Good day, ladies and gentlemen, and welcome to the Xencor Incorporated Third Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] I would now like to turn the conference over to Hannah Deresiewicz of Stern Investor Relations. You may begin.

Thank you, operator. Good afternoon. This is Hannah Deresiewicz with Stern Investor Relations, and welcome to Xencor's third quarter 2015 financial results conference call. This afternoon, we issued a press release, which outlines the topics that we plan to discuss today. The release is available at www.xencor.com. Today on our call, Bassil Dahiyat, Ph.D., President and Chief Executive Officer, will discuss the company's business and clinical highlights from the last quarter; John Kuch, Vice President of Finance, will review the financial results; and then we will open up the call for your questions. Before we begin, I would like to remind you that during the course of this conference call, Xencor management may make forward-looking statements, including statements regarding the company's research and development, including clinical trial plans for XmAb5871, XmAb7195, XmAb14045 and XmAb13676 and its other bispecific product candidates, future financial and operating results, future market conditions, the plans and objectives of management for future operations, and the company's future product offerings. These forward-looking statements are not historical facts, but rather are based on Xencor's current expectations and beliefs and are based on information currently available to us. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including but not limited to, those factors contained in the Risk Factors sections of its most recently filed Quarterly Report on Form 10-Q. With that, let me pass the call over to Bassil.

Thank you, Hannah, and good afternoon everyone. We're happy today to report on the advancements made in the recent months for both our internal and partnered XmAb programs which collectively represent the full breath of Fc engineering technology suite. We'll also be describing the upcoming development milestones we expect for our programs in the coming months. I'll start today by updating on XmAb5871, it's our first-in-class monoclonal antibody that targets CD19 with its variable domain and that uses our proprietary XmAb immune inhibitory Fc domain to target Fc-gamma-RIIB, a receptor that inhibits B-cell function. We remain on track to file an IND for an open-label single-arm multiple-dose pilot Phase 2 study of XmAb5871 in the rare autoimmune disorder IgG4-Related Disease this year, and plan to begin patient enrollment in early 2016. As we described previously, IgG4-RD is a rare fibro-inflammatory autoimmune disorder that affects approximately 10,000 to 40,000 in the U.S., and currently has no approved therapies. Corticosteroids are the standard care. We believe that these cells and IgG4-positive plasmablasts may play an important role in the disease process and the B-cell inhibition had significant potential as a treatment modality. Now, the planned pilot trial of 5871 in IgG4-RD is designed to assess control of disease activity with every-other-week intravenous administration. We planned to enroll approximately 15 subjects for up to 24 weeks and will utilize the recently developed IgG4-RD Responder Index measure treatment activity. We're also collaborating with its developers to complete a large international validation study of Responder Index. We expect to preliminary data from the pilot trial by the end of 2016. We also plan in 2016 to initiate clinical development in an additional autoimmune disease indication for XmAb5871, where we believe we can clearly assess 5871 clinical activity and have the potential for meeting significant unmet…

Thank you, Bassil. In this afternoon's press release, we reported a cash equivalents and marketable securities totaling $197.6 million as of September 30, 2015, compared to $54.7 million as of December 31, 2014. The increase reflects net proceeds of $115 million received from the completion of Xencor's follow-on financing in the first quarter and net proceeds from partners and collaborators during the first three quarters of 2015, including an upfront payment of $45 million received from Amgen in the third quarter. Revenues for the third quarter of 2015 were $3.5 million compared to $0.8 million in the same period of 2014. Revenues for the nine months period ended September 30, 2015, were $6 million compared to $3.9 million for the same period in 2014. Revenues in the three and nine period ended September 30, 2015, were earned primarily from the company's Novo Nordisk and Alexion collaborations and also reflect the milestone payment we received from our CSL collaboration, compared to revenue for the same periods in 2014, which was primarily earned from our 2010 Amgen collaboration which was terminated in the fourth quarter of 2014. Research and development expenditures for the third quarter of 2015 were $10.6 million compared to $5 million for the same period in 2014. R&D expenses for the nine month period ended September 30, 2015, were $23.3 million compared to $13.5 million for the same period in 2014. The increased R&D spending for the three nine months ended September 30, 2015, were the same periods in 2014 is primarily due to increased spending on the company's bispecific technology and development pipeline, including its initial bispecific oncology candidates, XmAb14045 and XmAb13676. General and administrative expenses in the third quarter 2015 were $3.2 million compared to $2.2 million for the same period in 2014. G&A expenses for the…

Thank you. [Operator Instructions] I would now like to turn the conference back to Bassil for any further remarks. We actually have a question from Chris Marai from Oppenheimer. Your line is now open.

Hi guys, this is actually Michelle on for Chris. We were just wondering what your plan is to take 7195 forward and other IgE related diseases beyond allergic asthma?

Great question. So, once we initiate development with the subcutaneous formulation which we expect to happen in middle of 2016 that’s really the next step in development, because of course, the potential of an antibody in allergic disease markets, including asthma, really requires subcutaneous deliveries. So we've always known then and we're now ready to initiate that development and will be by mid 2016. That trial we hope if successful, will position us to initiate 1b/2a studies in different allergic diseases which could include asthma as well as things like food allergy and skin allergies. And so we'll assess how to do that first set of studies in – of these indication at the tail end of that subcutaneous study, which is going to sort of combine bioequivalents with IV, PK safety and of course, looking at IgE levels and pharmacogenomics.

All right, great. And then one question on the bispecifics, we were just wondering how much screening you guys have done or bispecific formats to potentially identify I guess the most active for any given target?

Yeah, we typically do a good amount of prototyping based on of course, the core Fc domain that gives us that very stable scaffold. We do arrange different variable domains around it. And we do look at a number of different arrangements, so for example, for our CD3 bispecifics we've looked at broad spacings and narrow spacings of the variable domain binds the tumor target with the CD3 and different arrangements around the Fc, and found one that gave us both the right level of activity, we didn’t want too much we think that a lot of the toxicities like cytokine release syndrome involves with T-cell engaging therapies like bispecific antibodies or [indiscernible]. We believe that they have the potential to be modulated while still maintaining antitumor activity, if you have the right combination of long duration of action, stability and right level activities, we looked at a large number of formats and settled on one where we then can do further tumor using affinities against tumor antigen and CD3. For different programs we are currently exploring for example with our dual checkpoint inhibitor programs we've explored and continue to explore different arrangements of the binding demands on the Fc and it's typical that we'll spend in our prototyping process which is again, very rapid we could still find this really stable Fc. We'll look at both different affinities and formats as we pan through our sort of screening assets or [indiscernible] U.S. screening assets. It's hard to say for anyone given the program the number will differ from others, but it's an integral part of our candidates, I mean we're not one side T-cell format.

All right, great. Thank you guys.

Thank you.

[Operator Instructions] I'm showing no further questions. I would now like to turn the call back to Bassil Dahiyat for any further remarks.

Thank you. In closing, we've had a very full slate of development activities and we will continue to have a full slate development activities for the year ahead, as we continue to grow in advance the XmAb pipeline. In the coming months, we expect to initiate new clinical trials with four internally developed candidates. The ongoing XmAb5871, XmAb7195 programs and hopefully new into the clinics XmAb14045 and XmAb13676, bispecific oncology programs. And we will also expect to report data from our ongoing Phase 1a trial of XmAb7195 in the first half next year. Thanks again everybody for your time.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.