Good day, everyone, and welcome to BeyondSpring Incorporated First Quarter 2018 Financial Results Conference Call. My name is Amanda and I will be the operator on today’s call. Please be advised that today’s call is being recorded. At this time, I’d like to turn the call over to the host for today’s call, Joe Rayne of Argot Partners.

Thank you. Before we begin, I’d like advise that remarks made on today’s call may reflect forward-looking statements relating to such matters as BeyondSpring’s clinical and preclinical research and development activities, regulatory plans, industry trends, market potential, collaborative initiatives and financial projections, among others. These statements are based on currently available information and management’s current assumptions, expectations and projections about future events. While management believes that its assumptions, expectations and projections are reasonable in view of the currently available information, you’re cautioned not to place undue reliance on these forward-looking statements. The Company’s actual results may differ materially from those discussed during the call for a variety of reasons, including those described in the forward-looking statements and risk factors section of the Company’s 20-F and other filings with the SEC, which are available from the Investors section of BeyondSpring’s website. It is now my pleasure to turn the call over to Dr. Lan Huang, Co-Founder, Chairman and CEO of BeyondSpring. Lan?

Thank you. Ladies and gentlemen, thank you for joining today’s call. With me today are Edward Liu, our recently appointed Chief Financial Officer who will discuss our first quarter 2018 financial results and recently announced registered direct offering; and Dr. Ramon Mohanlal, our Chief Medical Officer who will be available to answer questions during the Q&A portion of today’s call. This morning, I will begin by providing an update on our most current pipeline advances. As I noted on our last conference call in early April, 2018 promised to be an important year for BeyondSpring with significant milestones that have the potential to transform the Company and advance us on our trajectory to become a multinational commercial-stage oncology company. Already this year, we have made critical steps towards achieving this objective, advancing our late stage, lead asset Plinabulin in multiple clinical studies with ongoing data readouts that to date support our expectations for Plinabulin as a potentially superior new treatment for chemotherapy-induced neutropenia or CIN, and a new treatment candidate for non-small cell lung cancer. With additional interim data readouts expected beginning in the first quarter and assuming those data are positive, we plan to submit NDA to the China FDA soon thereafter, generating a steady flow of catalysts over the remainder of 2018 and into 2019. Specifically, in CIN, we expect number one, Phase 3 interim analysis data for Study 105, evaluating Plinabulin and docetaxel for prevention of CIN in the fourth quarter of 2018; number two, Phase 2 data for the primary endpoint of Study 106, evaluating Plinabulin and TAC also in the fourth quarter of 2018; number three, pending positive results from these two studies, we would expect to submit the NDA to the CFDA in late 2018 or earl y 2019 for Plinabulin for a broad…

Thank you very much, Lan. As this is my first earnings call since I joined BeyondSpring, I would like to take this opportunity to say that I’m extremely honored and excited to have joined BeyondSpring at such an important time in its development. With so many late-stage data readouts and regulatory submissions in the near to mid-term, BeyondSpring is truly in a unique and competitive position relative to other biotech companies. And I couldn’t be more enthusiastic about its prospects. I’m excited to be joining such an accomplished senior management team as we move towards taking BeyondSpring to the next level. The $20 million registered direct offering that we announced in late-May is one more step in achieving this goal. We were very pleased to have been able to attract high-quality, strategy institutional investors, including New China Asset Management, Everbright Sun Hung Kai, CSOP Asset Management, which RQFII Asset Management globally, and Tianyi Development, who’s an investment firm who owns a leading pharmacy retail chain in China. The proceeds from the offering will further solidify our financial position to prepare ourselves for commercialization, first in China and advance the development of our other drug pipelines. With respect to our financial results. For the first quarter of 2018, R&D expenses were $14.1 million, compared to $46.7 million for the fourth quarter of 2017, which included a $42.3 million non-cash charge for acquiring global patent of Plinabulin outside of China. Excluding the impact of this acquisition, the R&D expense for the first quarter of 2018 would have increased by $9.7 million. This is largely attributable to the $4.9 million of non-cash share-based compensation expense recorded in first quarter of 2018 and $2.8 million related to increased clinical trial expenses. G&A expenses were $0.7 million for the first quarter of 2018 compared to…

Thank you, Edward. As we highlighted today, there is a lot of exciting development at BeyondSpring and we are making significant progress toward our goal of delivering innovative, new medicine to the two largest markets in the world. The remainder of 2018 and early 2019 will be a pivotal time for our Company, and we have ambitious plan with a steady flow of significant milestones that have the potential to transform BeyondSpring into a commercial stage company as early as next year. We look forward to keeping you updated on our progress. Again, our Company’ principle is using sound science and solid execution to bring transforming medicine to patients. With that, we would like to now open up to questions. Operator?

Thank you. [Operator Instructions] Our first quarter comes from the line of Caroline Palomeque of Maxim Group. Your line is open.

Hi. Thanks for taking the question. So, I was just wondering how you’re thinking about some of the competitors that are about to enter the space, particularly Coherus’ CH-1701, the Neulasta biosimilar and that’s coming this fall. I just wondered how you’re thinking about the impact on the market there and how it might affect Plinabulin.

Yes. So probably I can start, this is Lan first and then we can have a Ramon to further explain. So, still, I think Plinabulin is a very differentiated molecule against the G-CSF. And it has overall superior profile, not only in the first day dosing, but also in lower bone pain. Those are the limitations of G-CSF. So, in that sense, I don’t think, there is so much competition here. Probably we can let Ramon to further explain.

Yes. Thank you, Lan. So, yes, we will have Neulasta biosimilars on the market shortly. And what is important is that they typically are priced at a discount of somewhat between 15% and 20% relative to the original product, which still represents high price in today’s market. Where the differentiation with Plinabulin comes in is firstly, we expect to be at least -- we expect to be superior or at least the same based on the Phase 2 data for what we call the intermediate segment. Plinabulin differentiates itself from Neulasta for firstly, the reason that it’s given on the same day of chemo, whereas Neulasta has to wait 24 hours. We see that as a big advantage, because one why would doctors wait until the next day if there is a treatment available to them that is at least the same or better treatment that doesn’t have bone pain and has other major advantages. That is one. Second is that Neulasta will not enter what we call the intermediate segment for febrile neutropenia which is the largest market for neutropenia. As you may know today, G-CSF products, they are only indicated in high risk segment. We see an opportunity with Plinabulin to enter the intermediate segment, in addition to the current established high-risk market, because Plinabulin has a much better safety profile and also can compete on pricing. We believe that those are two drivers for uptake in intermediate segment. So, from a differentiation perspective, we believe we are well-positioned in terms of product profile. But also, if this will eventually become a pricing strategy, Plinabulin also is very well-positioned to compete against Neulasta and biosimilars because our cost of goods is much lower than this. So, collectively, we believe that in the established market of the high-risk segment, we can compete well, based on product differentiation and pricing advantage. And in addition to that we will position ourselves in the intermediate segment market where Neulasta and G-CSF have not been able to establish themselves because of pricing and safety reasons. That we see as the opportunity here for Plinabulin, even with the arrival of Neulasta biosimilars. Thank you.

Okay. Thanks so much. That was really helpful. And then just really quick is the U.S. FDA filing is still on track for the first half of 2019 as well or is that going to be after the China NDA?

Yes. For the CIN indication, yes, I think China is at the end of 2018 early 2019; and for the U.S. NDA as we just related to, probably the second half of 2019, because we’re waiting for the whole dataset to finish.

Thank you. Our next question comes from the line of Vernon Bernardino of Seaport Global. Your line is now open.

Hi. Thanks for taking my question and congrats to all on the progress. The question I have is what pre-commercialization activities can you pursue? And what have you pursued or intend to pursue before the end of the year?

Okay. So, probably I can start, and then Edward can add in addition. So, first is of course, to line up for the pre-commercialization, there are few things we could do. Number one is resource-wise. So, as you see, we just did the registered direct, and some of the funds come in from China including insurance company New China, including Tianyi, which owns pharmacy retail chain in China. So, all of them, they are strategic investors to help with future sales and also insurance payments for our products in China. So that’s one. Number two is also to line up talent to plan for the commercialization. So, we are in the stages of having some significant heavyweight who has already done marketing before in the U.S. and China to help us to move ourselves into the next commercial horizon. So, this is how we are doing. And then in addition, the clinical sidewise, as you see in China, we have used Study 103, the lung cancer and also the CIN indications. We are using 60 of the best cancer hospitals in the country. And so, they already -- the doctors, they already know what Plinabulin is, its safety profile and efficacy profile. So, in the future, they are very big hospitals for getting Plinabulin to their patients. And as you know, in China, actually we cover 100 of the top cancer hospitals and we cover 80% of the China market. And then from KOL point of view, China is very much top-down. And so, we have influential KOLs who are leading the clinical trials in China including Dr. Yan Sun, who is the China PI for the non-small cell lung cancer study. And he is the NCCN chairman for non-small cell lung cancer in China and also the co-founder of…

Yes. I think you pretty much covered everything. I just want to say that we are also, as Lan said, are actively looking at talents but also we are actively evaluating the market opportunities in both China and U.S. as well. But it’s an ongoing process for us to evaluate the potential opportunities in these markets.

Thanks. That’s terrific information. As a follow-up, can you perhaps describe how widespread the use of the G-CSFs are in China, and whether it’s comparable to how they’re used as they are in the U.S.? And what do you think is prospects are as far as the other types of GSFs and their effects in the China market?

Thanks for the question. So, G-CSF is largely used in China but of course not as widely used in the U.S. Mostly, I think the usage is still in the short lasting G-CSF because it’s much cheaper there. The market is tremendous as you know because Plinabulin is really overall superior product against G-CSF. It’s not only a drug which protects neutrophil in a normal range, and that’s basically the effect G-CSF trying to achieve so that patients don’t have severe infection or sepsis or die. But, very importantly, Plinabulin is also anti-cancer drug. And adding to the chemo -- really turning the chemo into immuno agent. So, with that superior profile and a differentiated profile, potentially Plinabulin can really get into the distinct market by itself. So, in China, there are over 4 million new cancer patients a year. As you know upto 65% patients actually do use G-CSF -- do use chemotherapy and those patients are the patients Plinabulin can get to. So that’s over 2 million patients. And so, the market actually, as we see is going to be tremendous in China. So probably, I can let Edward to add to this. Edward, do you have anything to add?

No. I don’t have anything.

Thanks for that. And last question before I get into queue then, what level of education do you think you’ll need to optimize the initial adoption of Plinabulin in China?

Well, of course, market education is of the key to any market adoption of a new drug. So, as I just alluded to, so, we are doing the tiered approach, right? So first is, we have the KOLs in the field, as well the drivers into NCCN Guideline adoption of Plinabulin into the CIN indication, and it will be adopted into high risk and also the intermediate risk indication as what Ramon just discussed. And number two is, we’re already using the 60 of the best cancer hospitals in the country to let the doctors already reviewing our drug profile. And then they already have the patients seeing the results of our drug. So, they will be the promoter of our drug. And number three is of course, while giving a lot of talks in the -- using our KOLs and also let them share their passion and excitement about Plinabulin, at the major oncology meetings and including the CSCO in September and then there is another major meeting that is happening this weekend in Beijing. So, this way, it’s just a layered approach to education of the doctors in China.

Yes. Lan, if I may, this is Ramon. What also is applicable for the U.S. in addition to China is that we work very closely with members of the NCCN, which determine how Plinabulin and all the G-CSF products will be used in the context of chemotherapy with cancer patients. These are guidelines that are created by very experienced oncologists and who then conclude on certain guidelines. It is important for us that we engage with these discussions which we have started. And eventually, the goal is to be integrated in these guidelines. With Plinabulin’s favorable product profile as we discussed, we do expect that it will enter these guidelines and that will help the uptake of Plinabulin in both U.S. and China. China has a very similar approach as well. So, in addition to education, we also work closely with medical policymakers and doctors, who advise their fellow colleagues as to the use of neutropenia agents and Plinabulin being on their guideline. That is going to be very important to us. Thank you.

Thank you. Our next question comes from the line of Matthew Cross with JonesTrading. Your line is now open.

Hey, guys. Congrats on the all the recent progress this quarter and thanks for taking my questions. I wanted to ask about your TAC Study 106 that we’re expecting data from later this year. Since you’ve now used a couple of different DSN calculation methods in the docetaxel CIN setting, could you comment on which method or methods you expect to utilize for the TAC study? Thanks.

Probably this question is for Ramon. Would you like to answer this?

Yes. So, this question relates to the statistical method for DSN. As we discussed, there are two different methods that are widely used and both are accepted by the U.S. FDA. And typically, the method that we use in Phase 3 is the method that we also will use in Phase 2. So, the data that we presented recently at ASCO used the Phase 3 method that was then applied to the Phase 2 data. So, we really used the Phase 3 method, it’s called the extrapolated method for both studies in Phase 3 and in Phase 2 moving forward.

Perfect. Okay. Thanks for the clarification there. And then, I was also hoping to get an update on the progress for the Phase 3 lung cancer trial, which I think we’re expecting interim analysis for by the end of this year, but it looks like it’s now tracking for early 2019. So, could you comment on what’s driving that slight timeline pushback here?

Yes. I can comment. The interim analysis in study 103, the lung cancer trial will be triggered at the time point that we have a certain number of events. Events means the number of patients that have died. To do a meaningful interim analysis, we need to have a minimum number of events, those deaths. And death is not entirely accurate to predict, when the timing of that will be? If the timing will be this year, then, we will have the interim analysis this year; if the timing of getting that number, that minimum number of events early next year, then of course we have to wait till next year. It’s not in our control. We need to wait until we have the right number of events, before we can trigger the interim analysis.

Right. Just to add to Ramon’s comments, yes, it’s event driven. So, we have to wait for the patient to die. But as you know that we’re into the 2018. So, now the timeline simply just reflects the more finely tuned estimate of what we expect interim analysis to be? So, it’s really not changing from what we have discussed before.

Got it. That makes sense. And then, if I can squeeze in just one more. I know you mentioned the potential for immune exhaustion with Neulasta is very high, neutrophil counts well above normal you see with that therapy. And I was hoping if you go into a bit more detail on whether or not this may represent a benefit for Plinabulin in your lung cancer and other I/O combo trials.

Probably, Ramon, you can take this question?

Yes. Thank you. So, what we see with Neulasta fairly clearly and we’ve presented that data at ASCO, is that Neulasta is producing an overshoot of neutrophil production that is at least three to four times more than normal range, offers value of normal range. And we have experts, KOLs who are experts in the field of neutropenia and neutrophils on our scientific team. And generally, the concern is that if you over-stimulate the bone marrow and you continue to do that, you could have exhaustion of the bone marrow eventually. So, that is the potential concern. The other concern is also that with very high neutrophil numbers as we see the G-CSF, we also start to have the concern that that may negatively impact the immune system. We now have many immuno-oncology agents. And we also have increased our understanding of the importance of the immune system in fighting our cancers. We equally now have the large number of studies published including in Nature that shows that very high neutrophil numbers inhibit the immune system and also have a negative effect on survival. We believe that this also is an important product differentiation with Plinabulin. With Plinabulin, we keep neutrophil numbers within the normal range. We don’t have the overshoot. We don’t have the over-production whereas with Neulasta, we do see that over-production. That over-production also is likely the reason why most patients have bone pain because it reflects an overstimulation of the bone marrow. So collectively, the overshoot in neutrophil counts we believe -- with Neulasta believe and that also applies to Neulasta biosimilars. We believe that will prove to be important disadvantage for Neulasta and their biosimilars and that will help Plinabulin also in market uptake. Thank you.

Perfect. I’m glad to hear it. And thanks, I think it that does it for me.

Thank you. And that concludes the Q&A session today. I’d like to hand the call back to Lan Huang for any closing remarks.

Well, thank you everyone for joining the call today. And we will keep you updated of our future progress. and thank you and have a nice day.