Good day, everyone, and welcome to the BeyondSpring Quarterly Investor Conference Call. Today's call is being recorded. At this time, I'd like to turn the conference over to Mr. Garth Russell of KCSA Strategic Communications, BeyondSpring's Investor Relations firm. Please go ahead, sir.

Thank you, operator. Before turning the call over to management, during today's call, management may make forward-looking statements relating to such matters as its clinical and preclinical research, research and development, industry trends and collaborative initiatives. These statements are based on currently available information and management's current assumptions, expectations and projections about the future events. While management believes that its assumptions, expectations and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements. The company's actual results may differ materially from those discussed during this call for a variety of reasons, including those described in the Forward-looking Statements and Risk Factors section of the company's 20-F and other filings with the SEC, to which your attention is directed on the company's Investor Relations website. With those comments complete, it's my pleasure to turn the call over to Dr. Lan Huang, Co-Founder and Chairman and Chief Executive Officer of BeyondSpring. Lan, the floor is yours.

Thank you, Garth, and thank you, everyone, for joining our call today. On the call with me today are Dr. Ramon Mohanlal, our Chief Medical Officer; and Richard Brand, our Chief Financial Officer. I'm delighted to welcome everyone to our first investor communications being successfully completing our initial public offering on March 9. As this is our first quarterly conference call, I want to take this opportunity to provide a broad overview of BeyondSpring. BeyondSpring is a late-stage global clinical development company with a robust immuno-oncology pipeline. Our lead asset, plinabulin, is currently in global registrational trials for 2 large cancer indications with near-term catalysts over the next 6 to 12 months. We also have several preclinical IO drug candidates and a research platform targeting ubiquitination degradation pathway in collaboration with University of Washington. BeyondSpring is committed to developing drugs in a manner that benefits both the patient and the medical community. We are confident that our disrupted U.S.-China drug development model has the potential to result in a more efficient and cost-effective drug trial process, which in turn should reduce time to market and may ultimately reduce cost to the patient, solving the pricing problem of innovative medicine. Finally, I'm gratified to have been able to assemble a world-class internal team who collectively have brought to market more than 30 innovative drugs. And I am appreciative of the support we have received from the Fred Hutchinson Cancer Research Center and the University of Washington through our significant collaboration. Our lead asset, plinabulin, is a synthetic analog of a marine-derived small molecule, which alters the tumor microenvironment and may provide multiple therapeutic opportunity. Through our 3-year collaborative effort with the University of Basel and Massachusetts General Hospital, now we understand that plinabulin is a GEF-H1 activator. Plinabulin destabilizes microtubule network…

Thank you, Lan. I would also like to thank everyone for your participating on today's call. In March of this year, we successfully completed our IPO, selling 174,286 ordinary shares of BeyondSpring at $20 per share. Concurrently, we completed a private placement transaction for 2,541,048 ordinary shares, also at $20 per share. Total net proceeds to BeyondSpring were approximately $48.17 million after deducting underwriting fees and other expenses. Admittedly, completing an outside private placement concurrent with our IPO is atypical. That said, a number of our existing strategic investors, including HuaRong, the largest asset management company in China with AUM of $150 billion globally, wanted to invest at significant levels that only the private placement structure would allow. At the end of the day, BeyondSpring was able to satisfy the needs of those investors while at the same time creating a public market for its shares, which we consider a win-win. Turning to our financials. For the full year 2016, research and development expenses were $10.4 million compared to $6.3 million in 2015. The increase in R&D expenses in 2016 was primarily due to increased costs related to the ongoing Phase III trial in advanced non-small cell lung cancer, including a higher number of patients, additional investigator sites and additional drug cost, as well as our planning for the Phase II/III trial for docetaxel-induced severe neutropenia. Our general and administered expenses for 2016 were 1.7 -- $1.9 million, excuse me, compared to $1.2 million in 2015. The increase in G&A expenses was primarily due to an increase in personnel costs and outside professional service expenses incurred preparing for the IPO. We reported a net loss attributable to BeyondSpring Inc. of $12.0 million for 2016 compared to $8.0 million for 2015. As of December 31, 2016, we reported cash and cash…

Thank you, Richard. I'm extremely proud of the entire BeyondSpring team and wish to express my sincere gratitude for their ongoing effort. I also want to recognize the contributions to our success, including our investors, employees and Board of Directors as well as our investment bankers and other professional service providers. Each of these groups played an integral role in helping BeyondSpring achieve its milestones to date. And the last, but not the least, I would like to thank the patients who participated in our trial. We also believe we have exciting catalysts over the next 24 to 30 months. First, within the next 6 months, we expect to have Phase II data from our neutropenia study. Second, over the next 12 to 18 months, we expect interim Phase III data from both our neutropenia and the lung cancer study and data from our PD-1 combo study. In addition, we expect to submit IND for BPI-002 for T-cell activation. Number three, which is, finally, over the next 24 to 30 months, we expect final Phase III data from both our neutropenia and non-small cell lung cancer study and several R&D submissions, including Phase III PD-1 combo, BPI-004 in Phase I and a molecular glue agent from our collaboration with the University of Washington on a research platform. As you can see, there's a lot of movement and excitement surrounding BeyondSpring's activities and I look forward to sharing updates as they occur. With those comments complete, operator, we are now ready to open the call for questions.

[Operator Instructions] Our first question is from Joe Pantginis of Rodman & Renshaw.

A couple of questions, if you don't mind. First, I'd love for you to provide a little more color from some of your prepared comments about how plinabulin might be differentiated from other microtubule destabilizing agents.

Thank you, Joe. This is Lan. Yes, this is a great question. As you know, from our current poster presentation at the Keystone meeting in March 23 with Dr. Zippelius and Dr. Reinecker from Harvard, we have seen that other microtubule depolymerization agents, such as the CA4P class, do not activate the DC maturation. So it does not actually induce the neutrophil protection or the neutropenia prevention. The mechanism behind that is mostly due to the molecular structure because the plinabulin actually binding to a different amino acid in the beta tubulin of these alpha-beta tubulin compacts. So the binding to this alpha-beta tubulin can release the GEF-H1. And meanwhile potentially CA4P class, but they don't bind to the same amino acid so couldn't release this GEF-H1, which is the key activator for the DC maturation. And from the clinical data of the effect is we have seen that CA4P in combination with carboplatin and paclitaxel in lung cancer, they show Grade III and IV neutropenia at the 75%. Another microtubule depolymerizing agent also in the same class of CA4P is ombrabulin and that compound, also in combination with cisplatin and paclitaxel, showing Grade III and IV neutropenia at 67.6%. So you can see that's a differentiated agent which binds the right target of beta tubulin and which can release this GEF-H1 and the key factor for DC maturation. Thank you.

That's actually very helpful. If I could just follow up with an additional question. If you look at the data that you already have in hand with regard to neutropenia, you are looking to generate a drug profile that has potential superiority to the G-CSF compounds that are out there. And I guess I want to address my question regarding the current macroscopic or political environments with regard to drug pricing. If you are even able to, which it appears you might be able to, get superior drug profile with regard to the G-CSF, with regard to, say, Grade IV neutropenias in DSN, can you comment about how you might be able to address drug pricing since that's a very sensitive issue right now, especially in the United States?

Thank you so much, Joe, for this great question. As you can see, it's a small molecule so actually we have a very low cost in manufacturing. And also, for this neutropenia prevention indication, we're only giving on day 1 out of a 21-day cycle, so very minimum dosing. So it's around 20 milligram per meter square around there. So that's probably like 40 milligrams the maximum. From that sense, our cost is very low. And then for biologics, as you know, it is seeing the very high cost arena to manufacture. So -- and in addition, plinabulin, with our very innovative and efficient drug development clinical model, so the cost for development is very low. So this way, we could give a pretty nice [indiscernible] also and a superior profile to G-CSF.

The next question is from Gabrielle Zhou of Maxim Group.

So can you -- for the 106 study design, can you walk us through and help us understand what the expected duration of neutropenia would be with Neulasta and what the delta would need to be with plinabulin to show a significant difference? What was the expected change in overall survival?

Okay. Great question. So probably I should turn this question to our Chief Medical Officer, Ramon, to answer.

Yes. Thank you. So this question relates to study 106. That's correct, yes?

Yes.

Okay. So with study 106, we will use the chemo combination of TAC. That combination was used successfully by Novartis and Sandoz to obtain regulatory approval for their G-CSF biosimilar last year. So a lot of the data and assumptions in our 106 study, they are derived from the results from that study. We also, therefore, also have the confidence that the FDA will accept this study design because they basically accepted this same design to approve the Novartis product. So from that study, we see that the DSN is around 1.5 days for the chemo combination with G-CSF. We expect to be shorter than 1.5 days. And we made several scenarios and assumptions. We made calculations based on a 50% reduction, a 40% reduction, et cetera. And based on those numbers and the -- also the assumed difference, our sample size calculations are that with only -- and 60 patients in each arm, we should have enough power to demonstrate superiority.

Great, appreciate the insights. So I have a follow-up question. And can you discuss the duration of neutropenia associated with the chemotherapy and the rates of opportunistic infection with bacteria, yeast and mold?

Yes. So the chemotherapy, of course, we have the, as we know, the important clinical consequence that we have low numbers of neutrophils. Typically, when in patients we reach the critical threshold of Grade IV neutropenia, and that's a number of around 0.5 times 10 to the 9th per liter cells. When we reach that critical threshold, from thereon, patients are very susceptible to infection. And that could be a host of infections that could lead to bacterial infections, fungal. It could be gram-positive, gram-negative. So neutropenia, as we know -- neutrophils, as we know, they are what we call our first line of defense against all microorganisms, irrespective of what type of microorganism. And it's also part of what we call the innate immune system. It means that it's there all the time and it's there to defend your body against the invasion of all these microorganisms. That's the importance of neutrophils and neutropenia, and we know that in particular in cancer patients, especially in cycle 1, we have a fairly large number of cancer patients that develop Grade IV neutropenia. And therefore, we still see a large percentage of mortality in cycle 1, also using today's standard of care. So this remains to be an important need for the medical community, and as mentioned, to maintain the right numbers of neutrophils is our prime responsibility in treating cancer patients.

The next question is from Tony Butler of Guggenheim Securities.

Lan, a couple of questions related to the clinical trials, if I may. So the trial that is with nivolumab-plinabulin, one where the University of Washington is actually the sponsor and it's being collaborated with NCI, it appears, at least according to ClinTrials, that you could get a read out -- or that could read out in September of this year. A, is that true? And B, would we actually learn that data set in the second half? And then the second question is really around DUBLIN-3, the Phase III study. And it's -- if you're enrolling 550 patients that started last year, can you give us some idea of what enrollment is to date?

Okay. Thank you, Tony. Let me answer your first question, the nivolumab and plinabulin combo at University of Washington. Yes, so the trial just started. We had a little delay with the tubing. There is a tubing issue because their tubing -- we have a certain solid [indiscernible] in our excipient. So they need to do -- we need to do leachable studies. So -- but currently it's starting. And so their projection is 2 patients [indiscernible]. The second half of this year, we'll see some preliminary data of the Phase I portion of this Phase I/II study. The Phase I portion is looking at the dose escalation of [indiscernible]. This dosing is different from the dosing from UCSD. UCSD is doing the day 1, day 8, day 15 out of 28-day cycle. And then for University of Washington is doing day 1, day 15 out of a 28-day cycle. So potentially by the end of this year, we should see the Phase I portion data from the UW study. So did I answer your question?

Ma'am, you did.

Yes, okay. So the number two question is the 103 study, which is the DUBLIN study. It's the 550-patient enrollment [indiscernible]in second-line, third-line non-small cell lung cancer. Yes, we just started last year. But because we have this large patient population from China, which has 700,000 lung cancer patients each year and we have all the major centers helping. So we are confident that we can still meet our enrollment need of 550 patients by quarter 1 of next year. Because for this 550, 440 from China and then 110 from U.S. and Australia. So currently, we have enrolled around 75 [indiscernible].

The next question is from Bruce Jackson of Lake Street Capital.

Thanks for taking my questions, most of which have been answered. I had a follow-up question about the mechanism of action trial where you demonstrated that plinabulin can promote the maturation of dendritic cells and have other positive downstream effects. Can you just speculate on whether this could be useful in combination with other types of immunotherapies like CAR T or dendritic cell therapy?

Okay. So probably, Ramon, you want to take a stab on this first? Because Ramon has over 20 years experience in the IO field.

Yes. Thank you for the question. So as we saw from the checkpoint inhibitors that we currently have on the market, they are fairly effective. However, there are still limitations, in particular, we have the phenomenon that we started high response rates and then reduced response over time. So it is clear that the checkpoint inhibitors will have to be combined with something else. The other important point to make is that if you look at the immune system, the immune system is a cascade of events. And each of these steps within this cascade is very critical to lead to an adequate immune response. Checkpoint inhibitors, they cover only one part of the cascade without covering the other parts of the cascade. What they don't cover is the DC cell, dendritic cell maturation that's very important. What we know is that the dendritic cells, they are also called antigen-presenting cells. They present the antigen to activate these T-cells and they are very critical in getting to a very powerful overall immune response. So we see therapy for plinabulin with the checkpoint inhibitors, they're also -- it's clear that there are other components in the immune system that will be the target for the next wave of immunotherapies. DC cells, that certainly is one of them, but we have all this also. The interesting component with plinabulin is that in addition to its effect on dendritic cells, it also has the ability, as we see from our preclinical studies, it has the ability to generate antigens. They're also to direct the T-cells and other immune-competent cells to the right side of action. So dendritic cells, we believe, are vastly important and important additions to the overall landscape of immune therapies. And in particular, we see the synergy between this approach and checkpoint inhibitors.

There are no further questions at this time. I would like to turn the conference back over to Lan Huang for closing remarks.

Okay. Thank you, everybody, for participating in this call. We really enjoyed all your insightful questions, and it was an enjoyable discussion. So we would like to welcome everyone to come to our presentation at the Gunnar Conference at The Mandarin Oriental on May 2. Our presentation time is 10:30 to 11 a.m. Thank you all.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.