Thank you for standing by. This is the conference operator. Welcome to the ZIOPHARM Oncology Third Quarter 2020 Earnings Conference Call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Chris Taylor, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you, Operator. Good afternoon and welcome to the ZIOPHARM Oncology conference call and webcast to review results for the third quarter ended September 30, 2020. This afternoon we filed our 10-Q and issued our third quarter financial results release, both of which are available in the Investors section of our Web site, 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 in the Investor section of our website. During this call, the company will make several 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-Q and within other filings that we may make with the SEC from time to time. Leading our call today for ZIOPHARM will be Dr. Laurence Cooper, Chief Executive Officer; and Sath Shukla, Chief Financial Officer. 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. I'll turn the call over to Dr. Cooper. Good afternoon, Laurence.

Thank you, Chris, and good day, everyone. We hope you're safe and well. We've been making progress in many areas while navigating the impact of the COVID-19 pandemic. This is a challenging environment for everyone. Yes, where we have direct control, we are executing and have been making meaningful advancements. First, let me begin with our Sleeping Beauty TCR-T program where we are making great strides to progress our internal program from our Houston campus alongside MD Anderson. ZIOPHARM has expeditiously expanded our infrastructure footprint in Houston, leasing facilities from MD Anderson to increase our laboratory presence. We have hired highly skilled personnel, specializing in areas such as the genetic modification and growth of primary T-cells, bioinformatics, process development, manufacturing of clinical grade T-cells, correlative studies, and ancillary services. Our team is optimizing today's T-cell biology and establishing foundational science for next generational programs intended to overcome challenges posed by the tumor microenvironment and to increase T-cell functionality. Also, behind the scenes, our team has been working on assembling data in support of regulatory documents, as well as investigating next-generation technologies combining TCR with cytokine biology. We have built a formidable bioinformatics program in supportive neoantigen identification, and a group that identifies and characterizes T-cell receptor or TCR. Manufacturing of our TCR-T for human use is an important part of the program. We are building a clinical production unit or CPU to provide backup to our outsourced approach to manufacturing. This pilot facility not only helps insulate ZIOPHARM from uncertainties in the supply chain, but may also facilitate and accelerate the testing of new future ideas in the clinical setting. We are only using a small portion of our existing footprint on the MD Anderson campus and expect it will be ready for manufacturing and compliance with current good manufacturing…

Thanks, Laurence. I'm very excited to join you and the ZIOPHARM team. I've certainly tracked the company's innovation in the self-therapy space, as well as the promising platforms and programs for some time. My diligence, it was clear that ZIOPHARM is well positioned to attain a number of value enhancing milestones across all three platforms. I fully recognize that we have more work to do, and I'm eager to get started. In particular, I look forward to working closely with our shareholders and analysts, several of whom I know very well for my time at Gilead. Thanks again for the opportunity, Laurence.

Thanks, Adam and welcome aboard. We are so pleased that you've joined us. In closing, I will return to this year's priorities that we have previously communicated. We have been focused on building out our internal T-cell program as that value driver for the future, executing on the controlled IL-12 program, and bringing our RPM technology to the clinic with CD19 specific CAR-T. All while being careful stewards of capital. While no one could have anticipated the gravity of the ongoing pandemic, we were able to put in place the financing on our own infrastructure beginning in the first quarter of this year to help us weather uncertainties. We have been working diligently through the challenges of COVID-19 and the resulting delays from some of our external partners. However, I do not want these challenges to overshadow the fact that we have made important progress and are excited by the culmination of all of that good work. With that, let me now turn the call over to Sath for a review of our financials.

Thank you, Laurence, and good afternoon, everyone. Let me start with a quick review of our financial results for the quarter. As noted in our news release, research and development expenses were $14 million for the third quarter 2020 compared to $8.6 million for W3 of 2019. The difference reflects increased clinical trial activity and increased headcount in our R&D team. G&A expenses were $6.4 million for the third quarter of 2020, compared to $4.8 million for the third quarter of 2019. The increase is primarily due to higher headcount and legal costs associated with an expanded fashion portfolio and facility costs. On a cumulative basis for the third quarter of 2020, we reported a net loss applicable to common shareholders of $20.3 million, or $0.10 per basic and diluted share, compared to a net loss of $74 million, or $0.43 per share for the third quarter of 2019 which had requested a $60.8 million or $0.36 per share non-cash charge for an inducement port. Cash and marketable securities, as of September 30 2020, was $135.5 million. In addition, we also had a prepayment balance of approximately $11.4 million for work to be conducted by the company at MD Anderson. Consistent with the prior disclosures, our cash position is forecasted to be sufficient to provide funding for all our programs and infrastructure built into mid-2022. With that, I will turn it back over to Laurence.

Thank you, Sath. Before I open the call for Q&A, I want to mention again our plans to conduct on R&D day. We're excited to showcase our progress, and provide an opportunity for the investment community to hear from our very distinguished faculty of clinical partners, scientific advisors and KOL. And with that, operator, we're pleased to move to Q&A.

Thank you. [Operator Instructions] And our first question is from the line of Roger Tung [ph] with Jefferies. Please go ahead.

Great. Thank you for the update. And congrats on the progress. Maybe just a few quick ones from me. So first of all, I see you have kind of disclosed the potential targeted new antigen, KRAS and TP53 and potential, the targeted tumor types. Maybe Lauren, can you just comment a little bit about the potential addressable market among those targeted cancer types considering the new antigen you're targeting and the HLA matching kind of a library.

Yeah, sure, Roger. It's a -- it's an important part of our program. And thank you. So there's a number of pieces that go into choosing these cancers. The first is a representation of the antigens of KRAS and TP53. The second is the mixture of patients that make up the MD Anderson, essentially, patient portfolio, who's coming to Anderson, who has the right HLA background. And then third is the -- as you're getting into sort of what is the market capability. So the way I think about it right now is establishing the proof-of-concept in these very important tumor types. We will be able to get patients from the Anderson, they are well represented in the in -- among the people come to MD Anderson. And the second is that, you know, they have the right mutations that we can screen for. They also though, are significant, significant opportunities in terms of the types of tumors we're going after. I mean, if you just look at the list that we put out, colorectal cancers, I mean, that's massive all by itself. Non-small cell lung cancer is massive all by itself, you know, so there is all three pieces of the puzzle, now really coming into focus. We're out in the right tumors. we are using the right kind of biology, and we will be addressing formidable market opportunities.

All right, great. Yeah, that's helpful. And maybe just stick with the TCR. And since you are on track to file the IND, early next year first quarter, just maybe any additional color you want to comment what's left to prepare for the IND? And yeah, so that's that.

Yeah, Roger, that's an important part, too. I mean, just to kind of frame this, again, we've gone from soup to nuts in two years. Two years, I just got to emphasize that that's a remarkable amount of progress. That's establishing the team, building Apa lab, identifying the receptors, working with our colleagues at MD Anderson, putting together the CMC package, putting together the production systems, identifying the manufacturing, finalizing the Bioinformatics, and all the correlative studies and all of the clinical team. It is full on 24/7 for ZIOPHARM to be able to do this. And I'm just thrilled to be able to tell investors about all the progress we've made in this.

Great. Thank you. Yeah, that's all from me. Thank you. Thank you, guys.

Sure. Thank you.

[Operator Instructions] And our next question is from the line of Yale Jen with Laidlaw & Company. Please go ahead.

Good afternoon, and thanks for taking the questions. Just two from me. The first one is -- so to clarify that the TCR-T trial most likely will treating patients and to be treated at MD Anderson next year, and it may or may not actually have a trial being done in the NCI. Is that correct? Or is that the case?

No. So, Yale. Thank you. I just make sure I heard the question correctly. It's a little bit faint on my end. So we have the trial queued up under our own IND at Anderson, you are quite right, right. That's the library trial. That IND as we've said, you know, is due to be submitted Q1 next year and then the patients to follow. Then we also have the NCI trial under the direction of Steve Rosenberg for the personalized TCR-T trial. We ZIOPHARM will also have a personalized TCR-T trial, but we're managing that important workstream to start after the library trial has commenced.

Okay, great. That's very helpful. And also just two quick ones. The first one is that you guys going to have a presentation at SNOW. So what should investors to expect from those presentations at this moment?

Sure. So obviously, you know, the actual meat of it is embargoes. So we'll have more to say as we get closer to that. But I can tell you, we have three presentations. One of them will address the early data in DIPG. And in particular, looking at how this particular patient survived the end and tolerated the technology. This is incredibly important, you know, at this early stage. The second is around the two combinations study. So one is a Phase 2 trial with Libtayo and the other one is a Phase 1 trial in combination with OPDIVO. So we'll have some maturing data without OPDIVO. And we'll have the initial set of data with Libtayo.

Okay, maybe last -- thanks, Laurence. That's a very helpful. And maybe the last question here is, recently there's some chatters in terms of one minor shareholder of you guys -- and they have some -- a letter send it out publicly, and would you have any comments on any of those?

Yeah, no, I think as we've said, publicly, we value input from all of our shareholders and take their feedback seriously.

Okay, great. Thanks a lot. Thanks for taking the question.

Thank you.

Our next question is from the line of Alethia Young with Cantor. Please go ahead.

Hi, guys. Thanks for taking my questions. I guess, you know, on the SNOW data sets, I mean, do you have a perception that the combos yield a greater synergy than monotherapy? And I mean, I guess, doesn’t really matter, either way. And then, you know, next question is on TCR-T trial at MD Anderson. I mean, just to break it down a bit more, is it really related to like, kind of the capacity and kind of dynamics related to COVID or are there other factors that kind of are lingering to kind of get everything up and running appropriately there? Thanks.

Sure. So in terms of the combination trial, we looking at this as real upside. As you might be aware we reported at ASCO this year in patients with recurrent GBM who are -- who received just the aisle 12 at a median overall survival of about 16 months, are now pretty mature a long-term follow-up. That by itself, really stand apart from really our competitors and quite frankly from the historical data where we are the best -- we’re the best of the patients lived about 12 months in the recurrent setting. So that looks really encouraging all by itself. And I think as you, you said, it's really now option value to see if the combo with IL-12, excuse me the combo of IL-12 with PD-1 inhibitors improves upon that. But either way, ZIOPHARM has a line of sight now to advanced clinical trials, at least with the monotherapy, if not with the combination. So then in terms of the trial, the TCR-T trial, I think you said MD Anderson, but I think you're referring to the NCI there. So what -- ZIOPHARM partnership with the NCI is very important. Steve has really leaned in and helped ZIOPHARM over the years, especially with the IMB process. But what you're hearing is a consistent message really dating back to 2019 that ZIOPHARM is increasingly taking over essentially its own future. At the beginning, when we separated from our partner we didn't have the resources, infrastructure and so forth to really accelerate that program. However, now we do. We’ve undertaken the fundraising. We have hired the people, we have support and so we're able now to put in place the team to execute on our own program. This doesn't diminish the work that Dr. Rosenberg is doing and we're excited for him to be putting patients on trial. But it really allows ZIOPHARM to operate now independently to see Rosenberg under our own timelines. And as we said, this is actually going swimming.

Maybe just one follow up. Yeah, sorry -- around and as the academic institutions, just on the CAR-T study. I mean are there expectations that we could potentially see a little bit of data on that program in 2021 since you're sort of starting? And I mean, how important do you kind of think about getting even just some proof of concept there with the CAR-T…

Yeah, that's a great question. So as you know we can buy or sell as both, it work under the compassionate use, as well as the IND that's making its way through the Taiwanese process. And we're actually quite optimistic about that. So next year you're quite right. There'll be two -- there’ll be one, if not two lines of communication back to investors from Asia on these -- on the proof of concepts around the rapid manufacturing. My remarks today really give an indication that the technology, at least in its early, early stages as being communicated to us actually looks encouraging. So we're cautiously optimistic there. We'll also be able to validate that right here in Houston with our partner and MD Anderson as we also have a phase 1 trial that's enrolling patients there and those data will report out. So I think, you're right in the timing and as these data mature, as we are able to follow-up, we will be able to say more in the New Year, but essentially what investors need to know is that, there's some initial good news.

Awesome. Great. Thank you for the follow up question.

Next question is from the line of David Novak with Raymond James. Please go ahead.

Good afternoon, folks. Thanks for taking my questions. I guess, just one in and one quick follow-up. First, with respect to the NCI TCR trial, could you guys elaborate a little bit on the regulatory requirements being implemented? And understanding that the agency is currently under significant burden, a burden, which is unlikely to lighten in the near-term? What's the risk here of further delay post Q1 2021?

Yeah, so thank you, David. So, I think the shareholders have heard me over the months, really work with them on the NCI timelines. And, it's been difficult for me to match the NCI timelines and investors' expectations. So increasingly, and this is, I think strategically you can see us doing this is that we're building out our own program, because we can manage that and execute on that independently. And that really, act sense and I think emphasizes how important ZIOPHARM is because it has its own TCR-T program. Steve's work, he's just a genius. And we should just reflect on how amazing this man is for the history of cancer therapy and immunotherapy. He's embraced the Sleeping Beauty system, he wants to see this in the clinic. But just as you point out, David, he has a complex system to manage. And indeed, there is oversight on his program from the National Institutes of Health. So obviously, that's the umbrella under, which the NCI sits, they have their own regulatory processes in place that Steve and everybody at the NCI has to work under. And those are new system since the IND essentially was cleared. So that's one set of logistics, if you would, or one set of governance structures, that Steve’s working under, that's not a big burden, but he takes time to work through that. And then, of course, he has to manage his patient queue, which as everybody knows in this time of pandemic is quite difficult. And that involves, him hunting for the TCRs, and so forth, and patients essentially being in the wings waiting to relapse. As I guided in my remarks a few minutes ago, this affects, not all program and we believe it affect other programs at the NCI.

Got it, great. Thanks, Lawrence. And just as a quick follow-up, and again, just quickly touching on the current proxy battle with a dissident shareholder here, these things tend to be quite costly with lawyers, advisors, and not to mention fairly disruptive to operations. So just from that perspective, and for modeling purposes, on my end, maybe SAP, could you provide us with an estimate on how much you think this might actually cost the company when all is through and done?

Hey, David, yeah, it's hard to say right now, we disclosed G&A estimate for this numbers, that right now might be in roughly $1 million or around that range, but it's very difficult to say, because, frankly, that that number depends on how circumstances come in, and how the current situation evolves. So, would that be something that’s a state funding? We couldn't tell you at this moment in time.

Perfect. Thanks very much.

Sorry. I'm just going to give you another flavor, you know, in terms of MCI [ph], ZIOPHARM seat, we value the shareholders input. But we're also focused on executing. You heard me again, go through the type of work down in Houston, the type of work we're doing up in Charlestown in Boston area, the company is executing, and I think that's an important part to remind the investor community is that this company is fully working to better shareholder value and better the lives of these patients.

Okay, perfect. Well, thank you very much, guys. I'll hop back in the queue.

Thank you.

Our next question is from the line of Thomas Flaten with Lake Street Capital Partners. Please go ahead.

Thank you. And thanks for taking the questions. I apologize, if these are repeats at some challenges with my connection? Did you disclose how many patients have been enrolled in the DIPG study?

No, we haven't yet. We can we can enroll up to 12. I think you know, Thomas, this is a good example of where, you need a great expertise to be able to treat a patient, a child with DIPG. And the team that we have assembled at, ZIOPHARM to be able to do this, our partners that these three hospitals have all of that, these children with intratumoral they desperately need therapy. And it's a program that really, I think, speaks the kind of company that I like to work for, a company that is leaning in, that is doing really important work for vulnerable populations. And we benefit essentially, from a great team and a great board to be able to do that.

Great. And then, maybe one for Sath, there was about $2.5 million worth of the pre-payment in MD Anderson that was spent in the third quarter. Once there's patient enrollment and things start really moving down there, how long do you expect that $11.5 million bucks to last? And when we have to start supplementing that in order to continue things forward?

No, exactly right. So if you look at our exposure drawdown, as you say we came -- we had [indiscernible] 2.5 million there. And our cash number went down a little bit by about $18 million. So if you think about that, from a run rate perspective, that 11 million and change prepaid balance will be expected to last couple more quarters to the few more quarters. And after that, that will start coming out of the cash balance. So if you think about the net draw down, I put about 21 million, about 18 of that goes on the cash, 2.5 million rates from the NBN completed. And so that's what starts, ramping up going forward. I think if you look at our projections and we just closed a mid-2022 cash reduction that's pretty consistent with total sense that is similar to what we're seeing in these quarters. So there'll be some quarters that will be higher, the seasonality wise, but in general terms, if you just extrapolated it from the cash reduction in this quarter, and you draw down on that balance, you would end up right in the ballpark of our disclosed cash reduction.

Got it. And then one final one and I apologize also, this is a repeat, with respect to the allogeneic CAR-T study. How close is screening and evaluating is great, but how close do you think they are to actually identify?

Yeah, yeah, we're working with probably the nation's largest cancer center and it's where I actually had the privilege of working. When I lead the pediatric program, they are constantly transplanting patients. So I think investors can take part there, that there are patients going through the system all the time. And therefore we have lots of opportunity to look for patients, who would benefit from our technology.

Great, I appreciate. Thank you for taking the questions.

And there are no further questions on the line at this time. I'll turn the call back to Dr. Cooper for final comments.

Yeah. Thank you so much operator. And thank you everybody, who listened in and participating. Be safe and be well. And we look forward to talking with you next time. Bye-Bye now.

That does conclude the conference call for today. We thank you for your participation. And ask that you please disconnect your lines.