TG Therapeutics, Inc. (TGTX) Q4 2017 Earnings Report, Transcript and Summary

Greetings, and welcome to TG Therapeutics' Fourth Quarter and Year-End Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jenna Bosco.

Thank you. Good morning and welcome to our conference call regarding TG Therapeutics' fourth quarter and year-end 2017 financial results and business update. I am Jenna Bosco, TG's Senior VP of Corporate Communications, and I welcome you to our conference call today. Following our Safe Harbor statements, 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 Chief Executive Officer, who will provide an update on the ongoing development of our novel, glycoengineered anti-CD20 monoclonal antibody, ublituximab; our novel, once-daily PI3K delta inhibitor, umbralisib as well as a review of our recent achievements and upcoming milestones. 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.tgtherapeutics.com, where it will be available for the next 30 days. All participants on this call will be in a listen-only mode. And 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 2017 as well as the Company's overall financial condition.

Thank you, Jenna, and thanks, everyone, for joining us. As you may be aware, our financial results were released this morning and can be viewed on the Investors & Media section of our website at www.tgtherapeutics.com. I'll begin with our cash position. At December 31, we had cash, cash equivalents, investment securities and interest receivables of $84.8 million. Our pro forma cash position as of December 31, 2017, is approximately $114.6 million when including $29.8 million of net proceeds from the utilization of our ATM sales facility during the first quarter of 2018. Our net loss for the fourth quarter of 2017, excluding non-cash items, was approximately $27.3 million, including $6.1 million of manufacturing and CMC expenses for Phase III clinical trials and in preparation for potential commercialization, $4.2 million in expenses related to the commencement of the Phase III program for ublituximab in MS. The GAAP net loss for the fourth quarter of 2017, inclusive of non-cash items, was $30.9 million or $0.46 per share compared to a net loss of $23.7 million or $0.48 per share during the comparable quarter in 2016. As we had expected, our net loss, excluding non-cash items during Q4 of approximately $27 million, was very much in line with what we saw during Q2 and Q3 of 2017. Our net loss for the year ended December 31, 2017, excluding non-cash items, was approximately $102.5 million, which include $26.6 million of manufacturing and CMC expenses for Phase III clinical trials and in preparation for commercialization. GAAP net loss for the year ended December 31, 2017, inclusive of non-cash items, was $118.5 million or $1.91 per share compared to a net loss of $78.3 million or $1.60 per share for the year ended December 31, 2016. I'd like to spend just a few minutes providing some additional color on expectations for our burn rate moving forward and how our clinical programs may impact what we see in 2018. As we had predicted, our burn leveled off over the last three quarters. Moving into 2018, we expect our burn to be between $20 million and $25 million per quarter as the UNITY-CLL program winds down and the MS Phase III program ramps up. It should increase modestly if the MS program enrolls more rapidly than anticipated, which would, of course, be a good outcome. To ensure that we remain well-positioned to deliver on our goals, during the first quarter, we added just under $30 million to the balance sheet through the use of our ATM. Our average price during this campaign was $11.93 and total shares issued were approximately 2.5 million. Inclusive of the capital raise during the first quarter, we believe our current cash position will be sufficient to fund our operations well into 2019. With that, I’ll now turn the call over to Mike Weiss, our Executive Chairman and CEO.

Thank you, Sean, and thank you, Jenna, and thank you all for joining us this morning. 2018 is off to a great start with the recently announced publication of the Phase I study of umbralisib in The Lancet Oncology and the presentation of actions of updated data from our Phase II MS study as well as the in-licensing of our novel BTK inhibitor program from Jiangsu Hengrui. And this is just the beginning. We expect to report many exciting developments throughout 2018. Before a review on what's in-store for the remainder of this year, I'd like to kick off this call by recapping some of the major highlights from 2017. I've listed them chronologically. We received orphan drug designation for the combination of ublituximab and umbralisib for the treatment of chronic lymphocytic leukemia and diffuse large B-cell. We announced the publication of the Phase I/II trial of ublituximab in the British Journal of Haematology. We presented positive data from the Phase III GENUINE trial of ublituximab in combination with ibrutinib at the ASCO Annual Meeting in June. We launched the ULTIMATE Phase III trials evaluating ublituximab in patients with MS. And we presented positive data from our Phase II MS trial at various conferences throughout the year. We completed an enrollment in the UNITY-CLL Phase III trial in the third quarter. We advanced our PD-L1 monoclonal antibody into clinical development in the fourth quarter. And finally, we raised a total of $137 million over the course of the year with an additional $30 million being raised thus far in 2018, leaving us pro forma for January 1 with approximately $115 million in cash with a healthy balance sheet and cash well into 2019 and an exciting 2018 to come. Let's now review the current status of our ongoing Phase III and pivotal programs. I'll begin with the UNITY-CLL. As a brief reminder, the UNITY-CLL Phase III trial is a randomized study of ublituximab in combination with umbralisib or U2, as we refer to the combination, compared to an active control of ublituximab plus chlorambucil in patients with both treatment-naïve and relapsed or refractory chronic lymphocytic leukemia. This trial is being conducted under Special Protocol Assessment with the FDA and is a large global study including over 600 patients. As announced last October, the demand for this study exceeded our expectations. And we completed the enrollment nearly nine months ahead of schedule. Approximately 60% of the patients enrolled were frontline, and approximately 40% were relapsed or refractory. We expect topline overall response results in this study to be available in the second quarter of 2018. Let me remind everyone that we are targeting a 15% absolute improvement in overall response. And if successful, we plan to seek to file for accelerated approval in the fourth quarter of 2018. Following the overall response readout, the primary endpoint for this study is progression-free survival to support full approval of the combination and ideally support a very broad label for the treatment of CLL. With that, let me give a quick GENUINE update. As a reminder, the GENUINE Phase III trial is a randomized trial of ublituximab plus ibrutinib compared to ibrutinib monotherapy in patients with high-risk CLL. In light of the guidance given by the FDA last year with regards to accelerated approval, we were eager to see the results from the MURANO study of venetoclax plus RITUXAN. Recall, in order to file for accelerated approval, we will need to compare our data to all available therapies, which we believe will include venetoclax plus RITUXAN at that time. The results from the MURANO study were presented at ASH last year, which showed a 92% overall response rate with an 8% complete response rate as confirmed by independent review. We believe our GENUINE results compare quite nicely to these results, which as of August 2017 showed an 81% overall response rate with a 10% CR rate. While we believe the response rates were similar between GENUINE and MURANO, we believe in GENUINE, we were treating a more challenging patient population, including all patients being high risk with a median of three prior lines of therapy as opposed to MURANO, which included only a portion of high-risk patients and with a median of one prior line of therapy. With this information in mind, we believe we may have strong arguments that show meaningful benefit over venetoclax, RITUXAN, including, for example, the avoidance of fatal and/or life-threatening tumor lysis syndrome associated with venetoclax therapy. Again, we think the GENUINE story is coming together nicely and believe these are all pieces that we would include in a potential BLA submission to show that we may provide meaningful benefit over available therapy. While we have not made a final filing decision, we are continuing to drive the preparation of the BLA with the goal of being ready to file in the third quarter of this year. Now I'd like to turn the discussion to our UNITY-NHL trial. As you may recall, the UNITY-NHL trial has three independent parts targeting three subtypes of non-Hodgkin's lymphoma, including follicular lymphoma; marginal zone lymphoma; and diffuse large B-cell lymphoma. Let's start with the follicular cohort. In this cohort, we are currently enrolling into a single arm of umbralisib monotherapy in the same patient population that supported the accelerated approval of copanlisib. And we are targeting a similar number of patients, approximately 100 in this cohort. We expect to achieve complete enrollment in mid-2018. Next, let's review the marginal zone cohort. Similar to the follicular cohort, we're also currently enrolling into a single arm of umbralisib monotherapy for patients with relapsed or refractory marginal zone lymphoma. Here, we're following the ibrutinib approval, which is based on a single arm trial in 63 patients, and showed a 46% overall response rate. Our goal is to complete enrollment into this cohort in the fourth quarter of this year. Lastly, let's review the diffuse large B-cell cohort. We have now completed enrollment into the ublituximab plus umbralisib or U2 arm of this trial. And we are currently enrolling patients with a relapsed or refractory diffuse large B-cell to a single arm of U2 plus bendamustine. We are targeting complete enrollment into the U2 plus benda cohort by mid-year. Accordingly, if all goes as planned, we should be able to have topline data available for all three cohorts of the UNITY-NHL study in the first half of 2019. With that, let's switch gears and discuss some key highlights from our MS program. Let me remind everyone that we are running two identical Phase III trials under Special Protocol Assessment called ULTIMATE I and ULTIMATE II, evaluating ublituximab in relapsing forms of MS. I am pleased to report that the trials are well underway and open for enrollment in both the U.S. and Europe. We are targeting approximately 850 patients across the two studies with enrollments slated to complete in the first quarter of 2019. Ocrelizumab, an anti-CD20 monoclonal antibody like ublituximab, was recently approved for MS and is tracking to generate about $1 billion in sales in its first year. Accordingly, we think MS represents a major opportunity for us and our shareholders. Supporting the Phase III program, we presented updated data from our Phase II clinical trial of ublituximab in MS at the ACTRIMS Annual Meeting last month. We have now presented data from 40 of 48 enrolled patients through 24 weeks and are pleased to report that 97.5% of these patients were confirmed relapse-free after 24 weeks of treatment. This data compares very nicely, so it was presented in both the ocrelizumab Phase II and III studies. And we look forward to presenting the full data from the Phase II trial later this year, which will include all patients treated on the study through one-year of treatment. With that, I'd like to turn the call over to the conference operator to begin the Q&A session, following which, I will return and provide some concluding remarks.

Thank you. [Operator Instructions] Our first question is from Yatin Suneja with SunTrust.

Hey, guys. Congrats on the progress and thank you for taking my question. Just a couple of questions, starting with the UNITY-CLL expectations. I think in the past, you have mentioned that the trial is powered to detect about 13% delta in ORR. So the 15% that you are targeting, is that what you consider clinically meaningful? Is that based on the research and the feedback you received with the FDA? Just trying to understand what could be clinically meaningful in this setting.

Yes. So basically, what we've described is we've powered it for a 15% delta, which means that we have some additional power or additional ability to detect successfully a lower delta, which we say is about 13%. Clinical meaningfulness is determined as a review issue. So I don't think we can't ever get a guarantee that the delta that was chosen will be satisfactory as clinically meaningful. We think that, certainly, 15% is a nice delta. It's an absolute improvement. And again, I think, as we said when we were looking at the GENUINE data originally, anything better in terms of a delta over and above it just makes the case for clinical meaningfulness more compelling.

Got it. And then PFS is the primary endpoint for this trial based on the SPA that you negotiated. But did you receive any – or at that time, did you receive any feedback from the FDA or other regulatory agency with regard to the ORR as an – for accelerated approval? Just trying to understand what their feedback or what the feedback has been from the agency on the ORR for accelerated approval from this trial.

Yes. So we discussed with them the possibility of using overall response for accelerated approval. So that's all been pre-discussed. We allocated a certain amount of alpha independently for this endpoint. So both endpoints stand on their own. So yes, I mean, again, I think, subject to all the limitations of accelerated approval and all the rules surrounding that, I don't think there's any particular issue with the concept of using the overall response for an accelerated approval filing.

Got it. And then have you disclosed the alpha split between the ORR and PFS yet? Or is that something you want to tell us about?

We have not discussed the actual split between the two. But we have said that the 15% improvement is powered to a certain alpha, right? So it's – we're looking at a certain alpha that's associated with that 15%. So it's kind of an irrelevant number as to what the proportion is. But the more important side of it is we've maintained most of the alpha for the PFS endpoint.

Got it. And then just finally, and I'll get back in the queue. On the GENUINE filing, have you had follow-up discussions with the FDA about the PFS? I mean, it seems right now that you have seen MURANO data. Just trying to understand if the dependence on PFS is now a little bit lower than – and then if you could comment how, maybe, the PFS is trending, and when could we see the PFS from that particular trial, the GENUINE trial? Thank you.

Sure. So we've had discussions with the FDA on the PFS endpoint. I think there's – we've got good information. We're deciding what to do with that information. I don't think it's – as you said, as relevant now that we've seen the MURANO data. But certainly, the original discussions with the FDA, all the discussions have included if we want to use the PFS. We need to keep it blinded [indiscernible] flow, so there's no planned update, anytime soon on the actual PFS. They will be blinded for an amount of time until we can determine if it's at all useful for us to open it again, whether it's later or earlier, so. And for the moment, the PFS is now back to a blinded portion of the study. And I think over time, we'll figure out what the agency – what the utility, but again I think as you stated, it's probably less relevant at the moment as we're focused more on comparing ourselves to MURANO.

Got it. Thank you very much.

Our next question is from Matt Kaplan with Ladenburg Thalmann. Please proceed.

Good morning, guys.

Good morning.

Congrats on a progress. Just wanted to shift back to the MS program a little bit, you mentioned some of the data that was presented at the ACTRIMS meeting. And coming up at the AAN meeting, what should we expect to see there in terms of an update?

Yes. I don't know exactly what we're going to be presenting. I assume we'll certainly finish off, I think we were able to present 40 out of 48 patients thus far through the 24 weeks. So certainly, we'd like to finish off the 24-week data points. I'm not sure how much we will be talking about the 48-week data. I think our goal is to try to reserve that data for oral presentation, whether it's some portion of it or all of it. So I'm not going to commit to how much 48-week data, if any we'll see at AAN. But for sure, we'd like to clean up and finish off the 24-week endpoint.

Great, perfect. And then in terms of the ULTIMATE Phase IIIs, how is enrollment progressing there now that you have sites outside of the U.S. up and going?

My understanding is that we're on schedule, according to the CRO. So I think as far as I can tell, we're still on track for a completion of enrollment by 1Q of 2019.

And then in terms of the market potential there, given the success of ocrelizumab, I guess, so far in the market, what are your thoughts on that?

Yes. I mean look, we certainly believe that there's a huge market opportunity for a novel, active and convenient, well-priced MS treatment. I think ocrelizumab is showing and has shown that anti-CD20 monoclonal antibody therapy is a very attractive and very active treatment option for these patients. And I think we're going to come into the market at the right time with the right message with convenience and price being forefronts. Someone had sent me a – interestingly, someone sent me a little copy of someone's tweet the other day and it says, the person was quoted as saying, I didn't get upset when I was told I had MS, I got really upset, I'm paraphrasing, when I found out how much it would cost. So the MS community has been communicating to us after the KOL interactions we've had, the physician interactions, and we haven't had direct patient interactions, but they're angry about the pricing. Drugs that cost them, less than 10 years ago, $10,000 to $15,000 a year are now $80,000 a year. And they just can't understand why. So I think we're coming in with the right product at the right time at the right price.

Right, that's helpful. And then just going back to the UNITY programs, UNITY-NHL, you've previously said that the DLBCL arm, you don't have as much regulatory clarity with respect to that. Can you discuss that? And what are the moving parts there?

Yes, so for – we always feel most comfortable when there's a very on target, specific regulatory precedent. So with follicular lymphoma, as we discussed in the prepared remarks, copanlisib was approved using a certain patient population, certain endpoint and time. So we feel very good about that pathway. And same goes for marginal zone, where ibrutinib recently was approved. Again in certain marginal zone population, so we feel good about those regulatory pathways. With diffuse large B-cell, the only really recent precedent – there's actually been nothing approved for relapsed or refractory diffuse large B-cell. And then the most recent precedent was the CAR-T, which received full approval for truly refractory patients, third line, kind of just basically at least two prior lines of therapy refractory to prior treatment, kind of I'm not exact, but it's pretty close. So the CAR-T got a full approval based on complete response, but I – our understanding is that's not a – and I guess, if we want to go and cite the same exact patient population and do that strategy, but we've always been studying in intermediate population. So the intermediate population is for those unfortunate folks who fail front-line therapy, who are not eligible for transplant currently because there's nothing approved in that setting, and they'll receive a, what I describe as an alphabet soup of potential chemotherapies, whether it's EPOCH, GEMOX, B-R, R2, you get something off – I mean, technically off-label, but on at least standard of care today. And then if they fail one of those, then they become eligible for CAR-T. So in the middle, there's really no standard for what approvable? What would be approvable in accelerated approval setting? So that's why we're not as confident in that area. It's also – these are very challenging patients to treat, even the CAR-T, if you look – if you peel away the onion just one small layer, you see that I think the 6-month CR rate is down to about 30%. So it's a very challenging indication. And like I said, from a regulatory standpoint, we just don't have the kind of clarity that we have in some other areas. But our goal is to continue to push hard to find the right answer. We think U2 plus bendamustine with the early data looks quite compelling and exciting, and we'll continue with that. If that doesn't work, we'll just continue to build. I think the B-cell scenario, that's going to require a lot of multiple drugs. Like I said hopefully, we'll reach the hurdle with U2 plus benda. But if we don't, we've got a great trial up and running and we can continue to add drugs in to get there. So it's a – yes, from a regulatory standpoint, it's just hard to know for sure that what the hurdle will be.

That's very helpful. And then last question, just jumping from the pipeline a little bit, you recently in-licensed the BTK inhibitor. Can you give us some detail about your plans for that compound or that program?

Yes, sure. So look, it's just about to get into the clinical or phase sometime before the middle of this year. We'll start treating patients. Profile looks very good to us. Like all small molecules, you kind of never know until you start treating patients, what it's going to look like. But assuming it has a clinical profile that's similar to the preclinical profile, I think we have a very attractive BTK on our hands. And our long-term vision is one, to enhance U2 by adding a BTK inhibitor. We think across CLL, follicular, marginal zone and mantle cell, the U2 plus a TK combination could be very attractive. We also – clearly, we can use it in other ways, including additional lines of therapy of BTK plus ublituximab or just using the oral umbralisib plus BTK, which we've used in a study up at Harvard. [Indiscernible] so I think there's a lot of optionality having BTK in our portfolio. So we think we can drive better and deeper responses with a triple therapy. But we also have the flexibility to create multiple lines of treatment. So we can have U2, so we get multiple doublets out of this. So yes, I think we're excited about the potential. And I think everyone has seen it, I've shown the slides multiple times that when you put the three drugs together in follicular, marginal zone, CLL and Mantle Cell, you get 80%, 100% response rates almost across the board, albeit small numbers today, but soon we'll be able to use our drug to hopefully enhance those databases.

Great, thanks a lot for taking questions.

Yes, thanks Matt.

Our next question is from Ren Benjamin with Raymond James. Please proceed.

Hey, good morning, guys. Thanks for taking the questions and congratulations on all the process. Mike, can you talk a little bit about just – driving the final decision for GENUINE application? I know you guys are having discussions. You're still talking amongst yourselves. But should we be thinking about it in relation to UNITY and the UNITY results, and that's what drives it or is it more market-dependent, maybe just some additional clarity there.

Yes. So there's a few factors that we believe come into play in making this final decision. I think, first and foremost, we want to make sure that it is a strong package on its own. So independent of UNITY-CLL, we want to ensure that we believe the GENUINE package is strong. And part of that is this risk-benefit section that we've talked about quite a bit over the last several months that would be part of the filing, where we would basically describe why we believe that ublituximab plus ibrutinib provides meaningful advantages over all available therapy, which really boils down to the two primary available therapies, it will be ibrutinib, which we went out and beat in a head-to-head study for overall response and the others, what we expect to be approved, which will be venetoclax, RITUXAN. And so now – from the first time we announced it until today, we obviously have the MURANO data. We're also hoping there will be a publication of that data in a reasonable timeframe. So we can have an even more detailed look at that data for comparison purposes. And then, part of our process is we're writing that section. Literally as we speak here today, we've got good working drafts, and we will continue to work on that. And then soon enough, our next plan is to start to engage thought leaders and community oncologists and just make sure that we're not kidding ourselves on some of what we perceive to be advantages over the other regimens. So I think we're going to engage the KOLs. We're going to make sure that they're onboard, and we're not just as I said, fooling ourselves. But so far, we're happy with where we are, and we'll continue to drive that process forward. And that's all we'll be – will be focused on that portion as we continue to build out the entire BLA over the next three or four months. Simultaneously, we do understand that the filings are a lot of work for everyone, including the agency. And we want to make sure that we file - put our best foot forward first. So we will know more obviously after we have the UNITY-CLL data, assuming that data is positive. And we believe that that is a stronger package. We may consider that package instead of the GENUINE package. And I've said multiple times, our choices are we file one or the other or both. I think as I sit here today, filing neither is the least likely of those scenarios. And again, I just think, as we go through the process of defining the risk-benefit opportunity for GENUINE. We'll become more or less confident in our position. But again so far, I think we feel very good about it, but it's a process. So hopefully – it's a lot of words – hopefully, it provides just a little bit of insight how we think about this [indiscernible].

Yes, thank you for that. And just thinking about switching gears to UNITY real quick, can you just take us through – I know you're very confident that the results will come out in the second quarter. Does that confidence just come from the fact that the last patient was enrolled at this point, we have six months from there and that puts us in the second quarter or has the database already been closed? Maybe just the steps involved over the next several months of what needs to take place for that announcement to come out. And will we see anything meaningful in the press release more than the study had met or not met the endpoints? Will this data be embargoed until a medical conference?

Yes. So I think the last point for sure, there will be – we'll have the – I think we'll be bounded by two principles in and what we can put into the press release. We'll put in the maximum amount that would be permissible so that we can still get it published and also make sure that the FDA is comfortable that we're not, in any way, impacting the study. So I think we'll put as much as we can and my guess is it will be pretty light on details to a household presentation. Having said that, in terms of the process, Ren, so the way our protocol is set up is that once we have six months of follow-up on every patient. We can then open up the study, obviously you're right and it requires database lock and cleaning. And I think we do have a little bit of flexibility around that six-month number. So we've built in a lot of a little of bit of cushion for us to push ourselves for more follow-up. I think the one thing that I think everyone wants is to the study to have a successful and positive readout. And I think one thing that we all know is that more follow-up is better. So we've built-in even with the 2Q number, we've built in not just a six-month follow-up, we've built in nine or more months follow-up and so we could put the data out in the second quarter. So a little flexibility, we know the FDA would like more follow-up. We know that with PI3K deltas and BTKs, for that matter that the longer the follow-up, the higher the response rates. So we're going to optimize that for sure. But I think we've given ourselves room to get more follow-up in and then in terms of is there any chance it could bleed a little bit beyond 2Q? It would only be by choice and really even like coming up with scenarios, you're only talking about up to maybe 30 extra days [indiscernible] says. And that would give us almost up to 12 months of follow-up if we did something like that. But for the moment, we're targeting 2Q. We have flexibility within the quarter to give ourselves the optimum amount of follow-up. So yes, I think we're feeling good. I mean, where we are? We're comfortable. It's completely within our control to do – to open it up once we have the six-month follow-up on all the patients.

Got it, and then just one last one for me, if everything goes according to plan, both with UNITY-CLL, UNITY-NHL, the MS studies, it seems to me that there's the potential for an approval and a revenue stream almost every year by starting in 2019. Am I thinking about that right? And what happens if let's say, ORR doesn't work, the UNITY trial continues, and the timelines just gets shifted? How should we think about that?

Yes. I mean, look, I think if UNITY overall response, it doesn't work out for us. Obviously we are and we said this multiple times, we are super confident on the PFS outcome for that trial. And so yes, we'd end up pushing the timelines back. We think we should have an outcome for that study sometime during the course of 2019 and we would –then we'd still have the possibility of the GENUINE filing, getting in there and while we're waiting for – at that point, we'd be waiting for readouts for our follicular, marginal zones and diffuse large B-cell, which would be also mid 2019 events. So we'd end up shifting back around six to nine months or so. That – but again, I think we've got a lot – we have a lot going on with GENUINE at that point. We'll be completing enrollments in the MS study. But yes, I mean I think that's the delay scenario. And again I know investors will be upset. But I think the timelines are not that long. And we have a lot of certainty going forward. So either way, we are confident in UNITY overall response. We think we've got a really good combination on our hands. And so we're looking forward to that data. But yes, in the worst-case scenario, would have to wait for PFS there and we'd be looking at the possible GENUINE BLA filing in the second half of this year and then we'd probably be stacking up a lot of data in the first half of 2019.

Perfect. Thanks very much and good luck in the second quarter.

Yes. Thank you.

Our next question is from Madhu Kumar with B. Riley FBR. Proceed with your queations.

Good morning. So first question is about the GENUINE study, so thinking about a potential GENUINE filing, do you have any reason to think you could apply for a label of ublituximab with a BTK inhibitor generally as compared to ibrutinib specifically?

I don't think so.

Okay. So then thinking about UNITY-CLL, what do you understand to be the rough objective response rate for GAZYVA and chlorambucil, the control arm in the relapsed/refractory setting for CLL in clinical practice?

Yes. So we've talked about this in a few settings. We don't have a lot of great information on that. We typically look at it in comparison to what we know we've seen with bendamustine, RITUXAN, which again chemo plus CD20. Our belief is that bendamustine is a stronger chemotherapy than chlorambucil, but GAZYVA is a much stronger CD20 than RITUXAN. And so on average, we might see similar outcome in those relapsed/refractory patients. I think we pegged it at somewhere between 55% and 60% for the GAZYVA, chlorambucil side of the relapsed/refractory setting. Again, that's off of an analogous dataset from bendamustine, RITUXAN, where they had a 68% overall response rate, but they didn't include any high-risk patients. And so you're going to have to discount - we've discounted that. And that's how we got that range. But it's certainly not a scientific analysis.

Okay. And then one last question, thinking about the burn rate mentioned at the beginning, the $20 million to $25 million per quarter, and that [data that] could increase as MS enrollment improves. How can the blue sky scenario that UNITY-CLL just blows the barn doors off and has a really striking result as a basis for BLA filing. How does that affect kind of SG&A assumptions, thinking about a potential 2019 commercial launch?

I mean, either way, we're currently in the mindset that we're filing something, whether it's GENUINE or UNITY. I mean, we're operating under that assumption. All our burn scenarios include building out the commercial team with an anticipated launch sometime in 2019. So again, I think we start to replace large clinical cost with the commercial costs. So our feeling is things seem to balance out on average. Again, as we get into again first quarter 2019, by the first quarter 2019, the vast majority of the MS cost will be behind us. The vast majority of the UNITY-CLL cost will be behind us. The UNITY-NHL trial probably maintains a steady course and is not a super large clinical trial. So yes, I think on average, we're probably pretty good in a relative range of cost. We do already have on staff a portion of our field force that we've used as part of our launch in terms of our – we have a group that we call our CSLs and our oncology nurses, which would be part of our MSL team. So I think we're pretty good on the stability of that burn rate over some period of time.

Good, thanks.

Our next question is from Edward White with H.C. Wainwright. Please proceed.

Hi, guys. Thanks for taking my questions. Most of my UNITY – all of my UNITY have been answered. So I'm just going to ask a question on the earliest – so the PD-L1 program you announced in October, your first patient was enrolled. And you're enrolling patients in Australia and in New Zealand. Can you just give us an update on how many patients are in there now and when we could see data on the PD-L1 product? And then also if you have a GITR update. We saw preclinical data at AACR last year. Are we going to see any data this year as well? Thanks.

Thanks for asking the question. So the answer to your question on how many patients, I actually don't know the exact number of patients offhand. As you may recall, the Phase I is being run by our partners at Checkpoint. So they're managing that program right now. My understanding is that they are or are very close to finding the dose or hitting the target dose that they wanted. So they can start some expansion cohorts. Our expectation is that we'll be in a position to start an aggressive heme campaign in sort of the September, October timeframe. So we're letting them do some expansion cohorts – use one of the expansion cohorts as one of the heme indications for us. So I think the initial idea of the expansion cohorts is to identify the tumor types that have the highest single-agent response rates for PD-L1. So once we get that – and we have a good confidence level that the drug is doing what we expect it to do. I mean, I sit in the position that it's a PD-L1 antibody with binding affinity and other properties that look quite similar to the best-in-breed as a class. So with an antibody, so you don't really have to worry about whether it's absorbed and after it's swallowed, you put in the blood, and it should do what it's supposed to do. So I have a high level of confidence. But apparently, other people want to see patients responding to the drug. So that's the next phase for the Phase I. So it will be in tumor types like malignant melanoma, lung cancer that has very high – greater than 50% expression of PD-L1. And I believe I said Hodgkin's disease is also included in the Phase I cohort. But as I said, once we get into September-ish, October, we should be able to start really ramping up the heme side of the program.

Okay, great. And just on the GITR?

Yes. So the GITR, we've progressed it forward to a certain point. And I think there's been a decision to continue to evaluate the properties of the GITR without moving into an aggressive development program until we see more data from GITR outside of our program. So it's moving forward, but PD-L1 is clearly the focus.

Okay, Mike. Thanks for taking my questions.

Thanks, Ed. End of Q&A

Ladies and gentlemen we have reached the end of our question-and-answer session. I would like to turn the conference back over to Michael Weiss for closing remarks.