TG Therapeutics, Inc. (TGTX) Q4 2014 Earnings Report, Transcript and Summary

Greetings and welcome to TG Therapeutics Fourth Quarter 2014 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jenna Bosco, Director of Investor Relations. Thank you. You may begin.

Thank you. Good morning, and welcome to our conference call regarding TG Therapeutics fourth quarter 2014 financial results and business update. I am Jenna Bosco, TG’s Director of Investor Relations, and I welcome you to our conference call today. Following our Safe Harbor statement, Sean Power, TG’s Chief Financial Officer, will provide a brief overview of our financial results; and then turn the call over to Michael Weiss, the company’s Executive Chairman and Interim Chief Executive Officer, who will provide an update on the ongoing development of our novel, glycoengineered anti-CD20 monoclonal antibody, TG-1101, and our novel once daily PI3K delta inhibitor, TGR-1202, as well as review of our preclinical program. Before we begin, I would like to remind everyone that various remarks that we make about our future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. TG cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated. Factors that may affect TG Therapeutics’ operations include various risk factors and uncertainties that can be found in our SEC filings. This conference call is being recorded for audio rebroadcast on TG’s website, www.tgtherapuetics.com, where it will be available for the next 30 days. All participants on this call will be on listen-only mode. Now, I would like to turn the call over to Sean Power, our Chief Financial Officer, to briefly discuss the financial results for the fourth quarter of 2014 as well as the company’s overall financial condition.

.: To begin, I’d like to provide an update on our cash position. At December 31, 2014, we had cash, cash equivalents, investment securities and interest receivable of $78.9 million, as compared to $45.4 million at December 31, 2013. While we expect our cash equivalents to increase in 2015, we will continue to operate with a very controlled burn and expect our current cash will be sufficient for over two years for what we believe will be very significant value creating milestone. Additionally, given increased manufacturing expenses incurred in the fourth quarter as we scale up and prepare for Phase 3 and commercialization, we decided to take advantage of favorable market conditions and during the first quarter raised approximately $19.6 million under our ATM sales facility at an average price of $14.36 per share. As a result, our pro forma cash balance as of December 31 is approximately $98.2 million. Turning to the financial results for the quarter, our consolidated net loss for the year ended December 31, 2014, excluding non-cash items and a one-time upfront cash milestone payment, was approximately $25.3 million. The consolidated net loss for the year ended December 31, 2014, inclusive of all items, was $55.8 million or $1.64 per diluted share, compared to a consolidated net loss of $20.5 million for the year ended December 31, 2013, representing an increase in consolidated net loss of $35.3 million. The increase in consolidated net loss during the year ended December 31, 2014 was primarily the result of $8.1 million of expense, $4.1 million of which was non-cash stock expense recorded in conjunction with the licensing agreement for TGR-1202, $1.2 million in non-cash stock expense recorded in conjunction with the licensing agreement for the IRAK-4 inhibitors program and a $15.9 million increase in non-cash compensation expense related to equity incentive grants. Exclusive of the items mentioned, other research and development expenses for TG-1101 and TGR-1202 increased $7.1 million and $3.8 million, respectively, over the comparable period in 2013. Our consolidated net loss for the fourth quarter ended December 31, 2014, excluding non-cash items was approximately $13.8 million, which included approximately $8.9 million of manufacturing and CMC readiness expenses in preparation for Phase 3 clinical trials and commercialization. The consolidated net loss for the fourth quarter ended December 31, 2014, inclusive of non-cash items, was $18.8 million, or $0.48 per diluted share, compared to a consolidated net loss of $5.7 million during the comparable quarter in 2013, representing an increase in consolidated net loss of $13.1 million. The increase in consolidated net loss during the fourth quarter of 2014 was primarily the result of other research and development expenses for TG-1101 and TGR-1202 increasing $9 million and $0.2 million, respectively, over the comparable period in 2013. The increase in other research and development expenses related to TG-1101 was primarily the result of increased manufacturing and clinical trial expenses in preparation for the launch of Phase 3 registration programs. Also contributing to the increase in consolidated net loss during the quarter ended December 31, 2014 was a $4.1 million increase in non-cash compensation expense related to equity incentive grants. I will now turn the call over to Mike Weiss, our Executive Chairman and Interim CEO.

Thanks, Sean, and thanks to all of you for joining us on this call today. 2014 was a truly transformational year for our company. We made significant progress in the development of our lead compounds, TG-1101 and TGR-1202. And we’re excited to announce the company’s first Phase 3 clinical trial, the GENUINE trial, which is being conducted under Special Protocol Assessment for patients with high-risk chronic lymphocytic leukemia or high-risk CLL. Additionally, we’re able to expand our portfolio with complementary product candidates, as well as end the year with a strengthened balance sheet through strategic capital raises. Our vision has been clear since the start of the company, just three short years ago, to be the leader in developing best-in-class combination therapies for B-cell malignancies. And we’re proud of the progress we’ve made thus far toward that goal. Before I review the most recent clinical updates, I want to highlight some of the notable achievements over the last 12 months. We presented clinical updates from all ongoing studies in seven months at ASCO, EHA, and the Pan Pacific Lymphoma Conference. We converted our agreement for TGR-1202 from a joint venture structure to a full license agreement providing us greater control over development and commercialization. We completed a global license agreement with Ligand Pharmaceuticals for the development of IRAK-4 inhibitors. We commenced the first ever triple combination clinical study of TG-1101 plus TGR-1202 plus ibrutinib. We announced our first Phase 3 clinical trial of TG-1101 in combination with ibrutinib under Special Protocol Assessment. And finally, we presented key data at the 56th Annual American Society of Hematology meeting also referred to as ASH in December, which included an oral presentation of the data from our Phase 1/2 dose escalation study of TG-1101 in combination with TGR-1202, including a few patients on the triple therapy arm, which again included ibrutinib. We also had two poster presentations showing updated data from the Phase 2 trial of TG-1101 in combination with ibrutinib and updated data from the Phase 1 dose escalation trial of TGR-1202. And just last week, we were excited to announce that we entered a global collaboration to develop and commercialize anti-PD-L1 and anti-GITR antibody research programs in the field of hematologic malignancies. These antibodies were developed in the labs of Dr. Wayne Marasco of Dana-Farber Cancer Institute. In the addition to the above achievement, we also raised approximately $70 million over the course of 2014 and an additional, approximately, $20 million this year, which we feel positioned us well to execute the planned clinical programs and our overall business plan. Now I would like to review the data that we recently presented at ASH in December. I’ll start with the data on the combination of 1101 plus ibrutinib, which supported the launch of our first Phase 3 trial. I will then review data from our ongoing single-agent study of TGR-1202, which will then be followed by data on the proprietary combination of 1101 plus 1202. And lastly, on the triple therapy combination cohort, which includes all three 1101, 1202 and ibrutinib. Beginning with the Phase 2 data from the combination of TG-1101 and ibrutinib, the poster presentation included data from 54 patients with relapsed and/or refractory CLL or mantle cell lymphoma. The combination was well tolerated in the 54 patients evaluable for safety, with few Grade 3/4 reported. Adverse events were manageable, with only 7% of patients discontinued from the study due to adverse events. This included two events attributed to ibrutinib and two events deemed not related. With respect to efficacy of the 20 CLL patients with previously treated high-risk disease, 19 or 95% had a complete or partial response as per the iwCLL criteria. This is the patient population that will be studied in the company’s recently announced GENUINE Phase 3 clinical trial, which has been conducted pursuant to a Special Protocol Assessment with the FDA. As a reminder, the GENUINE Phase 3 trial is a randomized controlled clinical trial, with patients receiving either TG-1101 plus ibrutinib or ibrutinib alone. The trial will enroll approximately 330 patients, the first 200 patients included in the overall response endpoint. As per the SPA, if positive the company plans to file the overall response data from the trial to support accelerated approval for TG-1101. All patients will then be followed for progression free survival or PFS, which is designed to support full approval of TG-1101. We are very excited about the prospects of this study and look forward to completing enrollment and reporting on the overall response endpoint in the second half of 2016. Let me now discuss the data presented at ASH on TGR-1202 as a single-agent followed by the combination of 1101 and 1202, which we affectionately refer to in company as TG-1303. The TGR-1202 single-agent ASH update included data from 55 patients either relapsed or refractory hematological malignancies achieve a TGR-1202 at doses ranging from 15 milligrams to 1,800 milligrams once per day of the initial formulation and 200 milligrams to 1,200 milligrams once per day of the recently introduced micronized formulation which is assumed to exhibit approximately double the absorption of the initial formulation. From a safety standpoint, TGR-1202 is well tolerated with no observed dose related tends and adverse events, notably of the 55 patients evaluable for safety, no single agent drug-related liver toxicity or events of colitis were observed, with the median time on study of approximately six months and some patients on daily TGR-1202 for over 1.5 years. As you may be aware, these are adverse events associated with other PI3K-delta inhibitors, both FDA approved and in development. Of the 55 patients treated with TGR-1202 at the time of the presentation, only two patients less than 4% were withdrawn due to adverse events. Significant clinical activity was observed in patients with CLL treated at what we consider to be therapeutic dose levels. That is to say, doses greater than or equal to 800 milligrams of the initial formulation or any of the doses tested with the improved micronized formulation. In those patients with starting doses at therapeutic levels 13 of 14 evaluable patients or 93% exhibited greater than 50% reduction in nodal size, sometimes referred to as a nodal response and seven of 14 patients or 50% achieved a partial response per the iwCLL criteria. Lastly, at ASH, Doctor Matt Lunning of the University of Nebraska Medical Center presented data from the dose escalation study of TG-1101 in combination with TGR-1202. The combination was viewed to be well tolerated with few Grade 3/4 events reported outside neutropenia, which was seen in about one-third of the patients. With respect to efficacy, the data presented at ASH showed 100% of the evaluable CLL/SLL patients were 9/9 had nodal reductions with six of nine patients or 67% achieving an objective response per the iwCLL criteria and the remaining patients on study awaiting further assessment. Additionally, we saw a 43% response rate in three of seven patients with relapsed/refractory diffuse large B-cell Lymphoma, including two patients achieving an independently confirmed complete response. Consistent with the dose exposure relationship observed with single agent TGR-1202, all Lymphoma responses thus far in the study occurred at the highest doses of TGR-1202 tested at that time, which was 1,200 milligrams of the old formulation and 600 milligrams of the micronized formulation. We are encouraged by these early dose response data and look forward to presenting additional data from later cohorts this year, as we push the doses higher to what we believe will be optimal doses of TGR-1202 of 800 milligrams to 1,200 milligrams. Also included in the ASH presentation from Dr. Lunning were the first five patients who were treated with a triple combination of TG-1101, TGR-1202 and ibrutinib. Notably, this marked the first data presentation on the clinical combination of a PI3K delta inhibitor and the BTK inhibitor. Given the recent tolerability issues seen with novel combinations of this type, we proceeded cautiously with this combination in a three plus three dose escalation and up-to-date [ph] very pleased with the results, even in the difficult to treat population that has been enrolled. With respect to safety, a triple combination was well tolerated with no Grade 3 or 4 events observed with patients on the triple therapy, upward of four plus months. Of the five patients enrolled, three were evaluable for response with two patients too early to evaluate. Two of the first three evaluable patients responded to the triple therapy including a patient with Follicular Lymphoma. It was refractory to both ibrutinib and rituxan. That patient achieved a significant response within eight weeks of the initiation of therapy. Dose escalation continues in that arm of the study as well and we’re excited to see how that data evolved with higher doses of TGR-1202 still yet to be incorporated. It is important to note at this time we have approximately 50 patients who have been on TGR-1202 for greater than six months as a single agent or in combination studies and we’re yet to observe any drug-related colitis. Given the inter-patient dose escalation, most of these patients would have been exposed to doses greater than 800 milligrams of the original formulation for the majority of their timeline study and are currently at doses of greater than or equal to 800 milligrams of the micronized formulation. We are looking forward to building upon these encouraging data presentations. I’m presenting updates on all of our studies throughout 2015. We expect 2015 will be another transformational year for the company and has already gotten off to an exciting start with the recent additions of our anti-PD-L1 and anti-GITR programs. With that as a summary, with a very productive 2014, let me talk about our top priorities for 2015. First, we plan to aggressively recruit into the GENUINE Phase 3 clinical trial, TG-1101 in combination with ibrutinib. We’re planning to commence additional combination of Phase 3 clinical trials, particularly for the company's proprietary 1303 combination of 1101 plus 1202 in patients with CLL and NHL. We plan to launch new triple therapy combination trials in addition to the currently enrolling Phase 1/2 trial of TG-1101 plus TGR-1202 plus ibrutinib. We are targeting to enter the clinic for the company’s IRAK4 inhibitor program sometimes in the second half of the year. We are also targeting the commencement of clinical development for the treatment of autoimmune diseases with one or more of our drug candidates. And finally we plant to present updated data on each of our Phase 1 and Phase 2 clinical trials at major hematology/oncology conferences during 2015. As you can see, we have a very ambitious program set for 2015 that will continue to set us up for success in the coming years. With that, I’d like to turn the call back over to the conference operator to commence the Q&A session, following which I’ll return to provide some concluding remarks.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Jonathan Aschoff with Brean Capital. Please proceed with your questions.

Thanks and good morning. So Mike, given just the 1202 patient, who have been out for six months on a dose that you would reasonably think would be a commercial dose if approved. How does that amount of colitis compared to the same duration of treatment with the approved dose of Zydelig?

Sure. So I mean – alright, thanks, Jonathan. So when we look at the product label for Zydelig or idelalisib they’re showing about a 14% rate of life threatening or severe colitis or diarrhea. It has come to our attention that or is believed by investigators that colitis is a late onset events typically occurring six plus months out. So if you look at the number of patients from the product label that were out six months or more, when they came up with a rate of 14%, it’s probably about half or maybe even less than half of the patients on idelalisib. So 14%, I’m pretty sure it’s calculated based on 110 patients enrolled into the study which leaves you with about 15, 16, 17-ish patients with colitis over and really about 50 patients or so that made it out the full six months or more. So it’s hard to know exactly what their actual rate is because they’re not the exact numbers, but it seems like it’s higher than the 40%. I think the denominator is closer to 50 and the numerator is in that 15 patient, 16 patient range. And we’ve got the single-agent 1202 patients out over six months I think it’s 25 patients or 30 patients-ish out over six months with zero as the numerator. Again, I can’t say we will never see colitis and who knows what’s going to happen. But I think that if you put a confidence interval around that, it would have to be much, much lower of a rate than what was seen with idelalisib.

Okay, thanks. I was wondering, as it relates the two antibodies that you recently in-licensed, just given how much, let’s call it, I don’t know, assumed evaluation that eNeura Therapeutics had in cancer recently, is there any chance that one or both of those leapfrogs IRAX-4 in any way or are they definitely behind it in our development for the time being?

For the time being, I’d say we’re behind the IRAK-4, in terms of time to the clinic as it is today, they’re behind. I’d say the only way that they can make it to the clinic before IRAK-4, if IRAK-4 had a problem. So I hope that doesn’t occur and then once things are in the clinic, they do take their own twists and turns, so I can’t predict even if IRAK-4 is in the clinic six months or so before, or even eight months or so before the two antibodies. It’s hard to predict which ones will be further along in the clinic. It will depend on safety and activity seen at the time. So I think there are, I mean, to me, they are all within a reasonable timeframe of each other I think gives us a lot of options for creating novel combinations and as well as exploring the single-agent activity in new patients. I mean IRAK-4 may have some very unique properties as a single-agent in the [indiscernible] tumors. But also of course we’re super excited to layer that on top of the1303 combination and see what that brings us and same thing for PD-L1 and GITR. I don’t think we can rule out single-agent activity of those drugs in any particular sub type, for instance PD-L1 in Hodgkin's disease. We know it’s a very attractive opportunity, but there too, we’re super excited about seeing what will happen when we start layering some of these pieces together.

Okay. Thanks Mike.

Thanks, Jonathan.

Our next question comes from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

Hey, good morning, guys.

Good morning, Matt.

Congrats on the progress. Just want to warn you, I’m going to ask you to make some forward-looking statements.

Well, thank you for the warning. Lucky Jenna, I believe, gave a nice cautionary remarks on the forward-looking statements. So please go ahead.

Just starting out in terms of this year, which we look forward to in terms of data, you mentioned ASCO, EHA and [indiscernible] can you give us any detail in terms of what you expect at each of them.

Yeah. So basically at the three conference, we are submitting basically some overlapping abstract to the three conferences and we’ll basically decide which gives us the best opportunity to present data, but the trails that we’ll be – that we’re targeting of course at the 1202 single agent and then 1101, 1202 double combination and then separately I think we’re pulling out the 1101, 1202, ibrutinib as a separate possible presentation. So those are the three pieces we’d like to present at the different conferences and again, it maybe that we present one at each one or more like than not, my guess is we’d probably present one or two that overlap in some of the other conferences as well. So we’ll try to get pieces in both – one of the U.S. conferences and the European conferences, but those are the three data sets we’d like to update.

Okay, sounds good. And just last week, AbbVie announced the proposed acquisition of Pharmacyclics and during their conference call AbbVie’s CEO made a statement that he is acquiring a pipeline and a drug. Seems to me you’ve got both of that opportunity in a number of your drugs, that you also have a pipeline behind it as a single drug. Can you just help us think a little about your pipeline and in context of that statement as well?

Sure. So who said that? I’m not familiar with that company, what are they called?

AbbVie

Just kidding. Yeah, so look we have a mission here to eradicate B-cell malignancies. The answer for us is not just one single drug. We are trying to put together as many best in class opportunities as we can come up with. I think we’ve been very fortunate in our search far and wide to some really main piece starting with the 1101. And I think one thing that people should take from how we positioned ourselves and what we’ve done is we’ve taken in every one of these drugs and we said that we know that they are active in their classes or the process are active. The 1101 in particular we said, look we know it’s active for sure in humans, but we don’t know fully what the glycoengineering will do for us and how much of improved activity and I think as we’ve evolved, we believe and we’ve certainly think that group as a whole would decided that the other glycoengineered CD20 have demonstrated that there is advantages to being glycoengineered. And so we believe that we are sitting on, if not the best-in-class equivalent to, a best-in-class like CD20 PI3K delta, we’re very cautious when it’s pre-clinical. We were kept very reserved outlook on it. We said we know that it hits the target, that’s all we know until we put it into humans, but it does have some optionality to be better than what exists and as we’ve develop the drug and this is where it all comes out in the clinic, we’ve identified a drug that is as active if not more active than what exists today with a safety profile particularly as it relates to liver-tox and colitis that at least observation I’d say looks significantly better than what exists today. So as we move forward with the IRAK4 program and we move forward with the GITR and PD-L1 programs, I think each one of those, again, IRAK4 we will be either the first or second to bring an IRAK4 into the clinic. I think where lets [ph] say Greenfield in terms of how to handle an IRAK4 and what’s the best-in-class and hopefully we will have that kind of an agent. But we’ll certainly be close to first-in-class and then as it relates to PD-L1, we are believers in the class. I don’t think you have to have too much faith to acknowledge that PD-L1 is an important area. And we are engineering and has already engineered pieces into this antibody that could make it best in class kind of compound as well. And then GITR is a relatively novel, very few competitors out there. We won’t be first-in-class but we’ll be very fast follow-on. And so again, I know the point was – they talked about a pipeline and a drug, obviously each one of these drugs is a pipeline in themselves, because there’s always going to be multiple opportunities for each of these compounds. But we think we put together rationally a set of compounds that can work synergistically together. We can improve outcomes. We seeing it already with 1101 plus 1202 and we’re obviously super excited to start layering on some of these other components and see what happens.

Alright, thanks and let’s just dive a little bit more into your pipeline, specifically with your Phase 3 trial 1101 plus ibrutinib, could you talk a little about the market opportunity there potentially in relapsed/refractory CLL indication and how to think about that?

Sure. So we’re – I know that there is lot of folks – when we talk to a lot of folks that are concerned about how and where this will fit in. It’s good when we get to the question which is not, if will be approved? But when you are approved, what will happen? I think that’s a good step forward for the company. I think last year the question was how in the world you only get the products approved. I think we’ve convinced those, the callability [ph] of approval is high and then we have to worry about how we’re going to fit in to the marketplace. I think the nice part about looking at CLL specifically and looking at relapsed/refractory CLL, one, I think ibrutinib will be for sometime the dominant backbone in that area. And the question is, if you’re a physician what are you going to do in the relapsed/refractory patients on top of ibrutinib? So your options, as we see it from studies that are being conducted today, the most likely labels for relapsed/refractory settings with ibrutinib will be ibrutinib alone, ibrutinib with our CD20 with rituximab or TG-1101 or ibrutinib plus bendamustine/Rituxan and that study is likely to read out, I think, sometime later this year or into next year. So those are the three labels Rituxan, ibrutinib alone will not be a labeled indications as far we could see it in the near-term. There is no regulatory Phase 3 trial on the horizon that should complete in the next two, three years. So if you have the choice, if you are a physician, and you have the choice of those three what are you going to use? We start with, when we look at the market opportunity – we start probably by then saying where is the patient going to be treated? Are they going to be treated in an academic center? Are they going to be treated in the community? Our assessment is that about 70% of the patients will be treated in the community in early relapse settings and about 30% will be treated in academic settings. And for the moment, let’s just focus specifically on the community where they are more like than not going to use a labeled add-on to ibrutinib community docs will perceive the additional overall response rate advantages of adding on a CD20 as obvious and helpful to the patient, but also for them, they have an economic incentive to offer an additional infused product. So we think in the community, it’s more likely than not that ibrutinib will be used with something. And if you look at the something, again we have two label choices that we market it to those physicians. One will be 1101 and one will be bendamustine/Rituxan. In studies previously conducted, it does not appear that bendamustine has much affect in high risk patients with CLL. Most physicians are aware of that [indiscernible] just bendamustine is just not a good drug in those high risk patients. Lower or most chemotherapies, FCR also has very low response rates in the high risk or [indiscernible] patients. So those are about half of those are observed hepatic patients. So just taking off the tab, we see that 35% of the total market is more likely than not without much of an effort then to go on to ibrutinib plus 1101 and then you have the rest of the market close [ph] that will be shared in some rational, in some rational. We do not believe that bendamustine plus Rituxan on top of ibrutinib is going to have much more than we’re going to see with ibrutinib plus 1101. So we think from a toxicity and safety standpoint particularly, again, into the community, even in the patients that are not high risk they’re not going to perceive any additional benefit by adding them the bendamustine and getting the toxicity. So we do think that we have a really dominant potential position in the community, in the relapsed/refractory patients in combination with ibrutinib. And then in the academic setting, I think that’s going to be more of a mixed bag, I think we’ll see more competition from Abt-199 based combinations which will be more relegated to the large academic centers where you can manage the toxicity of those regiments. But I think we’ll participate in that market as well. So it’s just not as clear for us to model that I think. Even if one [indiscernible] model out the 35% of the total market basically take in 50% or just a high risk CLL patients in the relapsed/refractory setting treated in the community, I think one could model out a very attractive opportunity for us that’s even before we get started across the rest of the in the marketplace.

Great, thank you. That’s very helpful. I’ll jump back in queue now.

Thanks Matt, appreciate it. Operator Our next question comes from the line of Arlinda Lee with MLV. Please proceed with your question.

Hi guys, thanks for taking my question. On the IRAK4 program with starting in the clinics later [indiscernible] can you maybe talk about what data we might see on that maybe preclinical coming before when you start the trials and how you should think about oncology versus other immunities? Thank you.

Sure, thank you. So, yeah, so we will have a data presentation at AACR this year. It will be in vitro showing relative potency against a number of known compounds and also in combination with a number of known compounds, including our own other compounds internally. So I think it will be an interesting presentation to start to [ph]. I think it show the potential advantages and where IRAK-4 fit into the treatment landscape obviously with all the precautionary – that it’s preclinical in vitro information, but that will be coming up soon, I think, at AACR just in a few weeks from now. And the second part of the question, Arlinda, was?

How you speak about maybe prioritizing oncology versus other immune disease?

Great. Thanks. So we are going to start for sure on the oncology side, I think for us it will be quite easy to get rolling in that area. There are a few indications that are MYD88 driven, Waldenstrom's being the most notable. About 90% of all Waldenstrom's are believed to have the MYD88 mutation. So that will be a really good place for us start. We’ve done a lot with Waldenstrom's in the past. The context that we have a lot of great relationships in that area and believe we could rapidly enroll into a Waldenstrom's study just to again as they capture the hypothesis that MYD88 is important in that disease and we can down regulate it. But we are not – we are certainly not going to rule out the possibility that the pathway that IRAK-4 fits in is important for tumor growth and survival independent of MYD88. So MYD88 being constituently activated is certainly the easiest place to look, but we certainly don’t want to rule out looking across all the tumors to see again if the pathway may not be constituently activated, but could be activated as part of the disease process at the receptor level versus at the MYD88 level. So I think there is a big opportunity, we need to explore and then understand it better before we make any decisions on where we will focus the cancer effort. And, yes, we’re certainly very interested in the autoimmune side of the opportunity. The IL-1 receptor is a validated target. This IRAK-4 sits below that receptor, but it is – there is one approved drug that targets the IL-1 receptor for rheumatoid arthritis. So we definitely think that there is an opportunity either alone or in combination with some of our other agents to create a better treatment option for patients in autoimmune diseases – RA, Lupus, MS are all potential candidates.

Great. Thanks very much. And can you also maybe just [indiscernible] with all these – you have preclinically that are coming into the clinic fairly soon. How do you think about developing them individually? And are there plans to maybe have multiple combination or even larger combinations or I guess more drugs in your combinations than you’ve talked about so far? Thanks.

I think the answer for both of that is yes, yes, and yes. So we have to – I think, to get a base case and understanding, we have to develop the drugs as single agent to understand their attributes. And then, clearly, our belief is that 1101, 1202 is our foundation. It’s where we spend most of our time. It will be the first approved regime across, we believe, multiple indications. So as that at the base, then we have the opportunity to start adding in each one of these compounds. From our standpoint, it will be relatively straightforward; from the Street standpoint, it will be completely complicated, and then we will understand exactly what we are doing. But we will definitely be doing a number of studies basically identifying the different potential combinations that we can do leveraging off of the 1101 and 1202 piece.

Great. Thanks very much.

Thank you.

[Operator Instructions] Our next question comes from the line of Ren Benjamin with HC Wainwright. Please proceed with your questions.

Hi, good morning, guys. Thanks for taking the questions.

Hey, Ren.

Hi.

Hello. And I guess just digging in a little bit deeper into the triple combinations and the additional triple combination trials that could occur this year, can you help us provide some color, are we looking at triple combinations with established – on the market therapeutics or is it just triple combination with additional pipeline products or the pipeline products that you have? Can you give us some color as to where this is going?

Yeah. I mean, I think in terms of any triple combination that will be started this year, we deal with agents that are already on the market, but what we are trying to do is look at particularly in one for sure look at things that we maybe able to bring in or bring to the clinic later. So we use them as almost a proxy kind of study. So we think that in our portfolio probably not too much, because there is one class of drug in our portfolio that’s actually approved, so I think you can [indiscernible]. And then we have a few other things that we think are interesting out there that we will take a look at. But I think in terms of additional combinations one that we will particularly keen on is getting started with something in the PD1, PD-L1’s space. Try to get that going so that would, for us, represent a proxy. We’d learn how to use it, build us a mechanism and then we could layer in our PD-L1 when it’s available, sometime second half of next year, which if we started something in the next three or four months, it’s part of the perfect timeframe for us to understand the attributes of that combination and help us move more rapidly with our proprietary combination.

And so would this be the first time that, I mean, are you thinking about going into solid tumors with various combinations or are you staying in the heme space, but brining the PD1 [indiscernible] into heme space?

Yeah, so it’s the latter for sure. Our focus is primarily to almost exclusively in heme. We may look at some solid tumor stuff at some point, but it’s not a major focus of ours. Again, we’re here to eradicate B-cell malignancies and also create better treatment options in autoimmunity. So I think we’ve got [indiscernible] with that mission, but, yeah, we would like to take PD1, PD-L1 into heme malignancies and see what actually happens. No one knows, it really has not been done certainly in combination like this, so then it’s something we’d like to do. Not necessarily we’ll see how it goes from here. But certainly that’s something we would like to do to get a lot of information or more information before we start on our proprietary PD-L1 program.

Got it, okay. Would we see any preclinical work exploring the effects of PD1 inhibitors, or PD-L1 inhibitors in the heme space in combination with your products sometime in the first half of this year?

Sometime in the first half of this year, definitely not. I think sometime in the first half of next year, it is possible.

Got it. Just switching gears real quick to the tox profile. Can you give us some thoughts regarding, not necessarily why tox added, but a lot of people seem to be, one of the tougher positions, seems to be handling the tox fairly well. So the question comes out, well, okay, you are seeing some liver tox or some colitis, but people are getting better at managing these toxs. Can you give us some thoughts as to how you are thinking about that?

Yeah, for sure. So you raised a really interesting point, Ren. We went to the ASH and we did have a series of investors who came to us and said, you know, we talked to the doctors and they said that they are – they can handle, they can manage the liver tox, and they can even manage the colitis, although we are seeing a lot, we’re concerned about colitis for sure. But they said look we can manage liver tox, we give patients chemotherapy everyday, in the grand scheme of things, we can handle this and we handle chemotherapy. And we said to the investor that sounds reasonable, these are very sophisticated doctors who deal with very toxic agents all the time, but did you ask them a follow-up question, which is, we know you can handle it doctor, oncologists, but can you – if you had a choice of a drug that doesn’t have liver tox versus a drug that have liver tox or one that has colitis versus one that does not have colitis or even much lower incidents of each one of those, which drug you want on to use, and they said, no, no, we didn’t ask that question. But we did, we asked that question to every doctor we met with and we had a resounding laughter. Not one person did anything, but laugh at us and say, well, of course, we are going to use the one that has the lower toxicity if we have a choice, we were just saying we can manage it if we don’t have a choice. So I think that’s the problem when you ask the question can they handle it. We are dealing with people who are used to be on very toxic agents. They can handle just about anything. The question is if you have a choice, everything else being equal, less toxic alternative, they are always going to take the less toxic alternative. And that will become even more pronounced in the community where, again, I’m not saying this is going to be our issue or any ones issue, but they would even use probably a less active agent if it had a much better toxicity profile. You might not get that in academic settings where they would – the risk/benefit ratios might be slightly skewed, in terms of the community, they are going to have a real focus on that safety profile where the academics may push it a little bit. But even still, we think that all things are going to be equal, if not, again, to our advantage on the efficacy side versus a safety profile that is clearly distinguishable and that will resonate with the physicians.

Got it. Just one last one on the R&D increase this quarter. Sean, can you just give us a sense as to how we should be think about it, it seems like it’s a one time kind of in preparation of Phase 3 sort of charge, but maybe we need to thinking about it differently and can you guide us a little bit more on what the burn for 2015 could be?

Sure. Thanks, Ren. So in terms of the burn for 2015, we envision it being – burn of around $6 million a quarter. And on top of that as we’ve said previously as we commence additional registration trials that will add approximately another $2 million a quarter on that. And then we do envision incurring some incremental CMC prep and readiness expenses as we did in the fourth quarter. Those will come periodically throughout the course of 2015. So that’s kind of how we are looking at the burn for 2015 today.

Got it. Thanks very much and good luck in 2015.

Thanks, Ren.

Mr. Weiss, we have no other question at this time. I would now like to turn the floor back over to you for closing comments.

Great, thank you, and thanks again everyone. On behalf of all of us at TG, I’d like to thank our investigators and the patients as well as all the shareholders and investors for their continued support. We will approach most exciting 2015 in which we plan to aggressively accelerate all clinical programs including driving recruitment into our currently open GENUINE Phase 3 clinical trial and launching our first Phase 3 trial for proprietary combination of TG-1101 plus TGR-1202. Again, thanks for joining us and have a great day.