MorphoSys AG

XETRA:MOR

Earnings Call Transcript 2018-Q3

[Operator]

Ladies and gentlemen, welcome to the MorphoSys Quarterly Results Conference Call. Please note that for the duration of the presentation, all participants will be in listen-only mode, and the conference is being recorded. [Operator Instructions]Now I would like to turn the conference over to Alexandra Goller. Please go ahead.

[Alexandra Goller, Associate Director Corporate Communications & IR]

Good afternoon, good morning, and welcome to our Q3 2018 conference call and webcast. My name is Alexandra Goller, Associate Director, Corporate Communications and Investor Relations at MorphoSys.With me on the call today are speakers, Simon Moroney, our Chief Executive Officer; and Jens Holstein, our Chief Financial Officer. Also with us on the call is Malte Peters, our Chief Development Officer for the Q&A session later on.Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning the development of MorphoSys' core technologies, the progress of its current research and development programs and the initiation of additional programs. Should actual conditions differ from the company's assumptions, actual results and actions may differ from those anticipated. You are, therefore, cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.In the presentation, Simon will start by giving you an operational review of the third quarter as well as an outlook for the rest of this year. After that, Jens will review the financial results of the third quarter and the first 9 months of 2018. The presentation will last about 20 minutes.After the presentation we will all be available for your questions. You will find the slide deck for this presentation on our corporate website.I would now like to hand over to Simon Moroney.

[Simon E. Moroney, Chairman of Management Board & CEO]

Thank you, Alex, and also from me, a warm welcome to our Q3 call. The third quarter of 2018 was a productive one for us, highlighted by very encouraging progress in therapeutic programs within both our proprietary development and partnered development segments.I will go through the highlights in both areas starting with our proprietary programs.The most advanced program is MOR208, the Fc-enhanced antibody in clinical development for B cell malignancies. You'll recall that we're running the L-MIND and B-MIND trials in relapsed/refractory DLBCL and the COSMOS trial in BTK inhibitor refractory or intolerant CLL and SLL.I'll start with L-MIND, our chemotherapy free regimen for DLBCL, comprising MOR208 plus lenalidomide.Last Thursday, we were pleased to announce that the abstract we have submitted on L-MIND was selected for an oral presentation at this year's ASH Conference in December in San Diego. In accordance with ASH rules relating to prior disclosure of conference presentations, we are unable to go into detail here on the new L-MIND data beyond what is in the abstract. Therefore, I'll just mention the key points and ask for your understanding that we will not be able to say much more during the discussion.The abstract outlines preliminary safety and efficacy data on all 81 patients enrolled in the L-MIND trial. By the time of the data cutoff on June 5 of this year, the overall response rate was 58%, comprising 33% complete responses and 25% partial responses. Very significantly, Median PFS was 16.2 months. Median duration of response and Median overall survival were not yet reached, but we highlighted the 12-month overall survival rate of 73%, and the 12 months there had been no disease progression in 70% of patients. We are pleased to see both ORR and mPFS, Median Progression Free Survival, improving compared to the last data cutoff.We will, of course, speak to these data in detail at ASH. As a reminder, we've announced an Investor event in New York City on December 5, at which we will be joined by one of our investigators, and there too, we will be available to speak about the data in as much detail as possible. We hope to see many of you there.We see you're very encouraged by the latest data for our plans to seek U.S. regulatory approval on the basis of the L-MIND study. As of now, our plans are unchanged. We expect to have final data from the study available for an appropriate medical conference in the middle of next year and we remain on track to completing a rolling submission by the end of next year, which would allow for a potential approval in mid-2020. This program has the highest priority within the company.Meanwhile, the B-MIND trial of MOR208 and relapsed/refractory DLBCL also continues. B-MIND is a Phase III study evaluating MOR208 plus bendamustine. This is rituximab plus bendamustine, and approximately 230 patients with relapsed/refractory DLBCL who are ineligible for high-dose chemotherapy and autologous stem cell transplantation and who have failed prior rituximab-containing therapy.The trial continues to enroll patients and we're currently anticipating completion late next year. The trial includes a planned interim analysis for fertility, which, depending on when the required number of events is reached, should be conducted within the next 6 months.The third MOR208 trial is COSMOS. This exploratory study is looking at the safety of MOR208 in combination with idelalisib, that's cohort A, or venetoclax, that's cohort B, in patients with CLL or SLL who have failed or become intolerant to prior treatment with ibrutinib. We reported data from the first cohort at the EHA Conference this year, and we were very pleased to announce last week that our abstract with first data on 13 patients from cohort B comprising MOR208 with venetoclax has been accepted for a poster presentation at ASH. As published in the abstract, MOR208 plus venetoclax showed generally acceptable safety and tolerability as well as antitumor activity, with all 7 out of 7 patients who had at least 1 post-baseline assessment showing a partial response.Overall, we're very excited about MOR208. We believe that the current L-MIND data suggest it has the potential to transform the treatment of aggressive lymphoma and that with a chemotherapy-free regimen. We're currently evaluating additional development options and hope to be able to update you on those plans in the coming months.Let me turn now to MOR202, our proprietary anti-CD38 antibody currently in development for the treatment of multiple myeloma. Our Phase I/IIa study of MOR208 in multiple myeloma either alone or in combination with pomalidomide or lenalidomide is fully recruited. As reported last week, the abstract we submitted on data based on the primary completion of the trial was accepted for an oral presentation at this year's ASH Conference and we look forward to sharing the study results there. Our partner I-Mab is continuing preparations for late stage clinical development in multiple myeloma. I-Mab has submitted an IND application to the Chinese authorities for MOR202, and we currently expect that they will start a pivotal trial of MOR202 in that indication in China early next year.We're continuing to evaluate development options of MOR202 in other indications, including autoimmune disorders and expect to be able to give you an update on our plans in the near future.I'll continue with MOR106, an antibody directed against IL-17C. In our half year call in early August, I commented in detail on the exciting license agreement we and our partner Galapagos had recently signed with Novartis. The approval of the transaction by the U.S. antitrust authorities under the Hart-Scott-Rodino act took place in early September. That's the upfront payment of EUR 95 million from Novartis to Galapagos, and MorphoSys became payable. As a reminder, we and Galapagos are eligible to receive success-based milestone payments of up to approximately EUR 850 million as well as tiered royalties on net sales in the low teens to low 20%.With the signing of the agreement, overall search, development, manufacturing and commercializing cost for MOR106 are being covered by Novartis. Our ongoing Phase II IGUANA trial in atopic dermatitis patients, which we started together with Galapagos in May is continuing enrollment. We expect completion around the end of next year. We started a Phase I bridging study in the third quarter to evaluate the safety and efficacy of a subcutaneous formulation of MOR106 in healthy volunteers and atopic dermatitis patients.We see great potential for MOR106, which is to our knowledge, the first program against IL-17C in clinical development. While the initial focus is on atopic dermatitis, which is an enormous unmet medical need, we expect to commence clinical studies in at least 2 other indications in the future as per our agreement with Novartis.I'll turn now to our Partnered Discovery segment. This segment comprises more than 100 programs currently in R&D, 24 of which are in clinical development. As always, far too many to talk about here, so I'll focus on the most advanced product in the segment, Janssen's Tremfya, which in July 2017 became the first drug based on our antibody technology to reach the market. Trials of Tremfya in plaque psoriasis are developing nicely. Tremfya seems to be an important asset for Janssen and has been given the appropriate attention both in commercialization and in further development.In July, we announced the start of Janssen's pivotal development program GALAXI in Crohn’s disease, and in September, the initiation of a Phase III trial in pediatric psoriasis patients. These new pivotal studies add to the ongoing development program, which includes 2 Phase III studies in psoriatic arthritis and a number of Phase III studies in psoriasis, including the head-to-head study ECLIPSE comparing Tremfya and Cosentyx. We expect results of the ECLIPSE study early next year.We're delighted to see such a broad clinical development program and are optimistic that Tremfya could become a widely used drug. It's closed the section in September, we expanded our existing dermatology alliance with LEO Pharma to include peptide-derived therapeutics. This alliance is the first to be based on our proprietary peptide technology. We will use this technology to address target molecules selected by LEO that might not be addressable with antibodies. Under the terms of the agreement, we will receive R&D and success-based payments for reaching developments to regulatory and commercialization milestones as well as royalties on net sales arising from commercialization of any peptide-based drugs developed by LEO Pharma. While LEO will hold all developments and commercialization rights in dermatology, we will have an exclusive option to secure worldwide rights to all oncology drugs resulting from this collaboration.To conclude my part, at the end of the third quarter 2018, the MorphoSys pipeline comprised 115 program spanning discovery to the market. These include 1 program on the market, Tremfya, and 29 programs in clinical development. We still expect additional clinical data and potential milestones from several programs up to year-end. As always, we have no control over what our partners communicate, but there is obviously the potential for quite a few results to come. We believe many of these programs have the potential to be major value drivers for MorphoSys. We look forward to updating you on all of these programs in the future.That concludes my operational review. I'll now hand over to Jens for his wrap-up of the financials.

[Jens H. Holstein, CFO & Member of Management Board]

Thank you, Simon. Ladies and gentlemen, also from my side, a warm welcome to all of you, and thanks for your interest in the company. As Simon already pointed out, we're very pleased with our performance in the past quarter. Driven by an attractive licensing deal with Novartis for MOR106 and an increasing royalty income from Tremfya, we saw a strong revenue performance in the third quarter. On the back of MOR106 transaction, we had already increased our financial guidance for the year in July. Given what we have reported today, we indicate that our overall revenue figure is anticipated to be at the upper end of that guidance.The good top line performance has nicely contributed to the bottom line in Q3 too. So all in all, our financial results are well in line within the announced guidance. With our cash position that we have strengthened with our NASDAQ listing earlier in the year, we're well positioned to continue the advancement of our proprietary portfolio, in particular, to bring our lead program MOR208 towards the market and to set up a commercial structure in the U.S.Let's now take a closer look at the most important financial figures for MorphoSys for the third quarter. And I would like to start with our P&L statement on Page 12. Group revenues totaled EUR 55 million compared to revenues of EUR 50 million in the third quarter of 2017. The revenue increase was mainly driven by the realization of the upfront payment in the amount of EUR 47.5 million that we received from Novartis in connection with the MOR106 license agreement. As in previous quarters, the contractual relative reporting from Janssen for Tremfya has not been received yet. Tremfya royalties booked for Q3 2018 will estimate based on public announcement made by Janssen J&J.Total operating expenses reached EUR 25.3 million. The expenses thereof for research and development were EUR 18 million. General and administrative expenses increased to EUR 5.1 million. In the first quarter of 2018, we introduced selling expenses as a new line item in the profit and loss statement. This was necessarily following the rising importance of those expenses in connection with our preparations for the commercialization of MOR208 in the U.S. Those costs have been rather small so far but are expected to increase in the quarters to come. The line item cost of sales consist of expenses in connection with the services being rendered with transferring projects of the kind of MOR106 to partners. In the first 9 months of 2018, cost of sales amounted to over EUR 9 million. Earnings before interest and taxes came in at EUR 30.1 million in Q3 2018 in comparison to minus EUR 23.5 million in the third quarter of 2017. Reflecting, in particular, the already mentioned upfront payment made by Novartis.Our consolidated net profit after taxes amounted to EUR 30.2 million in Q3 2018 compared to a net loss after taxes of EUR 24 million in Q3 2017. The earnings per share for Q3 2018 reached EUR 0.96 after minus EUR 0.83 in Q3 of the previous year.Let's move to our segment reporting for Q3 on Page 13 of the presentation. In our Proprietary Development segment, we focus on the research and clinical development of our own drug candidates. In the third quarter of 2018, this segment recorded revenues EUR 48.8 million as compared to EUR 0.2 million in Q3 2017. As mentioned before, the revenues include the upfront payment for the license agreement for MOR106 with Novartis.The expenses for proprietary R&D including technology development amounted to EUR 15.9 million as compared to EUR 29.8 million in Q3 2017. The main reasons for this year-on-year decline in proprietary earning expenses were reduced expenses for MOR202 development compared to the previous year and due to reimbursements from I-Mab as well as extraordinary negative effects that we had in Q3 booked of last year, following the writeoff in connection with MOR209. Consequently, the segment EBIT of our Proprietary Development segment came in at EUR 30.3 million compared to minus EUR 29.8 million in the previous year.In our Partnered Discovery segment, we apply our proprietary technology to discover new antibodies third parties. We benefit from our partner's development advancement through R&D funding, license fees, success-based milestone payments and royalties. In the third quarter of 2018, revenues amounted to EUR 6.2 million as compared to EUR 14.8 million in the Q3 of 2017.Please be reminded that our long-term research collaboration with Novartis has ended in November of 2017. Consequently, the EBIT in our Partnered Discovery segment reached EUR 3.8 million as compared to EUR 10.4 million in Q3 of 2017.Let's now move on to the balance sheet on Slide 14. As of December 30, 2018, we recorded total assets of EUR 578.7 million. This represents an increase of EUR 163.3 million compared to year-end 2017. At the end of Q3, we had a cash position of EUR 481.2 million compared to EUR 312.2 million as of December 31, 2017. Please be aware that as we have started to apply IFRS 9, effective January 1, 2018, you'll now find the liquidity items on the balance sheet under the following line items: cash and cash equivalents, financial assets at fair value through profit and loss and current and noncurrent other financial assets at amortized cost.The increase in funds resulted mainly from the capital increase together with our successful NASDAQ listing that we completed in April of 2018 with gross proceeds of USD 239 million. The upfront payment made by Novartis in the third quarter in the amount of EUR 47.5 million came then on top.The number of shares issued totaled 31,839,572 at the end of Q3 2018. The increase in the number of shares was mainly driven by the capital increase in connection with NASDAQ listing.To briefly sum up the key figures for the first 9 months, please turn to Slide 15. Group revenues amounted to EUR 66 million for the first 9 months of 2018, after EUR 38.6 million in the comparable period of the previous year. Of the revenue in the first 9 months of 2018, EUR 14.2 million were for success-based payments, a great majority of which were coming from Tremfya royalties.R&D expenses for proprietary drug development and technology development amounted to EUR 55.1 million in the first 9 months of 2018 after EUR 67.1 million in the first 9 months of '17. Hence, the EBIT in the first 9 months of 2018 came in at minus EUR 30 million compared to minus EUR 53.8 million for the first 9 months of 2017.I will conclude my section with reiterating our guidance for 2018. MorphoSys confirms its 2018 financial guidance, which we had increased after signing the agreement with Novartis for MOR106 in July. In light of the recent public development of Tremfya royalties, we expect revenues at the top end of the guided range of EUR 67 million to EUR 72 million, and earnings before interest and taxes verses the EBIT of minus EUR 55 million to minus EUR 65 million. Tremfya royalties that we had guided in the range of EUR 12 million to EUR 17 million are expected to also be at the upper end. R&D expenses for proprietary programs and technology development are expected to be in the range of EUR 87 million to EUR 97 million. In other words, we expect increasing expenses for -- before of this year.Please be reminded that the guidance does not include additional revenues from potential future collaborations and/or licensing agreements, nor any effects from possible in-licensing of development partnerships for new drug candidates.Ladies and gentlemen, that brings me to the end of my part for today. In the past quarter, we followed our plan to transform MorphoSys into a fully integrated biopharmaceutical company. With growing royalties from Tremfya sales and through our deal for MOR106, we strengthened our financial position. The solid cash position provides us with flexibility to allocate necessary resources to our lead program MOR208, continue the advancements of our other pipeline programs and continue to build out our U.S. commercial capabilities.That concludes my review for the third quarter of 2018. I will now hand back to Alexandra for the Q&A session.

[Alexandra Goller, Associate Director Corporate Communications & IR]

Thank you, Jens. We will now open the call for your questions.

[Operator]

[Operator Instructions] The first question is from Konstantinos Aprilakis of JMP Securities.

[Konstantinos Nikolaos Aprilakis, Senior Analyst]

So Simon, as you mentioned in your prepared remarks, MOR208 demonstrated a highly impressive 16.2 month key assessment outline in the last week's release. I know you said you won't go into any more detail on the data at this time, but I was wondering if you might comment on how result like that affects the regulatory path forward as you see it, considering the vast improvement over both standard of care and investigational agents in the setting.

[Simon E. Moroney, Chairman of Management Board & CEO]

Yes, thanks, Konstantinos. We have -- we actually have Malte on the line as well. He's not with us here in the room but he's on the line. And I would hand that over to him actually. Malte?

[Malte Peters]

Yes, thank you, Simon, and thank you, Konstantinos for the question. I think it's fair to say that the data that we published at ASH are considered to be extremely encouraging. We -- since we received breakthrough therapy designation from FDA, our interaction with the agency has been extremely collaborative. Actually FDA has demonstrated a great deal of willingness, to support MorphoSys to move our program ahead on the regulatory path. And based on these statements, we are optimistic and confident to maintain our timelines that we had communicated earlier, which includes a filing of the 81 patients worth of data by the end of 2019, which could lead potentially, if all goes well, to a regulatory approval in the middle of 2020. So I think, in short, our interactions with FDA are extremely positive. And based on recent action, we continue to assume what I just said on the timeline basis.

[Konstantinos Nikolaos Aprilakis, Senior Analyst]

Okay. Fantastic. And when do you think we'll hear sort of explicit feedback from the FDA, like, minutes from the meetings with the FDA? Is the post-ASH Investor event a possibility or would it be after that?

[Malte Peters]

So we commonly do not publicly share written minutes from our FDA interactions. I don't think any other company does that. We would, of course, communicate any significant news in our communications between MorphoSys and FDA, if you consider that that's appropriate. But other than that, there are too many interactions between MorphoSys and FDA at the moment that we would comment on each of them, right? So it's -- if you have the breakthrough therapy status it means that you have a very close communication between the company and the agency, and it's way too many interactions for us to publicly share. So I think we can certainly provide some more detail on our data at ASH and also at the investor event. But I do not foresee that we share minutes of our interactions with FDA.

[Operator]

The next question is from James Gordon of JP Morgan.

[James Daniel Gordon, Senior Analyst]

A couple of questions, please. The first question would be just that the PFS estimation approach. So the data and the abstract are very strong to motivate. But one investor question has been the extent to which it's an estimate of Median PFS, which could dramatically change if the data matures. Could you just clarify, is this a consistent way that you estimate PFS versus other studies you might be familiar within this field? And is it likely that you're going to have dramatic change in the Median PFS as the data matures?

[Simon E. Moroney, Chairman of Management Board & CEO]

Malte, do you want to take that one?

[Malte Peters]

Yes, I can take that one. James, so first of all to our methodology that we apply, yes, so we apply a standard methodology to calculate our Median PFS. It's the same methodology that is used by Novartis, Roche, Pfizer and any other company. And the PFS estimates are the realistic estimates of where the median progression-free survival will end up at the conclusion of the study. So the number you see is not very positive, it's not very negative, it's actually right in the middle of where you -- where we believe we will end at the completion of the study. So I think we use a very common standard methodology to compute our Median PFS. And it gives you the most realistic number that's -- is available. The other comment I would make is that and if you look at the Median PFS numbers that we have published over the last year, I think, we have published on cutoffs in 6-month intervals, the Median PFS number has gone up. So that indicates in our opinion that's the robustness of the data increases and the probability that this is somewhere close to where we will end up at the final data evaluation is fairly high. So I think that's what I would say to this point to your question. I hope I could answer your question to some extent.

[James Daniel Gordon, Senior Analyst]

Yes. That's very helpful. And then just two other quick questions please. One was, in terms of what we're going to see ASH versus the abstract, they're not asking for a disclosure now, but I believe the abstract was a June cutoff. Is it going to be the same June cutoff? And is there anything else incremental that would be at the presentation be on the ASH detail versus what was in the abstract is the second question.

[Simon E. Moroney, Chairman of Management Board & CEO]

Yes, and maybe -- let me just handle that. James, as per the ASH regulations, I understand that we're actually not allowed to disclose what we're -- precisely what we're going to release at ASH. And we can't say at this point whether what you'll see at ASH will be exactly what's in the abstract or whether it'll be something subsequent to the abstract. So unfortunately, we can't elaborate on that at this point.

[James Daniel Gordon, Senior Analyst]

And third and the final question was, I noted within the release a change in personnel in terms of U.S. the lady who was going to lead U.S. commercials was Jennifer Herron and I've seen that she is departing after pretty short tenure with the company. Are you able to provide any color around that in terms of why such a short tenure? And should we -- could we read anything into that?

[Simon E. Moroney, Chairman of Management Board & CEO]

Yes. We can't say much James. Jennifer left to pursue other opportunities, and unfortunately, we can't go into details. We wish her well. Unfortunately, these things can happen. But I think important to point out is that, her departure has absolutely no impact whatsoever on our plans to commercialize MOR208 in the U.S. or elsewhere for that matter. And I have to say, we're absolutely delighted to have Jim Hussey, who stepped in as Acting President. Jim is someone who has many years of commercializing -- many years' experience of commercializing cancer drugs in the U.S. We've actually been working closely with him now for some time, and he has happily stepped into to fill the gap and ensure what's turned out to be absolutely seamless continuity since the departure of Jennifer. So from that point of view, we're happy with the way things are going. And as I said, no change in plans for MOR208.

[Operator]

The next question is from Gary Waanders at Bryan Garnier.

[Gary Anthony Waanders, Managing Director]

Simon, if might just a follow-up on the question about commercial strategy and U.S. activities. I wonder if you could tell whether in your discussions with clinicians ahead of any regulatory filing, what has been their perspective on the use of 208 with lenalidomide compared to say the CAR-T approaches? And have they given any steer as to what their potential preferences might be?

[Simon E. Moroney, Chairman of Management Board & CEO]

Yes, let me start with that Gary. Many thanks for the question and then I'll ask -- actually ask Malte to comment as well because, of course, he has many discussions with the clinicians. Yes, the -- I think the reception of the data has been very good, very strong. Particularly, the progression-free survival in this very sick patient population, the clinicians that we've interacted with have been very encouraged by what they've seen. And that is actually one of the drivers behind some of the other plans we are making for MOR208 at the moment to take it into other settings. We've talked about earlier lines of DLBCL for example, that's been to a large extent catalyzed by the enthusiastic response we've seen amongst the clinical community. But Malte, do want to add anything regarding the potential of 208 versus some of the competing programs out there?

[Malte Peters]

Yes. I can maybe add a couple of thoughts or maybe a couple of comments that we are typically hearing from our investigators. Of course, I cannot speak so much about the investigators' opinion about the CAR-T cells because not too many investigators have actually an opportunity to administer our CAR-T cell transplant to a patient as you know. But what we are hearing from our investigators is that, particularly, the effects of the chemo-free nature of MOR208 in combination with L-MIND is considered to be an extremely positive feature of our possible treatment option. It also means that being chemo-free, our regimen might be of particular importance for elderly patients and for patients who are too ill, too sick to tolerate any very toxic regimens like high-dose chemotherapy or autologous stem cell transplants. And last, but not least, our treatments is also very unique to administer, right. So there's no waiting time, no turnaround time until a patient has access to the CAR-T cells. So I think these are the key features that we are hearing commonly from investigators. So we feel fairly confident that MOR208 in combination with lenalidomide could be a truly novel chemo-free opportunity for very ill patients.

[Gary Anthony Waanders, Managing Director]

Excellent. And if I might just also ask about B-MIND. There was -- in the comments there, there was a suggestion that the interim analysis might be within 6 months depending on events. Could you give us any detail about what events are particularly required for that -- to trigger that futility analysis, please?

[Malte Peters]

I can take the question. Yes, if I can take the question, Simon? So we typically would not like to share any details of the protocol. I don't think we have done that in the past. The interim analysis is built in the protocol. I think all I can say is that the interim analysis will not allow us to stop for success, but it will allow us to stop for futility under certain conditions. And I don't want to go into the statistical details of the protocol at this point. We are quite on track with the study. There's excitement about the possibility of combining MOR208 with another agent, bendamustine in this case. And obviously, the fear is interested in signing out its MOR208, which eventually be better than rituximab in this patient populations.

[Operator]

The next question is from Anastasia Karpova of Kempen.

[Anastasia Karpova, Research Analyst]

And two questions, if I may. With the data you have in hand, where do you -- when do you expect to be able to guide the markets more concretely on the further expansion strategy for MOR208 development? And then, second, in regards to B-MIND and L-MIND as well, do you think that's the observed efficacy is specific to lenalidomide or IMiD combination? Or should we, at least, mechanistically hope to see something of the same magnitude not exactly, but as a same magnitude in combination with bendamustine?

[Simon E. Moroney, Chairman of Management Board & CEO]

Anastasia, those sound like 2 more for you, Malte.

[Malte Peters]

Yes. Happy too, Simon. So first of all, for the further expansion of the program, I would like to refer to our investor event that's coming up December 5. We have actually fairly concrete plans in frontline DLBCL. We also have plans in other indolent lymphoma entities, and we will update all of you on that date what these plans are. To your second question, I think, at this point, it's too early to really make that comparison. Obviously, we are so highly interested in the question you asked. It's a very relevant question. But first of all, to B-MIND -- for the B-MIND case, we're still blinded, so we have no idea, which patient received which treatment. And the median duration of response -- I'm sorry, the median duration of treatment for B-MIND -- for the B-MIND patients is very short. So it's not really possible at this moment to make that comparison. But eventually, I see you hit the nail on the head. This is going to be a very exciting question to see what is really the best combination partner and is there any difference between lenalidomide and bendamustine as combination partners to 208. But at this time, it's a bit early to speculate on that.

[Simon E. Moroney, Chairman of Management Board & CEO]

And maybe if I can just add one point to that. When asking and it's a good question about the importance of lenalidomide, one thing to keep in mind is that the protocol calls for lenalidomide treatment to discontinue after 12 months. And of course, we have a lot of patience now and increasing number who are still on treatment beyond 12 months and those patients obviously are only getting antibody, they're not getting lenalidomide anymore. So I think that's something that one should keep in mind as well when one thinks about just how much of the contribution is coming from len in this combination.

[Malte Peters]

Yes. That's an excellent point, Simon. And Anastasia, you will see -- you will be excited to see the PFS curve at ASH and it will provide more details to what's Simon just said. So about China, that was a very good addition, yes.

[Anastasia Karpova, Research Analyst]

And maybe is to follow up quickly, given that most of the patients receive for -- there is a proportion of patients that receive MOR208 as a monotherapy later in the trial. Will you consider exploring maintenance to be reflected in the label somewhere down the line?

[Simon E. Moroney, Chairman of Management Board & CEO]

Malte?

[Malte Peters]

Yes. We have not gone into the maintenance discussion with the authorities at this point. The protocol request that's the lenalidomide has stopped after 12 months and MOR208 is continued until progression. So in a way, we have built in already a kind of maintenance treatment. And whether this will be specifically mentioned in the label, I can't really speculate at this point.

[Operator]

We currently have no questions coming through. [Operator Instructions] A follow-up question from Gary Waanders, Bryan Garnier.

[Gary Anthony Waanders, Managing Director]

It's actually to change track a little bit and talk about MOR103. I wonder if you had any further guidance as to when that might progress and how that might progress with GSK?

[Simon E. Moroney, Chairman of Management Board & CEO]

Gary, the short answer is, no. We're encouraged by what GSK has said about the program, highlighting it, noting, in particular, the very beneficial effect on pain in these patients. So it seems to be a program that GSK is prioritizing. The next step we hope would be transitioned into a Phase III study, but we're not sure that, that will be the next trial and we haven't had an update from GSK.

[Operator]

The next question is from Danielle Brill of Piper Jaffray.

[Danielle Catherine Brill, VP & Senior Research Analyst]

I'm just curious what your thoughts are on the potential accelerated U.S. approval in combo with lenalidomide. This isn't indicated for DLBCL, I just -- I'm curious, is there a precedent for this?

[Simon E. Moroney, Chairman of Management Board & CEO]

Malte, is that one that you can take?

[Malte Peters]

Yes, I can take that. So the short answer is, there is no precedent for this. Of course, this was clear also to the FDA that mentioned it to us in our further interactions, but they also were quite clear that they're willing to set a precedent if our data continue to look like they look. So that's I think the shortest possible answer here. We are aware of testing new waters here of getting on new territory here. But the fact that FDA has granted breakthrough therapy for this particular combination indicates that the agency is truly willing to consider the study as a basis for an approval. So I think it's a good signal that we received breakthrough therapy status, and yes, despite that we -- the fact that we have new territory here in front of us. We are quite confident at the moment.

[Danielle Catherine Brill, VP & Senior Research Analyst]

And then, just to clarify. Did you say that we could expect an update at ASH on -- I know you said future development plans. Does that include commercialization strategies?

[Simon E. Moroney, Chairman of Management Board & CEO]

Yes. Let me -- I think what Melta was referring to Danielle was clinical development plans. We'll update you as much as we can about our commercial plans as well. We'll take that opportunity in New York in early December really to give you a comprehensive picture as possible about our intentions and plans for the 208 program.

[Operator]

The next question is from Zoe Karamanoli at RBC.

[Zoe Karamanoli, Analyst]

Just a follow-up on MOR208. Simon, given the impressive data on MOR208 so far, has this now changed your approach for the EU? And would you perhaps now try to apply for PRIME designation and perhaps pursue an expedite regulatory approach there as well?

[Simon E. Moroney, Chairman of Management Board & CEO]

Yes. Again, I'll hand this over to Malte. I mean, I think one of the things we need to keep in mind is that the regulatory environments in the U.S. and Europe are quite different. And that obviously has a bearing on what's doable, what's approvable in the 2 jurisdictions. But Malte, maybe you can elaborate a little bit.

[Malte Peters]

Yes. Thank you, Simon. So it's an excellent question, Zoe. We are in the process of approaching EMA for a discussion. So we will go in the first or second quarter of next year. We will present, of course, our L-MIND data. We deliberately staggered our interactions between FDA and EMA by a little bit so that we can embark already when we speak to EMA on some experience and some feedback from FDA that typically help. And your question, which related to PRIME, that may be a possibility, but I would say at this moment, we will hold off on that until we have had an opportunity to actually talk to the European agency and to await their guidance of what they suggest as next step. So we're a little behind deliberately by approximately 1-year I would say in Europe. And we would have more to say about this, I would say, in the first or second quarter of next year.

[Zoe Karamanoli, Analyst]

And just a follow-up on that. You're still looking into your options whether you will try to commercialize yourself or try to find a partner. Is that right?

[Simon E. Moroney, Chairman of Management Board & CEO]

Yes. That's something that we're still looking at. I think we've communicated rather clearly what our plans are for the U.S. that we intend to commercialize ourselves there. Ex-U.S., we would probably look to commercialize in conjunction with a partner, just precisely what our level of involvement will be remains to be determined depending on the partner and the type of deal that we would close there. But certainly, right now, highest priority for us is to get it right in the U.S.

[Operator]

The next question is from [ Hoggard Bloom ] at WIZZIT Bank.

[Unknown Analyst]

[ Hoggard Bloom ], WIZZIT Bank. Just a quick one on 202. You mentioned autoimmune diseases as a potential indications or maybe you can quickly share with us how your thinking has evolved over time? Whether an oncology or indications of the table now and whether you, in principle only would do a larger trial with a partner also on a standalone basis?

[Simon E. Moroney, Chairman of Management Board & CEO]

Yes. Let me start there. And I'm sure, Malte will have some comments to add as well. The initial setting obviously was multiple myeloma. We've concluded that, that is at least in the Western world intensely competitive space, not just because of the other anti-CD38 antibodies but based on what's happening with other modalities as well. And we've decided that the smart thing there is not to continue ourselves in that indication. We have, of course, the partnership with I-Mab for China and that will continue. But we do see opportunities outside of cancer. And let me just back up one step and say, actually other solid tumor trials of CD38 antibodies have not done terribly well so far. So I think the jury is still out as to what extent CD38 antibodies are going to play a role in cancer outside of the multiple myeloma. We actually see some opportunities in autoimmune disease based on the fact that CD38 antibodies MOR202, in particular, are very effective plasma cell depleted, okay? And obviously, 202 having been in the clinic and be generally safe and well tolerated gives us a good starting point. I think we're not yet ready to talk about precisely what indications we would proceed in. But we have some pretty firm plans that we will share with you at some stage in the not-too-distant future about how we'd like to go ahead with MOR202 and autoimmune disease. Malte, have I left anything out there?

[Malte Peters]

No. I think you summarized it very well. No, nothing to add from my position.

[Unknown Analyst]

But just on the point of partnering or standalone?

[Simon E. Moroney, Chairman of Management Board & CEO]

At this stage, there is interest, of course, in this approach in CD38 antibodies, in general. What we found is that based on our partnering discussions in multiple myeloma over the last whatever 18 months or so, I think the community at large recognizes that, that's a very competitive space. And that certainly puts some of the partners that we spoke to off. But we would never rule out the opportunity to do a partnering deal if the terms and conditions are right for us. The Chinese deal with I-Mab I think is a brilliant one. They're a fantastic partner, a real up-and-coming company in a geography where we are clearly not going to play a role on our own. So that's I think an absolute win-win deal. And a nice example of those kinds of things we may try and do in the future. So it really depends on the opportunity that comes along, Hogarth, but we wouldn't exclude it.

[Operator]

[Operator Instructions] We have no further questions coming through. So I will now hand back over to Dr. Simon Moroney to wrap up today's call.

[Simon E. Moroney, Chairman of Management Board & CEO]

Thank you. And to wrap up, we're well on track to achieving or exceeding our goals for this year. In the big picture, the company is at an inflection point as the late stage development of MOR208 takes us ever closer to being a commercial entity with our own sales organization in the U.S. With MOR208, based on all the data we've seen so far, we believe we have a very promising drug candidate. We very much look forward to the coming up ASH conference where we'll present the latest data in detail. We continue to work diligently on the setup of our U.S. commercial capabilities. Assuming smooth progress on both the developments and regulatory fronts, we hope to be on the market in mid-2020 subject, of course, to regulatory approval. Our other programs are also making good progress and we believe they have the potential to further strengthen our overall product offering. We're in good financial shape to continue our plans during the remainder of the year and beyond. And finally, as a reminder, we look forward to your participation either in person or via the webcast at our Analyst and Investor event on December 5 of this year, 10:00 Eastern Standard Time in New York.

[Alexandra Goller, Associate Director Corporate Communications & IR]

That concludes the call. If any of you would like to follow up, we're in the office for the remainder of the day. Thank you for your participation on the call and goodbye.

[Operator]

Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.