Good day, ladies and gentlemen, and welcome to the Ziopharm Fourth Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today's program may be recorded. I would now like to introduce your host for today's program, David Connolly, Vice President of Corporate Communications and Investor Relations. Please go ahead.

Hi, thank you. We're starting a few minutes late this afternoon as there was a last minute rush of callers. We wanted to give a few minutes to let folks actually get engaged on the call. And earlier today, we issued a press release with our financial results for the fourth quarter and the year end of 2018 and that press release is available on our website, www.ziopharm.com. We'll discuss these results today and Company highlights during this call, and representatives of the Company will make a number of forward-looking statements that are -- including statements regarding the potential 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 10-K -- SEC filings. And moving to slide 3, there is one housekeeping item for today's call before we begin. For those of you following along online, you are now in control of advancing the slides, not us and the folks on this side of the phone call. And speaking on today's call are Dr. Laurence Cooper, CEO and Director for Ziopharm Oncology and Dr. David Mauney, our Company President. After their remarks, we'll open the call to take any questions you may have. And with that, I'll turn the call over to Dr. Mauney.

Thank you, David, and thanks everybody for joining us on the call today. We'll start on slide 5 and we'll touch on it briefly. However, we ended 2018 with a very strong quarter, a quarter that truly transformed our Company's ability to achieve immediate and longer-term success. As a quick reminder, we secured a new licensing agreement, we eliminated $157 million in convertible preferred stock, we raised $50 million, and established two new partnerships and collaborations. We are in our strongest position ever to execute in 2019, and have already demonstrated success in most of these efforts. We have noticed considerable change across the organization now that we have full operational and clinical control over our platforms. From a qualitative view point, I can tell you that we have increased our operating efficiency in just about every category. We have seen dramatic increase in interest from a recruiting perspective, and with regards to outreach to potential partners, analysts and investors, we have seen a considerable change in posture, and in some cases, noticeable surprise and renewed interest in our story. We will obviously push this trend as strongly as we can going forward. We have also made considerable progress in adding and promoting within our organization, and we continue to build a world-class team in every area, with particular focus and active external recruiting efforts to expand our C-suite and manufacturing capacity in Houston. In addition, we now enjoy an almost entirely revamped Board of Directors, having changed four of the six occupied seats and naming a new Lead Director. We have one open seat remaining and a very active outside search is ongoing to fill it with a seasoned leader who will bring valuable and unique skills to our table. With demonstrable success seen in multiple areas over the…

That's right, and well said, David. Thank you. We are a different company from years past. After we restructured the license agreements in October of 2018, we gained autonomy and operational independence, which allows us to go in a direction that is beneficial to us and to our shareholders, and as David detailed, we are well on our way in that direction. We have continued support from our investors, mutually beneficial relationships with partners of the highest caliber, and we are enhancing and expanding these relationships. We are building and expanding our in-house capabilities and expect to have manufacturing and laboratory facilities as well as infrastructure and programs developed in Houston. This will enable us to broaden the number of patients who can benefit from our programs. Slide 10. We are on the cusp of treating patients with solid tumors with our neoantigen specific TCR-T cell, a therapy designed to be unique to each patient. This is a long sought-after goal by many, and it is Ziopharm that will be in the clinic with this mid-year. This is a huge milestone for our Company. In addition, we expect to be off-hold and in the clinic in the second half of this year with a very rapid manufacturing of genetically modified CAR-T cells to produce patient-derived CD19 specific CAR-T in two days or less. We've made significant strides in our engineering work for improved cell viability for this third-generation Sleeping Beauty trial. Furthermore, having recently come back from China, I can tell you our partners at TriArm are already fast at work to bring our CD19 therapy into the clinic as soon as possible. Lastly, we are seeing excitement with our Controlled IL-12 program as we expand our clinical footprint in the treatment of glioblastoma over the last quarter or so.…

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

Maybe, just to start off with the NCI, Laurence, can you talk a little bit about what this Phase 1 trial could look like? I assume it will be an all-comers, but any sort of color regarding what sort of tumor types you'll be going after, the vein-to-vein time, as it exists right now, and do you ever see a point of care product potentially coming into play in the TCR setting or is that just not something that could work out in the near future?

Sure. So, thank you, Reni. Those are very helpful questions to us. So the NCI, and indeed Ziopharm, as the trial opens for enrollment, we'll give further details and clarifications on the trial design. And just to kind of give you some of my excitement about the types of learnings that I think we will find, the first is that the patients on this trial, as is typical for the referral pattern to Dr. Rosenberg's program, will have advanced solid tumors, metastatic solid tumors. These are some of our nation's sickest patients, and obviously highly motivated to find new treatments. In some ways, these are sort of the toughest of the tough, but we fully expect to be able to treat those patients. The second is, there's really going to be a multiple of opportunities here and I won't go into exactly what tumor types are going to be addressed, but to give you a sense, the technology that we're in partnership with the NCI, is designed, by nature, to be in some ways agnostic of the solid tumor type. We can go after really multiple solid tumors because we're going after the neoantigens, in other words, those genetic mutations that gave rise to the tumor. So I think what you'll see as we get into the details later this year, is that there is really an opportunity for across the solid tumor spectrum. The vein-to-vein time, obviously, is important, but it actually is perhaps a little less pressured than when you're treating fast-growing liquid cancers like leukemias and lymphomas. There, it really is a foot race between the ability to get the product made and the patient to be medically stable to receive those cells. In solid tumors, there's a win-to-win, really, of opportunity and a little bit longer, if you would, for the cells to be made. So that's probably as far as I can take it there, Ren, on that part. And then, the last one is a really interesting question, and that is, explain a little bit more about a point of care, if you would, or very rapid manufacturing in the TCR space. And so, I think for you, Ren, and for the investors alike, Ziopharm at the moment has carefully calibrated its programs to give you three enticing lines of investment, our TCR program, our CAR program and our IL-12 program, but rest assured, in my mind, as I map essentially the future of Ziopharm, these programs will all essentially have opportunities to synergize together, and to build a cohesive story that is actually the summation -- more than the summation of its parts. And more importantly still, we have rights to all of those three programs, and you'll see essentially us building upon that in the months to come.

And just kind of sticking with the TCR program and thinking about multiple antigens, I think, during the prepared remarks, you mentioned that the NCI is already kind of established and has gone through utilizing multiple antigens utilizing the Sleeping Beauty system. How do you control for, I guess, the equivalent expression of multiple antigens in this process, and how do you decide from patient to patient, how many antigens to use?

Yeah, again sophisticated questions here. So in terms of the relative pattern of expression at the antigens, so here, the T-cells actually act in your favor in this respect, and the dialog of the T-cell receptor for instance against antigen A that's very highly expressed versus the dialog the T-cell receptor against antigen B that has a reduced level of expression, the T-cells will respond to that level of threat. The A antigen specific T-cells will expand the number and can recycle their effectual function to knock out the more dominant A expressing cells, and the B one, essentially by analogy here, will have less of that drive, less of essentially need, if you would, to propagate within the tumor microenvironment because the B antigen load is less. So there is a built-in mechanism in the T-cells to essentially solve some of the heterogeneity of antigen level of expression. But your second question is also very important, and that is what is the answer to the heterogeneity of antigens that are more than one. In other words, how is that, that you're going to target more than one antigen, and this is really where the Sleeping Beauty system will separate itself from the pack because it's just simply not feasible to be able to make product and make more than one product per patient when one's using a viral-based approach. The only way I know to be able to do this is using a non-viral system because it's the plasmids. It's really the simplicity of using plasmids and the cost reduction of using plasmids that allows you to make multiple products per patient. Picking those products, picking those antigens then is the next step, and here, we partner with the best in the business. We already know for Dr. Rosenberg's work that the -- essentially the picking process, if you would, the identification of the neoantigens and the selection of the right T-cell receptor has put patients into remission using non-genetically modified T-cells, using TIL, if you would, TILs that have grown up and expanded input into patients. The issue there, of course, is that those TIL, while when they work, work with a real sense of wonder and excitement, it's just simply not scalable or reproducible because the TIL themselves, the effector function of those T-cells, they run out of gas. So you have to graft the T-cell receptor into these fresh, young T-cells, and the Sleeping Beauty system, with essentially its scalability, can do that.

And, I guess, just one final one for me, just regarding Eden BioCell, I know you mentioned multiple trips to China. Can you talk a little bit about, maybe an estimate as to when we might see the studies to begin or when the manufacturing might be complete, any sort of color? Thanks.

Yeah. Yeah, and that will all come really through the remainder of the year here. Let me just say that, that going to China and witnessing essentially the progress since we have started this joint venture to basically to today, it is remarkable how much progress can be made in such a short timeframe. People have been hired, people have been training, infrastructure is going into place, GMP's coming online, all basically within a blink of an eye. And so, if that momentum keeps going, I think Eden BioCell and its partners with TriArm, will be well positioned to attest a point of care, sooner rather than later.

Our next question comes from the line of Eric Joseph from J.P. Morgan.

Just a couple on the IL-12 program. I guess with the monotherapy expansion study fully accrued, I'm just wondering if you can elaborate a little bit more on the rationale design, what feedback you got from docs on -- what's the latest feedback was from docs on the use of a low-dose or steroid-free regimen, and maybe if you can just sort of set the stage a little bit in terms of number of valuable patients and duration of follow-up when we see preliminary data later this year, and sort of how that [indiscernible] next steps particularly in relation to the ongoing PD-1 combo studies.

Yeah. Thanks, Eric. So just taking that the questions in order here, in terms of the steroid-free or low-dose steroids, this is something we are very anxious to test with our clinician partners because as you know and I think the investors know, we had six patients or -- that have had low dose steroids with the 20 milligram of veledimex and those patients really tell a very interesting story that living 17.8 months now at last check, and that gave us essentially a playbook for what we think is the magic recipe, 20 milligrams of veledimex, the activator ligand, and low-dose steroids. So when we guided the -- and collaborated with the physicians, we were anxious to share that 17 month survival story, and we were anxious to share with the physicians that we think the magic recipe is, as I've said, the low-dose steroids. That met with a lot of head nodding and acceptance. And we're really just delighted, Eric, because the patients that are now on the trial in the sub-study, at least half of them, have low-dose steroids. So this is completely feasible now for patients to undergo neurosurgery, to have a direct injection of the adenovirus into their brain, to have received 20 milligrams of veledimex, and to essentially receive low-dose steroids, and we're very optimistic for those patients. In terms of the reporting of the data, we started that study -- that sub -- expansion sub-study basically last quarter, September or so of last year, and it's already accrued, and if you would, Eric, the clock is now ticking on those patients. So that bolus of patients now are marching through this year and we'll get to update the investors on essentially the overall survival of those patients towards the end of this year. In terms of the PD-1 data sets, those data sets are also essentially are in hand. As you heard on our call, we have two cohorts now treated in the Phase-1 trial with nivo and that data started accumulating in, I think, June of last year. So for some of those patients, the data is actually maturing quite nicely and we just opened the third cohort -- dosing cohort for that. Again, that data set will mature in terms of their overall survival, and we look forward to updating the Street also this year as we begin to look at the overall survival of those patients.

Yes, I'll just add one comment, Eric, this is David. I mean, I think when you're looking for qualitative feedback from physicians and hospitals, I mean, one thing you just have to look at to get a quantitative answer is look at our enrollment rates. I mean if you look where we were a little more than a year ago, when I started at Ziopharm, the biology was a bit unknown. It was a bit untested. We were just into the 20 milligrams of veledimex. Since then, we've gotten some biology, some biopsy data. We've gotten more information on the low-dose steroids, and as a result, it's not by accident that our enrollment rates have gone up dramatically, and with that, obviously, comes inbound interest for the technology, and for what we're going to do this year. So I think if you just look at the momentum we have across all three programs, it should be pretty telling.

I guess, I'm just curious to understand whether you -- I guess, given the interest that you have on the monotherapy expansion cohort, how much more information you -- whether you might wait, whether in fact you might still need to wait for the PD-1 combination data before moving forward with a potential registration study or is it -- is there actually a kind of a waiting consideration here do you kind of move forward with both approaches potentially?

Yeah, I mean, that's a great question. The way I think about it is that we have two shots on goal for registration. We have monotherapy, and if the data holds around the 17 plus months of survival with this expanded dataset, that will give a lot of enthusiasm for a monotherapy registration trial. But to double down on that, we have this compelling rationale to combine IL-12 with PD-1. And so, as that data plays out, and it will come roughly around the same time, we'll start to essentially see both sets of data coming out. We'll have essentially that second look if you would, that second opportunity in the design of the registration study.

Our next question comes from the line of Sean Lee from H. C. Wainwright.

I just have a quick one on the IL-12 program, for the upcoming Phase 2 study with Libtayo, could you compare and contrast that a little bit with the ongoing studies with OPDIVO in terms of patient populations, treatment regimen, and how do you expect those two to play out?

Yeah. Thank you, Sean. So, the Phase 1 data with nivo is very important to us because the first time that folks have been able to put a PD-1 inhibitor with IL-12, and by guiding the Street now that were in the third dosing cohort really gives reassurance that this is a safe combination. You can put these two powerful immunotherapies together, and to do so in patients with recurrent GBM. That data directly feeds into now the Phase 2 trial with cemiplimab and that learning, essentially, of the dosing of the IL-12, the dosing of the PD-1 inhibitor, the ability to treat basically all-comers with recurrent GBM who then have a surgery, that allows us to essentially have a direct line of sight to how the Phase 2 trial is built, and so it's going to look in terms of the patient population very similar, but it will be accelerated in terms of its accrual pattern because basically we figured out all of the -- if you would, the mechanics of how to put these two drugs together on the Phase 1 study.

I see. Would we see some information regarding the different dosing in that from the OPDIVO study this year?

Yeah, I think that's fair to say. We will give an update on that this year in terms of the cohort dosing, and the safety data and begin to give some initial data on the OPDIVO study in terms of overall survival in this year.

Thank you. And this does conclude the question-and-answer session as well as today's program. We thank you, ladies and gentlemen, for your participation. Everyone, have a great day.