Forty Seven Inc. (FTSV) Q1 2019 Earnings Call Transcript

Forty Seven Inc. (FTSV)
Q1 2019 Earnings Call
May 13, 2019, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen and welcome to the Forty Seven Inc. first quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session and instructions will follow at that time. If anyone should require operator assistance during the call, please press * then 0 on your touch-tone telephone. As a reminder, this call may be recorded.

I would now like to turn the call over to Hannah Deresiewicz. You may begin.

Hannah Deresiewicz -- Investor Relations 

Thank you. This afternoon, Forty Seven issued a press release detailing its first quarter 2019 financial results along with anticipated future milestones and recent accomplishments. This release is available on the investor section of Forty Seven's website at www.fortyseveninc.com.

Today's call will begin with prepared remakrs by Dr. Mark McCamish, Chief Executive Officer of Forty Seven, Dr. Chris Takimoto, Chief Medical Officer, and Ann Rhoads, Chief Financial Officer. Then we will open the call up for your questions. Dr. Craig Gibbs, Chief Business Officer, Dr. Mark Chao, Founder and Vice President of Clinical Development, and Dr. Jens-Peter Volkmer, Founder and Vice President of Research and Early Development are also on the call and will be available for questions.

Before we begin, I would like to remind everyone that statements we make on this call will include forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ. A description of these risks can be found in our most recent period reports we filed with the SEC. Any forward-looking statements are made only as of today's date and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. I would now like to turn the call over to Mark.

Mark McCamish -- President and Chief Executive Officer

Thanks, Hannah. Good afternoon, everyone. Thank you for joining us today to review our first quarter 2019 financial results and recent business highlights which we announced earlier today. 2019 has been a busy year for Forty Seven so far and I'm excited to share recent progress across our portfolio.

In the first quarter and more recently, we continued to build and strengthen our broad pipeline. We advanced our ongoing trials toward near-term readouts and we remain on track and are looking forward to announcing updated data from our ongoing Phase 1b/2 study in non-Hodgkin's lymphoma and our Phase 1b study in AML and MDS at medical meetings in June.

Building on the promising results observed in our Phase 1b portion of our non-Hodgkin's lymphoma trial and robust scientific rationale supporting the potential synergistic value of combining 5F9 and rituximab with additional agents, we entered into two new collaborations with Roche/Genentech and AstraZeneca/Acerta to explore 5F9's potential as part of two distinct triplets regimens in diffuse large B-cell lymphoma.

Finally, as we discussed on our fourth quarter call in March, we expanded our pre-clinical pipeline with FSI-174, our anti-cKIT antibody for use in combination with 5F9 as part of a less toxic transplant conditioning regimen as well as a treatment for hematologic malignancies. This progress reflects our unwavering commitment to taking advantage of the CD47-SIRP-alpha pathway as a novel target and our belief in the innate immune system as a tool that can be effectively harnessed to help patients better battle their cancer.

On today's call, we will focus on our prepared remarks on our development program for 5F9 in non-Hodgkin's lymphoma, where we are advancing efforts to optimize clinical benefits to patients. Before turning the call over to Chris to speak to these efforts in greater detail, let me first speak to the strategic rationale behind our focus on non-Hodgkin's lymphoma. As we've described before, relapsed refractory non-Hodgkin's lymphoma remains a disease in significant need of new therapeutic options.

The natural progression of non-Hodgkin's lymphoma varies widely across multiple forms, including aggressive forms such as diffuse large B-cell lymphoma or DLBCL and more slowly growing our indolent forms, such as follicular lymphoma or FL. Without treatment, patients with the most aggressive forms of non-Hodgkin's lymphoma survive for only a matter of months.

Based on encouraging preliminary data from our Phase 1b trial of 5F9 in combination, we believe 5F9 with rituximab has the opportunity to improve the treatment landscape in non-Hodgkin's lymphoma. We are particularly encouraged to have seen durable responses in both DLBCL and FL patients to date across a heavily pre-treated population with more than 90% of evaluated patients deemed rituximab refractory by standard clinical criteria.

As you know, we are planning to present updated data from our ongoing Phase 2 study at both the EHA and Lugano meetings in the second quarter, which will include data from longer-term follow-up, including duration of response for the patients reported on last year as well as initial safety and efficacy data from the patients enrolled in the Phase 2 portion of the trial.

I'd now like to turn the call over to Dr. Chris Takimoto, our Chief Medical Officer, to provide an update on our broader clinical development efforts, review our progress with our ongoing Phase 2 study in NHL and introduce the scientific rationale behind the two collaborations we recently announced. Chris?

Chris Takimoto -- Chief Medical Officer

Thank you, Mark and good afternoon, everyone. Since Mark has noted, we are looking for to presenting new data from our ongoing NHL Phase 2 study next month, which we hope will provide important insights of the merits of our combination approach and inform our next steps. In addition to providing an update on the median duration of response on those patients included in our initial New England Journal of Medicine publication, this update will include early data from approximately 70 new patients treated in the Phase 2 portion of the study, 5F9 doses of either 30 or 45 mg/kg.

As we announced earlier this year, we introduced dose optimization cohorts into the Phase 2 portion of our study in order to further evaluate the observation of a potential positive dose response correlation in the Phase 1b study, suggesting that a higher dose may be associated with inherent efficacy.

Importantly, at the FDA's recommendation, all of the DLBCL patients enrolled in the Phase 2 portion of the study are CAR T therapy ineligible. This means that our newest patients are harder to treat and generally thicker than those enrolled in the initial Phase 1e portion of the trial and that we're homing in on the population with the greatest unmet need.

As Mark mentioned, we are also working hard to take advantage of our encouraging responses in NHL to explore recent advances and emerging treatment modalities available to optimize patient outcomes. In recent months, we were excited to enter into two new clinical collaborations, one with Genentech and one with Acerta, which allows us to evaluate 5F9 and rituximab as part of triplet regimens, each with a distinct scientific rationale.

Importantly, under the terms of both collaborations, we will retain full commercial rights to 5F9, while also allowing us the opportunity to expand our development program in a cost-effective manner without sacrificing longer-term values of our pipeline.

With Genentech, we will be evaluating 5F9 and rituximab in combination with Genentech's anti-PD-L1 antibody, atezolizumab or Tecentriq in patients with DLBCL. Our hope with this combination is to engage both T-cell mediated cancer killing and macrophage phagocytosis in a single targeted pack. CD-47 antibody-media phagocytosis has been shown to enhance antigen presentation in cited T-cells.

Also, in analysis conducted by Genentech's biomarker group, biopsies taken from DLBCL patients enrolled in the GOYA and MAIN Phase 3 trials showed unusually high PD-L1 expression levels on macrophages, which could create an amino-suppressive environment for T-cells.

The established efficacy of 5F9 plus rituximab coupled with the presence of these macrophages in our pre-clinical data suggests that 5F9 can mobilize these macrophages for phagocytosis, repolarize them to a non-amino-suppressive state while, in combination an anti-PD-L1 antibody, enhancing cancer cell antigen presentation in reducing the amino-suppressive [inaudible].

Based on these findings, we are working closely with Genentech to initiate a Phase 1b trial evaluating safety and efficacy of the triplet regimen in patients with relapsed refractory DLBCL. We expect the trial to begin enrolling patients before the year's end.

With Acerta, AstraZeneca's hematology R&D center of excellence, we will be evaluating 5F9 and rituximab in combination with AZ's acalabrutinib or Calquence in patients with DLBCL. Acalabrutinib is the highly selective Bruton's tyrosine kinase inhibitor which binds covalently to the BTK, thereby inhibiting its activity.

In B-cells, BTK signaling results in the activation of pathways necessary for B-cell proliferation, trafficking, hemostasis, and adhesion. Blocking these pathways can induce the regression of B-cell malignancies. Acalabrutinib has already demonstrated profound potential in patients with B-cell lymphomas and was granted accelerated approval by the US Food and Drug Administration for the treatment of mantle cell lymphoma patients, which received at least one prior therapy. We believe that harnessing this approach while also activating macrophage components of the innate immune system can offer patients even greater benefit in a broader range of patients.

Under the terms of the agreement, Acerta will sponsor and fund a Phase 1b trial [inaudible] the safety and efficacy of the triplet regimen in patients with relapsed or refractory DLBCL. We expect the trial to begin enrolling patients before the year's end.

As we expand our efforts in NHL, we are equally focused on advancing our other ongoing clinical trials with 5F9, both as a monotherapy and combination agent. An abstract detailing the safety and initial data from our Phase 1b trial of 5F9 as monotherapy and in combination with azacitidine in patients with AML and MDS is accepted for poster discussion at the upcoming American Society of Clinical Oncology or ASCO's annual meeting. We look forward to reviewing these results at a KOL reception on the evening of Monday, June 3rd.

Additionally, all our other clinical programs continue to progress on track with data from our Phase 1b/2 trial in combination with cetuximab in patients with colorectal cancer and from our Phase 1b trial in combination with avelumab in patients with ovarian cancer both expected in the fourth quarter of this year.

In data from the Phase 1b trial, 5F9 in combination with atezolizumab in bladder cancer and in AML, both being conducted by Genentech, is expected in 2020. We continue to advance the FSI-189 and FSI-174 programs through pre-clinical development in IND filings early next year.

All in all, we are extremely pleased with our progress year to date, both internally and in forging new collaborations with leading pharmaceutical partners, whose support allows us to expand and accelerate the breadth of our impact. We look forward to announcing updated clinical data in NHL and AML/MDS in the coming weeks and to updating you soon as we continue to execute our mission of helping patients defeat their cancer by leveraging the untapped potential of the innate immune system.

With that, let me now turn over the call to Ann to review our financial results for the first quarter of 2019.

Ann Rhoads -- Chief Financial Officer

Thank you, Chris. Forty Seven continues to operate from a position of financial strength. This will enable us to continue to fund investments in our clinical stage portfolio while further leveraging our leadership and innate immunity to advance and broaden our pre-clinical pipeline.

We ended the first quarter of 2019 with cash, cash equivalents, and short-term investments of $113.6 million compared to $139 million as of December 31st, 2018. This decrease reflects cash used to fund our operating activities in the first quarter of 2019, which included an advanced payment for contract manufacturing of approximately $7.7 million.

Based on our current plans and consistent with our prior guidance, we believe that we're sufficiently capitalized to fund our operations through the first half of 2020. As demonstrated by two new collaborations we announced in April and in May of this year, we remain committed to preserving capital through cost-sharing partnerships with pharmaceutical companies, which afforded the flexibility to accelerate our evaluation of 5F9 and expand our development program into new treatment modalities or indications without significantly impacting our own financial position.

Turning to the first quarter 2019 income statement, during the quarter, we incurred $19.1 million in research development expenses compared to $11.2 million for the same period last year. The increase in R&D expenses was primarily driven by an increase in third-party costs related to the advancement of our clinical programs for 5F9 and associated contract manufacturing costs.

The year over year increase in R&D expenses was also driven by an increase in other pre-clinical and discovery program costs and an increase in personnel related costs including stock-based compensation. General and administrative expenses were $4.6 million for the first quarter of 2019 compared to $3.8 million for the first quarter of 2018.

This increase in G&A spending was largely due to an increase in personnel related costs driven by an increase in headcount, an increase in director's officer insurance expense, that was partially offset by a decrease in accounting and consulting expenses incurred in connected with us operating as a public company. Our net loss for the quarter was $23 million or $0.74 per share compared to a net loss of $14.8 million or $2.24 per share for the first quarter of 2019.

With that, I will now turn the call back to the operator for questions.

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, if you have a question at this time, please press the * then the number 1 key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the # key.

Our first question comes from Matthew Harrison with Morgan Stanley. Your line is now open.

Connor Meehan -- Morgan Stanley -- Analyst

Hi, everyone. Thanks for taking my question. This is Connor Meehan on for Matthew Harrison. We were just wondering for AML, could you guys help frame what you guys would view as strong data, especially given that you're enrolling in combination with azacitidine monotherapy, considering there's no control arm?

Mark Chao -- Founder and Vice President of Clinical Development

Sure. Yeah. This is Mark Chao. I can answer that question to start off. I think with our initial data, one of the things that we want to be able to ascertain is the effect difference in contrast to azo monotherapy itself. So, there's a lot of reported literature historical controls in that regard, where we anticipate the monotherapy response rate or CR rate of azacitidine to be between 15% to 25%. So, I think that's the first part to see whether we're adding to that.

I think with regard to your second point in regard to AML and NDS, maybe I'll start with NDS as a landscape, where we know, again, the unmet medical need there is fairly high in the sense that there are no approved therapies beyond citidine and azacitidine for this untreated high-risk population. So, we think there's definitely a significant unmet need there.

I think with regard to AML, it's been an exciting time for patients and for clinicians, as there's been several agents that have been approved, including venetoclax. I think our data, we're certainly looking at that landscape in terms of what would provide valuable activity, but also note that in addition to efficacy, the safety profile is also important in terms of being able to stay on therapy for a long time. For us, we're looking at both the efficacy and safety data and we'll be evaluating our data as the data matures to assess how we further develop the next phase.

Operator

Our next question comes from Martin Auster with Credit Suisse. Your line is now open.

Martin Auster -- Credit Suisse -- Managing Director

Hey, guys. Thanks for taking my question. This one might be for Chris. I was wondering if you could remind us on number of centers involved in the Phase 2 versus the Phase 1b and then also, I'm not sure when the Phase 2 finished enrolling, but I'm curious in general if you saw patients with less pre-treatment coming on board since the Phase 1b data were presented last year then subsequently published and just in general how you think about the ability to treat a less pre-treated population offset by the comment you made earlier about the CAR T-ineligible patients maybe having more aggressive or advanced disease. Thanks.

Chris Takimoto -- Chief Medical Officer

Sure, Marty. So, in terms of the number of centers that have participated, we had centers participating in the Phase 1b part of the NHL study and then 12 centers in the Phase 2 part of the study. So, we did increase the number of centers by four.

In terms of the differences in the study population in the Phase 2, the Phase 2 component of the trial is continuing to go on and is ongoing. As we mentioned earlier, it's in the CAR T ineligible patients. In Phase 1b, we had patients with a median number of prior therapies of four lines of therapy and in the CAR T ineligible patients that we're currently treating, some of these patients are being treated with less prior lines of therapy. I think the other factor that we did call out is that these patients are generally older and sicker patients. That's part of the reason why they're not eligible for CAR T cell treatment.

Operator

Our next question comes from Michael Schmidt with Guggenheim. Your line is now open.

Michael Schmidt -- Guggenheim Securities -- Analyst

Hey, guys. Thanks for taking my questions. I had a couple. Maybe just following up on your comments around enrolling more or exclusively CAR T-ineligible patients in the Phase 2 portion of the study, I'm just wondering how should we think about the clinical and the regulatory bar in that patient subset?

I think the SCHOLAR-1 data that you previously mentioned has been generally considered as the bar for CAR T-cell therapy in that setting. I'm curious how you think about what a strong data set would look like in those patients. Maybe the follow-up would be how would this data inform your next development steps for the doublet therapy in DLBCL and maybe also in follicular?

Mark Chao -- Founder and Vice President of Clinical Development

Sure, Michael. It's a good question. This is Mark Chao. I think you actually helped answer part of that question. In terms of CAR T-ineligible patients, as you state, there are actually no standard of care therapies. I think our best historical data set for benchmarking is the SCHOLAR-1 data set, which are in refractory DLBCL patients with a mix of mainly rituximab-salvage chemo, which would be options in this space.

In that study, the response rate was 26%, but a CR rate of only 7%. Importantly, those responses appear not to be durable as the median overall survival was only 6.3 months. So, for us, that actually underscores a very high unmet need population. Again, that's kind of what we're looking at in terms of the available benchmark. I think just a follow-up with regards to CAR T-ineligibility, this is actually defined in terms of two facets.

I think one is eligibility based on safety, which can include performance status, age, comorbidities that could exacerbate in terms of neurotoxicity or cytokine release, but it also includes a lack of availability. That lack of availability importantly can include not being able to weigh the duration of time needed for manufacturing the cells to get the CAR T therapy. That is actually generally a reflection of the fact that these patients have more proliferative disease and can be faster growing. So, I think that's important to highlight as we define that definition.

I think to your piece about how these data inform our regulatory strategies, as you know, we received fast-track designation for both DLBCL and follicular lymphoma. So, we are having ongoing discussions with the FDA in regard to areas where we can further develop. I think we've mentioned pretty consistently that our base case is a randomized control study, but obviously with the data with the unmet need, we're looking at potential single-arm routes, which will be, again, dependent on discussion with the FDA as well as maturation of our data set.

Michael Schmidt -- Guggenheim Securities -- Analyst

Very helpful. Thanks. Just regarding maybe both ASCO and EHA just with abstracts coming out this week, I'm just curious how much information will be in the abstract relative to the full presentation for both?

Mark Chao -- Founder and Vice President of Clinical Development

Sure. Maybe I'll take that again. So, we do have abstracts coming out for ASCO and EHA as you note this week. Those abstracts will have data in there. So, these won't be based on an initial data for the abstract for both AML and NHL. So, there won't be data including safety, response rates, durability as appropriate for NHL. We will also have separate data upcoming for the actual presentation. So, we would expect additional data on all fronts to be added into the presentation as well.

Michael Schmidt -- Guggenheim Securities -- Analyst

Thank you very much.

Operator

Our next question comes from Arlinda Lee with Canaccord. Your line is now open.

Arlinda Lee -- Canaccord Genuity -- Analyst

Hi, guys. Thanks for taking my questions. Maybe just following up on the AML side, what kind of a patient population do you think we might see at ASCO and maybe can you give us an idea of if there are going to be more patients or just longer follow-up for the actual presentation? Then secondly, on the NHL data, can you also frame what you might think would be something to be excited about? Thanks.

Mark Chao -- Founder and Vice President of Clinical Development

Sure, Arlinda. Thanks for the question. I think I can answer the AML part and then maybe I'll turn the NHL piece to Chris. With regard to AML, there will be two patient populations who will report. I think as Chris mentioned, we will have a safety running cohort of 5F9 monotherapy and relapse refractory AML and MDS. This is, again, just to confirm the safety as investigated in our Phase 1 study conducted in the UK that was published at EHA last year.

The main focus of this study will be on the second population, which will be in treatment-naïve AML patients who are ineligible for intensive induction chemotherapy as well as treatment-naïve MDS patients that are intermediate to higher-risk by IPSFR criteria. These both will be in combination with 5F9 and azacitidine. I think in terms of what we should expect for that data set, we are, again, providing guidance that will probably have about ten patients in the relapsed refractory cohort just for the safety run in and approximately 20 patients in the azacitidine combination.

That will be the anticipated estimates for the time of the presentation. We will have some additional data from the abstract release to the actual presentation, which will likely be comprised of several additional patients and some additional follow-up, although that will be premature. Then maybe for NHL, I'll turn that over to Chris.

Chris Takimoto -- Chief Medical Officer

Yeah. So, Arlinda, you asked about what we will be presenting for the NHL update and what would get us excited. I think one of the key things to focus on for the NHL data will be the durability of the patients that we initially reported on in the Phase 1b part of the study.

We will be having obviously an extensive follow-up on those patients in terms of the durability of their responses. Particularly in this disease setting, it's not just response rate, but it's durable responses that are really critical. We'll be focusing on the durability not just of the complete responses, but also of the partial response patients as well.

I think the other factors that we'll be presenting to keep an eye on is that in terms of the newer patients in Phase 2 and some of the newer cohorts, as we mentioned, we're exploring some higher dose levels than we have explored in the past. So, treating patients at 45 mg/kg both in DLBLC and in follicular lymphoma, we'll be presenting cohorts there. So, I think we'll have the early efficacy data for those patients. I think those are the key things that we would keep an eye out for.

Arlinda Lee -- Canaccord Genuity -- Analyst

Okay. Great. Thank you.

Operator

Our next question comes from Mark Breidenbach with Oppenheimer. Your line is now open.

Mark Breidenbach -- Oppenheimer & Co. -- Analyst

Good afternoon, guys. Congrats on the progress and we're looking forward to all of the data updates next month. Actually, first question -- you have maybe more data presentations than I would have expected between three different conferences. I was wondering if you could help us maybe explain how you're planning to divide the data between ASCO and EHA in the AML program and between EHA and ICML in the NHL program. Are these going to be sort of redundant with each other or are you going to split the conferences into distinct segments or patient populations?

Mark Chao -- Founder and Vice President of Clinical Development

Sure, Mark. Yeah. It's a good question. This is Mark Chao here. We are presenting data at multiple conferences. I think the rationale here was really to be able to provide broad exposure to several different stakeholders including clinicians, scientists, investors, and analysts as well. So, to respond to your question, we will have multiple presentations for AML as well as NHL across those conferences. They will be the same data set. So, we are not parsing out specific sections for each conference. So, you would expect to see similar data with the same data cut.

Again, our intention here was we know that there are different audiences for each of the conferences. Given the excitement of 5F9 that we're seeing, we want to be able to provide broad exposure to multiple different stakeholders. I think that's important, especially for Lugano or ICML, which only happens every other year and we know a lot of the lymphoma clinicians are there versus more of an international presence at EHA, for example. So, hopefully that gives you color on our strategies to disclose the data at medical conferences.

Mark McCamish -- President and Chief Executive Officer

This is Mark McCamish. We probably use the term encore versus redundant. So, we'll have the AML presented at ASCO in a poster discussion, be orally presented at EHA, and then the NHL data will be orally presented at EHA and at Lugano. So, a little bit of an encore.

Mark Breidenbach -- Oppenheimer & Co. -- Analyst

Got it. Just a couple of quick follow-ups on the new collaboration studies with Genentech and with Acerta. I'm wondering in particular if both of these trials will be conducted in relapsed refractory DLBLC patients and would they potentially be competing with your own trials for enrollment in NHL?

Mark McCamish -- President and Chief Executive Officer

So, as we move this forward -- Mark, thanks for the question -- as we look, we're trying to expand as much as we can to help patients in their battle against cancer. In this situation, we've got a great signal that we want to pursue in our combo with rituximab 5F9. That's with our focused. As we published in the New England Journal of Medicine, we did quite a bit of interest in terms of looking at other potential pathways that could be synergistic.

If you recall the response rate we published in our Phase 1b and in the New England Journal, I believe diffuse large B-cell is in the 39% range, something like that for overall response. That still leaves a lot of room for continued advancement. So, it made sense for us to talk scientifically with colleagues at both Genentech, Roche, as well as AZ/Acerta to look at potential mechanisms that could add to that so we could even increase that and help out more patients. That's been the goal.

We'll still focus on our doublet. That's the discussion we'll continue to have with the agency and routes forward. Simultaneously, we can build on that base. If it makes sense, we will do so. As well economically, as you know, these trials can be expensive. So, having colleagues and companies that can come to the table and then support those studies makes it nice as well.

Mark Chao -- Founder and Vice President of Clinical Development

I'll just add one follow-up to what Mark said -- with regard to lines of therapy, both of these studies allow patients to receive a triplet after one prior line. So, it is moving up to an earlier line of therapy, whereas our current study, at least for the most part, requires two or more lines of therapy. This allows us also to move up additional lines. So, in that regard, there are some differences in eligibility that will allow us to make sure we don't compete in core areas with the doublet.

Mark Breidenbach -- Oppenheimer & Co. -- Analyst

Okay. One very quick last one for me -- when I think of BTK inhibitors like acalabrutinib and others, I do think of anemia and thrombocytopenia as common side effects. How are you thinking about that in terms of potential overlapping toxicity with 5F9? Thank you.

Mark Chao -- Founder and Vice President of Clinical Development

Sure, yeah. This is Mark. I can start with that. I think one of the things to first state with regard to moving into triplets is the notion at least to date that our safety profile for 5F9 has been very well-tolerated. We've been quite pleased. That's been as monotherapy or in combination with different agents. So, we think that affords us actually a very differentiated opportunity to be able to combine with other agents to minimize the overall toxicity and in case, whether it be with BTK or a checkpoint inhibitor.

So, we think that's a unique strength for us that allows us to be able to do triplet combinations. I think with regard to data we reported, the anemia that we have has been really mitigated by our high-maintenance dose strategy. That's been straightforward to take care of. We've not reported any significant thrombocytopenia.

So, we do not expect potentially interactions or exacerbations of that. I think within the lymphoma landscape for targeted or chemotherapy agents, these patients' clinicians are used to managing potentially cytopenias related with that. So, we feel actually that the safety profile or potential safety profile of the triplet can be managed well, mainly based on our well-tolerated safety profile for 5F9 and rituximab.

Mark Breidenbach -- Oppenheimer & Co. -- Analyst

Fair enough. Thank you for taking the questions.

Operator

Again, if you have a question, please press * and then 1. Our next question comes from Robert Haslet with BTIG. Your line is now open.

Robert Hazlett -- BTIG Research & Strategy -- Managing Director

Thank you for taking the question. A number of them have been answered, but can I just ask a question -- as you expand into multiple additional collaborations, has there been in any advancement in terms of your manufacturing capabilities or strategy. If there has, if you could update us on how you think of a production of 5F9, that would be great.

Mark McCamish -- President and Chief Executive Officer

Thanks, Robert. That's good question. In that regard, as you know, we've partnered with Lonza for quite a period of time and we continue to move forward. We've scaled up to 2,000 liter and ultimately, for commercial, we'd go to 20,000-liter. Those transitions take time and they take additional funds. Those transitions take time and they take additional funds. You can see that we did have a pre-payment of $7.7 million that we mentioned in the first quarter, which came a little bit earlier than anticipated, but that's to make sure that our manufacturing and scale continues to stay on track as we move forward.

As we mentioned also previously, we do have a very high-producing clone so that we produce over 5 grams per liter. So, by scaling to 20,000, we're able to accommodate the treatment even with 30 or 40 milligrams per kilo at reasonable costs of goods in the high single-digits. So, that relationship continues to move forward and we try to manage it as close as we can.

Operator

At this time, I'm showing no further questions. I'd like to turn the call back over to Mark for any closing remarks.

Mark McCamish -- President and Chief Executive Officer

Thank you, Operator and thank you all for taking the time to join us today. We are extremely excited for all that is to come in 2019 as we continue to execute in our ongoing clinical trials, announce data from multiple difficult to treat solid and liquid tumors and chart the most efficient path to bring 5F9 to market. We look forward to updating you on our progress again soon. Have a nice evening. Thank you.

Operator

Ladies and gentlemen, thank you for participation in today's conference. This does conclude the programming. You may now disconnect. Everyone have a great day.

Duration: 36 minutes

Call participants:

Hannah Deresiewicz -- Investor Relations 

Mark McCamish -- President and Chief Executive Officer

Ann Rhoads -- Chief Financial Officer

Chris Takimoto -- Chief Medical Officer

Mark Chao -- Founder and Vice President of Clinical Development

Connor Meehan -- Morgan Stanley -- Analyst

Martin Auster -- Credit Suisse -- Managing Director

Michael Schmidt -- Guggenheim Securities -- Analyst

Arlinda Lee -- Canaccord Genuity -- Analyst

Mark Breidenbach -- Oppenheimer & Co. -- Analyst

Robert Hazlett -- BTIG Research & Strategy -- Managing Director

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