Good afternoon and welcome to the Lion Biotechnologies Fourth Quarter and Full-Year 2016 Financial Results Conference Call. At this time all participants are in a listen-only mode. Following the formal remarks we will open your call up for questions. Please be advised that the call is being recorded at the company’s request. At this time, I would turn the call to Greg Schiffman, CFO. Please proceed.

Thank you, Operator. Good afternoon everyone. Thank you for joining us for Lion Biotechnologies fourth quarter and full-year 2016 financial results conference call. Joining me on today's call from Lion are Dr. Maria Fardis, our President and CEO; Dr. Michael Lotze, our Chief Scientific Officer; and Dr. Steven Fischkoff, our Chief Medical Officer. This afternoon we issued a press release that outlines some of the topics we plan to discuss today which is available on our website at www.lbio.com. Before I turn the call over to Maria, I would like to remind everyone that statements made during this conference call will include forward-looking statements regarding Lion's goals, business focus, business plans, clinical trials plans, and result, potential future applications of our technologies, manufacturing capabilities, licensing and collaboration transactions, future updates and cash usage forecasts. Forward-looking statements are subject to numerous risks and uncertainties many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially than those projected on today's call. We undertake no obligation to publicly update any forward-looking statements. With that, let me pass the call over to Maria.

Thank you, Greg. I would like to take a few moments to review some of our accomplishments in 2016 and then I will outline our goals and objectives for 2017. When I started as a CEO in June of 2016 I prioritized having a clear clinical development plan and the appropriate infrastructure and capabilities to execute it. In June of 2016, we had approximately 20 employees. Over the second half of the year, we build out our team, executed a broader clinical development plan, adding the necessary functions and capabilities to finish the year with almost 60 employees. The new hires included staff in clinical, biometrics, regulatory, manufacturing, quality, research as well as general and administrative function. We are still in the process of recruiting for 12 additional positions, although at this time we have a critical infrastructure in place for all of the major functions to meet the current need of our clinical organization. I would expect that by mid-year year we will have approximately 70 to 75 employees. In support of our clinical development plan, we have focused on expanding our manufacturing capacity, also increasing the number of manufacturing facilities we collaborated with as well as in shortening our manufacturing process. Further, we set to secure dedicated staff and suites for the TIL manufacturing process moving us away from the clinical manufacturing source with shared resources. We have made significant progress in those areas. In the past few months we have expanded our manufacturing capacity to three US available providers. Our collaboration with [indiscernible] expands our clinical capacity and capacity as well and providing access to several dedicated preclinical late stage clinical and commercial study. As we are considering global study, we will be working with the European contract manufacturing organizations in order to produce products for that…

Thanks Maria. Our GAAP net loss for the fourth quarter of 2016 was approximately $15.7 million or $0.25 per share. In the fourth quarter there were approximately $3.1 million of non-cash charges related to stock-based compensation. We are providing both GAAP and non-GAAP financial information as we believe it is important for you to understand the trends in our financial statements excluding these non-cash charges. Our non-GAAP net loss for the quarter was approximately $12.6 million or $0.20 per share. As I indicated, the non-GAAP adjustments are all associated with non-cash stock-based compensation charges. Our GAAP net loss for fiscal year 2016 was approximately $102.3 million or $1.85 per share. This includes approximately $19 million of non-cash based stock compensation of which approximately $10.6 million was associated with the departure of the Company's former CEO and CFO. In addition that includes a one-time non-cash deemed dividend of approximately $49.5 million which is associated with the approval by shareholders to enable the preferred Series B shares that we sold in our June 2016 financing to be convertible into common shares. This deemed dividend will never impact the company's cash and will not impact any future financial statements. Our non-GAAP net loss for fiscal year 2016 was approximately $34 million or $0.62 per share. For the fourth quarter, we had a cash usage of approximately $13 million ending the year with cash and cash equivalent of approximately $166.5 million. This cash spending was slightly lower than our guidance of approximately $15 million leaving us with a cash balance that was approximately $2.5 million above our guidance of $164 million. The decreased spending is almost all timing-based associated with initial start-up expenses for both clinical manufacturing and CRR activities. For fiscal year 2015, we had a net cash usage excluding the approximate net $96 million raised in the June equity offering of approximately $34 million. For the year, we are projecting some growth in our quarterly cash expenses. Much of this growth will be dependent on the timing and speed of enrollment into our clinical trials. Giving the timing for the year-end call, we will be providing guidance on projected cash usage for the next two quarters on this call. In general, on each quarterly call we will provide guidance and expected cash spending for the next quarter. For the first quarter of 2017 we are projected cash usage of approximately $17 million. This would give us an ending cash balance of approximately $149.5 million. For the second quarter of 2017, we are projecting a cash usage of approximately $20 million for an expected ending cash balance mid-year of $129.5 million leaving us with a strong balance sheet to continue to fund our clinical activity. I’ll now turn the call over to the operator for your questions. Operator?

[Operator Instructions] And our first question comes from Josh Schimmer with Piper Jaffray. Your line is now open.

Great. Thanks for taking the questions. First, I guess the FDA provision that you'll be working with is SBIR [ph]. And so how do you think the various precedents for approval pathways from SBIR in oncology clinics, which precedents do you think may be most constructive?

Thank you Josh for the question. It’s a little hard to hear you, but I think what you asked for was how do we compare SIBR maybe compare to SIDR [ph] and the recent oncology approval. Was that what your question was?

Yeah.

Okay. Thank you.

So I’ll repeat a little bit better. What do you think the relative precedents are within SIBR for getting the path forward in terms of regulatory requirements?

Understood. Thank you for that question. I think there is, as a matter of fact, quite a bit of relevance between SBIR and what SDIR has done in the past five years from regulatory approval perspective. And relative to September-October of 2016, I saw an announcement from SBIR division that they are borrowing some staff from SDIR division in their oncology division and my expectation would be, this is an anticipation of additional workload that is coming towards SBIR. In general, I'm very encouraged by what I see from the agency in the past five years or so regarding the speed of which we have taken oncology products and they have brought it forth. And I expect that SBIR would have the same degree of sense of urgency and just a new wave of products that are coming through are more cell therapy than small molecules and antibody. So I'm personally encouraged by what I see. I think the future is looking favorable. The cell therapies are coming and they're here to stay. That's what I see.

Got it. And then a quick question for Greg, just a housekeeping issue, the fully diluted share count at the end of 2016, what should we be using?

Sure. So our diluted shares, if you look primary shares around 62 million, I think the diluted would really look at, if you add it in the preferred shares that are outstanding and that gets you to about 71 million shares.

Our next question comes from Ed White with FBR and Company. Your line is now open.

Hi. Thanks for taking my question. So you're going to have some preclinical data out, I was just wondering at AACR, are you expecting to have anything at ASCO this year?

Hi, Ed. Thank you for your question. We have publicly announced that we will plan on putting our LN-144 clinical data out in an upcoming scientific conference during 2017. So definitely we are planning on that and at the same time, as more non-clinical data become available, we are putting them out, the first of which is in AACR.

Okay. And then just my other question is on other INDs for 2017 or perhaps 2018, if you just talk about, are you looking to expand into bladder, lung and breast in this year or maybe next year?

We have definitely been looking at other indications and we are very encouraged by potential possibility of using TIL and other indication. There are other plans in the work for even 2017 for us to possibly initiate additional indications either through company sponsored or collaboration.

Okay. And then just if you could comment on the status of the combo trial with AstraZeneca’s checkpoint inhibitor. That’s all I have. Thank you.

Sure. Absolutely. We have a collaboration with AstraZeneca regarding [indiscernible] combination. The preclinical component of that collaboration has been very active and we have been exchanging data between two partners. As for the clinical study, we expect to start something in 2017.

Our next question comes from Biren Amin with Jefferies. Your line is open.

Yeah. Thanks for taking my questions. Just I guess on the 144 Phase 2 trial, how many patients would your enroll in each of the cohorts that you're - you would initiate this year.

Sure. Hi, Biren. Thank you for taking the call and the question. Definitely, the study has expanded to three cohorts. Cohorts A and B, cohort A will continue enrollment of the fresh product and that’s 20 patients as it was before. Cohort B will be using cryo [ph] product and that’s 20 patients. And cohort C will allow for a retreatment should the patient or the physician want to or patients from cohorts A or B. So it is going to exceed cohort study, but the total sample size remains at 40. It is going from 20 to 40.

Got it. And then on the retreatment criteria, do the patients have to respond initially and then progress to be eligible for this retreatment?

Hi. This is Steve Fischkoff. No, they don’t. They could elect to try again if they don't respond or they could elect to go back on the cohort if they had a nice response and they progressed in which to try again. So we've really left it open for a lot of different experiences.

And then, are any of these datasets going to be available this year as far as the original cohort?

We do expect that we would initiate enrollment into our cohort 2 this year. I think the data for LN-144 and typically as we've talked about before, they mature over time. So I’m not entirely sure if you’re going to have all the detail provided on cohort 2, but certainly some data from cohort 1 will become available.

Our next question is from Mark Breidenbach with ROTH Capital. Your line is now open.

Hi, guys. Thanks for taking the question. Just a quick one on the new manufacturing process, both manufacturing with a shorter turnaround time and also using new manufacturing facilities, can you just give us an idea of what metrics or criteria you're looking at to sort of guarantee product equivalent between the different sites and also using the shortened manufacturing process? Thank you.

Sure. So there is a number of different metrics that we look at. When we go from one manufacturing facility to the other, of course, there's a lot of similar wages, similar equipment, we make sure of that and we go through a process of qualifying a facility before we use them at all. So that aspect is something that’s fairly standard when you go from one supposedly to the next. I think the second part of your questions is an excellent one, which is what kind of cell based assays do we use in order to assure these cells are the same, the products are the same. I would like to ask Mike Lotze comment about the spectrum of the assay that we use to show equivalency.

This is Michael Lotze. We use a number of both cell based and serologic assays to show that there is equivalence between our two planned cohort studies and the cells that we manufacture. This includes rather conventional ones, including cytotoxicity and other factor functions, including cytokine release, but it also concludes more detailed studies, so cellular metabolism as well as studies of a broad panel plate of both [indiscernible] and intrinsic factors in the individual cells. Finally, we also use a typing of the individual T-cell receptor uses, so that we can show that there's a full and broad range of T-cells in the repertoire that are being administered and we've seen comparability in those kinds of studies. Does that answer your question?

Yeah. Thanks for that clarification Thanks a lot.

Our next question is from Gbola Amusa with Chardan. Your line is now open.

Good afternoon. This is Madhu Kumar on for Gbola. Couple of questions. First on the LN-145 program, are you performing selection on HPV antigens?

Are you asking whether we’re selecting patients based on HPV antigen or you’re asking are we conducting them?

Are you selecting, the original Rosenberg studies with HPV involved - some selection on HPV E6 and E7. And so I was wondering if there's going to be any kind of selection of details on reactivity to E6 and E7?

There is not planned to be any in the initial trial.

Okay. Cool. Also in the 144 Phase 2, are you guys measuring PD-L1 in the tumors?

So we currently measure a variety of different attributes in the tumors, including their mutational profile. This includes identifying a whole series of novel mutations, epitope generating, but it also involves expression of a variety of different markers, including the exhaustion markers that you were talking about, PD-L1 or the drive exhaustion, PD-L1 and PD-L2.

Look, I’d like to just add one other comment, because I think it’s a really great you’re asking. The patient selection as Steve noted, the selection is not based on HPV positivity, but retrospectively, we plan on going back and assuring that we understand the landscape of the patient in terms of E6 or E7 presence. So it is going to be used as sort of a biomarker. It's not prospective. It's retrospective.

Okay. And then thinking about the process development you guys have done in the last few months, how do you understand the - what are your thoughts like, what is your understanding of the antigen complex to be at the beginning of the TIL amplification process and the end, how much of that multi-antigen complexity gets maintained through that IL2 expansion process?

That's a really good question. In fact, we think that's one of the things that distinguishes TIL from other kinds of single target specificities and so in our prosecution, we've seen 70 to 100 different targets for as many as 300 to almost 1000 targets, many of which are representative and literally tens to hundreds of T-cell types and so the answer is that the genomic instability of the tumor associated with the neoepitope generation is what we think TIL has actually recognized. And so our process, both through the initial expansion and the so-called rapid expansion protocol has been confirmed to capture this kind of broad repertoire of T-cells capable of recognizing the tumor.

[Operator Instructions] At this time, I'm showing no further questions. I would like to turn the call back over to Ms. Maria Fardis for closing remarks.

Thank you so much. I would like to thank you for joining us today for our first quarterly call. This is our second quarterly call. We plan to continue to utilize these quarterly calls to keep you informed of our progress throughout the year. Thank you very much. Have a great evening.

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may now disconnect. Everyone, have a great day.