Lite Strategy, Inc. (LITS) Q4 2019 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the MEI Pharma 2019 Fiscal Year-End Conference Call. Please be advised that this conference call is being recorded at the company's request. Later we will conduct a question-and-answer session. [Operator Instructions] At this time, I would like to turn the call over to Mr. David Walsey, MEI's Vice President, Investor Relations and Corporate Communications. Please proceed.

Thank you. Good afternoon, everyone, and thank you for joining us. After the market closed today, we filed our Form 10-K for the fiscal year ended June 30, 2019, with the Securities and Exchange Commission and issued our financial results and corporate highlights press release, both of which are available in the Investors section of our website at www.meipharma.com. On our call today, we will provide a summary of financials from the fiscal year ended June 30, 2019, and then review progress in our programs and business over the last year. We'll then open the call up to your questions. Before we get started, I want to call your attention to the fact that this conference call may contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in any forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties as discussed in our SEC filings, including our most recent annual report on Form 10-K filed earlier today. A replay of this call will be available on our website approximately an hour after its conclusion. I'd now like to introduce you to our speakers for today. With me are Dan Gold, our President and Chief Executive Officer; Brian Drazba, our Chief Financial Officer and David Urso, our Chief Operating Officer. Additionally, Richard Ghalie, our Senior Vice President of Clinical Development; and Karen Potts, our Senior Vice President of Regulatory Affairs are also with us today. Brian will start with a summary of our financial results, after which Dan and David will provide remarks. After that we'll open the line for your questions. I'll now turn the call over to Brian.

Thank you, David. I'll provide a brief overview of our financial results. For more detailed information regarding our results, I invite you to review our form 10-K, that was filed earlier today. I'm pleased to report that we finish the year with $79.8 million in cash, cash equivalents, short-term investments and common stock proceeds receivable with no outstanding debt. Additionally, for the year ended June 30, cash used it operations was $39.4 million, compared to $21 million last year. Research and development expenses were $32.3 million for the year ended, compared to $17 million last year. The increase was primarily related to increased activities, and all clinical programs, including development costs associated with ME401, and voruciclib. General and administrative expenses were $14.6 million for the year, compared to $9.8 million last year. The increase primarily relates to professional services expenses, share-based compensation, and general corporate expenses. We recognized revenues of $4.9 million for the year ended June 30, compared to $1.6 million for the year ended 30 last year. Revenues resulted from the recognition of fees allocated to research and the development activities related to the Helsinn and Kyowa Kirin license agreements. Revenue increased due to higher levels of research and development activities during this year. Net loss was $16.8 million or $0.24 per share for the fiscal year ended, compared to a net loss of $40.1 million or $0.97 per share for 2018. The company had 73.5 million shares of common stock outstanding at June 30, 2019, compared with 70.4 million shares at June 30, 2018. The adjusted net loss for the fiscal year ended June 30, 2019, excluding non-cash expenses related to changes in the fair value of warrants issued in connection with the May 2000 financing, a non-GAAP measure was $44.5 million. In summary, we started fiscal year 2020 in the strong position to continue advancing our programs. With that, I'll turn the call over to Dan.

Thanks, Brian. And thanks everyone for joining us this afternoon. Over the last year, we've executed on a straightforward purposeful strategy to advance our pipeline of four clinical stage oncology candidates, while building a strong foundation to deliver value to our stakeholders, and importantly, to continue our ultimate mission of delivering patient benefit beyond what is currently achieved through existing therapies. As I go through my prepared remarks, I'll update you on each of our programs, including the upcoming milestones and plans for the next few quarters. Let's start with ME-401 which we believe based on the clinical evidence so far is emerging as the potential best in class PI3 delta inhibitor for the treatment of B-cell malignancies. Please recall that we have two ongoing studies, a Phase 2 clinical trial evaluating patients with relapse to refractory follicular lymphoma intended to support a strategy for an accelerated approval of a marketing application with the FDA, as well as a Phase 1b study that currently is evaluating ME-401 primarily in combination with agents such as Rituxan or zanubrutinib an investigational BTK inhibitor being developed by Beijing. PI3 delta inhibitors are clinically validated for the treatment of B-cell malignancies. This is not surprising given that PI3 delta is found at the crossroads of several B-cell signaling pathways. And as such PI3 delta is a target for treating B-cell disease in general, hold significant potential that matches and I believe may actually exceed the potential of other drug classes targeting these other B-cell pathways, even the BTK inhibitors. However, historically, PI3 delta inhibitor class has been challenged by those limiting toxicities, restricting their clinical utility. This presents an opportunity for the development of a next generation candidate with pharmaceutical properties that can better maximize the biologic potential of PI3 delta inhibition, while limiting toxic studies that hinder their clinical utility. With ME-401, we believe we have the opportunity to open a new chapter in the utility of PI3 delta inhibitors, particularly in combination with other therapies to treat B-cell malignancies. This is in large part because of the unique molecular structure of ME-401 that results in pharmacodynamic characteristics which are distinct from FDA approved delta inhibitors, and others in development. ME-401 is characterized by prolonged target binding, preferential cellular accumulation, significant distribution throughout the body tissues and a 28 hour half-life suitable for once daily oral administration. We believe these attributes are important to the potential differentiation and clinical utility within the class of PI3K inhibitors. Specifically, we believe ME-401's properties allow exploration of flexible dosing regimens, such as in an intermittent dosing schedule, which has the potential to maintain clinical benefit, while minimizing immune related toxicities common to the other PI3 delta agents, either as a monotherapy or in combination with other therapies or investigational agents. On the intermittent schedule ME-401 is administered once daily for two cycles or eight weeks, followed by administration once daily for the first seven days of a 28 day cycle, followed by 21 days of placebo versus the continuous schedule where 401 is administered daily. Based on the maturation of our data today, which now includes over 100 patients treated with ME-401 either on the continuous or intermittent schedules, we believe there's strong evidence for this view of ME-401 as a potentially differentiated next generation PI3 delta inhibitors. Recently, we presented data at the ASCO 2019 and ICML 2019 meetings, demonstrating that follicular and CLL patients on the intermittent schedule achieved an overall response rate similar to that in patients on the continuous schedule, but with nearly a two-thirds reduction in the adverse events of special interest, such as diarrhea and colitis to levels of 10% or less. This highlights the importance of the intermittent dosing schedules a key part of this development program. And we believe a key factor in the emerging clinical profile is observed in the ASCO and ICML data. In this data, we see strong clinical support for the intermittent schedule, consistent with a scientific basis for PI3K delta as an important B-cell target and the rationale for the intermittent dosing schedule that being intermittent schedule provide sufficient delta inhibition in B-cell tumors, while potentially allowing the recovery of T-regulatory cells, the likely catalyst for the adverse events of special interest in the periphery. Based on these data around the beginning of calendar 2019, we initiated a Phase 2 clinical trial evaluating ME-401 as monotherapy for the treatment of adults with relapse to refractory follicular lymphoma after failure of at least two prior systemic therapies, including chemotherapy and anti CD20 antibody. We intend to submit the results to support an accelerated approval of a marketing application with the FDA. We anticipate completing enrollment in this trial sometime around this time next year. The Phase 2 is evaluating both the continuous and intermittent dosing regimens. Approximately 166 patients will be randomized in the trial and the primary efficacy endpoint will be the rate of the objective response to therapy. The Phase 2 study represents an opportunity for an expedited regulatory path to marketing approval for third line follicular lymphoma through the FDA is accelerated approval mechanism. While third line follicular lymphoma represents an important opportunity to meet an unmet medical need and is attracted commercially, we are targeting a broader opportunity. As such in the Phase 1b study, we are continuing to further explore the intermittent schedule as part of a combination approach for the treatment of other B-cell malignancy indications. David Urso, our Chief Operating Officer, who leads our business development efforts will speak to some of our work around these combination treatments with ME-401 since they are related to the expanded opportunity and our strategic partnering activities over the last year and our plans moving forward. And with that, I'll turn it over to David.

Thanks, Dan. As Dan mentioned, the Phase 1b is ongoing and of particular interest to our programs clinical and commercial value or potential combinations of ME-401 with other therapies. To that end, the Phase 1b has already evaluated ME-401 in combination rituximab, this arm was primarily to evaluate safety since general -- since in general, the patients in the study were rituximab experienced. As presented in June of this year at ICML, we observed no change in the safety profile with the combination compared to monotherapy with ME-401 and again a very high response rate. In a second arm of the 1b study, we are evaluating the safety and efficacy of ME-401 in combination with zanubrutinib, an investigational BTK inhibitor being developed by our partner BeiGene. This is being done under collaboration finalized with BeiGene in October of 2018. This arm of the study is evaluating the combination in patients with mental cell lymphoma, diffuse large B cell lymphoma, and second line follicular lymphoma. The cost of the combination trial is being equally shared with BeiGene, with each company supplying its own compound. We retain all commercial rights to ME-401, and BeiGene retains all commercial rights to zanubrutinib. The collaboration with BeiGene is an example of our efforts to be mindful of deploying resources efficiently and to make decisions to develop and commercialize our drug candidate strategically, either independently or via partnerships to most effectively leverage the potential of our candidates and resources. In this past year, we also license Japanese rights to ME-401 to Kyowa Kirin Company in a transaction completed last October. This is another example from the recently completed fiscal year of a strategic transaction that effectively leverages the partner's resource, while advancing the development of one of our candidates. As we continue to develop ME-401 as a next generation PI3K delta inhibitor, we believe that there is significant potential to treat a range of B-cell malignancies in combination with other therapies, including not only rituximab, and BTK inhibitors like zanubrutinib, but also BCL-2 inhibitors, such as venetoclax and potentially agents with other mechanisms of action as well. Where practical, we are exploring additional clinical collaborations to advance evaluation of combinations of ME-401 and other agents in various B-cell malignancies. We anticipate having an update on the zanubrutinib combination potentially around mid-2020. And we will also look forward two other opportunities to update on Phase 1b data, as it matures including publication of the data in a peer reviewed journal. In short, taking a combination approach to development across multiple B-cell indications may open opportunities in earlier lines of treatment for follicular lymphoma as well as opportunities to treat select significant addressable markets, with unmet medical needs in multiple treatment paradigms, including CLL, SLL, mantle cell lymphoma, marginal zone lymphoma , and DL, BCL. Overall we estimate the addressable markets in these B-cell malignancies represents roughly 50,000 patients in the United States. We also see this program as an opportunity for MEI to transition to a commercial organization either independently or via relationship with a strategic partner. While the nature of the indications allows MEI to pursue commercialization independently, we believe there may be value and strategic benefits to partnering. To that end, we have regular discussions with potential strategic partners. We're pursuing opportunities and avenues of development and commercialization both independently and with partners that we believe will best build the clinical utility of ME-401 for patients and realize value for MEI stakeholders. I’ll now turn the call back to Dan, to review our other three clinical programs. Dan?

Thanks, David. I'd now like to update you on our remaining programs starting with our CDK inhibitor voruciclib. Another exciting program that we believe has tremendous potential to improve on existing treatments for B-cell malignancies, and AML. Particularly in combination setting with venetoclax an FDA approved BCL II inhibitor. Voruciclib is an orally available CDK inhibitor differentiated by potent inhibition of CDK9 in addition to CDK6, 4 and 1. As you may know, CDK9 in regulates the myeloid leukemia cell differentiation protein or MCL-1, a member of the family of anti-apoptotic proteins, which when elevated may prevent cells from undergoing cell death. Inhibition of CDK9 blocks the production of MCL-1, which is an established resistance mechanism to the BCL-2 inhibitor, venetoclax. CDK9 also regulates MYC, a transcription factor regulating cell proliferation and growth, which contributes to many human cancers and is frequently associated with poor prognosis and unfavorable patient survival. Last year at ASH in 2018, we presented preclinical data demonstrating that voruciclib synergizes with venetoclax to induce apop doses in both venetoclax sensitive and resistant AML cells and cell lines. The preclinical data further demonstrate that voruciclib transiently down regulates MCL-1, and that MCL-1 down regulation is likely responsible for much of the synergy seen with voruciclib and venetoclax. These data add to earlier studies demonstrating voruciclib dose dependent suppresses MCL-1 and that the combination of voruciclib, and venetoclax was capable of inhibiting MCL-1 and BCL-2 and achieve synergistic anti-tumor efficacy in other B-cell malignancies, including aggressive subsets of DLBCL in preclinical models. Currently, we are evaluating patients with hematologic malignancies in a dose ranging Phase I clinical trial of a voruciclib in which we started treating patients this past year. The trial is initially intended to evaluate voruciclib primarily for safety as a monotherapy in patients with relapse to refractory B-cell malignancies or AML after failure of prior standard therapy. In parallel, we have submitted an amended protocol to the FDA to evaluate voruciclib in combination with venetoclax to confirm the synergies and the opportunity for combination treatments across multiple indications. We look forward to updating you on this program, likely around a medical meeting in the first half the calendar year 2020. Next up is ME-344 our novel and tumor selective mitochondrial inhibitor targeting the oxidative phosphorylation complex in the mitochondria. As reported at ASCO 2019. ME-344 recently completed a multi-centered investigator initiated randomized open label clinical trial evaluating the combination of ME-344 and the VEGF inhibitor bevacizumab or Avastin much easier to say in 42 patients with early HER2-negative breast cancer. Patients were randomized one-to-one to receive either ME-344 in combination with Avastin or saline in combination with Avastin. This study was designed based on the observation that while anti-angiogenics like Avastin or the small molecule kinase inhibitors are able to reduce the rate of glycolisis in tumors as a mechanism to block cell growth. Tumor metabolism will shift to mitochondria metabolism to continue energy production and support continue tumor proliferation. In such cases of tumor plasticity, in the presence of treatment of anti-angiogenics, it was hypothesize that simultaneously targeting the alternative medical source with metabolic source with ME-344 may open an important therapeutic opportunity. The primary objective of the trial was to show proof of ME-344 biologic activity as measured by Ki67 reductions, a measure of cell proliferation that is highly correlated with tumor response. The data from this study demonstrate significant biologic activity in the ME-344 treated group as measured by the main relative KI 67 reduction compared to patients from the Avastin monotherapy group. Treatment was generally well tolerated there were just two grade three adverse events of high blood pressure, one in each arm. The next step for ME-344 is to evaluate it in combination with an anti-angiogenic and look at more meaningful clinical endpoints. This is a very exciting tumors metabolism approach and program and we are evaluating the best path forward including the potential for collaboration. Now, moving to our final and fourth clinical candidate pracinostat, the oral HDAC inhibit are being evaluated in a pivotal Phase 3 global registration clinical trial for the treatment of adults with newly diagnosed AML who are unfit to receive intensive chemotherapy. Pracinostat is also being evaluated in a Phase 2 trial in patients with high or very high risk MDS. Recall, we received breakthrough designation from the FDA in 2016 for pracinostat in the treatment of AML. And in January 2018, the EMA granted orphan drug designation also for the treatment of AML. Pracinostat is fully partnered under an exclusive worldwide licensed development, manufacturing, commercialization agreement with Helsinn Healthcare. Helsinn is primarily responsible for funding global development and commercialization costs for pracinostat. We are responsible for conducting the Phase 2 MDS trial, the cost of which is being shared equally with Helsinn. Upon successful completion of the Phase 2 study all future development and commercialization costs will be the responsibility of health. The Phase 2 study completed enrollment earlier this year, and patients are now being followed for survival. The data from this study are encouraging and in discussions with our partner Helsinn we are targeting to report 12 months survival data possibly at a medical meeting in the first half of calendar 2020 after we have 12 month follow up on every patient. In summary, we are very encouraged with the progress we've made over this last year. We have a diverse clinical stage pipeline, we have two candidates in global studies to support marketing authorization pipeline that we expect to continue to generate exciting data over the coming quarters and a healthy balance sheet. We are in a strong position to continue building value for our shareholders as we work diligently to advance our clinical candidates towards approval for patients. With that update, I think we're now ready for question. Operator, could you open the line to questions please?

Yes, thank you. We will now begin to question and answer session. [Operator Instructions] The first question the queue comes from Tom Shrader with BTIG. Please proceed.

Good afternoon, everybody. Thanks for holding the call. I just had a little bit of a philosophical question about the zanubrutinib combinations. Just your thought process there this drug is neither is a simple drug to dose. Do you think you're back to square one with dosing your drug or you’re only interested if you can sort of use what you've learned in the intermediate dosing. Just your thoughts about where that stands in dosing. And similarly, your thoughts on the diseases, you gave a list of diseases, which CLL isn't on, which I find interesting, and I just love to get your thoughts.

Yes, thanks. Good questions, about the dosing, so we feel from the safety profile of the drugs that were starting at the recommended Phase 2 dose of both agents. We had a lot of discussions with BeiGene about this, and we both felt there was no reason to go down. We have the option, of course, to go down and there are always dose modification predefined in the protocol. The first part of the study actually is and it is fully enrolled now is specifically addresses your question about the safety we're looking at to make sure there are no issues with that. And we should know that answer relatively soon. And assuming that that is the case, we will then proceed to doing the dose expansion cohorts that David mentioned in his remarks. You are correct. We specifically at this time are not looking at CLL. That doesn't mean that isn't a target for us in the future. I think, this question may come up in with others. CLL is an interesting disease that we've given a lot of thought to, as you know, Tom our response rate with 401 is extraordinarily high. We have 100% response rate so far. CLL is not one of those diseases where there's a lot of wide space currently, it is very well served by the BTK inhibitors ibrutinib as a model. And as such, we felt that it would probably be difficult to discern in a timely fashion an effect of the combination because you really then looking at prolong progression free survival endpoint or MRD negative activity and therefore, we decided to look at the other indications where BTK has some indication of activity, although not as strong as it does in CLL. That said, of course, if it turns out that there is good indication in some of the other indications that the combination is potent, we obviously could revisit CLL, but I think, with the data that have been presented most recently at ASH and ASCO with various BTKs. It would be a very long protracted, development plan to look at especially in a front line or second line setting with the combination.

All right. And just to make sure I got you this first cohort with the BeiGene drug, that's we really should be looking for efficacy there that's designed to the inactive combination?

Yes, totally. Yes, absolutely. It's just -- for the first I think does half dozen patients where it was really a quick look at safety, to make sure there's no acute safety issues in the first month and then we will do the expansion cohorts and it is a efficacy as well. Yes.

All right. Great. Thank you.

Just to finish up on the CLL, as BTK -- this is David. As BTK gets used more and more up front, we do think that in the future. There is a place to play with BTK progression, whether as a single agent or potentially in combination with venetoclax.

Okay, great.

Okay, the next question in the queue comes from Peter Lawson with SunTrust. Your line is open, please proceed.

Hi, everyone. Congrats on the progress this quarter. This is Nen Bo [ph] on for Peter Lawson. Just really quick I might have miss this, can we expect an update from 401 around December or ASH time this year? And so how many more patients do you think we may get?

Yes, hi, Nim. I think there -- because we have been putting all of our efforts in the registration study or the accelerated approval intended study. We -- any patient who would have typically been enrolled in the Phase 1 being for follicular for relapse refractory follicular were encouraging going on to the registration. So we really don't have a lot more, we tend not to want to just continue to dribble out information. So, I think for this upcoming ASH, there won't be any significant updates in the patients that we’ve reported on. I mean, we kind of had a pretty comprehensive response rate update at ASCO and ICML, the only thing that would be new would be continued look at the duration of those responses. And I think we're going to probably -- the thinking is right now we might incorporate that into a manuscript rather than continuing to just dribble out new information -- in small amount of new information.

Great, thank you guys. It's helpful. And then, I guess around the registration policies to with enrollment expected to be complete around sometime next year. Are you waiting for all the patients have six months follow-up before presenting the data sort of early 2020? And then the filing early 2020 and then -- in early 2021 and then filing afterwards?

Compound question there, yes. So working backwards, the intention is to file sometime late 2021. In terms of the data presentation, recall this is being run as a blinded study, the patients don't -- they know that they're receiving continual dosing for the first two cycles and then they've been already randomized and they're receiving blinded drug from that on either on the interned and the continuous schedule. So the only data that we would know for sure would be after two months of -- the response rates at two months. And then whatever blended response rates only from the investigators, this will be done by independent radiology, as well. So, the -- whether we will talk about the two month dose response rates or not, we haven't decided that yet. But you're correct, that once the last patient is in and has a two month evaluation, it would be a six month clock from there before we would report top line data.

I agree. I guess, last question, well followed your own thoughts and looking into possible combinations, can we expect initiation of a new combo arm in sometime this year or anytime soon then?

Yes, so, I think as David was alluding to currently we're exploring -- we've explored Rituxan and as we've mentioned that was primarily a safety question and the responses are very good, because we're dealing with a drug that has very high responses anyway. The zanubrutinib is really the one we're focusing on right now. And as David alluded to, we have received interest from investigators to consider looking at combinations with venetoclax, and we're looking at that very carefully. If we decide to go down that road, it probably wouldn't be a 2019 it probably be more in the early 2020 timeframe just because once we've made the decision to write the protocol and get it to the FDA and all that good stuff, takes some time. So, I think, I wouldn't look for new combination studies starting this year, but quite possibly at the beginning of next year.

Great, thank you so much for taking my questions. I’ll get back in the queue, thank you.

Okay, the next question in the queue comes from Stephen Willey with Stifel. Your line is open, sir.

Good afternoon. Thanks for taking the questions. Dan, I was just wondering if you could maybe speak a little bit to enrollment within the Phase 2 registration right now. And kind of what the 12 month guide is currently contemplating with respect to any additional sites that need to be either open and activated? I guess, whether or not there's any kind of legal room built into that guidance to accommodate some of the other competitive therapies that now seem to be moving into the end of the stage as well?

Yes. Good question, Steve. So, first off, I'll just say, just flat out, we will not be giving regular enrollment updates. It's a slippery slope. And we just decided we're not going to go down there. We've spent a lot of time since we decided -- since we had our discussion with the agency and got the blessing. And to initiate this study, we've done a lot of work with the CRO and the sites in evaluating their patient turnovers, their expected enrollment, and based on everything they say, just like my golf score scratch, right. They always overestimate the number of patients. So we discounted that and we came up with a calculation that we needed to open about a 100 sites internationally. And that is what our goal is, we're well on our way to doing that. And based on that calculation, we feel that currently from where we sit and what we've said that sometime mid-year to around now we should be able to enroll the 166 patients that we've said we would. In terms of wiggle room, there's no wiggle room until there is wiggle room. Well, if it looks like we're falling far short, we will update this you as appropriate, but from where we're sitting now with the pace of opening sites and the pace of enrollment, I think we're still comfortable with making that guidance. And as I said, if that should change we’ll let you know.

Okay, that's actually helpful commentary. And just with respect to the discussion regarding 401 partnering, it sounds like you guys are kind of still evaluating a strategy to go forward there. And presumably any strategy probably incorporate some level of an ex-U.S. partner. Have you guys given any additional thoughts to what a EU registration whole strategy looks like at this point for 401, just any commentary around what trial design there might look like in terms of supporting the Phase 2 sample?

Yes, as far as the -- this is David. As far as the partnering strategy goes, we're thinking about regional strategies as well as a global partner. And the go at alone scenario. Obviously, we don't have the capability to commercialize the drug ex-U.S. I think our preferred partnering strategy would be to have one global partner if we go down that route. And do -- I think we've talked about this before, co-promotional arrangement where we have profit and loss sharing in United States. And then basically just milestones or royalties outside of the United States and let the partner do the heavy lifting on the whatever incremental development there might be ex-U.S. and certainly the commercialization.

And in terms of the EU strategy, I think we're currently -- obviously since we're going down accelerated path, we have to be already planning or considering planning our confirmatory strategy. And we've kicked around a lot of things. We've bounced them off of a lot of our advisors. We are having an important discussion with our steering committee shortly and I think at that point, we will have as much clarity as we can and how we're going to proceed in Phase 3. I mean, I think the choices are obviously limited based on what's approved and what's used in second line follicular, obviously, it will incorporate some sort of a CD20 treatment. That's why we did the Rituxan arm just to be sure. And then the question is it a doublet, triplet or is it other potential combinations. And I think we will have a lot more -- we'll be able to say a lot more to that in the coming months, but right now, I think it's fairly obvious what the possibilities are. And we're exploring all of them both from medical feasibility as well as truly just operational feasibility in terms of which combinations would be more or less received by the investigators.

Okay, that's helpful. And then just for clarification, on the voruciclib update, I think you mentioned that there's a chance we could see some data first half off in 2020 at a medical meeting. Is that the dose ranging monotherapy results that we could see? And I have another question.

Yes. I think that obviously, since that trials been up and running, that would be the most data we have in terms of the monotherapy. And hopefully we'll start to get some early looks at the combination certainly in terms of safety and PK and that kind of stuff. But in terms of efficacy, I think, it would be a stretch to imagine we'd have something within the next six to nine months.

Okay. And then are there monotherapy expansion cohorts that are specified in the Phase 1 or is this just still follow dose ranging [indiscernible]?

I'll let Richard. Yes, I'll let Richard answer that.

Yes, Steve. It's following the dose escalation, the protocol contemplates expansion cohort in B-cell malignancies. And we have specific B-cell malignancies that are described as well as in AML where we could also look at monotherapy and all the combination with venetoclax.

Steve, I think that from -- our -- we would love to be surprised that we get a very good monotherapy response. And obviously, if we do, we would go running with that very quickly. The -- when we acquired this age and when we developed, we looked at the development plans for it, we really felt like just like the CDK4, 6 is in breast cancer, the monotherapy effects are not nearly as high at the combinations. So I think that's really sort of what our focuses but we would love to be wrong.

Okay. And should we assume that you guys would have announced that there's been a dose declared for dose expansion purposes within the trial or?

Yes. I mean, in the future, you mean?

Yes, correct.

Yes. Absolutely. Yes.

Okay.

Once we're still doing the dose escalation for safety and looking for hints of efficacy, if there are any.

Okay. Thanks for taking the questions, guys.

Sure.

Thank you. The next question comes from Yale Jen with Laidlaw & Company. Your line is open. Please proceed.

Good afternoon, and thanks for taking the questions. Just first one to be clear that the 401 combination with BTK. Is that in the intermittent dosing, even dose ranging or it's a continuous dosing?

Yes, Yale. Hi. All of our combination work is done in the intermittent schedule.

Okay, great. That's very helpful. One other question is about the pracinostat in AML, is that anticipate the patient recruitment could be completed by end of this year?

I am going to let Richard handle that.

Helsinn who was running this study is not making any public statements on what it is. But, the intent is to complete enrollment in the next 12 months, I would say that's based on my best judgment based on what I'm seeing the study. But again, there is no public information made from Helsinn on that completion of enrollment.

Okay, that's fine. And would you guys in this call giving any kind of financial guidance in terms of the next fiscal years, sort of a top line may be a little bit on the bottom line type of suggestion?

Right. So yes, we typically don't make forward looking statements beyond a year and we clearly have more than enough cash, a year's worth cash. You can see pretty consistently over the past several quarters going back a year or more that our burn is fairly consistent somewhere between $9 million to $11 million per quarter. And it's just hard because it all depends on the clinical activities we had ongoing. We've had a lot of clinical activity that's slowing down. And now with the registration study, we have more new clinical activity. So it's a little hard to judge from quarter-to-quarter, but I think, historically we've been in that $10 million per quarter, and that's about as best as we're -- that we're willing to speculate on.

Okay, that's helpful. And maybe final one is for 344. I know, you mentioned that you will continue -- you will provide more colors in terms of the future development, but could you just give us a general framework as how you think about next sets of development might be?

Yes, Yale, we really love this drug. The data that we presented at ASCO -- that were presented at ASCO was very encouraging. I mean it’s the combination of several years of a lot of hard work and trying to understand how this drug could be best used. And it does appear that the hypothesis driven study was fulfilled that if you block one source of energy, the tumors in-vivo will use the other source interchangeably, and that the only true way of getting a tumor metabolism is to block both avenues. We, over the years given a lot of thought on how to best develop this drug and I think with the anti-angiogenic, we're really looking at spaces where these drugs have been shown to have activity that obviously is less than optimal, and there's still a lot of space. We -- our preclinical work that was done in Spain was actually done both with -- mostly with the small molecule. So the tyrosine kinase receptor inhibitors, and I think -- so we're looking at the whole gamut of what's possible. There are clearly advantages with an antibody like Avastin compared to the small molecules, and a context in which they're used with or without chemotherapy. So there's a lot of moving parts that we're trying to get our arms around. And as we've said, we would ideally like to do it with a potential collaboration with another entity that has one of these agents, whether it's small molecule or antibody, so we can really best explore the full potential of the combination. So right now we're really focusing our energy and resources on 401 and voruciclib for the most part, but that's not to say that we're ignoring 344. We're just trying to really understand where the opportunities are and what our partners potential collapse would have interest, as well.

Okay, great. Thanks a lot that’s a lot of the details and appreciate the -- providing the call as well.

Sure, Yale. Nice to talk to you.

The next question in the queue comes from Jim Birchenough with Wells Fargo. Your line is open, please proceed.

Good afternoon. Its Nick, on for Jim this afternoon. The first question on cash run rate. So is the good aspiration of a 401 partnership to extend the cash run rate beyond data readout which is mid-2021?

I mean, I don't think that's the rationale for doing the deal. The rationale for doing the deal is to optimize the development leverage resources of a bigger partner so that we can go broader within B-cell malignancies and potentially have more muscle behind a launch, that would be the rationale for the partnership. I mean, obviously there would be an upfront payment there would have none to little capital in it if we did a deal like that.

So yes and yes.

And then…

I mean, Nick, I don't mean to be facetious. I think the -- we always look at what's really best in the long run for the company for the shareholders. And, if bringing in non-dilutive cash and a powerhouse partner would be much better in the long-term, we would definitely do that. And if we don't think there's a good deal, then we would look at other sources of capital, but we always take this very seriously. We're not trying -- I'm not trying to make a joke and neither is David. We always look at it -- both aspects very carefully.

I mean, one time I think you talked about opening some 20 patient Rituxan 401 combinations. Is that still part of the plan or is that sort of shifted now more towards zanubrutinib?

Well, I think we've pretty much done that, Nick. We've…

[Indiscernible].

Yes, we've kind of completed our valuation. As we've said before, and I think to echo what our investigators said to us as guys you're working with a drug that showing you 80% response rates, what do you expect to see from an efficacy. What we really wanted to see was the safety aspect and we've kind of done that, I'm not sure if it's 15 or 20 patients that we've treated collectively, it's in that ballpark, we've not seen any safety issues. We see very high response rates. And now the question is, I think really the purpose getting to an earlier question, I think, from Steve was, how do you incorporate your thinking into confirmatory studies, and obviously CD-20 will be an important part of that. So, I think in terms of continuing down the road with CD-20 for right now, we've accomplished what we wanted to, we know it's safe, we know that the drugs work well together. And we will just incorporate that knowledge into future planning with various combinations, whether it's doublets or triplets down the road.

Okay, thanks. And then just the BeiGene agreement call it more advance studies. And would there be an opportunity, for example, that your studies in China that could really drive expansion, particularly in education such as CLL that are obviously challenging to…

Yes, so the original growth [ph] of the agreement is to -- part of the attractiveness of doing it was to be able to leverage the ongoing 1b study that we're conducting, so we just opened up another arm with a quick amendment to the study and we're in the same sites. Then if where we see a signal in one of those initial cohorts, I think then you would move forward into an accelerated approval study. And more than likely, that would be a global study. But we have to get back together with BeiGene and both strategize on how to execute that trial. But that's beyond the initial scope of our agreement.

Okay. And then just last one for me, in terms of voruciclib amendment. Is that expected to be a 30 day turnaround time from FDA?

Yes, the clock is ticking.

Okay, thanks a lot guys.

Sure, Nick.

Thank you. And the next question in the queue comes from Adam Evertts with LifeSci Capital. Your line is open. Please proceed.

Great. Hi, everyone. Just going back to the indication choice for the zanubrutinib arm of the Phase 1b. I think it seems clear why you're not including CLL, but maybe anything else you can say on why you chose mantle cell lymphoma DLBCL and second line follicular. Is it based on unmet need, feasible…

Did we lose Adam or operator we still on?

Adam, are you there? Sir?

Can you hear me

Yes. Yeah.

Hi, everyone.

Yes, I think we understood the question, Adam. So the rationale was really to look at settings where there is clear activity with the BTK and with a delta, but you could hopefully improve on them with the combination. So for mantle cell, for example, responses are quite good with the BTKs, but they're not as deep as they could be. And probably not as durable as you would like. DLBCL, clearly, there not nearly as good as one would expect. And I think the decision in particular and second line was to see if you could come up with a chemo alternative combination that was safe and rather durable. So we did put thought into each and every one of those indications. And it really was a question of looking at potential synergies where the agents had activity where it could be better, or perhaps providing clinical alternatives for physicians, where there is existing therapies, but that maybe you could replace the use of chemotherapy, as an example.

Great. And then I guess, considering zanubrutinib and 401 are both targeting proteins in the B-cell receptor pathway? Are we expecting, in terms of response rate, deepening of responses, more durable responses, both of those? What is the sort of baseline expectation there?

Yes, I think that you hit it on the head. The hope is that we'll get deeper and more durable responses. And I think, as we understand those pathways they do overlap, but they are distinct. So, PI3 signals to AKT. I think BTK, probably signals more through NF-kappaB. And so there are reasons to think that there should be activity or even synergies. Certainly, the preclinical work in the knockout might suggests that the double knockouts are much more depleted than either the single knockouts. So, I think there is reason to believe that the combination should be better than either the agents by themselves. And so we're clearly are looking for deeper, more durable responses. I mean, after all, I think it's important we hear the message loud and strong from a lot of investigators that they're looking for the ability to get their patients into a deep remission and stop treating them. Patients don't want to be treated forever. And that's really our goal too, because that's what we hear back from the community. And that's what our goal is, is to get these patients into a very deep durable remission and give them a break, let them go about their lives fruitfully. And so that is really what a lot of the motivation of trying these various combinations.

Great, thank you.

Thank you, sir. I'll turn the call back over to Mr. Dan gold for any closing remarks.

Thank you. Again, I just want to thank you all for joining us today. We're beginning our new fiscal year in a very strong position with a continuing record of success in our execution on the development programs in our business strategy. We look forward to reporting on our progress across our entire portfolio in the coming quarters. And wish you all the best in the waning days of the summer. Thanks again for joining.

Ladies and gentlemen. This concludes today's teleconference.