Good day, ladies and gentlemen and welcome to the ZIOPHARM's Third Quarter 2017 Earnings Call. All 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 introduce your host for today's conference, David Connolly, Vice President of Corporate Communications and Investor Relations. Please begin.

Thank you. Earlier today we released our financial results for the third quarter 2017 with a press release, which is available on our website, www.ziopharm.com. During this call -- and I'm on Slide 2 for the forward-looking statements -- representatives of the company will make a number of statements that are forward-looking, including statements regarding the potential of therapeutic candidates in our development pipeline. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described in our SEC filings. Results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statements. Next slide, please. We'll provide a corporate update, review our pipeline and our clinical development programs with our gene therapy for gliomas and cell therapies for hematologic cancers and solid tumors. I will now turn the call over to Dr. Laurence Cooper, CEO of ZIOPHARM Oncology, who will lead today's call.

Good day to everybody, and we're on Slide 4, with the management team. With me here in Boston for this call is Dr. Francois Lebel, our Chief Medical Officer; Dr. David Mauney, our Chief Business Officer and also the Interim Chief Operating Officer; and Caesar Belbel, our Chief Legal Officer. As you can see and will hear, we've built out the management team around me with these new additions of David Connolly as Head of IR and David Mauney as an important part of the senior team. So what I thought we'd do is I'd turn the call over to David Mauney for a few minutes and let him introduce himself.

Sure. Thanks, Laurence, and good afternoon, everyone. Obviously I'm truly thrilled to be here at ZIOPHARM, and I certainly thank Laurence and the board for giving me this great opportunity. My job is to help build shareholder value, plain and simple, and having a deep and longstanding with ZIOPHARM, Intrexon and several of our key constituents gives me a competitive advantage in that effort. I truly believe ZIOPHARM has the breakthrough solutions to attack big problems that still exist in the fight against cancer and our scientific foundation is stronger than ever. Moving on to Slide 5, I wanted to take a minute to remind you how powerful our story is. Our company is built on 2 distinct, important platforms and we enjoy several great partnerships that you can see at the bottom. First, on the left-hand side, our gene therapy platform. The idea here is to improve your existing resident immune system and be able to call it to war, if you will, against cancer, and not only turn this response on or off on command, but also to be able to tune it up and down. We are completely unique in this regard, thanks to the RheoSwitch technology. Our platform is centered on a cytokine called IL-12, which just happens to be the most powerful regulator of the immune response in our bodies. We now know, with the data to show it, that we are capable of delivering, inducing, dosing and safely controlling IL-12, a feat that was doubted by many just a year or 2 ago. Our first application is in a devastating type of brain cancer called glioblastoma, where we see 160,000 new cases per year worldwide and almost 13,000 in the U.S. alone. 90% of these tumors will recur, with a total 5-year survival of…

Thanks, David. We're thrilled to have you on board and to be in a position to leverage your leadership and experience, focusing importantly on business development and corporate strategy. It's certainly an exciting time for ZIOPHARM in the months and the years ahead. So let's go to Slide 6, our pipeline slide. And I'm really going to highlight here 3 programs. The first is the adenoviral program. And just to make sure we're all oriented according to the nomenclature, Ad is adenovirus, RTS is the RheoSwitch and hIL-12 is human IL-12. So we're advancing this adenoviral program for the controlled delivery of IL-12 for the treatment of glioblastoma; and importantly, recurrent glioblastoma. Since our last call, we have developed and publicly presented additional evidence that supports the mechanism of action as well as the survival benefit and we have, I think, significantly, really exciting presentations at SNO coming later this month. ZIOPHARM's breaking new ground here, as we're the first company to demonstrate control and modulation of IL-12, this critically important protein that David mentioned, for stimulating an effective immune response from the brain. In the CAR programs -- and the CAR, of course, stands for chimeric antigen receptor -- in the CAR programs we're seeing progress towards our stated goal of reducing the manufacturing times of these genetically modified cells with the non-viral Sleeping Beauty technology. With our first- and second-generation trials at MD Anderson, we have reduced manufacturing of the CAR-modified T cells down to 2 weeks. But we're not stopping there. We're moving into the clinic in 2018 with very rapid manufacturing, under 2 days. This, again, will be a new standard for the field, achieving this very rapid manufacturing. We call this our point-of-care technology and we think this is a game-changer for the field of…

Thank you. [Operator Instructions] It looks like our first question comes from Keith Markey with Griffin Securities. Your line is now open.

Hi. Thank you very much. Dr. Cooper, I was wondering if you might be able to elaborate a little bit? I understand that the first trial involving the Sleeping Beauty-prepared CD19 CAR-T cells combined with hematopoietic stem cell therapy had a significantly longer survival than historical controls. Would you be able to tell us a little bit about that?

Sure. So thanks Keith. So that -- those data -- the initial snapshot of those data were presented at JCI, in the publication. And indeed, there's actually a lot of background information in that publication around the safety of the Sleeping Beauty system -- a lot of the informatics associated with gene transfer using this first-in-human approach. As we have watched these patients, though, over the intervening period since the publication, we have really recognized that there's contributing data that looks very supportive for the Sleeping Beauty platform. And so at ASH, we'll update you on that dataset, which will include longer survival; longer follow-up for these patients. And indeed, I think, reflecting on the use of the CAR field, our survival data for patients will be amongst some of the most mature that's out there. Really we're going to be talking in terms of years, Keith, not just months.

Right. Great. Thank you. And then I was wondering if you might be able to tell us -- it sounded to me like the design of the Phase III IL-12 GBM study would be -- might fit the definition of an adaptive trial design, where you have an opportunity to look at survival data on an interim basis and halt the trial early. Is that -- and did I understand that correctly?

Yes. So thanks, Keith. So we're going to give additional information about that trial later in the year. We're actually going to launch -- initiate that trial this year. So we'll have more to say about that in the -- really in the coming weeks.

Okay. Thank you.

Thank you. And our next question comes from Reni Benjamin with Raymond James. Your line is now open.

Hi. Good afternoon, guys. Thanks for taking the questions. I also had, I guess, just a -- maybe a follow-up with Keith's question regarding the pivotal trial design. I know, Laurence, you mentioned that you're going to provide more data; but could you give us a sense - you've mentioned these, the importance of keeping steroids at a low level and the impact of steroids. Can you maybe talk a little bit about how that might play into the pivotal study design, and are there any sort of biomarkers that you may be following that help you identify those patients that might have the right level of effector T regulatory cells to start off with, that might help that…

Sure. Yes. No, those are great questions. And that's really one of the -- I think the -- what the company's really been working on this year. Just to remind everybody, we've gone from a Phase I to a Phase III trial in rapid order here. And part of the reason we're going to be successful is that we didn't just jump to starting the randomized controlled trial. We spent this year really understanding our patients in greater depth, and in particular understanding what makes essentially for patients who do better. And you're exactly right to call out the reduced dosing of steroids. So that's indeed part of our strategy. I can't - I won't tip all of our hand today, but I can tell you that that is what we're -- exactly in line with what we're thinking, that patients on the trial will be in that sort of reduced steroid cohort, if you would.

And how are you thinking in terms of maybe the numbers; or if you can't get into details, how long do you think this study should last until we see some results?

Yes. That's a great question too. We will -- again, I think the best way for me to say it is that we'll give you more details towards the end of the year when we initiate it. And then the guidance around that will be the pacing of the study and the enrollment of the study.

Got it. And maybe just as a quick follow-up, with the CAR programs and the data that you'll be announcing at ASH, obviously you mentioned with the first generation you'll have much longer follow-up. Can you give us a sense, with both the first generation and second generation, about how many patients in each are we looking at? And then in the second generation, would we be seeing response rate data? What should we be paying attention to?

Sure. So in the first-generation trial there were no new patients. That trial is basically following the existing cohort. The second-generation trial, we haven't said how many patients are on, and you'll see at ASH those patients. What we're really essentially looking for in this sort of first- and second-generation trial is the movement towards the third-generation trial. These trials - these 2 trials were not designed to be commercialized. They were designed to answer discrete bodies of knowledge so that the company could obtain insight into the very rapid manufacturing, and importantly also insight into the regulatory process. And that's really, I think, where we're excited about the data and really can say with great confidence that it really points us in the right direction. But of course you and others want to learn something in addition about, do the T cells survive and the do the patients survive. And of course we'll provide that update. But it's the - I think what I would like to leave the community with is that these trials really are designed to get us to the point-of-care.

Got it. Thanks very much.

Thank you. Our next question comes from Swayampakula Ramakanth with H.C. Wainwright. Your line is now open.

Thank you. This is R.K. from HCW. A couple of quick questions. I'm just trying to understand the strategy behind initiating a trial with the combination of the PD-1 inhibitor, with your -- with the IL-12. Is there going to be a patient -- certain patient population that will be different from the pivotal trial? I'm just trying to understand, how are you positioning this trial?

Sure. So this will be -- this is a Phase I trial. It'll still be with recurrent GBM. And it's really to test this hypothesis. We clearly -- and I think you could see that from our brain biopsy -- brain tumor biopsy data -- we can clearly make cold tumors hot. And that's striking. Indeed, it's striking for our potential partners, quite frankly. Because we can, as a result, really have a line of sight now to engage these immune checkpoint inhibitors and make them work more effectively. And of course you can see that in your mind's eye. If a tumor's cold and doesn't have any T cells in it, then if you pump anti-PD-1 into the patient it's not going to provide a lot of biology because the T cells are not in the tumor. Now with IL-12, we can definitively say the IL-12 is calling in those T cells, and this immune checkpoint inhibitor then can really go to work. So I - we're - as we pointed out on the mouse study, the data was extraordinary in the mice -- 100% survival in some of the cohorts. And we think that we'll really see some very interesting data in the human now.

Great. Then I was wondering if you could provide us an update on the stereotactic trial and also on the pediatric brain tumor study.

Sure. Yes. Those are 2 really important studies. So they both broaden the application of the adenoviral program. The stereotactic trial obviously is for patients who couldn't go to re-resection, and we've started treating patients. We'll have more to say, but not yet today. And the same with the pediatric trial. That's just getting going. We'll have more to say, but again, we'd like some more time to develop that data.

Okay. Thank you very much Laurence.

Sure.

Thank you. And our next question comes from Tony Butler with Guggenheim Securities. Your line is now open.

Hey, Laurence, it’s Tony.

Hey, Tony.

Just a brief question on the partnership, and at least the pivotal trial and certainly the combo trial in recurrent GBM plus a checkpoint inhibitor. Are both of those dependent on a partnership? That's number one. And number two, would the trial designs change if and when you're able to gather that partnership? I'm just trying to understand, a, more importantly not just the timing by the end of the calendar year but more importantly, a larger trial or a smaller trial or some other permutation.

Yes. Sure. Thanks, Tony. So the randomized controlled trial does not depend on partnership. Nor does the anti-PD-1 combo trial. But obviously the company, as we've mentioned, is in discussions. And part of the reason that these discussions have continued is that we talk about the trial design with these potential partners. So we're really guiding folks now that the randomized controlled trial is what we're going to initiate by the end of the year.

That’s great. Thanks, Laurence.

Sure. Thank you.

Thank you. Our next question comes from Jim Birchenough with Wells Fargo Securities. Your line is now open.

It's Nicholas Abbott [ph]. Hi, it’s Nick, Laurence.

I thought everybody was absent there.

I am not a Canadian. So just on - for the point-of-care CAR-T program, can you just review what the key features are there? So is it a blood draw versus apheresis; dose; lymphodepletion; can you do simultaneous patients or is there a specific device that could be rate-limiting?

Sure. Those are good questions, Nick. Thank you. So the technology is, we showed on the slide it has these 3 pieces, right? That's the DNA transfer with the Sleeping Beauty system -- the non-viral approach. The co-expression of the CAR with this IL-15 -- and just, not to get too technical but this -- what's called this membrane-bound IL-15 and then of course the switch. These three pieces now really are plug-and-play. And this I think is the real beauty of the technology. Because it doesn't rely any more on building out sophisticated infusion like big GMP facilities. This is technology where simple electroporators can be used to transfer the DNA into the recipient T cells, and then those T cells in very rapid order, in under 2 days, are then infused - directly infused into the patient. And it's really the biology behind the IL-15 that allows the patient to serve, if you would, as the incubator for these T cells that then grow inside him or her. And that, Nick, is just a really scalable solution, because instead of having to apherese the patient, ship the product to a centralized facility, manufacture for weeks, release the T cells and then ship them back, we essentially have this code of conduct -- this very rapid circuit, really going from a needle in the arm to electroporator, followed by rapid infusion.

Without obviously lymphodepletion, if it's so?

Yes. That's going to be a really interesting part. And you and I have had a chance to talk about it. So just for the rest of the audience -- so IL-15 is one of the molecules that is liberated or freed up when you lymphodeplete the patient with chemotherapy. And so if you can provide -- if I can provide T cells with their own IL-15, the real question's going to be, does the patient indeed need lymphodepletion? And we're going to test that, Nick. We're going to test that in the clinical trial and you'll hear obviously more about it as we get into it.

And then, Laurence -- and for the neoantigen strategy, I noticed Steve Rosenberg just listed a vaccine trial with dendritic cells loaded with neoantigen-specific peptides. So in your discussions with him, or perhaps in your opinion, what are the various strategies for targeting neoantigens, and do you feel like a TCR strategy is going to be sufficient or might you need a vaccine strategy plus a TCR strategy?

Sure. So to target neoantigens -- you the nail on the head. There are 2 approaches: vaccine, and then the infusion of T cells. And vaccine has some advantages around, for instance, that you can -- it's easier to make. You're making it with RNA or you're making with peptides, or you just alluded to Steve's program with dendritic cells. But the issue, of course, is will the vaccines really work when there's kilograms of tumor in the patient? That's really the question. And as you know, patients with metastatic epithelial cancer are really untreatable in the United States right now, despite checkpoint inhibitors. And so we're really feeling that one has to provide the immune cells. One can't use vaccines to sort of activate the body's native immune cells. One has to be able to use a set of killer T cells targeting the neoantigens to do so. And I think Steve joins with us on this. And he -- obviously you saw his New England Journal of Medicine paper and his Science papers, which indeed do exactly that. They grow up neoantigen-specific T cells and then they infuse them back into the patient. So -- and we think that's really the way to go for patients, especially patients who have large amounts of tumor.

Great. Thank you very much and look forward to hearing about the data at SNO.

Yes. Thank you.

Thank you. And our last question comes from Michael Schmidt with Leerink. Your line is now open.

Hi. This is Varun Kumar on behalf of Michael Schmidt. Thanks for taking my questions. So my first question is on combo study with anti-PD-1 in glioblastoma. You kind of touched on this earlier. So my question is actually, when Opdivo was not found to provide survival benefit over control arm in the recurrent glioblastoma patient in CheckMate-143 trial earlier, can you provide your takeaways from that as you proceed for your combo study with anti-PD-1?

Yes. I think our understanding of that data is that one of the reasons it failed is that there weren't T cells within the tumor -- within the brain tumor, for the anti-PD-1 to disinhibit, if you would. And so what IL-12 has done and what, again, we've shown in 3 of 3 biopsies, this is quite extraordinary data now - in 3 of 3 biopsies we can see the T cells infiltrating into the tumor, making those cold tumors hot. And so it really begs the question now, will essentially the combination with anti-PD-1 make the T cells even more effective after IL-12 therapy?

Yes. That's really helpful. And just a last question on the pivotal trial design in the glioblastoma. Now certain genetic molecular markers, for example IDH mutation, they have been associated with favorable survival benefit in glioma patient. So just wondering if for your pivotal trial design, is there any current plan for patient stratification based on genetic markers?

Yes. That's a great question. So our read of that literature is that these type of genetic markers are important for primary diagnosis and are less impactful at the -- in the recurrent setting. And I think the position - what you say to patients is that once your disease has recurred it's already declared itself to be a bad actor, and no amount of these sort of upfront biomarker studies take away from just the pressing case that your disease has come back. So for us the biomarker, if you would, is the fact that the patients have all recurred.

Thank you. Thanks a lot for taking the questions.

Okay. Thank you.

And at this time I'm not showing any further questions in the queue. I'd now like to turn the call back over to Laurence Cooper, CEO, for any closing remarks.

Yes. Thanks very much, operator, and everybody listening in. I appreciate your attention, and we look forward to joining you next at SNO. Thank you so much.

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