Good afternoon. We will begin the MacroGenics' 2019 Second Quarter Corporate Progress and Financial Results Conference Call in just a moment. All participants are in listen-only mode at the moment. And we will conduct a question-and-answer session at the conclusion of the call. At this point, I will turn the call over to Anna Krassowska, Vice President, Investor Relations and Corporate Communications of MacroGenics.

Thank you. Good afternoon and welcome to MacroGenics' conference call to discuss our second quarter 2019 financial and operational results. For anyone who has not had the chance to review our results, we issued a press release this afternoon outlining today's announcements, which is available under the Investors tab on our website at www.macrogenics.com. You can also listen to this conference call via webcast on our website, where it would be archived for 30 days beginning approximately two hours after the call is completed. I would like to alert listeners that today's discussion will include statements about the Company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual, quarterly and current reports filed with the SEC. In addition, any forward-looking statements represent only views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so as our views change, except to the extent required by applicable law. And now I'd like to turn the call over to Dr. Scott Koenig, MacroGenics' President and Chief Executive Officer.

Thank you, Anna. I'd like to welcome everyone participating via conference call and webcast today. Thank you for joining us. g We made significant progress during the first half of the year across our pipeline of nonclinical immuno-oncology product candidates and I will be providing a review of recent accomplishments as well as some upcoming events. But before I do so, let me first turn the call over to Jim Karrels, Senior Vice President and Chief Financial Officer, who will review our financial results for the quarter.

Thank you, Scott. This afternoon, MacroGenics reported its financial results for the quarter ended June 30, 2019 which highlight our financial position, as well as the progress we've made over the quarter. As described in our release, MacroGenics had research and development expense of $51.4 million for the quarter ended June 30, 2019 compared to $52 million for the quarter ended June 30, 2018. This decrease was due to decreased clinical trial costs as a result of completing enrollments of the margetuximab Phase 3 SOPHIA study as well as decreased manufacturing and development costs for flotetuzumab. These decreases were partially offset by increased clinical trial costs for g MGD013, in addition to increased development and manufacturing costs related to MGA012. We had general and administrative expenses of $12.1 million for the quarter ended June 30, 2019, compared to $11.1 million for the quarter ended June 30, 2018. This increase was primarily due to higher consulting expenses and other professional service fees. We recorded total revenue consisting primarily of revenue from collaborative agreements of $10.6 million for the quarter ended June 30, 2019, compared to $18.8 million for the quarter ended June 30, 2018. This decrease was primarily due to decreased revenue recognized under the collaboration and license agreement with Incyte during the second quarter of 2019 versus 2018, as well as a decrease of $6.1 million in revenue recognized under the license agreement and asset purchase agreement with Provention Bio during the second quarter of 2019 versus 2018. These decreases were partially offset by the recognition of $4 million of deferred revenue related to the upfront payment under the collaboration and license agreement with Zai Lab. We had a net loss of $31.8 million for the quarter ended June 30, 2019, compared to a net loss of $43.2 million for the quarter ended June 30, 2018. I will note that our net loss for the quarter ended June 30, 2019 included other income of $21.2 million, most of which related to the revaluation of warrants received from Provention Bio under the previously mentioned agreements. And finally, our cash, cash equivalents and marketable securities as of June 30, 2019 were $272.1 million compared to $232.9 million as of December 31, 2018. Our cash as of June 30, 2019, excludes $15 million from I-Mab Pharma, which we expect to receive during the third quarter. And now I'll turn the call back to Scott.

Thank you, Jim. Let's begin with margetuximab, our novel, investigational immune optimized anti-HER2 antibody, which has an Fc domain engineered to enhance engagement and activation of the immune system. We presented results from SOPHIA, a pivotal Phase 3 trial in HER2-positive metastatic breast cancer at ASCO in June. SOPHIA was designed to compare margetuximab plus chemotherapy against trastuzumab in chemotherapy. We’ve reported that progression-free survival in the margetuximab arm was prolonged compared to the trastuzumab arm meeting the study's first sequential primary endpoint. This study's second sequential primary endpoint is overall survival or OS. At ASCO we reported early OS data from the first pre-specified interim analysis conducted after 158 events have been reached in October 2018, showing a preliminary trend in OS in favor of margetuximab. Given the molecules mechanism of action of enhancing antitumor immune responses as well as insight gained from our earlier Phase 1 study, we remain hopeful that the preliminary survival trend in favor of margetuximab will continue. Although subsequent results could fluctuate as additional OS events accrue. We expect to conduct the second pre-specified interim analysis based on 270 OS events in the second half of this year. The final OS analysis is planned after 385 events have accrued and is projected to be completed in 2020. Notably we believe that this is the first randomized phase 3 study designed to examine the potential benefit of Fc modification and the role where Fc gamma receptor genotypes on antibody efficacy. As you all recall, patients carrying the CD16A, 158F allele, which represents approximately 85% of the human population has been reported to show diminished clinical responses to certain therapeutic antibodies including trastuzumab. The optimized Fc region of margetuximab binds with increased affinity to CD16A, including 158F low-affinity allele. In an exploratory subpopulation of patients in…

[Operator Instructions] The first question comes from Christopher Marai, Nomura. Your line is now open.

Hi. Good afternoon and thanks for taking the question. I guess, I was wondering, Scott, if you could help us understand a little bit about the plan for the B7-H3 by specific development. It looks like your deep prioritizing monotherapy development , but looking at in combination with your anti-PD-1, it is -- is that because you couldn't find a tolerable dose, at higher doses. I know you had some problems earlier with or two. Could you maybe explain how far you got along in dosing and are you seeing maybe up regulation of PDL-1 on the tumor, like you did with the, I guess for flotetuzumab. Thank you.

Christopher thanks so much for the questions. We are very excited about the prospects of our B7-H3 programs. Number one, let's start off with the enoblituzumab. The fact and matter of that, we saw exceptionally encouraging data in head and neck cancers and in lung cancers with enoblituzumab combined with an anti-PD-1. In that case we are using flotetuzumab, which we reported at SITC meeting led to our plans to move that program forward front-line setting in head and neck cancer. And as I discussed today, we had a very successful meeting with the FDA quite recently with regard to Phase 2/3 study in head and neck cancer in front-line where we will combine it with in part our own anti-PD-1 and look at potential combinations with chemotherapy. And as I said, we will provide more detail about the design later this year, we would expect to have that study starting early this year. So as a target, we think B7-H3 is a very important one and valuable one to pursue with the specifics with regard to the question on the DART bispecific. And as you know early this year, we had a partial hold on our monotherapy MGD009 molecule. We have a -- we did a very lengthy dose escalation study and have observed as we previously reported [indiscernible] abnormalities that we reported to the FDA, in which we were put on partial hold and results what we believe the main causes for that elevation of LFTs being associated with metastatic disease of the liver and cytokine release associated with that. We put forward a plan that would look at monotherapy, where we would prophylaxis patients initially with molecules to mitigate cytokine release. And we initiate those studies in most of those patients and simultaneously we continued on the…

Yes, that was helpful. I guess a follow-up thinking [multiple speakers]

And actually, Christopher let me introduce -- I didn't make the point as we reiterate that the MGCO18, our ADC for B7-H3 is moving along quite nicely as well and we are sort of in the middle dose range right now. We expect to complete the dose escalation [indiscernible] next year or so. Again, we will have more data on that as well.

Okay. You read my mind on that question. But just a follow-up maybe on some of the comments you made with respect to the combination in the prior CRS and metastatic lung disease to intox, one might suspect that the combination of anti-PD-1 would make potentially the CRS or liver toxicity even worse. Could you comment on the safety that you have seen so far in that combination study, given your new prophylaxis? And that’s all I got. Thank you.

Excellent question. Very encouraged, safety is looking good, obviously limited dataset. We will continue to dose more patients. We will also potentially explore even step ups in the dosing going forward. But we certainly are in a dose range that where we are seeing clinical activity in the combination. So as I said, let's take a look at this current dose potentially slightly higher doses and we'll make some decisions going forward, but as of now we are very encouraged with the data so far.

Thank you.

The next question comes from Jonathan Miller with Evercore. Your line is now open.

Hi, guys. Thanks for taking the question and congrats on a whole bunch of updates this quarter. Very nice to hear. I guess a couple of rapid fire ones. For the enoblituzumab registrational trial, you mentioned you're not going to give any details now, that's fine. Do you have an FDA -- or agreement with the FDA in place on the design? And then I guess on MGD013 will you say you're going to try and get Phase 1 data in the second half, is that possible that we will see that at ESMO? I noticed it's not in the titles that have been released already as a possible late breaker?

Thanks, Jonathan. With regard to the registration trial with Phase 2/3 and the design, yes, we have the agreement with the FDA on our plans moving forward. And as I said, we will provide more updates later this year. And as I pointed out we expect that to begin enrolling by the fourth quarter. With regard to 013, the expectation is that that data will be presented later in the year not at ESMO. So, but I can tell you that we are very excited from many advantage points with regard to 013, the rapidity in which this is enrolling. We’re enrolling patients around the world, is excited about this program and we are seeing activity as I noted on the call earlier, in multiple tumor types. Early anecdotal at this juncture, lot of the patients are in the early phases of their treatment, but we are quite encouraged by what we are seeing so far.

Great. Then I guess on margetuximab, you mentioned that you’re making some preparations for solo launch in the event that you’re not able to put together collaboration for commercialization. What is the cost to keep those options open and how long can you go before making decisions that are expensive to reverse? And then the related comment is, I understand that with SOPHIA running down your R&D, OpEx got a little bit of a reprieve there, but as you’re advancing more and more patients to late stage trials with a bunch of different assets, how should we expect to think about OpEx going forward over the next year and what does that mean to your cash balance?

Thank you for that -- those questions, Jonathan. Let's tap into those questions. I’m sorry I didn’t -- if you -- though I was intimating that we were definitely going forward with solo, that was not intended at all. We are engaged with several parties in fairly late stage discussions on the opportunity to commercialize this with us. And I think those prospects are very good going forward obviously until it's done, you never know. But my expectation is by the time we submit the BLA, we will have a very clear understanding on what the plans are for commercializing with a partner. Clearly, there is also additional interest coming from other parties at earlier stages. So we are evaluating with the best way going forward. In that vein, we’ve been very judicious in terms of the use of capital going forward in preparing the commercialization, but we’ve been very diligent to prepare. So for example, we have been building out our medical affairs and field team. We, at the ASCO, if you had a chance to see, we launched an awareness campaign describing the mechanism of action of monoclonal antibodies and treatment of cancer. And then obviously the commercial team we have on site, again slow dedicated group is looking at ways to understand the market overall, as well as strategic approaches to market access. So I would say that we -- in summary, we've been very judicious in the expenses to date and anticipate not advancing too much spend on that over the next few months as we get ready for the submission of the BLA and identify a partner to work with us. With regard to the late-stage trials and other indications, obviously gastric cancer foremost, we expect obviously expenses to go down, now that SOPHIA is winding down. Obviously, there are so many patients on trial, but recall that we’ve a unique opportunity here to offset some of these expenses with our partners, our labs as they have recently met with the Chinese authorities with regard to starting a trial of margetuximab not only with breast cancer, but also in gastric cancer and they’re making plans going forward. And so, they will bear the expenses for recruiting patients in Greater China for this study conducted. Obviously, there will be opportunities if we develop a commercial partnership for others to participate in supporting things like ISTs and again depending on the partner other indications as well. I hope that answers your questions?

Yes, great. Thank you very much.

The next question comes from Yigal Nochomovitz with Citigroup. Your line is now open.

Yes, hi. Thanks for taking the question. Scott, could you talk a bit more about the statistical analysis for the SOPHIA trial on the OS endpoint? And specifically are you planning to share the interim OS results for the epithelial subgroup at the point where you reach the 270 events or will we just be learning the ITT result?

[Indiscernible] as you know, we've provided the statistics around this previously. This -- we were powering this study -- well, let's for instance on the whole analysis. Number one, remember this is a sequential analysis where we met the first primary endpoint of PFS and as a result that allowed us to now analyze the second sequential analysis of OS. We had three planned analyses to look at the OS. The first one occurred at the time of completion of enrollment in the study. As I have indicated, we spent very little on p value to take that initial look, but while not statistically significant, very early and 158 events, we were seeing particularly F allele population at the median OS median point we were seeing favoring of margetuximab over trastuzumab in that study. Right now, the next event as you pointed out, and as I said, 270 events, we expect to occur in the second half of this year. What I can say is, we have not achieved the 270 events to-date and team is well prepared to update the database as soon as those events are recorded. With regard to the timing and the event, well I can't give you exact -- where we are going to get the 270 event given that San Antonio is occurring later this year. This event will come late this year. My expectation is that it is likely we will report out the results of the 270 events around that time frame. And again, it depends on when it comes in. Just to remind everyone, the 385 events, which is the last final OS time when is likely to occur sometime in middle of next year, but we will be submitting the BLA with the interim to set the events.

Okay. Thank you. Maybe I could just follow-up and ask the as the following. Do you think that with -- just with the epithelial subgroup, which is obviously the majority of the population, just by power alone just because you're going to have more events, do you think you can cross the threshold and go from -- to become statistically significant just by adding more events or do you believe that you need a little bit of a better separation as well for the sixth -- the epithelial subgroup?

My answer to that is that I'm very encouraged by the response in the epithelial population. Given that the overall 385 events in the intent to treat population with power at 80%, could we region with the enriched F it's possible, but let the data speak for itself. But as I said, given the mechanism of action, how does -- have the patients have been performing, what we are seeing immunologically, very encouraged with the data so far and we will have an answer to you, hopefully later this year.

Okay. Okay. Thanks, Scott. And then, switching over to MGC018. I don't think you've commented in tremendous detail yet, have you been able -- could you tell us what the starting doses and sort of what cohort you are on as well as what dose Iran now which I guess is the cohort question relative to the highest non-severely toxic dose in the primary. So if you could just give us some additional color there.

The best I can give you at this point is -- I hate to say, I don't remember the exact starting dose. But it was obviously a very small dose because it's a toxin conjugate. There were approximately six or seven cohorts that were included in this study and we are right in the middle of the -- right in the middle study. So, the performance has been as expected and it's doing well. So that's why I was sort of guiding you that with this rate and not having achieved any dose toxicity today that we expect to finish out this by late this year or early next year and somebody just pointed out to me, we’ve five cohorts. So -- excuse me, instead of six of them.

All right. And regarding the -- have you commented on the drug antibody ratio for this asset as well as the how good internalization rate it has?

So we had -- I think the TAR is about 2.7 in terms of the internalization. I mean all I can say is that we specifically pick a different epitope for this then the -- enoblituzumab or MGD009 to actually get better uptake into the cells. And so that looks like it's turning out quite well as you know in our pre-clinical studies, in many of the models, single dose was sufficient to wipe out xenograft. So again, I'm very encouraged by the way, this has performed to date clinically as well as obviously the pre-clinical data and in vitro data that we've generated to date.

Thanks. And just one final question. Just curious if you could provide any thoughts on why you decided to go with I-Mab Biopharma for enoblituzumab in the Asian territories as opposed to Zai Lab?

So we’ve seen that they've done a very good job in their commitment to program, they are interested in this program. That's not to say that Zai Lab would not be an excellent partner as well. It was a combination of what we saw that I-Mab was willing to commit to this program, their timelines. Obviously some economic components to this, so you should understand that we had actually multiple parties at the table looking at that and not only decide that I-Mab for this particular program would be the -- that's one can serve us.

Got it. All right. Great. Thanks so much, Scott.

Thank you.

Your next question comes from Jonathan Chang with SVB Leerink. Your line is now open.

Hi, guys. Thanks for taking my questions. First question on the business development front for margetuximab. You indicated earlier that you are in the late stages of those discussions. From a timing perspective with potential partners need to see more mature survival data?

Thanks for the question, Jonathan. So the answer is, for the parties that I sort of alluded to on sort of late stage, they’re not waiting for any additional data. We are in good shape in terms of those discussions. As I also indicated, there are other parties in earlier stage discussion that has actually asked us for additional data on the 270 event. So it's sort of a mixed group, but we’re very happy with the interest of the number of parties and then we used to move forward with the current dataset.

Got it. And then on flotetuzumab, how are you thinking about potential registration path forward? And are you in discussions to re-partner the asset currently?

So, let's start with the registration study. As I pointed out in the call, we have reached out to the FDA for a meeting, we hope to have that meeting this quarter. Ideally a single arm study would be obviously one that in terms of response rate and duration of response would be a preferred design for the trial, not so different than what was used for approval of the IH targeted molecules. Obviously as I pointed out, we are particularly looking at refractory population to go after here. Clearly, we will need FDA feedback here and there may be requirements for a controlled study under that. It would be very hard to figure out what the control arm would be in this case because we're talking about refractory patients that have failed in most cases at least two lines of therapy. And if you look at historical data, the response rate of this population is close to zero. So I would almost argue that the ethics involved here will be difficult to defend. But again, I never know what the regulatory agencies will ask of us, so that's sort of our thinking at this point. With regard to re-partnering, I can tell you that while we still partner with Servier, we had interest from parties in the territories that we own. So the opportunity now obviously opens up for us as we move these program -- this program forward to reengage with these and other parties for opportunities to re-partner.

Got it. Thank you.

Our next question comes from the line of Debjit Chattopadhyay with H.C. Wainwright. Your line is now open.

Hi. This is Aaron Welch on for Debjit. So I just had a question on the MGD013 PD-1 LAG-3 asset. So you had mentioned that you seen compelling activity in some tumor types beyond gastric. So are you able to tell us what any of these would be and what kind of internal hurdles might MGD013 face prior to expanding into other indications or combinations besides margetuximab?

Too early to disclose both in terms of particular tumor types at this point is stayed tuned for later this year. But as I alluded to against multiple tumor types where we are seeing objective responses. What hurdles? As in any drug here you are always -- at the win of the size of the population you are treating, the type of patients you're treating, as I pointed out in the call, we treated 100 or so patients already with this drug. Some of them only for short periods of time. And until we get a sizable database on safety to meet them, obviously, the needs of this drug, we can never be certain. But [indiscernible] with the drug we applied is performing well both from a safety as well as a activity perspective, obviously as we get better understanding mechanistically and the way we are dosing the populations and what to combine this with, I mean that's one of the number of big objectives of MacroGenics is to look at complementary mechanisms of action to enhance both innate and specific community and I think that we've already outlined the possibilities of -- and with March, obviously, enoblituzumab opportunities to present itself in the future and one should not rule out the opportunity to combine this with an ADC. In fact in our MGC018 in the protocol, we have a cohort that will at an anti-PD-1 is a possibility, obviously heading anti-PD-1 LAG-3 as well later on. And the same thing goes for the combinations without the checkpoint. So everything is at least at this point based on the data to date is open to us for this molecule.

Okay, great. Thank you. And a real quick on MGD019, have the dosing and schedule been worked out yet?

As I was saying on the call, we were in the middle of dosing and like I commented on MGC018, multiple cohorts, we’ve seven cohorts and we're right in the middle of the dosing right now. And so we’re getting into a nice range of where we should be having appropriate engagement of receptors in these patients. So stay tuned for that.

Okay, great. Thank you.

The next question comes from Peter Lawson with SunTrust. Your line is now open.

Thanks for taking the questions. Just thinking about margetuximab and partners, what are the gating factors for the partners?

Well, number one, Peter, is their experiences and commitments of margetuximab sales force to the program, what else is in there pipeline, what else are they detailing then, that's obviously number one. Clearly, economics enters into the picture on for us as was pointed earlier in the call with such a extensive pipeline and many of these programs move into later line, our goal here is to defray at least for the next couple of years any significant cost on the commercialization side. As I've kind of alluded to is that for us to build out a full-fledged commercial marketing and sales team, I feel that it would be best to do a time when we’ve two products that we can market and sell. And so given where I think many of our programs are in its development, I would say in the next couple of years, we will be in a pretty good shape if margetuximab makes it over the finish line with the regulatory agencies to now add a second or maybe even a third molecule for marketing. So that's kind of really the strategy where we are sticking to them.

Great. Thank you. And then just on flotetuzumab, what was -- is there any color you can provide around what led to Servier terminating that collaboration?

I've been answering that question a number of times now, and I frankly don't have full insight into the rationale. Just to put this in perspective, they had recently start funding or co-funding our studies. We had obviously anticipated starting this combination study, which was -- they were not funding as well. And so with no commitment to the program, financially and they knew that we were meeting with the FDA very shortly, it is a little bit surprising to me that they would exit. So, again, it would be something that we would have done if we were in that position, but I can't speak to them.

Great. Really appreciate it. Thanks, Scott.

Thanks, Peter.

The next question comes from Michael Morabito with Credit Suisse. Your line is now open.

Hi, team. Thanks for taking the questions. I had a multi-part question on MAHOGANY. Trying to just get a feel for what would be your expectations for when we could see data from that the first year with the data? What would it take for -- what kind of result would be necessary to make module A potentially registrational for accelerated approval? And finally, what do you anticipate the mix being in the trial of patients from the U.S., from China and from the rest of the world?

Michael, thanks so much for the question. So with regard to given that we haven't started the trial and we are about to start the trial, it would be foolish to give you specifics on that. Having said that, given the -- what we are seeing is very strong interest in this based on the activity of OS in the second line setting that beats standard of care there. And we are actually beating the historical numbers with [indiscernible] in the front-line and we had an over 50% response rate in the patients in the second line setting. Now moving up the quarter line setting, there are probably twice as many patients that are PD-L1 positive. We have expectations that this could enroll quite quickly. As we’ve designed the study, I'm sure you've looked at, Michael, we are doing this sort of in two parts. One, take a look at the first 40 patients that are HER2 [indiscernible] plus positive and with the 1% CPS, PD-L1 positive. We are looking at -- trying to see a response rate that is at least as good or obviously, potentially superior to what the response was in Tobo [ph] and if you recall, that was -- that I think 47% -- 47%, 48% in response rate. So anything north of that. And then clearly the safety profile based on the second line treatment, which was in the mid to high teens will compare quite favorably to a chemo regimen in front line we are in Tobo that we're seeing a great degree of 68% of the patients. So combination of seeing is good response as Tobo or better. And then a better safety profile. So, you know, if I were optimistic, we all can see that enrolled by the end of next year, but stay tuned, I certainly will provide you updates, as we get this trial start.

Okay. And the global breakdown of patients?

Oh, yes, I'm sorry. So global break down, as we pointed out, Zai is met with the Chinese authorities. They’re are preparing now to put it this initiative, work to get that started for the study. Right now they will be participating in module B not in module A. So we will bear the enrollment for module A. Obviously that could change with further discussions. With regard to the mix, we will just have to see. My estimates is that, I would like to see at least a third to a half coming from China, but again stay tuned. Let's get started, let's get the sites up and we will see where we go.

Great. And just one more question on enoblituzumab. What is your estimated timing for when we could see the first data for the head and neck registrational trial? And do you’ve any plans to advance enoblituzumab in lung cancer based on the data that you have so far?

So, again, for the timing, I think we'll start the study in the fourth quarter, let's get the sites up. We are planning to be multi-national. But again, I'm hearing a lot of interest in -- from investigators out there to participate. So it's just too early to give you a timing on the enrollment. We are clearly interested along and actually other tumors as well. But given the breadth and depth of our portfolio right now, while we like to get this started like it -- I'm not going to start it because they have plans to move this forward and in fact they may advance this in other indications beyond that net and revisit them to discuss that as well. So there are opportunities even before we start that in other indication that they would pursue this outside of head and neck as well.

Great. Thanks so much.

The next question comes from Michael Schmidt with Guggenheim Securities. Your line is now open.

This is Charles Yuan [ph] for Michael Schmidt. Thanks for taking the questions and congrats on the progress across the board. I have a few questions on the MAHOGANY trial in gastric cancer, if you don't mind. So starting with - in module B in the MAHOGANY trial, are you only selecting one of the checkpoint inhibitors between the PD-1 and the bispecific for the Phase 3 portion and should you go with the PD-1 likely bispecific. How are you thinking about potentially further stratifying patients by LAG 3 expression in context, but some of the historical LAG-3 data from Bristol-Myers Squibb in melanoma and how that might impact eligible patient population and revenue opportunity? Thank you.

So with regard to the Phase 3 components, yes, we will only pick one checkpoint, so we will take the one that performs best both from an efficacy and safety vantage points, so it would lead with the MGA012 or the PD-1 LAG-3. With regard to expression patterns, what I can say, I'm very encouraged by what we've been seeing so far in the 40 or so samples of gastric cancer tumors. We are seeing about an 88% LAG-3 positivity. The problem as you may or may not know is that, you can never temporarily know when the LAG-3 is going to get expressed and over time when a patient can go up and down. And so as a result, then select is based on any given level, I think would be fought with a lot of challenges. Having said that, we will monitor, but I doubt that we would select patients or enrollment based on a level of LAG-3 expression at this point.

Got it. Thank you. That’s helpful. And also on the Phase 3 portion of MAHOGANY module B, it looks like your primary endpoint is OS and I had a couple of questions along that avenue. One, will you allow crossover and two, given that we have a basket of other drugs in gastric cancer looking at the post trastuzumab, but probably not the post merger talks in that setting. How would you characterize the potential for post-trial therapies to impact the final OS readout given that control arm, patients might be eligible for a different set of rent regimens for patients coming out of the experimental arm?

Very good question. At this trial we're not including crossover in that population and clearly that will be something we will monitor going forward and hope that by usual opportunities for either arm patients can gravitate to other experimental treatments. But at this point, we’ve no one specific plans to preset the conditions for those patients that progress.

Understood. Thank you so much for taking the questions. Again, thanks for your time.

Thank you. Thanks.

The next question comes from Ellen Sands with Stifel. Your line is now open.

Hi. This is Ellen on for Steve Willey. Thanks for taking the questions. So I'm just wondering if you get the sense of the partnering conversations you're having around margetuximab. If there's somehow potentially gated by some of the competitive updates expected in later line HER-2 space that will become available later this year?

Thanks for the question, Ellen. My answer is, no. As I pointed out, we’ve enough discussions ongoing now with parties that are satisfied where this molecule is in terms of the opportunity to treat a late-stage patients as I pointed out previously. There's no approved treatments in third-line patients. So I think this is a great opportunity for patients and I think the potential partners recognizes. They also recognize mechanistically that this is quite unique even compared to the other drugs that are out there whether it would be ADCs or TKI such that it gives us a unique profile than others don’t share with us. And clearly the opportunity as we move into early-line therapy with a more intact immune system, the potential magnitude of therapeutic benefit to go up quite dramatically in that population, not just -- last but not least, the ability to combine it with other checkpoint molecules in our program. I think people and potential partners see this is a great opportunity.

Great. Thanks. And then are you still pursuing CD137 based bispecifics? And if so, when might we see a lead candidate into the clinic?

Ellen, thank you for that question. We’ve so much to talk about in our clinical pipeline, we never get to talk about our preclinical pipeline and we are down the hall on our 137 program. We’ve multiple dark molecules have been made, they’re looking very encouraging across multiple target combination types as you know. We have presented publicly early data preclinical studies with the CD137 x PD-L1. We had that tiered with other tumor models. Our CD137 was HER-2, look orderly good as well. So we are very encouraged. I would say that we’ve a couple of these in toxicology studies right now. Stay tuned for guidance with regard to entering the clinic. The next molecule moving forward in the clinic is with ImmunoGen, our partner on [indiscernible], so stay tuned for that.

Great. Thanks for taking the question.

This concludes the question-and-answer session. I will now turn the call back to Dr. Koenig for closing remarks.

Thank you, operator. I would just like to thank everyone today for joining us this afternoon and let you know that we look forward to continuing to advance our progress in the coming months and providing updates on our progress. Have a good day.

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