Affimed N.V. (AFMD) Q1 2019 Earnings Call Transcript

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Affimed N.V. (NASDAQ: AFMD)Q1 2019 Earnings CallMay 22, 2019, 8:30 a.m. ET

Contents:

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  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and welcome to Affimed First Quarter 2019 Financial Results and Corporate Update Conference Call. At this time all participants are in a listen-only mode. As a reminder, today's conference is being recorded.

I'll now introduce your host for today's conference Greg Gin, Head of Investor Relations, Affimed. Please go ahead.

Gregory Gin -- Head of Investor Relations

Thank you Serena. Thank you for joining us today for Affimed's Conference Call to discuss the Company's First Quarter 2019 Financial Results and Operational Progress. This morning Affimed issued a press release which is posted on the Company's website at www.affimed.com.

On the call with me today are Adi Hoess, Chief Executive Officer of Affimed; Florian Fischer, Chief Financial Officer; also with us on today's call and available for questions are Leila Alland, Chief Medical Officer and Wolfgang Fischer, Chief Operating Officer who oversees our regulatory efforts. We will begin today's call with opening remarks from Adi on our strategic focus and progress during the first quarter. And then Florian will review the financial results. Following the prepared remarks, we will host the Q&A session.

Before we start let me review our safe harbor statement. Today's discussion contains projections and forward-looking statements regarding future events. These statements represent our beliefs and assumptions only as of the date of this discussion. Except those required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons why the actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

These forward-looking statements are subject to risks and uncertainties and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including but not limited to those identified under the section entitled Risk Factors in our filings with the SEC and those identified another section entitled cautionary statement regarding forward-looking statements in our Form-6K filed with the SEC earlier today.

With that I will now turn the call over to Adi.

Adi Hoess -- Chief Executive Officer

Thanks Greg, good morning everyone and thank you for being with us. Affimed intent is to broaden its leadership position in innate immunity based cancer therapies. We therefore conducted a strategic review of our development programs. We assess the target disease indications and unmet medical needs, commercial opportunities as well as the clinical and regulatory paths to approval. Following completion of this internal review, we believe even more strongly that our innates and engagers have the potential to transform current immuno-oncology approaches.

By actualizing the untapped potential of the innate immune system to give patients back their innate ability to fight cancer. Thereby addressing unmet patients needs in treating hematologic and solid tumor malignancies. As a result, we have determined that the optimal use of our resources at this time is to focus our research and development investments on advancing ongoing and previously announced clinical trials for our CD16A-targeting innate cell engager candidates, including AFM13 and AFM24.

In line with a strategic focus on our innate immunity portfolio, we have made the decision to terminate the Phase 1 clinical programs of AFM11, a CD19/CD3-targeting bispecific T cell engager. This decision took into consideration the competitive landscape of B-cell directed therapies currently in development and associated resources needed for further development of AFM11. In May, we received notification from the FDA that additional data would be needed to determine whether the AFM11 clinical hold may be lifted. We've informed the FDA of our intention to terminate the clinical program. Indeed, our R&D strategy is based on time and cost efficient drug development with the aim of providing safe and effective innate cell engager based therapies to patients.

In particular, we are focusing development of our innate cell engagers on indications with high unmet needs and the potential for a rapid path to regulatory approval. An example of this strategy is our plan -- registration directed study of AFM13 monotherapy in relapsed and refractory peripheral piece of lymphoma and transformed mycosis fungoides, which we believe to represent a potential streamlined path to commercialization for AFM13, and a substantial commercial opportunity for Affimed.

We're currently aiming at the second half of 2019 to start this study following agreement with the FDA on the final study protocol. We are also focused on exploring rational combinations of our innate cell engagers with other therapeutic modalities such as adaptive NK-cell therapy and (inaudible) products including checkpoint inhibitors. An example of these efforts is our work with the MD Anderson Cancer Center and that investigator sponsored study, directed toward development often off-the-shelf adoptive immunotherapy comprised of AFM13 pre-mixed with MD Anderson expanded cord blood-derived allogeneic NK-cells in patients with relapsed/refractory CD30-positive malignancies.

As you may recall MD Anderson presented data supporting the rational for such a study at the ASH Annual Meeting in 2018. Such data describe the successful development of a novel pre-mixed product of expanded allogeneic cord blood-derived NK-cells, preloaded with AFM13 to redirect their specificity of NK-cells against CD30-positive malignancies in procurement new models. As well, as in vivo data confirming the anti-tumor activity of these AFM13 NK-cells.

Of note we have recently seen other novel NK-cells based cellular product entering early stage clinical studies. And we believe such products could offer additional combination opportunities for our innate cell engagers.

During the first quarter, we presented new data on preclinical advances with AFM13, at the American Association for Cancer Research Annual Meeting. That further substantiates their rationale for combining AFM13 with adoptive NK-cell based therapies. With our collaboration partners from Washington University School of Medicine, we presented data describing functional responses of conventional and cytokine-induced memory-like NK-cells in the presence or absence of AFM13. In particular, applying functional mass cytometry AFM13 triggered functional responses were evaluated at single cell resolution providing important insights into AFM13 effects on NK-cells on a molecular level. The combination of these cytokine-induced memory like NK-cells with AFM13 potentiated cytokine secretion and cytotoxicity toward tumor target cells.

Looking ahead we anticipate further progress with clinical data updates on AFM13 from the completed combination study with Keytruda and ongoing monotherapy investigator sponsored study. Abstracts providing updates on these AFM13 clinical studies has been accepted for oral and posted presentations respectively at the upcoming 15th International Conference on malignant lymphoma in June in Lugano, Switzerland.

Now let's turn to AFM24, our second innate cell engager product candidate and a potential treatment for multiple solid tumor malignancy. We continue to anticipate completing IND enabling studies of AFM24 by mid-2019 to support the initiation of the first-in-human study of AFM24 in the second half of 2019. AFM24 is designed to treat patients with EGFR expressing solid tumors by using a novel differentiated mechanism of action that activates innate immunity, i.e. natural killer cells and macrophages. Rather than working through inhibition of EGFR mediated signal transduction. We see strong potential for development of AFM24 in multiple indications given that EGFR is expressed in several tumor types including BRC non-small cell lung cancer, having next glioma cell carcinoma glioblastoma end up.

Underscoring the need for novel therapies directed against EGFR such as AFM24 are recently reported unsuccessful attempts with modalities based on entirely different modes of action. So there is a large number of patients, that currently have very limited options. We presented new preclinical data of AFM24 at the AACR Annual Meeting. The data highlighted the differentiating features of AFM24 versus standard of care and EGFR therapies, such as cetuximab, including tumor cell killing independent of RAS mutational status. Induced tumor lysis through antibody-dependent cellular cytotoxicity, and antibody-dependent cellular phagocytosis, as well as toxicology studies demonstrating a favorable safety profile.

In detail, AFM24 did not elicit any side effects such as skin or gut toxicities at doses which were about four to five times higher than what has been reported for standard of care on EGFR therapy, which are associated with heavy side effects. Pre-clinically we have shown increased in vitro potency, directed against cells with high and low EGFR expression levels. Furthermore we believe AFM24 has the potential to treat a broader group of patients as compared to standard of care anti-EGFR therapy, which are active only in subsets of EGFR expressing tumors.

For example, we have shown preclinically that AFM24 is able to eliminate tumor cells that are also destroyed by monoclonal antibodies such as cetuximab. But importantly AFM24's key potential differentiation is, that it could also provide a therapeutic option for patients who are eligible for novel therapies aimed at treating the KRAS mutant population. KRAS is an important regulator in the EGFR signaling cascades and it has been reported that patients with mutated KRAS do not respond well to treatment with signal transduction inhibiting monoclonal antibodies like cetuximab and panitumumab.

Preclinically AFM24 has shown activity toward EGFR expressing self-offering KRAS mutant. In addition to a AFM13 and AFM24 we're also working toward expanding our early clinical stage pipeline, but generating proprietary novel innate cell engagers, based on our fit-for-purpose ROCK platform, that address hematologic and solid tumor malignancy. Additional efforts in this area include those under our ongoing collaboration with Genentech where we are developing novel NK-cell engager based immune therapeutics to treat multiple cancers.

During the first quarter, we receive a payment from Genentech, in an undisclosed amount triggered by the achievement of a preclinical milestone under our collaboration. Thereby strengthening our cash position from a non-diluted source.

Next, I want to briefly comment on the advantages of our CD16A directed innate cell engager ROCK platform and products which we believe differentiates us from other approaches. Historically, better survival once reported for certain monoclonal antibodies in patients expressing a specific variant of the CD16A receptor on innate immune cells, the so-called high affinity CD16A receptor. This version is characterized by the valine combination of amino acids at position 158. Patients expressing valine phenylalanine or phenylalanine variance have lower affinities to these monoclonal antibodies, resulting in shorter overall survival. Strategies aiming at addressing the 158 polymorphism with a high affinity approach have reasonably been reported to show a significant PFS (ph) and survival advantage, in such patients.

We have pre-clinical demonstrated that the CD16A ROCK platform can effectively target all polymorphic CD16A 158 versions equally. And this with an even higher affinity and selectivity as compared to other approaches. So overall this could result in increased efficacy in any population independent of the 158 polymorphism.

Lastly, I want to comment on the management change that we announced in this morning's press release. Dr. Martin Treder will step down from his position as Chief Scientific Officer to pursue other opportunities. He will continue to support Affimed as a consult. Martin made significant contributions to the development of our ROCK platform, the foundation of our innate engager technology. We thank Martin for his many contributions to Affimed during his tenure as CSO, and we wish him success in his future endeavors.

Now we'll hand it over to Florian to review our financial report. Florian?

Florian Fischer -- Chief Financial Officer

Thank you, Adi. Affimed's consolidated financial statements have been prepared in accordance with IFRS issued by the International Accounting Standards Board or IASB. The consolidated financial statements are presented in euros which is the Company's functional and presentation currency. Therefore, all numbers that I will present here in this call unless otherwise noted will be in euros. We remain well capitalized with a strong cash position, pro forma cash, cash equivalents and short-term deposits including the milestone payment under the Genentech collaboration, that Affimed received in April 2019, totaled EUR100.4 million or approximately $113 million. As of March 31st 2019, cash, cash equivalents and short term deposits on December 31st 2018 were EUR108.8 million.

Based on our current operating and budget assumptions we anticipate that our cash, cash equivalents and short-term deposits as of March 31, 2019 will enable us to fund our planned clinical development and early development activities into 2021. Net cash used in operating activities was EUR13.4 million for the three months ended March 31, 2019 compared to net cash used in operating activities of EUR6.9 million for the three months ended March 31, 2018.

Total revenue was EUR11.4 million for the three months ended March 31, 2019 compared to EUR0.5 million for the three months ended March 31, 2018. The increase in revenue is primarily attributable to the recognition of EUR10.6 million as revenue from the Genentech collaboration in the first quarter 2019. R&D expenses for the first quarter 2019 were EUR8 million compared to EUR6.4 million for the first quarter of 2018. The increase was primarily related to higher expenses related to clinical studies, start of activities for the AFM13 registration study PTCL, as well as early stage development and discovery activities.

G&A expenses for the first quarter of 2019 were higher at EUR2.4 million compared to EUR2 million for the first quarter of 2018. This increase was primarily related to higher personnel expenses. Net income was EUR1.9 million or EUR0.03 per common share for the first quarter 2019 compared to a net loss of EUR8.2 million or EUR0.15 per common share for the first quarter 2018. Weighted number of common shares outstanding were EUR62.4 million for the quarter end of March 31, 2019.

And with that financial overview, I'll now turn the call back over to Adi for brief concluding remarks. Adi?

Adi Hoess -- Chief Executive Officer

Thank you, Florian. Thanks again everyone for joining us today. We are focused on advancing our CD16A targeting innate cell engagers product candidates, as we progress through 2019, with the goals of initiating the market registration directed study of AFM13 and entering the clinic with AFM24.

We look forward to providing additional updates in the near future. We will now open the call to take some questions. Thank you, operator.

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) Your first question comes from the line of Maury Raycroft. Please ask your question.

Maurice Raycroft -- Jefferies -- Analyst

Hi, good morning everyone and thanks for taking my questions. First question is on AFM13, I'm just wondering if it's possible that you may provide an early look to the CD30-positive T cell lymphoma trial before mid-2020, since it's an open label study, I don't know if it's possible for you guys potentially to do that.

Adi Hoess -- Chief Executive Officer

Leila are you on the line to answer this question?

Leila Alland -- Chief Medical Officer

I'm here.

Adi Hoess -- Chief Executive Officer

Okay, very good.

Leila Alland -- Chief Medical Officer

Are you referring to the investigator sponsored study?

Maurice Raycroft -- Jefferies -- Analyst

No to the one that you guys are paying and starting.

Leila Alland -- Chief Medical Officer

And I'm sorry, can you repeat your question again?

Maurice Raycroft -- Jefferies -- Analyst

To the Affimed study.

Leila Alland -- Chief Medical Officer

Can you repeat your question?

Maurice Raycroft -- Jefferies -- Analyst

Oh, yeah, I was just wondering if it's possible to provide an early look to that study before mid-2020. If there was reason to do so?

Leila Alland -- Chief Medical Officer

We're not currently anticipating doing that. I think it's important that we have a robust data set at the time of the interim analysis, in order to make a determination as to the preliminary activity of the molecule.

Maurice Raycroft -- Jefferies -- Analyst

Okay, fair enough. And then for AFM24, there is been a lot of interest in KRAS currently, I'm just wondering for that study for the initial trial if you're going to focus at all on patients with KRAS mutations?

Leila Alland -- Chief Medical Officer

Yeah, so that's the high areas interest and that was behind all these comments around the potential for the AFM24 molecule. So absolutely that's one of the areas that we'd be very keen on testing AFM24.

Maurice Raycroft -- Jefferies -- Analyst

Okay. So you're going to enroll patients from these different disease settings that were mentioned and presumably some of them will have mutations and then, it would just be seen if you're getting any unique activity in these patients, I guess. Is that right?

Leila Alland -- Chief Medical Officer

Yes, as you will recall that our data at AACR showed that the activity was similar in cell lines with RAS mutation versus growth that were RAS type. And so based on these data as well as our mechanism of action for AFM24 we would anticipate that the molecule would be effective in patients with RAS mutation as well as those with RAS multi .

Maurice Raycroft -- Jefferies -- Analyst

Got it. OK. And just last question on AFM24. Just wondering if you're considering combination strategies there even in their preclinical setting. That's something that you're looking at and could potentially provide a preclinical update on that at some point?

Leila Alland -- Chief Medical Officer

Yeah, that's a great question. I think we're always considering pre-clinical combinations. And so I can provide an update at this time on that, but certainly as a drug developer, it's always important to establish both a single agent activity as well as the combination activity and that's something that we'll be providing updates on in the future.

Maurice Raycroft -- Jefferies -- Analyst

Okay. Thank you. I will hop back in the queue.

Operator

Your next question comes from the line of Jim Birchenough. Please ask your question.

James Birchenough -- Wells Fargo Securities -- Analyst

Hi guys. Thanks for hosting the call, and for all the detail. A few questions, I guess first just on AFM13 and the pivotal strategy, I think it was laid out shortly after the ASH meeting. I'm just wondering what the gating items are to starting that study and if there is any possibility that the study initiation could be accelerated but mainly interested what are the gating items that check the box or just to get that study going?

Leila Alland -- Chief Medical Officer

Would you like me to answer Adi?

Adi Hoess -- Chief Executive Officer

Yeah, yeah, sure Leila. Just go ahead.

Leila Alland -- Chief Medical Officer

Okay. So we're working closely with a CRO partner to open up the AFM13 Phase 2 study. And related to that, we filed our full study protocol with the FDA. And recall that this is a registration directed study with a potential for accelerated approval. And so with that, the FDA conducted a thorough review of the Phase 2 protocol and is came back with a number of detailed technical questions. We believe we've addressed all of the FDAs questions and are currently awaiting their feedback. So once we have a final agreement with the FDA then we'll be able to move forward in a more robust way to get the study open.

James Birchenough -- Wells Fargo Securities -- Analyst

And just to be clear Leila, these are technical questions that you don't expect to impact the timing initiation of the study -- the study initiation timeline is pretty firm, is that right?

Leila Alland -- Chief Medical Officer

Well, as I said we are awaiting feedback from the FDA, we believe that we've fully answered their questions. And until they respond formally to us, I can't really comment on the precise part of the studies.

James Birchenough -- Wells Fargo Securities -- Analyst

Got it. Is there a time frame for that response?

Leila Alland -- Chief Medical Officer

We believe that it will be very soon, but no, I don't have a precise date.

James Birchenough -- Wells Fargo Securities -- Analyst

Okay. Thank you. And then Adi, just in terms of your comments around potential combinations with other NK-cell therapies, I think WashU (ph) had spend some work with their own NK-cell therapies. Could you maybe expand on those comments on additional whether this potential for additional -- collaborations beyond the MD Anderson collaboration, and if that's a goal for this year or something more we should think about for next year?

Adi Hoess -- Chief Executive Officer

Yeah. So I made this comment more in the general perspective that other companies have taken the effort to bring NK-cells, they sell their therapies forward, some of them are just, we call them naked NK-cells, so non engineered NK-cells that are sourced from different sources. And so this is just one option to work with cord blood-derived cells. And those molecules are -- those products have entered the clinic.

On top of that, we see the first engineered NK-cells moving forward, many of them now have inserted a CD16A into that, also have some other features. So there is a variety of these approaches with clinical data available soon. And as we have pointed out, the CD16A ROCK platform gives a strong differentiation, finding these cells, meaning that we have very high affinity but also the selectivity of being able to bind to these receptor in the presence of high IgG amount. So this is how we are looking at that -- the horizon is widening for us and gives us multiple opportunities, in terms of then driving forward with AFM13 and AFM24.

I would not yet want to go any further and any more concrete on what is going to happen, but that we are still the only company with an advanced NK-cell engaging clinical development, so this is one of our big advantages.

James Birchenough -- Wells Fargo Securities -- Analyst

And then maybe just for Leila on AFM24, do you anticipate initiating dosing at an active dose? Or would the initial dosing be pulled back a little bit to sub-therapeutic, just trying to get a sense of at what point we should be starting to look for data from an active dose of AFM24?

Leila Alland -- Chief Medical Officer

Yeah, so I really can't comment on that. And I would say also that we're also seeking some regulatory feedback on AFM24 and our overall approach, but at this point I can't really comment on that.

James Birchenough -- Wells Fargo Securities -- Analyst

Okay, great. Well thanks for taking the questions guys.

Adi Hoess -- Chief Executive Officer

Thanks a lot, Jim.

Operator

(Operator Instructions) Your next question comes from the line of Peter Lawson. Please ask your question.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Hi Adi, just on the management change, will you be replacing the CSO? Or is that a role that you can kind of either fill internally or is no longer required?

Adi Hoess -- Chief Executive Officer

Yeah, good morning Peter and thanks for this question. So what we currently do is we are evaluating the needs of the organization from a scientific perspective, as well from operational needs, so that we have a robust internal pipeline while continuing to inbound our technology. Indeed in the interim our Chief Operating Officer Wolfgang Fischer will oversee operations and continue to work with the team on advancing our discovery and pre-clinical programs. And as mentioned before, Martin continues to support us with his expertise on a consulting basis. So our short-term is no quick reaction to be expected, and we feel that we have already very strong people internally, so that's how far we have come.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Got you. And you don't feel -- feel there is any institutional knowledge loss with Martin leaving around the ROCK platform?

Adi Hoess -- Chief Executive Officer

Well, I would say every person that leaves is something where you might have some, let me put it this way, there maybe some gaps at some other places. But overall, how we are set up, we have been working largely in teams, so our information is widely spread. And thereby we have all the capabilities and all the competencies in-house. Again with Wolfgang, being with the Company since two years, he is heavily involved in the early discovery work already. So we see ourselves exceptionally well positioned to continue with what we have started.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Got it. Thank you. And then just on the ROCK platform itself, have you seen kind of increased or decreased or about the same kind of interest from pharma partners for the potential to break out to the NK-cell world?

Adi Hoess -- Chief Executive Officer

Yeah, let me answer to this in a general fashion. We've seen general, much higher interest in innate cell engagers, so we will have a much closer attention to that, since we have announced data last year at ASH. That has prompted high interest. We have single agent efficacy, we have very nice combination data with PD-1 where we kind of doubled the complete response rate in such patient population. It's very robust the genetic use. So for us personally that the response is a very positive and there is a lot of dialogues ongoing.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Got you. Thank you. And then just on the AFM13 updates ICML, what should we expect to see, I guess the number of patients. What kind of breakouts could we see for the mono versus the PD-1 combination data? That would be helpful.

Adi Hoess -- Chief Executive Officer

Yeah. As I said it's an update on the data that were largely presented at ASH. So as compared to ASH we have had six months data, now we can present the full 12 month data in -- as an update. And there is additional for the Columbia study, so the AFM13 mono-study in TCL, there is additional impact given on the translational aspects of this study. As you may recall, we have not just investigated the systemic effect of our drug, but also have taken zero biopsies in order to understand, in case on the macrophage activation, both peripheral and within the tumor itself. So such data will be presented.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Got you. Thank you. And then just finally on AFM24, so the EGFR targeted molecule. The indications -- other particular indications you're thinking of initially or could this be kind of a tissue agnostic approach? And it sounds like you could have -- if it was like an actual cohort for KRAS mutations or that would just be a general inclusion criteria? Thank you.

Adi Hoess -- Chief Executive Officer

Leila, do you want to take a shot on this question?

Leila Alland -- Chief Medical Officer

Yes. I'll say that, firstly the final protocol is still under review internally with our investigator partners, our thought leaders, and with the health authorities. So it's still under active discussion. That being said, I think it's really important that we benchmark the activity of our engager versus other EGFR directed therapies. And so what we're thinking is to focus in on populations where we understand well, how the other EGFR targeted agents would work or not work, and then be able to demonstrate fairly quickly that AFM24 is differentiated from these other sorts of approaches. So what comes to mind obviously then would be eligible for lung cancer and colorectal cancer in particular, but we're considering other indications as well.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Great. Thanks so much.

Adi Hoess -- Chief Executive Officer

Thank you, Peter.

Operator

Your next question comes from the line of Daina Graybosch. Please ask your question.

Daina Graybosch -- SVB Leerink -- Analyst

Well. Thank you for the questions. The first one back on the AFM13 potential registration study. As you await the FDA feedback, are you going forward at risk with some of the other trial planning activities, like identifying the size, finalizing your staff, et cetera? Or in other words how fast can you start after you get that feedback from the FDA?

Leila Alland -- Chief Medical Officer

Thanks Daina. So that's exactly what we are doing. We're doing all of these preparation activities that we can prior to gaining that final FDA feedback. So that we can minimize the time from finalization of the protocol to study start-up.

Daina Graybosch -- SVB Leerink -- Analyst

Great. And one more on that. Did you ask -- are you also getting feedback from the EMA?

Leila Alland -- Chief Medical Officer

With respect to the AFM13 study?

Daina Graybosch -- SVB Leerink -- Analyst

Exactly.

Leila Alland -- Chief Medical Officer

Phase 2 study. We have not heard back specifically from the EMA.

Daina Graybosch -- SVB Leerink -- Analyst

Okay. And then another couple of competitive questions. The first one is a couple of people have already mentioned the excitement around the KRAS mutation inhibitors from Amgen and Novartis. A slightly different question on that. Do you have any pre-clinical data on how AFM24 would compare to an inhibitor going after a targeted mutation like one of these?

Adi Hoess -- Chief Executive Officer

So we have not generate the comparative data to that degree. We know that AFM24 is cytotoxic, independent of these mutational status. And we have done some comparison with cytotoxima but we have not compared it to any of the other small molecule compounds of that.

Daina Graybosch -- SVB Leerink -- Analyst

Okay. And then one last question. You mentioned some of the new engineered NK-cells entering the clinic. They engineer in a high affinity CD16A. A two part question. How do you think you would compare combining with let's say unengineered cord blood NK-cells versus those cells combining with something like the cetuximab. Can they achieve the same efficacy improvement that you achieve by basically putting the affinity on the cell. And then the second part is, if you can find your engagers with such a cell, do you think you can get even more efficacy with modifications on both ends?

Adi Hoess -- Chief Executive Officer

Yeah. So again some of my answers is data driven, some are speculative in here, on how we see the technologies. But the first and most important, when you look at the true affinities of IgGs versus our approaches, we have a huge affinity advantage of about a 1,000 fold and higher. So with much stronger binding, and secondly, we know that the circulation is quite full with circulating IgG, that all have the same binding domains, that compete for natural killer cells. So that gives us a much higher chance of much higher probability of success in order to bind the natural killer cells and then redirect them.

When we pre-clinically are incubating natural killer cells with our engagers versus an antibody. And then you have to do some washing steps. In between we know that IgGs do not wipe these washing steps, so that it will be completely washed off such NK-cells where our approach allows a full coverage and is just much stronger. So if you take a washed cell and then use that for a therapeutic models in -- in vivo models we see very high efficacy of these pre-incubator cells, that you cannot achieve otherwise with antibodies. So that means that we are indeed interacting already 'in-vitro CAR-NK, when you then have to do this by a separate fashion , so if you inject your NK-cell and your antibody into a patient, as I say, you are then -- you have to overcome these huge hurdle of internally -- of the internal IgG levels. This is again another advantage. So this is why we think that our approach can have much higher and much deeper efficacy, as compared to what's out there currently. Did that answer your question?

Daina Graybosch -- SVB Leerink -- Analyst

It does and I guess that the second question was if you combined with one of these engineered NK-cells, how much efficacy improvement do you think you could get versus combining of let's say the cord blood on engineered NK-cells?

Adi Hoess -- Chief Executive Officer

Yeah, it's all dependent on the CD16A expression, that is on the -- let say the non-engineered cells, that sometimes varies in a certain degree of how we know that, there is a high degree of CD16A already present. So I would not speculate yet, if the one or the other approach is the better approach. We don't have yet generated data. But the point that I wanted to make us we're agnostic about that. So I think with the cord blood derived we have a very state-of-the-art product that's clinically tested, we know that it has a very good safety profile. So we felt this is the right thing to do and go with it first because there is abundant amount of clinical data available. All the other approaches now have to proven its safety in the first place. But again when they then have established the safety is the key question what are they going to combine with? Because we know that these cells that are not targeted NK-cells have still challenges of identifying the malignant cell. And that's where an innate cell engager such as our molecules can basically be the bridge in this context.

So we see chances to -- we see good chances to be successful with the cord blood-derived cells. But we will also obviously carefully follow what the -- how the profiles of the other molecules are. So what I'm telling you is just there is more -- more available to patients and we are very unique with our innate cell engagers, and we have a very unique positioning and differentiation.

Daina Graybosch -- SVB Leerink -- Analyst

Great. Thank you. That's all the questions I have.

Operator

Your next question comes from the line of Yale Jen. Please ask your question.

Yale Jen -- Laidlaw & Company -- Analyst

Thanks for taking the questions. I probably start with some housekeeping ones, as for modeling purpose. First of all is that you have a milestone payment from Genentech in the last quarter -- fourth quarter of last year as well as the first quarter this year. I anticipate this is to be lumpy but what should we sort of think about in terms of top line perspective for remaining of the year?

Florian Fischer -- Chief Financial Officer

Hi. It's Florian. Thanks for the question.

Yale Jen -- Laidlaw & Company -- Analyst

Hi, Florian.

Florian Fischer -- Chief Financial Officer

Hey. So the -- I think that the first topic is that we have received one milestone payment and this is -- since we signed the agreement, so we received the upfront payment last year and this is now, this was the first milestone payment. We cannot comment on the likelihood of receiving other milestone payments, and therefore we don't also -- we also don't have it basically in our cash assumptions or in the budget. The milestone payment was a pre-clinical -- was a pre-clinical milestone, and that was related to one of the projects.

Yale Jen -- Laidlaw & Company -- Analyst

Okay. Great. That's very helpful. And then maybe again housekeeping question which is the first quarter this year, the R&D expense and the G&A was materially lower than the prior quarters. Again for modeling purpose, should we consider this to be something annualized sort of based on the first quarter figures? Or that will be increased much more substantially going forward?

Adi Hoess -- Chief Executive Officer

So I would -- we don't usually so the way we model is basically bound to content and not so much on periodic effects. So therefore I would rather even being cautious, I would rather see those in an increasing -- in an increasing level, given all the activities that are currently ongoing in the company.

Yale Jen -- Laidlaw & Company -- Analyst

Okay, great. And then maybe just -- last follow up question on two of the pipeline products. First in AFM13 in terms of the adaptive NK-cell study, what the MD Anderson in the press release they say that everything is planned. Could you give us maybe a little bit color in terms of whether this program may started, second half of this year or there is more details to that?

Adi Hoess -- Chief Executive Officer

Leila, can you take that question? Yeah. Thank you, Leila.

Leila Alland -- Chief Medical Officer

Let start with that question, so just to remind everyone, this is an investigated sponsored study under the control of MD Anderson. We've had multiple discussions with MD Anderson and they appears to be working very diligently to start this study as soon as possible. We can therefore communicate the precise start of the study, but as soon as the study has started we will be certain to inform you of that.

Yale Jen -- Laidlaw & Company -- Analyst

And maybe the last question for the AFM24 in terms of the Phase 1 study, would you also explore the possibility even at a Phase 1 stage for EGFR sort of resistant patients to explore the possibility of -- the potential of the AFM24?

Leila Alland -- Chief Medical Officer

Yes, absolutely. I think it's important that those sorts of patients are included in the clinical study early on.

Yale Jen -- Laidlaw & Company -- Analyst

Okay, great. Thanks a lot, appreciate it.

Operator

Your next question comes from the line of Jim Birchenough. Please ask your question.

James Birchenough -- Wells Fargo Securities -- Analyst

Hey, hi guys, just a couple of follow ups. First, Adi could you comment on the potential role or need for cytokine support for an eight cell targeted therapies, and IL-15 specifically? And maybe comments on where we are at with the nectar collaboration?

Adi Hoess -- Chief Executive Officer

Yeah. Thanks again. So let me just first on, let's talk a little bit about the nectar -- so the nectar aimed at combining our innate cell engagers with IL-15. And if you may recall, we have already published some data on other IL-15 molecules, not the nectar-derived one, but some different ones, and have shown synergy that we can see a stronger cytotoxic effect, so a higher degree of lysis when IL-15 is present and that rather relates to a proliferation of the natural killer cells.

IL-15 effect have been described in patients also to enhance immune cell function, mostly by increasing the number of NK-cells. So that also puts the picture, that it's probably a very valid idea, good rationale to combine innate cell engagers, with IL-2, IL-15, so it probably could take either of those two. I cannot comment further on the nectar collaboration, so we have explored the molecules in some of our models. We are basically wrapping up, and thereby I have concluded the collaboration with nectar at that stage.

Now you ask me for a changeover of role of these molecules in the context of combining it with cellular therapy. So there are different approaches outback, regarding IL-15, some have expressed as a -- as part of their engineering of natural killer cells, so that the natural killer cells can have a longer persistence. That's definitely helpful. But I believe we believe this is particularly helpful for those that are just working with cellular products. As you may recall these are very often allogeneic off-the-shelf products that may have just a very short persistence within the patient. So there is a limit on how often you can give it and how long the effect may be there.

It's a little bit different when you think about the approach. What we could do with innate cell engagers? So we have on the one side the option to combine innate cell engagers with the cellular product, but we also can continue dosing just with our innate cell engages and thereby relying on patient's own natural killer cells and macrophages. So this is a very distinct differentiation and obviously we are looking at what's happening with IL-15, but we may not consider this as a sticky component to be added in.

So just the combination with a large number of natural killer cells with our innate cell engagers, and then single dosing of, continuous dosing of innate cell engagers. This is a -- this is how we think and could be a very differentiating approach.

James Birchenough -- Wells Fargo Securities -- Analyst

And then maybe just one final question and might actually be for Florian, but there is been a considerable investment in AFM11 and the T cell engager, part of the business and just wondering if there is any way to monetize that know how in any of those assets even earlier stage assets if you think that's a potential source of non-dilutive capital perhaps?

Adi Hoess -- Chief Executive Officer

That's what we're currently evaluating. So our goal has been with the FDA to lift their hold. We've had an ongoing dialogue, so there is an opportunity to resubmit such data, just Affimed has decided that we feel our resources are dedicated to ongoing programs and new programs. Yeah, so the way how we do it at the moment, it leaves some options open for AFM11. There may be an opportunity that we can monetize, but it's not our key strategy and key focus in order to have any priorities on that. So we are looking at the inbound interest and then we check on what kind of interest there is.

James Birchenough -- Wells Fargo Securities -- Analyst

Terrific. Well, thanks for taking the follow ups.

Adi Hoess -- Chief Executive Officer

Thank you.

Operator

There are no further questions at this time Dr. Hoess, please go ahead.

Adi Hoess -- Chief Executive Officer

Thanks a lot for listening to our earnings call today. Highly appreciated for your attendance and the many questions we were receiving. And I wish you all a very nice day. Thank you. Bye-bye.

Operator

This does conclude our conference for today. Thank you for participating, you may all disconnect.

Duration: 51 minutes

Call participants:

Gregory Gin -- Head of Investor Relations

Adi Hoess -- Chief Executive Officer

Florian Fischer -- Chief Financial Officer

Leila Alland -- Chief Medical Officer

Maurice Raycroft -- Jefferies -- Analyst

James Birchenough -- Wells Fargo Securities -- Analyst

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Daina Graybosch -- SVB Leerink -- Analyst

Yale Jen -- Laidlaw & Company -- Analyst

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