Ladies and gentlemen, thank you for standing by and welcome to the Ziopharm Oncology Fourth Quarter and Year-end 2019 Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Chris Taylor, Vice President of Investor Relations. Thank you. Please go ahead.

Thank you, operator. Good afternoon and welcome to the Ziopharm Oncology conference call and webcast to review results for the fourth quarter of 2019. This afternoon we filed our 10-K and issued our 2019 year-end results release, both of which are available in the Investors section of our website ziopharm.com. For informational purposes, we have also included in our webcast a set of PowerPoint slides to accompany today's commentary. These slides can also be found on our website in the Investors section. During this call, the Company will make a number of forward-looking statements, including statements regarding the potential therapeutic candidates in our development pipeline regulatory status, financial information and business trends. Forward-looking statements are subject to numerous risks and uncertainties as described in our 10-K and within other filings that we may make with the SEC from time to time. Participating on our call today for Ziopharm will be Dr. Laurence Cooper, Chief Executive Officer; Sath Shukla, CFO; and Dr. David Mauney, President. Following commentary from our management team, we will open the call for Q&A. In the interest of time, we kindly request that you ask one question and a follow-up as needed and then please feel free to return to the queue. Thank you. And to get started, I'll turn the call over to Dr. Cooper. Good afternoon.

Thank you, Chris, and good afternoon everyone. We are pleased to have the opportunity to speak with you today and we welcome those of you who are new to Ziopharm. By way of introduction, we took dramatic steps forward in 2019 to build upon our plan to offer treatment to patients with solid tumors. We believe Ziopharm stands alone in the vision to be able to treat all solid tumors. We have advanced multiple innovative technologies that have been widely published based upon convincing preclinical and clinical data. We have Phase 1 and 2 INDs across each of our clinical programs and have alignments to execute on them with world-class partners. Finally, we are addressing the largest possible oncology markets by going after solid tumors. With approximately $177 million in our treasury, Ziopharm is now in its strongest fundamental position to date under my tenure. Our balance sheet gives us the ability to accelerate toward the size and scale needed to successfully execute on our vision. It has been just 16 months since we forged our corporate independence and could truly focus on solid tumors. We've accomplished a great deal during this time period and I will highlight a few. In addition to having multiple trials and INDs for all of our programs, we have secured contracts and cooperation with MD Anderson expanding into TCRT, we have a licensed critical intellectual property, and we have expanded our business developments in Wall Street outreach. We also spent much of 2019 working with well-known third parties to gain a deeper understanding of the long-term valuation proposition for each of our core assets. We are using that information to develop our blueprint for 2020 and beyond. Based on feedback, anticipated need and competitive analysis, we are accelerating our ability to manufacture T-cell products.…

Thanks, Laurence and good afternoon everyone. Let me begin by saying a few words about our recent financing efforts. To achieve our vision to develop treatments for all patients with solid tumors it is essential that we keep the Company well capitalized in comparison to competitors in the cell and gene therapy space. As we disclosed at the end of the third quarter of 2019, our cash balances at that time provided a runway into the first half of 2021 which meant that to avoid a growing concern audit opinion we would need to raise capital in the first several months of 2020. We carefully evaluated this timing and considered it to be risky. We do have market catalysts expected this year but we came to the conclusion that hoping and waiting for the exact right time while exposing the Company to capital markets and political risks was imprudent. Furthermore, given that many of the biotechs were secured capital in late 2019 and early 2020 potential deal fatigue and limited available funding could pose substantial additional risks if we waited too long to secure financing. We therefore began executing on fortifying our balance sheet starting in December first engaging in some ATM financing for approximately $16 million. However, following a successful GBM event where shared the Company's prospects with multiple top tier biotech investors, management turned off the ATM and engaged in a traditional financing. This financing was achieved quickly, derisked our balance sheet and will now enable us to accelerate and achieve many important goals for the next two pivotal years for the Company. The proceeds in addition to current market prices and conditions also preclude the necessity of using the ATM anytime in the near future. The new capital serves many critical purposes and to drill down a…

Thanks, Sath. Before I provide some comments on our business, I'll share a brief word on new coronavirus or COVID-19. Our thoughts go out to all of those affected by this difficult illness. We are currently assessing the impact a broader spread of the illness may have on our business and have begun identifying mitigation plans as needed. As Laurence noted, our colleagues at Eden and TriArm have confirmed that they continue making progress and they do not currently expect significant business disruption in our CD19 program in Greater China. Further enrollment in our IL-12 clinical trials, all of which are in the US, are either complete or nearing completion and we have drug available to complete our ongoing studies. Our planned TCR-T clinical trials appear unaffected by the outbreak. We expect to discuss the possible impact of the new coronavirus with our other partners, including the NCI and MD Anderson as the situation in the US evolves. And of course we will be evaluating the impact this may have on our employees' day to day activities. Fortunately, we already have the IT systems in place that allow most of our employees to work remotely if needed. We have obviously achieved many things in the last 16 months and look forward to a prosperous future. I would like to strongly reinforce our vision, which is to provide next generation therapeutic options to treat any patient with a solid tumor. And if we achieve that goal significant rewards can be seen. We have worked hard and fast to create unique attributes of Ziopharm which Laurence has covered today and the market opportunity for us is tremendous as Ziopharm has commercial rights to multiple billion dollar markets. We are of course engaged in multiple continued dialogs with potential partners and, as Laurence…

Thank you. [Operator Instructions] Our first question comes from Yale Jen with Laidlaw & Company. Your line is now open.

Good afternoon. And thanks for taking the questions and congrats on the progress that's quite remarkable altogether. Maybe two quick questions here. The first one is for the MD Anderson in terms of TCR-T development. Are you guys going to wait for the NCI complete their protocol and start to enroll patient before the work over in MD Anderson so you have more homogenized the protocol, clinical study protocols, or you will have additional sort of modification or adjustment on that?

Yeah, Thanks, Yale. I'll take that question first. So the clinical trials at MD Anderson, you can anticipate those to start alongside the NCI. The NCI to us is a program that has great value, not only today but going forward. You could I think expect continued iteration by Dr. Rosenberg and his group and those learnings under our CRADA will feed back into MD Anderson and thus our clinical trials. So to put it all together, we enjoy the relationship with Steve and his group as essentially the foundry. But we're a commercial leading company. We want to develop drugs for solid tumors. And so we will execute on that vision at MD Anderson and you have -- we'll have more to say about that going forward.

And then maybe to follow up a little bit on that from a revenue -- cost perspective, should we anticipate that once you start the MD Anderson work on TCR-T, the R&D expenditure could increase more substantially, I guess, than otherwise we were modeled?

Yeah, so, we'll review the model one more time and get back to you on that, Yale. But, yes, there will be a ramp in the R&D expenditure obviously for sure, because we are an R&D company. And if you look at how much we actually put in opex this year and our runways on cash, then we disclose that right now we are anticipating a cash taking us into middle of 2022, we can sort of back into some of ramp expected, obviously this year, also next year and then going into 2022. So certainly the expectation is that we will execute more and therefore we will spend more.

Okay. Great. I'll go back to queue and maybe have some follow-up later.

Okay. Thank you.

Thank you. Our next question comes from Thomas Flaten with Lake Street Capital. Your line is now open.

Great. Thanks for taking my question. To follow up on the earlier question with respect to the MD Anderson TCR study running alongside NCI, given that you're still in discussions with FDA around protocols and things like that, could you provide some more granularity on those specific discussions, IND submissions clearances etc., just so we understand how those things will run alongside one another?

Yeah. Thanks, Thomas. So the -- I think the way I think about it is, the playbook in terms of the IND has been established by Steve Rosenberg. We take that playbook now and adapt it to our own commercial facing needs at MD Anderson. Those discussions are under way with the regulators. They will come to rest soon. And then we will update you and the market on our plans in fuller detail.

And then, I guess, kind of tied into that and then I'll jump back in the queue, with respect to having data for across all three programs in 2020, could you comment a little bit upon what types of data we might expect to see? I'm having trouble seeing the timelines come together with kind of the broad first half, second half guidance.

Sure. We've got a slide actually that we -- that's on the deck. So the way we we're positioning the Company is really just a book end this in the first half of 2020 at the moment. So as you look at those programs, we'll have the dosing at the NCI trial, that's the Phase 2, we'll have enrollment to our Phase 1 trial for the rapid personalized manufacturer of CAR-T, we'll have announcement around the completion of enrollment and the initial data readout for our controlled IL-12 in combination with Libtayo, we'll have Phase 1 data readout with controlled IL-12 in combination with Opdivo, and we'll have Phase 1 data readout from controlled IL-12 as a monotherapy in that expanded cohort. So those five activities will be in the first half of this year. And then as we get into essentially the next quarter or so, we'll then move that timeline so that you can look deeper into the Company for the second half of this year. But that's a pretty significant package for just this first half.

Just a follow-up, sorry.

Sure.

So if you're going to see dosing in the first half at NCI, do you have a sense from Rosenberg with respect to number of patients, cadence of enrollment so that you can actually get data out in 2020?

Yeah, we -- so that timeline and with respect to the public is governed by Dr. Rosenberg, and that's really a lot of the impetus for us to be moving the technology under our own INDs down to Houston with MD Anderson. But having said that, Steve's been an excellent steward of our technology and quite frankly the field and regularly put out important updates, and I expect them to do the same with rapidity around our program.

Okay. I'll get back in the queue. Thanks.

Thank you. Our next question comes from RK of H.C. Wainwright. Your line is now open.

Thank you. Good afternoon, Laurence.

Hi.

Just on the NCI program, as you're learning more about the process itself, so after NCI runs these successful manufacturing runs for the clinical material to get started, is there anything else that they need to do before they get the study going?

Yeah, that's an excellent point. So the manufacturing, obviously, is an important part that's governed under the IND. You've heard my comments around how then learning was added on top of the IND. And then once Steve is ready to go, the patients then essentially that are in the queue can then be treated. So there's going to be, I think, an important part of the story where not only the manufacturing solutions, I think when he's checked that box, but the patients then essentially have that clinical need that they need to essentially receive that TCR therapies and Steve governs that transition essentially as patients come off queue into essentially the clinical trial.

Okay. Thank you. And on the controlled IL-12 program, outside of GBM, what other tumors would you be -- would you think are likely targets and if costs is no issue, which ones would you be going after?

Yeah. That's a great question. So for us, we are -- our clinical data really teaches us that IL-12 can turn whole tumor hot, and we think that's important, especially for tumors that have failed immune checkpoint inhibitors. So we are looking closely at those types of tumors. In other words, immunological deserts, ones in which they can be affected from an influx of T-cells, and there's a set of those tumors out there, RK, and often those tumors match up actually, quite frankly, to the ones that don't benefit from immune checkpoint inhibitors.

Okay. Thank you. And then the last question is regarding the data expected during the first half, is that pretty much wait till the end of the first half into ASCO or it could be any other...

It could be anytime. It could be anytime. We see a continued divulgence of data throughout this first half.

Perfect. Thank you very much, Laurence, for taking my questions.

Thank you. Our next question comes from Jim Birchenough with Wells Fargo. Your line is now open.

Good afternoon. It's Nick on for Jim this afternoon and, yes, congratulations on just seems like this is going to be a great year for the Company. So I'm sure you're very excited about all the progress. Just in terms of the hotspot trial, so the new antigen trials, it seems like the differential -- difference here between the NCI approach and your approach will be in terms of the algorithms and technologies used to identify the hotspots. Outside of that the two trials will be very similar. Is that the case?

Yeah, I think that's a good starting point, Nick. Both the NCI and Ziopharm will be pursuing the personalized TCR-T therapy. That's a very broad solution really for most patients, actually quite frankly with solid tumors. In addition, though, Ziopharm with its partner at MD Anderson will be developing the hotspot trial. And as you know that's the way to treat a subset of patients but to do so much faster, because you're screening the patients for the mutated antigen.

Right, right. And on that trail, Laurence, will you be in a position to essentially -- I think you made a comment that you already have enough TCRs from the library to execute a trial. Will it be an all-comer trial or will you initially will say, well, let's look at certain subset KRAS, for example?

Yeah. No, that's exactly the right question, Nick. We're in dialog about that. There's basically those kinds of trial designs. And we want feedback from the FDA on that type of trial design and then we'll get back to you.

Okay. And then last one for me and I'll hop back in the queue. And you referred to IL-12, so now you have cash through the middle of '22. You're going to have critical data by midyear for this program. What are you assuming in terms of additional trials beginning through the middle of '22 because I think at one point in the past, I seem to recall that your preferred way forward with IL-12 was with a partnership.

Yeah. No, I think as the data come in, especially through the expansion study and the Phase 1 trial study with Opdivo, we've seen really reassuring data, Nick. I mean, we've got pretty significant long-term survival, 16 or so months now. We've got clear evidence of anti-tumor effect based on MRI scan. We have serially biopsied these patients and shown influx of T-cells. So these data are -- means that the Company has done a lot of work since essentially those comments were put out there. At the time that was correct that there was a look for a potential partner. But now I think there are many options for Ziopharm and we're going to really essentially look at these data coming in through the year and see what makes the best sense for the Company.

So -- Laurence, so just to clarify, do you have money then assigned for additional -- starting additional trials in '21, '22?

Sure. I'll turn it over to Sath here.

Sure, Nick. So I think what I can say is that our cash runway conservatively does not assume any partnership and push at this point. So whatever we want to do with the program and progress it in our GBM and potentially other indications, we have assumed that the funding for that today comes from the Company for planning purposes and we lay out of the cash to runway. Obviously, when data rollout and we decide whether and which partnerships to explore that number could change. But conservatively, we have not built in any partnership funding in any of our analyses.

Perfect. Thank you for the clarity.

Thank you. Our final question is a follow-up from Yale Jen. Your line is now open.

Thanks for taking up the follow-up questions. Are you guys going to announce when you saw the face on the TCR-T study at the MD Anderson in the press release or some other sort of methods?

Yeah. Thanks, Yale. So just to clarify, we will announce when the TCR-T trial starts enrolls at the NCI. We will also guide the market on our plan for our own commercial activities at MD Anderson.

Okay. And maybe just one more question here, which is that in terms of combo study, Opdivo data you intend to report this half of this year, should we anticipate anything related to the time or the duration of the study that the endpoint such as so progression free survival, others, or simply we should mainly focus on the response rate and other relevant dataset?

Yeah, I -- what I try and do with -- what the Company tries to do is show survival, because that is the benchmark, that's by which the EMER as well as the FDA will allow potential products to move forward. But in addition, because we work with academic centers, we're often able to add additional color to those data, for instance the immune response data, whether that'd be through biopsy or through antigen. So that type of package will be put together, I anticipate, for the first half of this year. And as a guide, you can look back at the SNO poster that we put out last November as essentially the template for the way the Company is keeping the Street apprised of our activity.

Okay, great. That's very, very helpful. And again, congrats on the progress so far.

Okay. Thank you very much for questions. And I think that now concludes the call and everybody have a good day.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude your program and you may now disconnect.