: David Connolly - VP, Corporate Communications & IR Laurence Cooper - CEO David Mauney - Executive Vice President and Chief Business Officer :

: Bin Lu - Raymond James Keith Markey - Griffin Securities Swayampakula Ramakanth - H.C. Wainwright & Co. Nicholas Abbott - Wells Fargo Securities :

:

Good afternoon, ladies and gentlemen, and welcome to the ZIOPHARM Fourth Quarter and Year-end Financial Results Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Dave Connolly, Vice President of Corporate Communications and Investor Relations.

Thank you. Earlier today, we released our financial results for the fourth quarter and year-end 2017 with a press release available on our website, ziopharm.com. During today's call, 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 and we undertake no obligation to publicly update any forward-looking statements. We'll review our clinical development programs and financials and take a few questions from covering analysts today. And now I'll turn the call over to Dr. Laurence Cooper, CEO of ZIOPHARM Oncology, who'll be in today's call.

Great. Good afternoon, everybody. Thank you, David and we're on Slide 3. With me here in Boston for the call is Dr. David Mooney, Executive Vice President, Chief Business Officer and also our interim Chief Operating Officer; and on the phone and from the road is Dr. Francois Lebel, the Executive Vice President of the Research and Development and our Chief Medical Officer. Since 2017, we advanced ZIOPHARM's 2 platform technologies, Sleeping Beauty and the control of IL-12. This foundation will make 2018 an exciting year for us. With Sleeping Beauty, we have major milestones this coming year. We will move point-of-care into the clinical. And for the first time ever, we [indiscernible] patients with genetically modified T cells engineered without a virus and manufactured in under two days. Also these Sleeping Beauty modified T cells will be targeting neoantigens, the Achilles' heel of cancer and these will enter into the clinic under the guidance of Dr. Steven Rosenberg and his team at the National Cancer Institute. Turning to IL-12 and the control of IL-12. In addition to advancing IL-12 as a monotherapy, we look forward to seeing data from a combination of IL-12 and an immune checkpoint inhibitor to improve outcomes for patients with brain cancer. We have shown already in three types of cancer that the controlled IL-12 is a powerful platform that can turn cold tumors hot. In other words, drive and activate T cells within the tumor and with this comes broad applicability across oncology. Before however, we dive into these pragmatic updates, I'll turn the call over to David Mauney for a corporate development update.

Thanks Laurence, and thanks to all of you on the call with whom I have better acquainted with. During what's already my first five months here at ZIOPHARM. I'll head home a few of the messages that Laurence highlighted as well. After spending considerable time talking to many of you and asking for your feedback, for which I greatly appreciate the input, we have some good news. The good news is that the responses have been very consistent. It is clear that we have tremendous enthusiasm and support, as we further validate and derisk our clinical platforms, and we are all excited about the multiple inflection points ahead of us in 2018. As we move through this year, we will pursue two paths towards driving up our company value. We will continue to work to advance our existing scientific programs for control of IL-12, point-of-care and PCRs for neoantigens, through a series of inflection points, and we intend to fortify our balance sheet. We have been working to focus our time and capital commitments first to the programs that are truly moving the needle and in the shortest time possible. In this light, we recently unveiled a clear and concise two platform strategy at the JP Morgan conference, and are currently evaluating and refining our clinical and operating plans as we consider the potential of our current core value drivers. This clear, refined and broader view is resonating very well in these first two months of 2018. While we have had consistent interest in our story over the course of last year, we can say that the number and quality of third-party inbound inquiries and discussions as well business and financial meetings has increased substantially in 2018 already and with global reach. As we have progressed and learned over the…

Thank you, David. I appreciate your hard work and your expertise in corporate development. Your addition to the team just five months ago has been tremendously valuable. Okay. So let's dive right into the platform looking at Sleeping Beauty as well as IL-12 and we'll be on now Slide 7. Sleeping Beauty is our nonviral technology with which we can reprogram T cells with just DNA present and then turn them into weapons outside of the body to fight cancer inside the patients. The Sleeping Beauty system leaves the introduced DNA into that T cell genome. So the genetic material coding for the chimeric antigen receptor or sometimes referred to as CARS, targets tumor antigens on the surface of cancer cells such as, of course, CD19. But also with Sleeping Beauty, we can read other DNA elements into the genome such as those coding for T-cell receptors or TCRs to generate to CAR-T cells that can probe beneath the cells surface to attack for instance solid tumors. The Sleeping Beauty system is being used not just to genetically reprogram T cells however. But we're using to implement that in an entirely new approach to manufacturing that addresses head on the fundamental problems facing CAR-T and TCR-T. Mainly, we can avoid the cost and complexity of manufacturing T cells based on a virus. And thus, we can avoid the dependency on expensive and complex centralized manufacturing. In other words, Sleeping Beauty enables us to very rapidly manufacture patient derived T cells in less than two days and this is what we refer to as point-of-care. From Slide 8, we'll now examine how we're doing it at least from a conceptual, design point of view. Point-of-care T cells produced in under two days will really change the way CAR-T will be delivered.…

[Operator Instructions]. Your first question comes from the line of Reni Benjamin from Raymond James.

Hi, guys this is Bin Lu for Ren. I have several questions here, if you don't mind. First one is on your business and model for your CD19 POC product. So maybe can you just elaborate a little more on this model regarding like the per patient of fees that you'll be collecting. And also like do you or do the hospitals collect more revenues?

Sure. Yes, let me just handle the questions one at the time. We may have to - let me into the number of questions, we've said everybody but let me go quickly here. So we haven't say much more than what I'm - I just said in the comments. And of course, we want to keep it that way, because we're in the business now of negotiating with multiple hospitals. And as we bring out those negotiations, we want to be able to keep potentially the rules if you would by which we're negotiating to ourselves. So I think at a later time, we'll bring that to the floor, but I don't think it's appropriate for today.

Got it, that's fair. So have you or can you disclose which major medical centers that you have signed the first agreement with?

Yes, another great question, but not at this time.

Just last one from me is I think what more work do you need to do before you initiate the first trial for this POC product? And do you expect that this product could generate better efficacy or safety data as compared to the other 3 CD19 products?

Sure, so thank you again. So for the - marching forward for the point-of-care, as you saw at ASH and as you saw Keystone, our preclinical data set looks superb. And that data set is really the work that is fed into the regulatory paperwork to essentially achieve institutional as well as federal approvals. We are well along in that regulatory pipeline. I probably leave it there. Our guidance is that we'll be in the clinic second half of the year. In terms of efficacy, proofs in the pudding. But I would say that IL-15 is a remarkable molecule. As you saw from GEN [indiscernible] work at the NCI. If IL-15 was present then the patients went into remission. So I think that's a very strong indicator of the power of IL-15.

Your next question comes in line of Keith Markey from Griffin Securities.

I was wondering, Laurence, that I understand you to say that the patients who received very low dose steroid in the IL-12 GBM trial are still alive, a 100%?

So, it's a good question. So we last looked at the data in preparation for our major medical meeting. I think it was October. Thanks David. Yes, it was October and that's the last time we looked when those patients were alive. We will update that data at a medical meeting through the year.

Okay. And then I was wondering, what's the - how do you view the feasibility of using an injection of IL-12 to treat something like a visceral tumor?

Yes, that's a great question. So we're - so just to kind of levels set here. When you are treating glioblastoma, patients unfortunately die, because the cancer - it doesn't spread metastatically. In other words, it's not growing outside of the head, it's growing within the head, but it's growing into the brain, which of course, is very valuable resource. That means that the IL-12 and the T cells that are going to work in that environment are working essentially across a plain of tumor that is within in a box, that's in cranium within your head. What you're getting at now is can the IL-12 biology works systemically. In other words, you treat locally. For instance a liver lesion and you see something where you - in other words a lesion is going away at a remote site that hasn't been treated. That's known as an abscopal affect and we've already shown, Keith, that absolutely happens and for instance, in our early work that we did with breast cancer and with melanoma, we had those abscopal. In other words, those systemic effects treat locally, see something systemically. So we are very optimistic that, that data set provides a foundation now for getting essentially into systemic disease and particularly as we think about turning cold tumors hot and potentially combining such therapy with other immune stimulants or inhibitors such as the PD-1.

Your next question comes a line of RK with H.C. Wainwright.

My first question is a little high level question. In terms of how you are utilizing some of the researchers that you have, especially, the GBM is an exciting indication to go after, but at the same time, you have your fingers in multiple places right now with the TCR, with the CD33 and the AML through the CD19 work and what not. So is the GBM worth somehow taking a backseat compared to the rest of them because here you are being ignited mode on the CAR-T and the others stuff...

Yes, I hear you. No. I think really the opposite. It's like trying to pick your favorite child. We - both are loved equally. Both are different, right? ZIOPHARM has tried to be strategic here. We know that CAR-T works and - but we know that problem and the CAR-T is the cost on the scale. So yes, we're in a CAR-T race. So we're in a different CAR-T race. We're in the race to show investors that we have a manufacturing solution that will essentially blow the doors off the ways as other people are doing it. Significantly reduced cost of goods. So that's the race we're in for the Sleeping Beauty system. On the other side with the IL-12, the rates were in there is that we know for some cancers you don't know the targets. And we have to have a solution for that. In our data now that with IL-12 clearly shows that we can weaponize the patient's own immune system and that is a very compelling strategy, because it's bearing fruit. It's bearing fruit for not only monotherapy, but also combination therapy. So that's where you're seeing it. So yes, I think you are seeing a shaft in our focus, actually, because we've learned a lot and we're really thinking about these two technologies, a very rapid manufacturing and the IL-12 of these platform technologies to get some of the most fundamental problems with - of cancer.

Perfect. Then talking about the CAR-Ts and I know you take a lot of pride in how you have improved the manufacturing processes such that it has come down to hours instead of weeks. But one of the major issues I believe is still some of the toxicity and the safety profile of the CAR-Ts and how it is impacting off target tissues. So how - are you working anything on that front? Because it was just show both of them then you got a - your way ahead of the game.

Right. So, it's faked in. It faked in. So I come from a transplant background and I have taken care of kids and they gone by my transplant for 20 years. And I witnessed the birth of T cells in these patients that are coming from stem cells. In other words, the slow growth, the measured growth of T cells that are ingrafted in that child. That learning I've now applied to the point-of-care technology. When we go and infuse T cells on the point-of-care. We are not going to be giving many T cells, now don't press me on how many we're giving. We will just leave it as that, but I know that those T cells can essentially nest within the patient and then grow out in this sort of kinder gentle of fashion in patient. And I think this is going to be very important. So while there are others that give large doses of T cells and then all those T cells are synchronously activated and they all make a whopping amount of cytokines and the patient has an adverse event. We expect our T cells to essentially grow in the patient with essentially the tumor chipping away at the tumor and have a much different safety profile than others.

So when would we get a first look on some of the safety profiles that you are talking about?

Sure. So we'll be in the clinic either this year, second half of this year. And so that will allow the company then to take a look at that data. Is probably best to leave it there. And - but of course, you're right to emphasize it and I've been thinking about it for years. Thank you.

Your next question comes in the line of Jim Birchenough from Wells Fargo.

Its Nick in for Jim. So perhaps just going back to the point-of-care. Laurence, what can you tell us about the device you are going to use. Is that a bespoke device you manufacture and supply?

Yes, that's a good question. So at the moment, we haven't really developed much of the sort of the image of the point-of-care technology. Except I can say to you that it really relies on its simplicity and the device we're using, the electrocuted device we're using fits within that mindset.

Is this the device that you will supply or is this device that you could go to with the broader companies?

Yes, we haven't gone that far, Nick essentially, but there's learning and there's art within that technology that we prefer to keep to ourselves at this point.

Sure, okay. And Laurence we've talked about this before in the past. You highlighted going from GEN 1 to GEN 2 of the Sleeping Beauty, reducing the lease testing down from 14 days to 7 days. Obviously, you have to release this product essentially, instantly. Do you have an agreement with regulators on how to do this or at least are - I know you have a roadmap but where are you in getting that degrees?

In the road, right, we're drifting along that road. You know the - it's one thing to invent technology that's disruptive, right? And it's one thing to think through how point-of-care will get manufacture under two days. But it has to fit within the regulatory framework and that's a lot of the work the team is doing and has already done in the second generation trials. So I am fully aware that we're going to be making T cells and releasing T cells in under two days and we're right on target to do that.

Okay. And then one more question and then I'll jump back in the queue. And that is you sort of got into this a little bit with the last question, but how do you think about dosing here? Do you think about minimal residual disease, bulky disease, ability to do sort of inter-patient dose escalation that if after a few days you don't see by a market hex then you would go back and give a higher dose which as you know the first off the shelf CAR-T ran into trouble with unexpected toxicity. That product was apparently more active they were expecting. So how do you handle that?

Yes, so you never put a person on a trial that you wouldn't put you mother on the trial, right? So I'm a physician first and last. So we take this very seriously. So we're going to be dosing patients in a measured, careful way, because the last thing I want happen is something to [indiscernible] happens to the patient. So the dosing that I've settled on with the team is one which we think is appropriate we'll give a signal but it's also cautious and then we will work forward like most phase I trials do in terms of a dose escalation strategy.

I am showing no further questions at this time. I would now like to turn the conference back to Dr. Cooper. End of Q&A:

Great. Thank you, everyone. Again, if you have more questions, please reach out to Dave Connolly directly and his contact information is on today's release. Thank you.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.