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BeyondSpring (NASDAQ:BYSI)
Q4 2017 Earnings Conference Call
April 3, 2018 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to the BeyondSpring Inc. Fourth-Quarter and Full-Year 2017 Financial Results Conference Call. My name is Brian, and I will be the operator on today's call. Please be advised that today's call is being recorded.

At this time, I would like to turn the call over to today's host for today's call, Susie Kim with Argot Partners.

Susie Kim -- Argot Partners Investor Relations

Thank you. Before we begin, I'd like to advise that remarks made on today's call may reflect forward-looking statements relating to such matters as BeyondSpring's clinical and preclinical research and development activities, regulatory plans, industry trends, market potential, collaborative initiatives, and financial projections, among others. These statements are based on currently available information and management's current assumptions, expectations, and projections about future events. While management believes that its assumptions, expectations, and projections are reasonable in view of the 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 the call for a variety of reasons, including those described in the Forward-Looking Statements and Risk Factors sections of the company's 20-F and other filings with the SEC, which are available from the Investors section of the BeyondSpring's website. It is now my pleasure to turn the call over to Dr. Lan Huang, co-founder, chairman, and CEO of BeyondSpring. Lan?

Lan Huang -- Chairman and Chief Executive Officer

Thank you. Ladies and gentlemen, thank you for joining today's call. I will be giving the main presentation of our update of our pipeline and corporate development and 2017 year-end financials. With me today are Amy Yang, our controller, and Dr.

Ramon Mohanial, our chief medical officer, who will be available to answer questions during the Q&A portion of today's call. Our newly appointed CFO, Mr. Edward Liu, is still in transition period. Edward has over a decade of experience in capital markets, equity financing, merger and acquisition, global management, and investments in healthcare companies.

He worked as a senior banker at J.P.Morgan and Jefferies, and was a partner in the cross-border healthcare-focused firm which is an early investor in BeyondSpring. We're honored to have Edward on board to elevate our company to a new level. 2017 was a remarkable year for BeyondSpring. We're marked by a succession of developments and operational achievements that have put us in position for a number of truly significant clinical and the regulatory events in 2018.

Just a year following our IPO in the U.S., BeyondSpring is poised for multiple major milestones over the next 12 months that include late-stage clinical trial data readout and China regulatory submissions. Specifically, first, for chemotherapy-induced neutropenia, or CIN, we plan to announce Phase III interim analysis data for Study 105, evaluating Plinabulin and docetaxel for prevention of CIN in the fourth quarter of 2018, and announce Phase II data for the primary endpoint of Study 106, evaluating Plinabulin plus TAC, which is Taxotere, Adriamycin, and cyclophosphamide, also in the fourth quarter of 2018. Pending positive results from these two studies, we expect to submit a New Drug Application to the China FDA in late 2018 or early 2019 for Plinabulin for a broad-target indication of prevention of severe Grade 4 neutropenia induced by myelosuppressive chemotherapy. No.

2, for non-small-cell lung cancer, we plan to announce Phase III interim data for Study 103, evaluating Plinabulin and docetaxel for non-small-cell lung cancer, in the fourth quarter of 2018 or in early 2019 and submit an NDA to the China FDA in first half 2019. No. 3, we also plan to advance two Plinabulin triple combo immuno-oncology programs into Phase I in 2018. And representing our next innovation platform, we expect to advance BPI-002 from our immuno-oncology program that we unveiled in late 2019, with a planned Phase I study starting in 2019.

Before I go into detail on these milestones, I would like to take a moment to explain our strategy and what sets BeyondSpring apart from others in the oncology space. BeyondSpring's business model is highly scalable, integrating clinical and manufacturing resources in the United States and China. Our development strategy is focused first on the China and U.S. market and -- which are the two largest pharmaceutical markets in the world -- where there exists not only high incidence but also high unmet medical needs in chemotherapy-induced neutropenia, or CIN, and non-small-cell lung cancer.

Our unique R&D approach allows us to take advantage of the comparatively low-cost, ICH-conforming, U.S. GCP-quality clinical-development environment in China, which enables us to make rapid clinical progress while realizing substantial cost efficiencies, especially in the field of cancer treatment, as 80% of cancer care markets is concentrated in and surrounding three main cities, Beijing, Shanghai, and Guangzhou. Our strategy allows us to access the broad, fast-growing, and underserved patient populations in China, facilitating faster and high-quality enrollment and patient care. Furthermore, the regulatory process in China and our unique status in the country enable BeyondSpring the opportunity to pursue an expedited approval process, one that we are pursuing with Plinabulin, which I will discuss later on today's call.

Our presence in the U.S. as well as the multinational, multicenter trial design for each of our registration studies conducted with input from the U.S. FDA and in accordance with U.S. FDA standards, provide us with the foundation to also seek regulatory approval in the U.S.

Our U.S. submissions are currently targeted for 2019 for CIN, following successful completion of studies 105 and 106, and in 2020 for non-small-cell lung cancer, following successful completion of Study 103. We are very fortunate to have some of the world's leading clinical investigators in their field participating in our clinical trials, including the chairman of the NCCN Guidelines for CIN and non-small-cell lung cancer in the U.S. and China.

And our drug-development efforts are backed by our understanding of the pharmaceutical industry, clinical resources, and the regulatory systems in China as well as the U.S. During their careers, our seasoned management team has brought more than 30 innovative drugs, including a variety of oncology treatments, to the global market. All of these elements create a very strong foundation for success as BeyondSpring makes the turn from a clinical-stage biotech company in 2017 toward a highly efficient registration-stage development company and a view toward possible commercialization in China as early as 2019. To get there, we look ahead to the multiple data readouts we have planned for Plinabulin later this year.

For those who may be new to our story, our first-in-class immune agent, Plinabulin, is a marine-derived small molecule that is in development for the prevention of CIN and non-small-cell lung cancer. Each therapeutic area has a strong need for new innovation to improve patient outcomes, and each has billion-dollar market potential. In CIN, G-CSF drugs are the current standard of care, but they are characterized by second-day dosing regimens and overall safety limitations, including severe bone pain. Despite this, the market is substantial, generating over $8 billion in global annual sales and dominated by the current market leader, Neulasta and Neupogen, despite indications of limited use, primarily in the high-risk febrile neutropenia segment, which represents just 20% of patients undergoing chemotherapy.

Plinabulin is our lead asset and to date has shown very encouraging results in multiple clinical studies for CIN, two of which are ongoing late-stage registrational studies, studies 100 and 101, Phase I and Phase II studies in non-small-cell lung cancer. Plinabulin with differentiated mode of action of preserving neutrophil was associated with less bone pain and less hospitalization than when patients received G-CSF therapy. Earlier this year, at the ASCO-SITC Clinical Immuno-oncology Symposium, we presented data from one of the studies, the Phase II portion of Study 105, a Phase II/III study looking at Plinabulin's effect on docetaxel CIN compared to Neulasta. The Phase II portion achieved the primary goal to identify the dose of Plinabulin to advance into the Phase III portion of the study, with clear dose dependency related to Plinabulin.

And importantly, the data also showed comparable duration of severe neutropenia, DSN, and incidence of Grade 4 neutropenia between the Plinabulin 20-milligram-per-meter-square arm and Neulasta treatment arm. DSN represents how many days patients are in the hospital due to low neutrophil levels and infection. DSN of less than one day is considered clinically meaningful. In the Phase II portion of Study 105, DSN was 0.38 days for Plinabulin at 20 milligram per meter square arm, with one dose only 30 minutes after docetaxel in a cycle achieving the target DSN-reduction endpoint.

While the sample size is small, this is a promising outcome and the goal is to replicate or even surpass this non-inferiority results in the Phase III portion. In two recent surveys conducted by IMS or IQVIA in 2016 and the end of 2017, polling more than 180 physicians in the U.S. who regularly prescribe G-CSF therapy and who were familiar with Plinabulin's clinical data presented to date, doctors expressed excitement for Plinabulin's potentially superior profile for improved ease of use with dosing just 30 minutes after first-cycle docetaxel administration and potential in reducing bone pain, an often debilitating side effect that can lead to cancer treatment discontinuation. At the time, physicians surveyed indicated that they could see Plinabulin capturing 20% to 25% of the G-CSF market initially if Plinabulin successfully completed clinical trials and received approval with this product profile, and only comparable efficacy to Neulasta or Enbrel.

Our objective, of course, is ultimately to show superior efficacy to Neulasta, and these initial survey results were very encouraging and indicate that Plinabulin could be highly competitive in this market under various profile permutation. Recall that G-CSF sales in the U.S. were approximately $6 billion in 2016, with the market leader, Neulasta, accounting for around $4 billion of this market. In addition, Plinabulin has the potential to be used in the intermediate-risk chemo market, which is 60% of all chemo patients and where the current therapy is no therapy, except under limited patient-specific circumstances.

In the Phase III portion of 105, we expect to enroll 150 patients across 55 sites in five countries in 2018, with the primary endpoint of DSN in the first cycle. Secondary endpoint include bone pain and hospitalization. Our CIN program for Plinabulin also includes Study 106, a Phase II/III study looking at Plinabulin compared to Neulasta in treating high-risk chemo, TAC-induced neutropenia. Although the trial design is similar to Study 105, with the primary endpoint of DSN in the first cycle, the objective of the study is to show superiority with Plinabulin therapy compared to Neulasta.

We initiated enrollment in Study 106 last fall in China. The study is progressing well, U.S. and more Western country sites coming online. Our plan is to present interim results in -- on the primary endpoint from the Phase II portion of the study later this year.

Studies of Plinabulin to date, including studies 100, 101, and 103, have shown a favorable safety profile in more than 300 cancer patients, which, based on discussion with CFDA officials, is sufficient for safety database for NDA submission in China. We believe that Plinabulin's differentiated same-day dosing profile, which avoids the delayed dosing characterized by Neulasta, and potential for reduced bone pain contribute to an attractive profile that we believe could be highly competitive, if not disruptive, to the CIN-treatment paradigm with application in not only high-risk populations but also the vast and largely under-addressed intermediate-risk patient population. Together, results from all preclinical studies with Plinabulin demonstrating efficacy in reducing neutropenia of a variety of chemo with different mechanisms versus taxane, the CMC data and also the clinical trials which -- discussed above, including the safety database of more than 300 cancer patients, Phase III interim data from Study 105, where we look -- with 100 patients enrolled and Phase II data from Study 106, are expected to form the basis for our planned NDA submission to the China FDA later this year or early next year for CIN. This accelerated China submission plan is based on guidance issued to the industry by the CFDA late last year that presents an attractive and, we believe, viable pathway for Plinabulin toward a much-expedited commercialization timeline in China.

Under those guidelines, CFDA will consider accelerated or conditional approval based on the clinical efficacy trend and particular focus on novel drugs for life-threatening diseases. We have consulted with CFDA officials, and we believe Plinabulin's profile as a first-in-class therapy for treatment of CIN and non-small-cell lung cancer, coupled with the data generated by the ongoing studies, if demonstrating a clinical efficacy trend, meet this criteria. With respect to our U.S. strategy, we plan to submit with -- the final data readout from the 105 and the 106 studies, which are expected in 2019, setting us up for U.S.

NDA submission for CIN next year. We are taking an identical parallel approach for Plinabulin in the non-small-cell lung cancer or NSCLC indication. Eighty-seven percent of 1.8 million annual lung cancer diagnoses worldwide are for non-small-cell lung cancer. Sales of drugs to treat non-small-cell lung cancer in 2017 reached $8 billion worldwide.

Checkpoint inhibitors are increasingly used as first-line therapy, but as we know, there are limitations to the scope of patients that they will successfully treat, as they are only effective in 20% of late-stage patients. And there is a large portion of EGFR wild-type patients, around 70% of Asian patients and 90% of Western patients with non-small-cell lung cancer that we are evaluating whose cancer progresses. For late-stage patients, docetaxel remains the standard of care. However, given the lack of efficacy in 90% of these patients, there remains a severe unmet medical need.

The target patient population for the combination of Plinabulin plus docetaxel is around 50% of late-stage or second-line, third-line patients, including only EGFR wild types and those who failed with checkpoint inhibitors. Our clinical evaluation of Plinabulin plus docetaxel for non-small-cell lung cancer is based on the premise that adding Plinabulin to docetaxel increases anti-tumor activity compared to docetaxel alone while also reducing side effects, such as severe neutropenia. Plinabulin is believed to work in response to docetaxel's tumor antigen generation to activate the immune system by causing dendritic cell maturation and the tumor antigen-expressing T-cells that can attack cancer cells. In non-small-cell lung cancer, measurable lung lesions may provide a good amount of tumor antigen, and our Phase III non-small-cell lung cancer study will specifically evaluate patients with measurable lesions.

Study 103, a large-scale Phase III study in 554 patients, evaluating Plinabulin plus docetaxel compared to docetaxel alone as a second- and third-line treatment for non-small-cell lung cancer, is ongoing and progressing smoothly. Enrolling at clinical trial sites in the U.S., China, and Australia, this study will include EGFR wild-type patients and patients with measurable lung lesions. We also include patients who failed PD-1 and PD-L1 treatment and stratified these patients. The primary endpoint is overall survival, and secondary endpoint include Grade 4 neutropenia reduction, DOR, ORR, and PFS.

We plan to conduct a prespecified Phase III interim analysis in the fourth quarter of 2018 or early 2019, which we expect to provide as part of a planned accelerated China NDA submission soon after. Assuming favorable trends, the primary endpoint of Study 103 is overall survival. The interim analysis is event-driven and will look at 146 patient tests. Based on our discussion with CFDA, we plan to show a clinical-efficacy trend that will compare the one-year survival rate for each arm.

Secondary endpoints, including Grade 4 neutropenia rate, duration of response, and overall response rates, will be evaluated to potentially show trend consistency. These data are supplemented by a drug-safety database comprising data from the more-than-300 cancer patients who have received Plinabulin in clinical trials to date. This safety database would also be included as part of our China NDA submission. Assuming we submit the NDAs to CFDA late this year or in early 2019 for CIN and in first-half 2019 for non-small-cell lung cancer indications, we could be in a position to receive conditional approvals in China within six months following submissions or in 2019, as we are also eligible for accelerated review.

Our receipt of the 13th five-year grant award for Plinabulin and my status as a Thousand Talent Innovator, both from the government of China, facilitate these more rapid regulatory cycles from submission to review. I would note, as example, the record speed of receipt of registrational trial approval, which is the CTA for Study 106, was in one month of submission to CFDA in June 2017. This contrasts to the typical CTA submission-to-acceptance time frame of around one to two years. Our U.S.

regulatory strategy for non-small-cell lung cancer calls for completion of the ongoing 103 study, with test events in 438 patients, positioning us for a potential NDA submission in 2020. Finally today, just a few words on our early stage pipeline. Preclinical models and mechanism studies have suggested that Plinabulin may have broader applicability in the I/O treatment landscape and, specifically, may have additive tumor-fighting activity without increasing toxicity when used in combination with other cancer treatments. This premise underpins the focus of our early clinical program.

Safety results from two early stage studies were presented at the ASCO-SITC meeting in January. In the two investigator-sponsored Phase I studies of Plinabulin in combination with the PD-1 inhibitor nivolumab, no Grade 3 or 4 immune-related SAE were observed, although two patients developed either Grade 1 or Grade 2 IR-related AE, but not any SAE, and they do not need to use steroids for treatment, out of a total of 10 patients in the analysis. If PD-1 is used alone, there's around 10% to 15% of immune-related SAE. So the results from these two studies are encouraging and support a further study of Plinabulin in combination with nivolumab.

In late 2017, we announced our plans to expand our development portfolio with exploration of Plinabulin in triple-combination I/O therapies, combination that appear to have synergistic efficacy in tumor inhibition based on preclinical models. The expectation is that combining Plinabulin with the standard of care could improve efficacy while reducing toxicity. Our triple combinations include a PD-1 inhibitor, CTLA-4 inhibitor, and Plinabulin combination; and PD-1 inhibitor, a chemotherapy, and Plinabulin combination. And we anticipate advancing two triple-combo studies into Phase I studies this year.

Other preclinical assets include BPI-002, an oral CTLA-4 inhibitor; and BPI-004, an agent that appears to turn cold tumor into hot. These preclinical assets are complemented by our ubiquitination platform in preclinical trials this year, which represent a brand-new area of innovation that we plan to explore for its effect on the active-form mutant KRAS as the first target. Now let's turn to 2017 financial results. First, our cash position remains strong.

Our cash and cash-equivalents stands at $30.6 million at the end of 2017. Supplementing our cash position during 2017 was the receipt of two grants totaling around $920,000, or RMB 6.1 million, from Dalian local government, where BeyondSpring's China office is located. This non-equity-diluting grant signals government's recognition and support of our innovation. Based on our current operating plan, we believe that we have sufficient cash resources necessary to advance our ongoing clinical trials and submit the conditional NDAs in China for Plinabulin for the CIN in late 2018 or early 2019 and non-small-cell lung cancer indication in first half of 2019.

Moving to expenses. In 2017, our R&D expenses were $88.9 million, which compared to $10.4 million in 2016. R&D expenses for 2017 included two significant non-cash items. The first was $42.3 million in the purchase of remaining interest in Plinabulin from Nereus, and $17.8 million was for non-cash share-based compensation expenses.

So if just for the cash R&D expense in 2017, it was $28.8 million. G&A expenses were $9.1 million for 2017, compared to $1.5 million for 2016. The increase in G&A expenses was mainly due to the share-based compensation newly incurred in 2017 and the increase in advisory expense, headcount, and legal fees associated with operating as a public company. U.S.

GAAP net loss attributable to BeyondSpring for 2017 was $91.8 million, compared to $12 million for 2016. For greater detail related to our fourth-quarter and full-year 2017 numbers, I refer you to our results announcement issued this morning and our 20-F filing. So in conclusion, we named our company BeyondSpring to reflect our business model, one that means beyond borders as we integrate U.S., China, and global resources to develop transforming cancer drugs in a timely and cost-efficient manner. Our name also means beyond seasons, as we strive to rapidly leap from the planting and hope season of spring to the harvest season of NDA submission.

We remain confident in our lead asset, Plinabulin, and its potential as a meaningful new-drug candidate for CIN and non-small-cell lung cancer as well as its potential as a broadly applicable new component to combination therapies in chemotherapy and immuno-oncology. We're also eager to advance our next novel pipeline candidate into the clinic this year or early next year. As we look to the 12 to 24 months ahead, we have an ambitious plan with a steady flow of multiple significant near-term milestones that have the potential to transform BeyondSpring into a commercial-stage company as early as next year. I look forward to keeping you updated on each of these exciting milestones in the coming months.

With that, we would like to now open up for questions. Operator?

Questions and Answers:

Operator

Thank you ma'am. [Operator instructions] And our first question will come from the line of Joe Pantginis with H.C. Wainwright. Your line is now open.

Joe Pantginis -- H.C. Wainwright -- Managing Director

Hi, good morning, Lan, thanks for taking the question. Wanted to ask about some of the background activities going on right now. Ahead of the interim data that you're expecting from a couple of the studies later this year, I wanted to see if you could discuss the filing efforts that are ongoing right now ahead of these data. And then part of that question is also, what are you doing now? And what needs to still be done with regard to manufacturing in China for Plinabulin? Thanks.

Lan Huang -- Chairman and Chief Executive Officer

Thank you so much, Joe, and thank you for your support over all these years. So as you know, the NDA package is a very large package, and it's an ambitious plan. So as we are going toward for filing to the end of this year, we're already putting everything together. So NDA package includes a few components.

No. 1, it includes all the preclinical portion, including the GLP study, which were early completed in our package planning. And then, No. 2 is the CMC package.

And we have already manufactured Plinabulin, three batches of API and also three batches of product with registration quality in the U.S. and also in China. So those documents are being prepared at this moment, and they're already past one-year stability timeline, which is enough for submission for the NDA. And No.

3, as you know, is the clinical data package for safety. So as I mentioned in my talk, we have already had over 300 cancer patients who have used Plinabulin as a cancer treatment drug. So that's already complete, all the clinical -- the safety package. So now basically, for the CIN indication, we are just waiting for the data of the Phase III interim of the 105 study, which we plan to enroll 150 patients, but the interim data at a 100-patient enrollment, we should complete that portion.

And then also, for the 106 study, the Phase II portion should also complete for the clinical-efficacy trend for China. So those are basically currently ongoing, and when we have those data ready, we can plug into the NDA package. And then for the non-small-cell lung cancer study, for the 103 study, as I mentioned, we basically have enrolled over 230 patients already. And then for our interim analysis, we are waiting for 146 patient test events, and that could be at the end of this year.

So those are also in the waiting and then to be plugged into the whole NDA package. So as you see, it's a -- our team is working diligently to put the portions which we already have together and then just to plug into the clinical section. As what you just asked about the manufacturing, so we are taking the outsourcing way of doing it for the U.S. We have two CMOs manufacturing the API and another one manufacturing the drug product.

The same thing for China. We also employ two CMOs to do one -- for API. One is for the drug product. As I just mentioned, we have already finished all of the NDA-quality three batches, and then those are ready to be put into the writing and submit for the CFDA NDA.

Joe Pantginis -- H.C. Wainwright -- Managing Director

Got it. No, that's very helpful. And then one quick clinical question, if you don't mind. With regard to Study 106, can you remind us what you're looking for as the hurdle for superiority? Obviously, statistical significance, but have you -- can you just remind us what the actual hurdle is?

Lan Huang -- Chairman and Chief Executive Officer

OK. So for the 106 study, this is high-risk chemo study. So the chemo is TAC, so basically Taxotere, Adriamycin, and cyclophosphamide. So for the TAC, without any use of G-CSF, the duration of severe neutropenia or how many days a patient is in the hospital is around seven to 10 days.

With the use of Neulasta or G-CSF, basically, that DSN reduce to 1.5 to two days. So -- and when we calculated for the Phase III statistics, as we basically use our previous data of Plinabulin versus the published data of G-CSF, we basically calculate Plinabulin's treatment program to be 0.6 days, and then for the Neulasta arm, it's 1.2 days. So with that, we will only need to use 60 pair of patients to demonstrate the superiority for the DSN as the primary endpoint. Of course, the secondary endpoint includes the bone pain and that Plinabulin should show -- we believe it's going to show superiority as well because G-CSF by its mechanism truly makes the neutrophil -- pushing the neutrophil out of bone marrow.

That's why it has this debilitating bone-pain side effect. And Plinabulin is preserving the neutrophil from breakdown, so it does not have those bone-pain side effects.

Joe Pantginis -- H.C. Wainwright -- Managing Director

Got it. Great thanks for the added info, Lan, and good luck with all of the very busy times ahead.

Lan Huang -- Chairman and Chief Executive Officer

Oh, thank you so much, Joe.

Operator

Thank you. And our next question will come from the line of Jason McCarthy with Maxim Group. Your line is now open.

Jason McCarthy -- Maxim Group -- Managing Director

Good morning, Lan, thanks for taking the question. I have a question related to commercialization. As you're approaching filing in China, which should be quickly followed by the U.S., how do you position or see Plinabulin in the landscape of Neulasta, particularly as Neulasta is going biosimilar in the U.S., we expect, maybe later this year? Can you give us some color on the market dynamics of the Neulasta space in China and the U.S. and how you're going to position Plinabulin to take market share?

Lan Huang -- Chairman and Chief Executive Officer

Thank you so much, Jason. That's a great question. As you know, that G-CSF has dominated the market for the last 30 years, and as you know, G-CSF is a growth factor. So basically, we are using growth factor to treat cancer patients, so that's really counterintuitive.

And Plinabulin, as you know, is an anticancer drug, so it preserves the neutrophil from breakdown. So from a mechanism point of view, it's definitely superior to G-CSF. And then just from the value proposition of Plinabulin versus the Neulasta or biosimilar G-CSF, I think we can use the four Ps, as below, to explain. So No.

1, for the patients, so the first P. So we think Plinabulin has higher quality of life against Neulasta or any biosimilar G-CSF because that's still G-CSF, right, the same mechanism. So first is, it has high quality of life because we have much less bone pain as from the mechanism difference. No.

2 is Plinabulin is much easier to use because it could be used the first day after chemo dosing. From our Phase II study, we can only use -- we basically use Plinabulin 30 minutes right after docetaxel use in one cycle, in one dose, and that's how we showed its benefit. And Neulasta taking most of the market share is because it can be used one dose but on the second day of the cycle, right? So No. 2 is we say it also benefits the physicians, the second P, because Plinabulin is anticancer drug.

It shows a durable response in combination with docetaxel, and we hope it can also show those with other chemotherapies. So that's basically the immune effect, so that will be potential high efficient -- efficacy from a physician point of view to treat the patient. No. 2 is it also potentially has less unexpected visit for the patients, so the doctor could treat the patient less after the chemo dose.

So No. 3 is for the payers, so the third P. As you know, that from our Phase II study, 101 study, we have shown that Plinabulin has much less hospitalization than G-CSF. We're at 6%, and G-CSF was having 20%.

So in that sense, even if we charge Plinabulin later, if it's the same price as the Neulasta, then we still -- the payers still pay less because they pay less of the hospitalization. So that's also beneficial for the payer. Then No. 4 is for the protection, so the fourth P.

Because Plinabulin is a small-molecule drug, so only three-step synthesis, so it's very easy to make. So its cost of goods compared to a biologic, even with biosimilar G-CSF, it's still biologics, it's probably 1/10 of the cost. So with that, I think, in the future, we could use a much better competitive pricing so -- for the market. And then that will be very good for the patient, the insurers, and still, I think, we have plenty of margin for our investors.

So those are the value propositions for Plinabulin. So that's why when we did the research with IMs -- IMS with over 180 doctors in the U.S. who regularly prescribe G-CSF, they saw Plinabulin's profile and they were very excited. And as I mentioned, they would give us a large chunk of GCS market and for the high-risk chemotherapy market.

And still, Plinabulin actually could occupy a lot of the intermediate-risk market, which is 60% of the chemo market, where current NCCN Guidelines do not advise to use G-CSF. Coming back to your questions regarding the China dynamics and commercialization, as you know, China has 4 million new cancer patients a year, and we know probably up to 60% patients actually do use chemotherapy drugs in China, so that's 2.4 million patients. And out of them, potentially market -- 80% was the intermediate- and high-risk patient population, so that give us almost 2 million patients in China who could benefit from Plinabulin after their use of chemotherapy. So we also were very fortunate to receive this major grant from the Chinese government, the 13th five-year grant.

So that potentially could get Plinabulin into the national insurance after Plinabulin is approved in China and after successful price negotiation second half of next year. So with that, actually, we could make the government to pay for this drug, so our reach is tremendous into the market. And in China actually, cancer care is very centralized in Beijing, Shanghai, and Guangzhou area. It's very centered there, so it's around 80% of cancer care is happening there.

So we could use a very small commercial team, probably around 30 people, to cover those hospitals in those major areas and then using the contract salespeople in other second-tier cities and the provinces. So in China, actually, the commercial organization would be very lean but also very efficient, especially if we get the national insurance from the government. So we could help a lot of sick people and with the government also supporting the major effort.

Jason McCarthy -- Maxim Group -- Managing Director

Thank you so much, Lan.

Lan Huang -- Chairman and Chief Executive Officer

Thank you for the question.

Operator

Thank you. And our next question will come from the line of Matthew Cross with Jones Trading. Your line is now open.

Matthew Cross -- Jones Trading -- Analyst

Hey, Lan. Congrats on a productive year. So first off, I was wondering if you could give us just a quick status update on the investigator-sponsored combination trials with nivolumab that you presented early data from at the end of January. Could you discuss your expectations for timing of additional data from these and what kind of findings might be presented next? Thanks.

Lan Huang -- Chairman and Chief Executive Officer

Thank you so much, Matt. Thank you for your support. So for Plinabulin in combo with nivolumab, we have conducted investigator-initiated study with UCSD and the Fred Hutch. So currently, Fred Hutch has already moved into the Phase II portion of the study, so basically, enrolling patients mostly for efficacy than only for the safety.

So out of the 10 patients who we treated with nivolumab and Plinabulin, very significantly, we don't see any grades 3 and 4 immune-related SAE. As you see from the PD-1, PD-L1 alone, which you see probably 10% to 15% of the immune-related SAE. So this is truly encouraging to show that Plinabulin potentially could even reduce the immune-related SAE. And that would be really helpful because now -- the PD-1 agent, I think it's very effective, but now considering its use, its immune-related SAE, some patients have to stop use of drug for life.

So as what you talk about, for the additional studies, as you see, we are progressing nicely into the Phase II portion. So hopefully, we should have efficacy data to be shown probably the end of this year, early next year. We are also looking into some biomarkers -- immune biomarkers in the study. So hopefully, that will also further elucidate Plinabulin's immune mechanism during the clinical study.

Thank you.

Matthew Cross -- Jones Trading -- Analyst

Great. That's very helpful, and I'll look forward to that data update in 2018 or early 2019. And then I know it's been discussed that given Plinabulin's safety profile and the potential for earlier administration, the drug could be given to intermediate- as well as high-risk chemo patients. But to my understanding, the gauging of patients' risk of febrile neutropenia from a given chemotherapy regimen is pretty subjective or not particularly consistent from one physician to another.

So I was wondering if there was anything you could speak to from your discussions with physicians, through IMS or otherwise, about how potential label differentiation there on the risk here might be implemented in actual practice. Thanks.

Lan Huang -- Chairman and Chief Executive Officer

OK. So probably I should give this question to Ramon, our chief medical officer. This very much is a clinical question. Ramon, can you make some comments here?

Ramon Mohanial -- Chief Medical Officer

Yes. Thank you. So regarding the intermediate risk, that is fairly well-defined by NCCN Guidelines for the use of anti-neutropenia therapies. So the definition of the intermediate risk is based on having an FN risk between 10% and 20%, whereas, for a high risk, that risk would represent 20% or higher risk.

There's a long list of chemotherapies that falls within the intermediate segment risk, so there is fairly good guidance what patients will be subjected to intermediate risk for FN. Nevertheless, as you pointed out rightly, is that between physicians, there are different practices in the sense that different physicians, they may make their own decisions regarding when to prescribe G-CSF in these intermediate-risk patients. I would like to point out is -- that a lot of the behavior for prescription in the intermediate risk also takes into account the cost component that comes with these G-CSF agents, which typically is high. Combined with the cost component also, another consideration is the safety of these agents, and these agents, they do come with serious safety concerns.

So we believe that Plinabulin is well-positioned in this intermediate segment risk for the reason that it can be offered as cost-effective alternative, and it's also a long-acting one-dose cycle alternative. And it comes with a more favorable safety profile, in particular as it pertains to bone pain. We will work very closely with key decision-makers to influence the guidelines for NCCN, which typically carries a lot of weight among physicians to influence their prescription decisions. So collectively, we believe we are well-positioned for the intermediate-risk segment because we address important limitations for G-CSF products which limits the uptake of these G-CSF products for this intermediate segment risk.

And we will work very closely with NCCN members to influence the uptake of Plinabulin in this segment. I also would like to remind you that we have several NCCN members for myeloid growth factors on our development team because they see the tremendous potential that comes with the use of Plinabulin for the CIN indication. Thank you.

Matthew Cross -- Jones Trading -- Analyst

Perfect. Appreciate the clarity. I think that does it for me. Thanks, guys.

Lan Huang -- Chairman and Chief Executive Officer

Thank you.

Operator

Thank you. And I'm showing no further questions in the queue. So it's my pleasure to hand the conference back over to Ms. -- Dr.

Lan Huang for some closing comments or remarks.

Lan Huang -- Chairman and Chief Executive Officer

OK. Thank you. Thank you for your participation on today's call and also your insightful questions. You have a good day.

Operator

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude our program, and you may all disconnect. Everybody, have a wonderful day.

Duration: 55 minutes

Call Participants:

Susie Kim -- Argot Partners Investor Relations

Lan Huang -- Chairman and Chief Executive Officer

Joe Pantginis -- H.C. Wainwright -- Managing Director

Jason McCarthy -- Maxim Group -- Managing Director

Matthew Cross -- Jones Trading -- Analyst

Ramon Mohanial -- Chief Medical Officer

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