cancer when it becomes aggressive. Aggressive cancer is cancer that no longer respond to drugs, that's invisible to your immune system and spreads around your body. That's the really dangerous cancer we need to treat. BerGenBio and our collaborators have identified a key driver of aggressive cancers, it's called AXL, and we today remain the world leaders in understanding AXL biology. At this moment, we have 3 anti-AXL drugs in clinical development. Our lead drug is an oral, one-a-day anti-AXL pill, and that's in multiple Phase II studies. We're also developing an anti-AXL antibody in Phase I, and we've out-licensed the development of an anti-AXL antibody drug conjugate, that's also in Phase I being developed by a partner called ADCT.At the same time, we're developing a companion diagnostic. It's really important with cancer these days that we understand the patient's disease, and we can identify what's driving the disease and making it aggressive. We've developed diagnostics, so we can find the patients whose cancer is driven by AXL, and in future, we can target those patients only with our anti-AXL drugs. Having completed quite a broad Phase II evaluation, we're now laser-focused on 2 indications: second-line leukemia, second-line non-small cell lung cancer. And what I'm going to show you during this presentation is how, during 2019, we've successfully reported increasing confidence and data in these 2 indications. So that as we enter 2020, we're very confident with the way we're going, and we have some important clinical data cards to turn that will direct our first registration.We're listed on the Oslo Stock Exchange with the ticker BGBIO. We have a very significant and valuable collaboration with Merck, specifically combining our drug with their blockbuster KEYTRUDA in second-line lung cancer. And we have academic collaborations all over the world, which reinforce our world leadership position.We still retain research labs in Bergen and an administration office, but the vast majority of our organization is located in Oxford in the U.K. from where we manage our clinical trials and our translational activities, and of course, increasingly important, our interactions with the regulatory agencies.As we closed quarter 4 and successfully completed a PIPE investment in January, we now have NOK 470 million on our account, which is sufficient cash to see through the current trials and to be able to read out the current data and set our direction for registration. So the company is now well financed to move forward.Just looking back over the last quarter, some very significant and potent milestones I'd like to remind you of. In October, the FDA granted Fast Track designation for bemcentinib in AML, particularly in second-line AML. That's a real accolade and signals that the FDA will do everything they can to help us get this drug over the line, get it to patients who really do not have any treatment options. And we're capitalizing on that by seeking scientific advice from the regulators very soon.What you see through the highlights, of course, is a constant reference, AML, lung cancer, AML, lung cancer, as we're consistently delivering high-quality, meaningful clinical data to these patients. In November, we reported that our drug in combination with KEYTRUDA in second-line lung cancer saw a fourfold improvement over what patients might expect from KEYTRUDA alone. And again, our diagnostic, we're calling it cAXL, a composite score of AXL in various cells in the tumor, saw a fivefold improvement in response rate and this fourfold improvement in duration of response in patients that we could identify with this biomarker, very, very important.At the same time, we continue with our work in leukemia, combining our drug with a well-established standard of care low-dose chemo, and we presented some very, very encouraging results at the American Society for Hematology at the end of the year, and we're expanding that trial now. Just a few weeks ago, at the beginning of January, we announced that we met our overall response rate endpoint in a further cohort of this lung cancer trial, this time in patients that have failed on a checkpoint inhibitor, where we're able to resensitize them to that drug, and we continue to expand that research. And as I mentioned earlier, we are now well capitalized to see through the rest of our clinical trials.So my key message is during 2019, and as we look towards 2020, we've consistently reported high-quality clinical data on these 2 indications of interest, second-line leukemia, second-line lung cancer, and we anticipate doing the same again this year.Let's just remind you what AXL is. AXL is a protein that predicts poor outcomes for patients in almost every cancer. We really could work in almost any cancer that we choose. We selected the 2 largest cancer types, the largest leukemia and the largest solid tumor, where we're working with patients who are no longer responding to drugs. What we can see here in these survival curves is the patients who have an AXL positive disease have a much worse prognosis. We hope to improve the prognosis for those patients. Our drugs only engage with AXL. If the patients do not have AXL in their tumor, there's no point in giving them our drugs. In our research, we've identified that it's more than half the patients are AXL positive, that's a very significant patient population.So what is AXL? Well, it's a protein. It sits on the cell's surface. It's usually represented as sort of tentacle sticking out of the cell, but in actual fact, when it's activated, it mediates multiple mechanisms of resistance, mechanisms of survival.We have to understand the tumor. And this is where BerGenBio, our scientists, are particularly skilled. They understand the tumor. They understand the dynamics in the tumor microenvironment that make it very difficult for the cancer cells to survive. When this environment becomes challenging and becomes hostile, the cancer cells need to activate a survival program that is invariably driven by AXL.But it's not just on the cancer cells, it's also on cells that infiltrate into the tumor particularly the immune cells. And these immune cells also have a very potent anticancer effect. So on the cancer cells, they allow the cancers to survive in the presence of chemo agents. They allow the cancer cells to break away and spread around the body and see secondary tumors. But you also find AXL on cells in the immune system. And when the cancer is activated in these cells, it suppresses and stops the immune response, which is critically important. The patient has cancer, they're not immune compromised, how can the immune system doesn't see and clear the tumor. Invariably, it's because AXL is upregulated, the dendritic cells don't charge the T-cells to go and kill the cancer cells, the macrophages become immunosuppressive and stop the immune response. BerGenBio is leading the field in understanding how AXL does this and how it actually does this inside the tumor. This is critically important to understand the biology, so we can develop our trials so they engage with patients just at the right time.So our lead drug, which is concentrated on our lead program, we call it bemcentinib. And here it is, it's an oral, once-a-day pill. It's a nice small molecule. It's potent, really potent that it's very potent engages with AXL. But equally important, it's selective, it doesn't engage with other proteins, and therefore, it doesn't have any so-called off-target effect or toxicity. We've scaled the manufacturing so that it's ready for late-stage development and commercialization. And we have a nice product that is easy to take.It's uniquely selective for AXL, and that's so important going forward as we have to combine with other drugs in order to treat cancer patients. And that's just my second point. Its mode of action is synergistic with other drugs. The safety profile is really quite enviable, such that not only can we use this cancer drug in the frail, very, very sick patients, but we could also move it forward into the front line, where we could offer a chemo-free [ raising ] for patients in that front-line setting, which is increasingly attractive. Just once-a-day administration. I mentioned already, Fast Track designation, signaling that the FDA recognized this has potential to be a very, very important medicine for cancer therapy in the future.And so far, we've combined it with chemo agents, target agents and with immune checkpoint inhibitors without any additive side effects. The safety profile is really very well tolerated.So our focus. Laser-focused on bemcentinib in leukemia, acute myeloid leukemia and non-small cell lung cancer. During the second half of last year and during 2020, we are refining the patient populations so that we know precisely where to go with our registration trials, whether it is monotherapy in leukemia or whether it's combination with chemo in leukemia, slightly different clinical positions, larger or smaller patient populations. Similarly, in second-line lung cancer, are we working with patients that have failed on chemo or patients that have failed on checkpoint inhibitors or patients that have failed on the combination of both. We're experimenting and exploring these different indications to refine our position for the registration studies.And what we can see is, as we progress through these refinements, we're converting from studies that are ongoing, the studies that are complete, they become green, and we have a complete data set from which we can make our decisions. These studies are ongoing. And as you can see, we've completed the first part on to the second part of this study, similarly down here. First part is complete, moving on to the second stage of the study.Whilst we're putting most of our effort into bemcentinib, lest we forget tilvestamab, our anti-AXL antibody, is also in clinical development. It has progressed well through the first part of the safety study and is now moving into the second part of the safety study that will start later this year. This will become an equally valuable anti-AXL asset in due course.I've mentioned our companion diagnostic. We presented this data several times now at scientific conferences. The critical thing is that we understand how AXL can be seen using our diagnostic tools on cancer cells, and it can also be seen on immune cells. These are both slides taken from patient's lung cancer. And what we can see is, when there's a lot of AXL in the cancer cells and we inhibit that with bemcentinib, we see 60% shrinkage in the patient's tumor for a long period of time.But this patient, there was no AXL on the cancer cells, but a lot of AXL on immune cells in the lung cancer tumor. And again, there was a 59% shrinkage in the tumor for a long period of time, 95 weeks and counting for that patient. So we've developed this composite diagnostic, so we can measure AXL in both cell types in the tumor and identify those that are going to benefit.Whilst BerGenBio is leading the world in understanding AXL biology and also bemcentinib is leading the clinical development, we also are quite aware that there are other companies developing anti-AXL drugs. This is very strong validation of the biology that we've been pioneering and we continue to lead with. So we're very confident in the robustness of bemcentinib and our clinical direction. But lest we forget Daiichi-Sankyo and Genmab, to name but 2, have developed and are doing clinical trials with our anti-AXL drugs, gives a lot of validation to the science and the clinical path. And at the same time, our other 2 assets are at about the same stage of development.There are a number of other agents that are non-selective. These are so-called multi-kinase inhibitors. They have a chemo-like effect, and whilst they may have some impact on AXL, they also offer a lot of side effects, which are undesirable. A selective inhibitor is safe and well tolerated. Our biomarker strategy is completely compatible with identifying patients that are AXL positive, and we've demonstrated we can combine very well with other drugs.So let's look at our first indication, acute myeloid leukemia. This is typically a disease of the elderly, and AML is the largest leukemia. Blood is possibly the largest organ in our body, and AML is the largest cancer of that system. Traditionally, it's been very, very poorly served. Patients have quite a dismal overall survival rate, just 3% or 5% -- a 5-year survival rate for the elderly patient population. It's a severe unmet medical need, and all the forecasts project significant growth as a market, really driven by drugs such as ours that are in development.In order to position our drug appropriately, we need to understand the treatment hierarchy that patients receive. There's certainly some innovation in the first-line setting, and we could equally go there but it's complicated and quite drawn out, and as a result of the innovation that invariably combines other drugs into this first-line treatment, has left a vacuum, left a hole in the second line, where there's no real approved second-line treatment for these patients. We see significant opportunities for bemcentinib, in combination with LDAC in second line or indeed maybe later as a monotherapy. And that's the 2 positions that we are pursuing.So our trial, which is ongoing, started off with quite a large monotherapy cohort, up here, 36 patients and then broke out into various expansion cohorts, is progressing very nicely. In June of last year, we saw a very encouraging signal in this combination, bemcentinib plus low-dose chemo, where we saw significant number of patients seeing complete response. And this response is very, very durable, heading out beyond 12 months. I think this data was presented in December and still ongoing. This is a significant benefit for patients. These were patients in the first-line setting, slightly less clear picture in the second-line setting, and that's why we've decided that we're going to expand this cohort with a further 28 patients to confirm the signals that we're seeing, and we'll be able to report that out in the second half of this year.Based on the Fast Track designation received from the FDA, we're now formulating 3 registration paths to discuss with the regulators. We have one registration path, as I've just alluded to, bemcentinib plus LDAC, in patients that have previously failed that first-line treatment. Typically, this would be patients over 60 years old, and we can imagine a randomized study comparing the combination to LDAC alone. We need to discuss and agree the precise study design, but we could imagine the endpoints being response rate and duration of response. And the target is being quite manageable, and this patient probably really has no options. So maybe 200 patients and maybe a 6-month follow-up or to be confirmed with discussions with the regulators.We have a degree of confidence in the monotherapy, particularly in older later-line setting. Bemcentinib is very well tolerated. In patients that we can identify using our biomarker, we see a good response rate, 43%, and the duration is somewhere between 3 to 6 months. So this is a very, very attractive option for us, although the patient population is smaller and the duration of response is shorter, maybe not quite such a valuable position for the drug.And lastly, there really is an opportunity in first line. But our recommendation is that we hold that for now, and we see how the market evolves whilst we aggressively pursue a second-line position. All of this will be confirmed with discussions with the regulators during 2020 and with data from our expansion cohort.Turning to lung cancer. Lung cancer is still the largest cancer killer of all, represents more than 2 million cases a year, and a very, very significant market, north of $20 billion.What -- in spite of recent innovation and some amazing data that's been presented, there's still a very large patient population that really haven't seen any significant benefit in recent years, patients that can be identified with a marker that they use for checkpoint inhibitors called PD-L1. If they do not have that marker, that's 40% of patients, they really have not seen any significant improvement in their 5-year survival rate, just 3.5%. That's important to bring that to your attention now because when we look at our data, we see that the vast majority of our patients are in that patient population.So if we look at the total market, I would say, 40% of the patients with PD-L1, less than 1%, 38% in the middle band and just 23% in the higher band. The way in which the standard of a care has evolved is all patients now receive or will receive a checkpoint inhibitor in combination with chemo. And in the same way as for leukemia, this leaves a vacuum in second line. The only drugs that are available to patients in second line are the very old, very toxic, not very effective chemo agents that no patient wants to take. This is a real significant unmet need. All of these patients progress, and when they progress, there's no option for them.So we've designed a clinical trial in second line, patients who have progressed on chemo, patients who have progressed on immune checkpoint inhibitors and patients that have progressed on the combination of the 2, trying to satisfy all patient populations depending on how they were treated in the first-line setting.Cohort A is now complete, and we've reported out very, very encouraging data at various conferences in the second half of last year. And importantly, this really does provide valuable scientific insight as to what a first-line setting might be. In January, we reported that we achieved the necessary endpoint in order to progress from part 1 to part 2 of Cohort B, again, reversing resistance to checkpoint inhibitors in these patients that have already progressed. More data and more translational data will be revealed in coming months.If we look at Cohort A, as we mentioned previously, more than half of the patients here were PD-L1 negative, and we really wouldn't expect those patients to benefit from checkpoint inhibitor at all. We reported in a lot of detail the safety profile. The combination of a checkpoint inhibitor and bemcentinib is very well tolerated, no additive side effects whatsoever. And in terms of the particular patients, the profile of the patients is very typical. And we report this proudly because it confirms that this is a very meaningful and typical patient population.When we look at the primary endpoint overall response rate, these are patients that have seen a greater than 30% reduction in tumor size, and we separate the patients according to their AXL score. What we can see is a fivefold improvement in response rate between those that are AXL negative and those that are AXL positive. That's no coincidence. That's because we're inhibiting AXL, and we're allowing the immune system to work better, particularly if the checkpoint inhibitors are added in.But more than that, what we see is a very significant disease control rate. And of course, that's what's really important to patients. Not only do they want to see the tumor shrink, but they want to see it not growing as well. And that manifests itself in quite a protracted, progression-free survival, which is a surrogate for overall survival. If your disease is not progressing, in this case for 8 months, it's really good news for the patient, as opposed to those that are AXL negative, unfortunately, do not benefit from our drug, who just have a median PFS of 1.9 months, a fourfold improvement in median PFS by inhibiting AXL in the AXL positive patients. This is really very, very significant indeed.So our ongoing studies in this indication is expanding Cohort B to recruit another 19 patients, and we continue the recruitment of Cohort C, the chemo+IO failure patients, and we anticipate being able to report out some data middle of the year, second half of the year.I think it's particularly important to remind ourselves of the patient population. The patients come in all different stages of their disease management. And in order to provide some comparison between studies and agents, the regulators and the leaders in the market have defined the definition of a refractory patient, refractory checkpoint inhibitors. It's patients that have seen a response and their tumor has shrunk. And that's been verified by a second scan. And then they progress and the tumor started to grow, and that's also been confirmed by a second scan. And they no longer benefit from taking the checkpoint inhibitor. They then come on to our trial, no more than 12 weeks later, and they don't take any other medicines in that intervening period. It's quite important that we understand that so that we can compare agents against agents. And this is a precise definition in the literature. Our interim data from Cohort B satisfied those needs and we're able to progress for the larger patient population and complete details will be available at ASCO and later in the year.So our registration strategy in non-small cell lung cancer is still evolving based on these trials that we're running at the moment, but we clearly see a route forward in second line. We'll be targeting actual positive patients, that's subject to agreement with the regulators. We think, and indeed, genomic data has confirmed that that's independent of PD-L1. We think it will still be late-stage patients, and we imagine that our primary endpoint will be interim PFS and potentially 6- and 12-month overall survival, quite a manageable study. All of these concepts are subject to approval and confirmation with the regulators, but this is in keeping with our research at the moment. Our first-line options remain open, and we continue to evaluate the science and put together strategies there.Just a brief update on our antibody, formerly known as BGB-149. It's a wholly owned asset. We developed it ourselves in BerGenBio. It's a functionally blocking, naked, fully humanized antibody against AXL. We have a contract manufactured. It has all the hallmarks of being a very, very nice antibody drug. It's now completed the first part of the safety study without any red flags or any alerts, and we're now expanding out into a patient population, and we'll advise about that in the fullness of time.I've frequently mentioned the fact that not only is AXL important in cancer indications, it also has an important role to play in other diseases when cells need to switch from one form to another. Although BerGenBio is not doing any clinical research in these indications, the preclinical biology and the mechanism of action is becoming clearer and clearer. And you'll see presentations of this data at coming scientific conferences that are not cancer conferences. These will be in the first half of the year.Specifically, we understand that AXL is really important in the fibrogenesis, the making of fibrous tissue inside organs that stop the organs from working. And AXL's also just, I think, in cancer responsible for stopping the inflammatory response. So the mechanism is fully understood. The preclinical data is quite compelling, and we continue to support that research without being active there ourselves.I'll now hand over to Rune who will give an update on the financial status of the company.

[Rune Skeie, Chief Financial Officer]

Thank you, Richard. My name is Rune Skeie, I'm the CFO in BerGenBio. I will take you through the key financials for the fourth quarter and the full year 2019 and some details about recently completed private placement.The operating expenses in the quarter and the full year 2019 is quite stable on the same level that we have delivered on the -- even though it's quite milestone driven, the clinical expenses is milestone driven and may vary between the quarter.We ended up with a loss of NOK 57 million for the quarter and close to NOK 200 million for the full year 2019. Well-managed overhead cost and close to 80% of the spending is used on R&D costs.The cash flow was quite lower than the loss for the quarter. And that's due to some non-dilutive funding grants received in the quarter and some noncash items. And we ended up on cash position of NOK 253 million at year-end. And with additional private placement, we are quite well funded for the moment.So if we go into the details about the private placement, we raised NOK 220 million in January. We issued 12.2 million shares at NOK 18 and it was oversubscribed and attracted strong interest from investors, new investors and the existing. We are planning for our repair offering up to 1.5 million shares. I will give you some details about that in a minute.And the use of proceed is to execute on the ongoing trials, including the expansion in the AML and lung space and Phase Ib in tilvestamab, in addition to manufacturing of the drug bemcentinib and general corporate use.If I go into the details about the private placement, it could be kind of complicated, but the total private placement is subscribed of 12.2 million shares. We have used the existing proxy to the Board to issue 5.4 million shares in January. That's completed and the gross proceed is received. And the second tranche is subject to an EGM, which will be held on the 20th of February. That will give us additional NOK 120 million in gross proceeds.The details about the general meeting 20th of February, that will be held in Bergen at our office tower at 5:00. Be aware that the record date is the fifth working days before. So that's actually just this week, 13th of February. So you need to be registered in the share register at that moment. And you need a registration by Monday next week to vote in the EGM.There are only 2 items in the EGM. It's approval of the second tranche and approval of the subsequent repair offering. Proxy and registration form is available at our website.And the subsequent offering will be launched just after the EGM. Of course, we need an EGM approval. We need also prospectus approved, which will be -- which is planned for end of February. And also, it's also dependent on the share price development, of course.So that will be directed to the shareholder on the 29th of January. You get 0.045 subscription rights for each share you own at 29th of January, if you didn't participate in the private placement.Thanks. I hand it over to you, Richard.

[Richard Godfrey, Chief Executive Officer]

1Thank you, Rune. So what should we look forward to during 2020? Well, again, the key focus, of course, are our Phase II studies in second-line leukemia and second-line non-small cell lung cancer. These studies are open, ongoing and recruiting. And as per last year, we anticipate being able to report scientific details at major conferences during the back end of the year. We can't announce those yet. The deadlines for applying for these conferences are only coming up now. So we have to wait until we've been accepted to present data there, although our studies are ongoing and recruiting such that we will have valuable data to present at these various conferences.So in leukemia, the data to look for is in combination with LDAC in relapsed patients. The study is open and recruiting, and we should be able to report some response data and duration of response during the second half of this year.In lung cancer, the patients that have failed IO+Cohort B, again, expanded to the second part of that study. We should be able to report response rate and median PFS as it matures through time. As you can see, if patients are staying on drug for 8 months, 12 months and longer, the median PFS can become quite a long time. All we can do is report interim data to show you the patients that are responding and how well they're doing.And similarly, Cohort C, the patients that have failed taking checkpoint and chemo, the study is open and recruiting. All being well, we'll be able to report some response data and some duration of response in the second half of this year. These are the key trigger points that we're looking out for in 2020 for bemcentinib that will direct our registration path in both indications. And we will continue with development of tilvestamab as we move from a healthy volunteer to a patient study and report out that.So moving towards the conclusions and thinking about the investment highlights for BerGenBio. World leaders in understanding this very important biology that's increasingly validated by others investing in the technology. Pipeline of 3 anti-AXL drugs or first-in-class progressing through clinical development. Bemcentinib, first-in-class selective oral inhibitor, just a one-a-day pill. Personally, I'm very, very confident that if bemcentinib is successful in clinical trials, it would dominate the AXL field. There is nothing more convenient and more cost-effective than a one-a-day pill that's extremely well tolerated.The clinical profile is really quite attractive. And as we're tuning into these 2 patient populations without any standard of care, we see very significant patient benefit and, of course, commercial opportunity.As a business, we have strategic options, and I think that's really important. We have go-to-market opportunities in selected indications, which we can very, very comfortably manage the clinical development and even potential commercialization, particularly in leukemia, for example, and at the same time, developing into very, very attractive and highly valuable indications such as second-line lung cancer that we think will be extremely important and valuable for partners to consider and to take routes to in the future.Our companion diagnostic is critical, is on track and truly does identify the patients that benefit from taking bemcentinib. Not only is that important for efficient clinical trials, very important for personalized medicine approach and very, very important for reimbursement in the future, and we're completely on track there.We continue to build and support our management team, particularly in Oxford, where we now have a very competent team, poised to deliver on these milestones in 2020 and also develop the assets next year as we move towards registration trials and also engage with the regulators and agree the way forward.And last, but by no means least, BerGenBio is now well-capitalized company to burn through these clinical trials to report out the data and position ourselves for the registration studies later in the future.We continue to enjoy analyst coverage, and in particular, coverage from Trinity Delta is available from our website.That's the end of the quarter 4, full year update from me, and I'd be very pleased to take any questions. Thank you very much.

[Unknown Analyst]

Can you speculate a little on the time lines roughly when you'll start the dialogue with the governments, regulatory bodies regarding the pivotal studies and a realistic estimate of when those studies can actually start?

[Richard Godfrey, Chief Executive Officer]

Well, I can tell you that we've -- since receiving the Fast Track designation, which is almost the door opener, we now have a very active dialogue with the FDA and also with the EMEA on just this. So it's a multi-step process. It does take some time, but we will be taking scientific advice from the regulators very, very soon indeed. And on the back of that advice, we'll sort of reconsider our position and then go back for more questions and more advice. So this will evolve in parallel to our clinical trials this year -- in the first half of this year.So all coalescent to your second point is, when will we know which way we go with our registration studies. I think definitively by the end of the year. I mean, we're doing the trials now to refine the patient populations in second-line lung and in second-line leukemia so that we know exactly which patient population to go for in the registration trials, subject, of course, to data and subject to regulatory buy-in, but everything is lined up in the right place. So we're very confident that this is going to be a critical year to make those decisions and then set our sights on registration trials and commercialization maybe.

[Unknown Analyst]

I think I could assume that the leukemia will be the first one since you have the Fast Track.

[Richard Godfrey, Chief Executive Officer]

I think so. Yes, for sure. You can have Fast Track into many different indications. But I think the leukemia studies, which is one of the reasons why we pursued that, so clearly, it's because it's quite manageable. We're still an evolving organization. I put some parameters in there to give some idea of scale, again, repeatedly, all subject to regulatory buy-in. But these are quite manageable clinical trials. 200 or 300 patients, obviously, an international study with manageable time lines, we could really imagine doing these trials quite successfully ourselves and being able to get to a registration within a few years. So if we were to start the trials in 12 months' time, probably a 2-year cycle and then thinking about an NDA.

[Unknown Analyst]

And if I understand it correctly, the option #3, that is not covered by the FDA Fast Track since it's not relapsed.

[Richard Godfrey, Chief Executive Officer]

Exactly. That's true.

[Unknown Analyst]

Yes. So it's the 2 on the left that will be covered.

[Richard Godfrey, Chief Executive Officer]

That is correct, yes.

[Rune Skeie, Chief Financial Officer]

Any other questions? We have some online questions. Do you expect the cash burn in 2020 to rise compared to 2019?

[Richard Godfrey, Chief Executive Officer]

We are doing an increased amount of clinical development this year, so one might expect the cash to -- the cash burn to increase, but we're very confident with our cash position and our budget and forecasting.

[Rune Skeie, Chief Financial Officer]

And second question. How is -- could you provide an update on the position on partnering discussions?

[Richard Godfrey, Chief Executive Officer]

AXL is increasingly validated. There are some larger companies entering the space, as I've mentioned. So it's on the radar. Understanding the biology and realizing how AXL is very important for mediating resistance to drugs is now pretty well accepted. So we have active conversations with all of the right players about what a partnership might look like, when it might occur, what would be the trigger points, what would be the partner trajectory of the asset developments there afterwards. So there's a lot of interest at the moment.And I think it's also quite timely, as the oncology industry has evolved to absorb all of the benefits from immuno-oncology and checkpoint inhibitors and recognizing there's still the vast majority of patients that still aren't benefiting, how are we going to help those patients? And AXL is so fundamental to cancer survival that by inhibiting AXL, we access all of those patients. So this is a very interesting opportunity for many different companies, those that are large and dominant in the IO space, but also those companies that haven't got a position in immuno-oncology but realized there's a vast -- even the majority of patients that aren't benefiting. So we have a lot of active conversations going on in -- to do with partnering.

[Rune Skeie, Chief Financial Officer]

And next question is, in AML, might you proceed with bemcentinib monotherapy and in combination with LDAC into registration trials?

[Richard Godfrey, Chief Executive Officer]

Could you say again, might we...

[Rune Skeie, Chief Financial Officer]

The question is if we will proceed with bemcentinib in monotherapy and in combination with AXL or if you will do both trails?

[Richard Godfrey, Chief Executive Officer]

I don't think we'd do both, I think we want to choose which to go with. Our -- I've tried to say here, our preference, I think, because it will benefit the most patients and truly be the more valuable indication, would be second line in combination with LDAC in the patient population over 60 years old, and we think that always have a longer duration of benefit. But we have a very, very nice offering for patients who potentially in third line, a little bit older, unable to take chemo. So we certainly have an alternative, but I think as a business, our preference would be to go truly in second line.And, of course, what's happened during our development cycle is that hypermethylating agent and other drugs have been combined in the first line, leaving this vacuum in second line where patients only benefit from palliative care and supportive care. They really don't have any treatment options. By combining with LDAC in this space is a real benefit to -- opportunity to benefit basically every leukemia patient. They all progress progressively. There's no cure at the moment.

[Rune Skeie, Chief Financial Officer]

That was the last question.

[Richard Godfrey, Chief Executive Officer]

Very good, excellent. Well thank you, everyone, for your time.