Affimed NV (AFMD) Q2 2021 Earnings Call Transcript

Affimed NV (NASDAQ: AFMD) Q2 2021 earnings call dated Sep. 08, 2021

Corporate Participants:

Alexander Fudukidis — Head of Investor Relations

Adi Hoess — Chief Executive Officer

Arndt Schottelius — Chief Scientific Officer

Angus W. Smith — Chief Financial Officer

Andreas Harstrick — Chief Medical Officer

Analysts:

Daina M. Graybosch — SVB Leerink LLC Research — Analyst

Maury Raycroft — Jefferies and Company — Analyst

Nick Abbott — Wells Fargo — Analyst

Yale Jen — Laidlaw and Company — Analyst

Presentation:

Operator

Good day and welcome to Affimed’s Second Quarter 2021 Financial Results and Corporate Update Conference Call. At this time, all participants are in listen-only mode. [Operator Instructions] As a reminder, today’s conference call is being recorded.

I’d now like to introduce your host for today’s conference call, Alex Fudukidis, Head of Investor Relations at Affimed. Please go ahead.

Alexander Fudukidis — Head of Investor Relations

Thank you, Liz. I’d like to also welcome you all for joining us today for our second quarter 2021 results and operational update call. Before we begin, I’d like to remind everyone that we issued the relevant press release earlier today and that it can be found on the Investor Relations section of our website. On the call today, we have the following members of our management team, Dr. Adi Hoess, our Chief Executive Officer; Andreas Harstrick, our Chief Medical Officer; Arndt Schottelius, our Chief Scientific Officer; Wolfgang Fischer, our Chief Operating Officer; and Angus Smith, our Chief Financial Officer. The whole team will be available for the Q&A session.

Before we start, I’ll quickly go through the 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 call. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons why 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 these 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 under the section entitled Forward-Looking Statements in the press release that we issued today and filed with the SEC.

With that, I’ll turn the call over to Adi. Adi?

Adi Hoess — Chief Executive Officer

Yes, thank you, Alex, and good morning, everyone and thanks a lot for joining in for our second quarter update call. Today, we’re going to provide an update on our pipeline, discuss the progress on our ongoing AFM13, AFM24, and AFM28 studies and our plans, what promises to be an exciting period over the next few months for our company.

And before I do that, a quick summary of what we have accomplished so far. The clinical and preclinical data confirm that our unique and innate cell engagers are safe and has the potential to be effective in treating cancer patients, both as monotherapies and also in combination either with natural killer cells or with checkpoint antibodies such as PD1, maybe PD-L1. As we move the ongoing clinical trials forward, our efforts are now focusing on identifying and targeting indications where we believe our scientific discoveries will benefit patients by applying our three-pronged approach: monotherapy, therapies in combination with natural killer cells and checkpoint inhibitors.

We’re very happy to report that our pipeline remains on track for our registration directed study of AFM13 monotherapy in relapsed/refractory peripheral T-cell lymphoma. We are recruiting well and on track to complete enrollment of this study in the first half of 2022 and we expect to be able to provide further guidance about timing for data as we get closer to the completion of enrollment. In the investigator sponsored clinical trial at MD Anderson Cancer Center, evaluating cord blood-derived natural killer cells precomplexed with AFM13, we have completed the dose escalation part of the study with increasing doses. Indeed, there were three cohorts where we used either 1×106 cells per kilogram, three patients that received 1×107 cells per kilogram and three patients that received 1×108 cells per kilogram.

We are currently enrolling additional patients at the highest dose of 1×108 cells per kilogram to gather a robust data on safety and efficacy what would form the basis for discussions with regulators about appropriate approval strategies. No dose limiting toxicities have been observed during the dose escalation in any of the three cohorts and we remain encouraged by the observed response rates. The next data update is planned for the fourth quarter at a major medical conference.

Regarding our efforts to take over the combination of AFM13 with natural killer cells into a registration study, we have signed up a CDMO for the manufacturing of the NK cells and have generated additional data on cryopreserved natural killer cells precomplexed with AFM13. As we have shared with you over the past few months, we view this CAR-like NK characteristics of our innate cell engagers in combination with natural killer cells as a major advantage over monoclonal antibodies. The major difference being that when we look closer at the cell surface retention, our innate cell engagers won’t fall off and combine therapy for a very long time, including days later, whereas monoclonal antibodies are not retained for very long.

As a result, our research shows that it is not possible to generate a precomplexed product with monoclonal antibodies, but with innate cell engagers only. Moreover, our research demonstrate that the engagement of our innate cell engager molecules with natural killer cells activate the natural killer cells to kill tumor cells. In our collaboration with the Karolinska Institute, we found that AFM13 when compared to a monoclonal CD30 antibody mediated a more potent activation of natural killer cells, leading to a significantly increased number of natural killer cells that exerted engagement with multiple target cells [Indecipherable]. This exciting data have been accepted for the poster presentation at the SITC Annual Meeting in November.

In our ongoing trial with MD Anderson, it is our goal to generate a strong data package that would support the discussions with the FDA and other agencies regarding next steps for the program including a potential registration directed study.

Now let me turn over to AFM24, our EGFR directed innate cell engager. For our AFM24, we continue to execute our three-pronged strategy of monotherapy, combination with natural killer cells and combination with a checkpoint inhibitor PD-L1. Our goal in this program is to evaluate a broad set of solid tumor indications in parallel supported all by a strong biological rationale. We expect multiple inflection points this year and plan to have multiple additional data readouts in 2022.

Our monotherapy dose escalation study is on track. Based on current data Cohorts 5 and 6 are pharmacologically active dose. Therefore, we have increased the size of Cohort 5, patients are dosed at 320 milligram and Cohort 6 patients are dosed at 480 milligram to generate additional pharmacokinetic and pharmacodynamic data that we expect to aid our selection of the recommended Phase 2 dose. As of today, in each of the Cohorts 5 and 6, five out of six patients are enrolled. It is important to mention that to date in patients that have already completed the DLT period in each cohort, no dose limiting toxicities were observed.

So AS just mentioned, we continue to see a good safety profile of AFM24. we confirm that we have not seen any of the classical EGFR related side effect like acneiform skin rash or mucosal. This is in line with the distinct mechanisms of action of AFM24, which is very different from the mode of action of EGFR pathway targeting antibodies, like rituximab or panitumumab. The findings also confirm the data from our pivotal toxicology studies in cynomolgus monkeys that indicated a different side effect profile for AFM24 versus rituximab. Infusion related reactions remain the main side effects and are well manageable with symptomatic treatment and modifications of infusion rates.

The ongoing dose escalation part includes patients with any EGFR expressing solid tumors. When assessing antitumor activity at dose levels in the 320 milligram and 480 milligram cohorts, we are encouraged to see that there were several patients on the study that experienced disease stabilization beyond eight weeks and we are able to release additional cycles. Biomarker analysis of the patients point to the activation of the effector cells shown by increasing expression of activation markers and a continuous secretion of cytokines. The supportive of this observation is a continuous occupancy of the CD16A receptor.

We are enrolling patients in the monotherapy study and independent of the selection of our recommended Phase 2 dose, we plan to continue to increase the dose in non-selected patients to gather further insight into the exposure affects relationship of AFM24 focusing on PD marker and to confirm safety of AFM24 at even higher doses of it. Important now to notice is in addition, in line with our guidance, we expect now to start enrollment of indication specific patients in the expansion cohorts using single agent AFM24 in the second half of 2021. These cohorts have been chosen based on a detailed analysis of the tumor biology as we explained in the past and will enrich for patients that we believe have a high likelihood to respond to single agent AFM24.

These expansion cohorts will include renal cell carcinoma that failed standard of care, which includes TKIs and PD1 targeted therapy. Second indication is non-small cell lung cancer EGFR-mutant failing standard of care TKIs. And the third indication is colorectal cancer failing chemotherapy plus EGFR targeted antibodies. So, we have selected three indications for the monotherapy study. In addition, we are now in the final stages of the set up phase for our combination studies of AFM24 with both atezolizumab, study is called AFM24-102 and the autologous in case of the product SNK01, This study is called AFM24-103. We confirm our guidance that we expect both of these studies to start enrolling patients in 2021.

The tumor types we plan to study with the AFM24, atezolizumab combination are as follows. Again, non-small cell lung cancer in this case EGFR wild-type failing chemo and PD1 targeted therapy. Gastric and the GEJ cancer failing standard platinum-based chemo and a basket of EGFR expressing tumors comprising pancreatic, hepatocellular and biliary tract cancer again failing standard of therapy for the respective disease.

Now the tumor types we plan to study in AFM24, SNK102 NK cell combination study are as follows: Again, non-small cell lung cancer EGFR wild-type, squamous cell carcinoma of the head and neck failing chemo in PD1 and colorectal cancer failing standard of care. The indications for each of the three studies have been selected carefully based on the biology of each tumor type. This approach allows us to investigate a broad set of solid tumors, while also providing multiple shots on goal for the more prevalent tumor types such as non-small cell lung cancer and colorectal cancer.

In summary, we’re very satisfied with the progress of the AFM24 program. The data show that AFM24 possesses a different mode of action compared to conventional EGFR targeting antibodies. We see pharmacological activity based on CD16A receptor binding and NK activation markers. At these pharmacologically active doses, we see no classical EGFR related side effects like skin or mucosal toxicity. And in addition, we are seeing disease stabilization in these heavily pre-treated patients at those levels 320 milligram and 480 milligrams. We believe in the significant potential of AFM24 and with the planned expansion of the program, we’re seeking to maximize this opportunity, addressing a broad set of major EGFR expressing tumor indications and this strategy will allow us to provide a continuous flow of data.

Now let me move to the third program AFM28. For AFM28, we continue to advance the IND enabling studies and have submitted an abstract with initial pre-clinical data for a major medical conference later this year. We plan to release information about the target and indication once the abstract becomes available. We remain on track to submit the IND application in the first half of 2022 and our goal is to begin a clinical study in the second half of 2022.

In addition to moving things forward in the clinic, we are continuing to publish data that points to our work. One such example is the recently published preclinical data that supports the IND filing — IND application of our innate cell engager AFM24 in the journal mAbs. Arndt, our CSO, will discuss the key takeaways from the publication. Arndt.

Arndt Schottelius — Chief Scientific Officer

Thanks Adi and also from me a very warm welcome to everybody on the call. As introduced by Adi, I would like to summarize the key pre-clinical data for AFM24 describes in the recent publication in the journal mAbs. In this paper, we demonstrate the high affinity binding of AFM24 to CD16A on natural killer cells and macrophages with strong binding values and the low nanomolar range. Importantly AFM24 binds to CD16A on NK cells and macrophages with high affinity at a site that is distinct from the binding of IgG such that high concentrations of polyclonal IgG results in a minimal only two-fold reduction in binding affinity in contrast. Binding of an Fc-enhanced high affinity anti-EGFR IgG antibody was significantly inhibited.

This data again demonstrates the high surface retention of our ICE molecules to NK cells, enabling the earlier described precomplexed into NK cells with CAR-like NK cell properties, which are not possible with normal or Fc-enhanced antibodies. We also show high affinity binding of AFM24 in the nanomolar range to various EGFR expressing tumor cells. AFM24 demonstrated to be highly differentiated from marketed anti-EGFR antibodies with its ability to potently and effectively kill tumor cells through antibody-dependent cell-mediated cytotoxicity or ADCC our NK cells. Moreover, this ICE mediated potent antibody dependent cellular phagocytosis or ADCP via macrophages in vitro.

AFM24 was also shown to be effective towards a variety of EGFR expressing tumor cells killing these regardless of their EGFR expression level and irrespective of their KRAS or BRAF mutational status. In addition, as AFM24 has a lower affinity for EGFR and binds to a different epitope brentuximab, it exerts an over 1,000 fold lower inhibitory activity on EGFR signaling further underscoring its highly differentiated mechanism of action. Now in terms of in-vivo date in tumor mouse models, we have published at AACR, this year’s AACR, showing dose-dependent anti-tumor activity of AFM24 in combination with freshly isolated NK cells. This antitumor activity for AFM24 in combination with NK cells has now also been demonstrated with precomplexed and cryopreserved NK cells in-vitro and in-vivo within one off our preclinical collaborations. This exciting data gives us confidence that the NK cell product we used in combination with AFM24 retains its potent anti-tumor activity after cryopreservation in-vitro and in-vivo.

Now, coming to the toxicology studies in cyno monkeys also described in the paper, AFM24 was well tolerated up to the highest dose of 75 mg/kgwhen administered once weekly for 28 days. Remarkably skin and other cytotoxicities, which had been observed at these dose levels with cetuximab and comparable cyno monkey studies were not observed here. Only transient elevation of interleukin 6 levels was detected at all dose levels, which returned to baseline after 24 hours.

Moreover, an increase in circulating CD14 monocytes was observed after the first dose of AFM24 concurrent with a decrease of circulating NK cells at doses of greater or equal to 8 mg/kg.

Now, I’ll review showing the expected pharmacodynamic effect of this product candidates. Taken together, these results emphasize the promise of our bispecific innate cell engagers as an alternative cancer therapies and demonstrate the potential for AFM24 to effectively target tumors expressing various varying levels of EGFR regardless of their mutational status.

Happy to answer any questions you may have about this in our Q&A and for now I’ll hand the call over to Angus to review the financials. Angus.

Angus W. Smith — Chief Financial Officer

Thank you, Arndt. Affimed’s consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standard Board or IASB. The consolidated financial statements are presented in euros, which is the company’s functional and presentation currency. Therefore, all financial numbers that I will present in this call unless otherwise noted, will be in euros.

We ended the second quarter of 2021 with cash and cash equivalents of EUR222.7 million compared to EUR146.9 million on December 31, 2020. Based on our current operating plan and assumptions, we anticipate that our cash and cash equivalents will support operations into the second half of 2023. Net cash used in operating activities for the quarter ended June 30, 2021 was EUR17.3 million compared to EUR15 million in the second quarter of 2020. Total revenue for the second quarter ended June 30, 2021 was EUR9.7 million compared with EUR2.9 million euros for the quarter ended June 30, 2020. Revenue for the second quarter of 2021 mainly comprised of collaboration revenue from Genentech and Roivant.

Research and development expense for the second quarter of 2021 was EUR21.8 million compared to EUR11.7 million for the second quarter of 2020. The increase in R&D expenses compared to the same period last year were driven primarily by increased expenses for AFM24, including costs for the production of clinical trial material, as well as an increase in costs associated with our other early-stage programs and infrastructure and an increase in share-based payment expense.

General and administrative expenses for the second quarter of 2021 increased by 109% to EUR5.4 million from EUR2.6 million in the second quarter ended June 30 2020. The increase relates largely to higher personnel expenses, higher premiums for our directors and officers liability insurance, higher consulting expenses and increased share-based payment expenses. Net finance costs for the quarter ended June 30, 2021 increased by 63% from EUR1 million in the quarter ended June 30 2020 to EUR1.6 million during the second quarter of 2021. The increase is largely due to foreign exchange losses related to assets denominated in U.S. dollars as a result of the weakening of the U.S. dollar against the euro during the quarter.

Net loss for the quarter ended June 30, 2021 was EUR18.8 million or EUR0.16 per common share, compared with a net loss of EUR12.2 million or EUR0.16 per common share for the quarter ended June 30, 2020. The weighted number of common shares outstanding for the quarter ended June 30, 2021 was EUR119.6 million.

I will now turn the call back to Adi for closing remarks. Adi?

Adi Hoess — Chief Executive Officer

Thanks a lot, Angus. As just explained, our company is making significant strides forward by advancing science and demonstrating that our innate cell engagers can play a leading role in enabling innate immune cells to identify and eliminate cancer cells. Now for AFM13, our strategy — development strategy allows us to target a broad set of CD30 positive lymphoma, indeed including various types of non-Hodgkin and Hodgkin lymphoma. We’re very excited about the potential and market opportunity for AFM13 in these indications. And we will have additional data for the NK cell combination study by the end of the year.

For AFM24, we are now executing a strategy that we believe gives us the highest probability of success. We have reached active dose levels in our dose escalation study and will now use this to initiate this three-pronged development approach in parallel, indeed across a broad set of solid tumor indications. We expect that these three studies will generate a continuous flow of data.

Finally, we are executing on our preclinical pipeline to bring additional product candidates into the clinic. Our development progress from AFM28 is indicative of our ability to further expand our pipeline by leveraging the unique ROCK platform and we’re working on additional early candidates from the platform. Many, many people have contributed to bring our innovative therapies to patients who need additional options in the fight to cancer. These include patients and their families who entrust us with the lives of their loved ones, our employees and the investors, who over the years have supported our efforts. As always, I’m very thankful for the trust you put into our efforts. Thank you.

We’re now ready to take any questions that you may have. Operator?

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Daina Graybosch with SVB Leerink.

Daina M. Graybosch — SVB Leerink LLC Research — Analyst

Hi, all. Thanks for the question and for the pretty nicely comprehensive call. Two for me on AFM24. The first is, I believe you mentioned and I just want to confirm that you saw stable disease in several patients beyond eight weeks and in that same sentence you mentioned that you’re recruiting any EGFR expressing solid tumors. I’m wondering if you could clarify whether you saw the stable disease in patients that had more EGFR expression? Was there any correlation with that? Or even if you could tell us of these patients recruited at Cohort 5 and 6, what proportion of them did have high EGFR, which ended up with low EGFR? That’s the first question.

And the second question is, can you confirm how you ultimately will select the dose given you haven’t hit any dose limiting toxicity? Can you — will you be going off pharmacodynamic activation in periphery? What gives you confident that that will track with your activity in the tumor? Will you be going off of occupancy of CD16A or EGFR or will you continue to try to dose as high as possible? How you do understand your highest tolerable dose? Thank you very much.

Adi Hoess — Chief Executive Officer

Thank you, Dana. I have to check if Andreas is still on the phone, Andreas. Could you follow the specific questions and — okay, very good. Andreas.

Andreas Harstrick — Chief Medical Officer

Yes. I’m on the phone. I have to apologize I’m in rural Italy. So if I break up at some point, it’s due to technology reasons, but I try to stay as long as I can. So. let’s start with the second part of your question first and Arndt also chime in. So, as we always said, the selection of our recommended Phase 2 dose will be based on pharmacodynamic markers. As Arndt mentioned our mechanism of action is completely different from EGFR pathway targeting agents like cetuximab or other TKIs. So, we would not expect in to see any dose limiting toxicity like skin or mucosa. And we’re in fact seeing clinically, this has really reconfirmed this assumption. So, IRRs remain the side effect, which are well manageable, but we are not seeing any skin toxicity and mucosal toxicity.

As we have said in terms of pharmacodynamic markers, we have a whole array of parameters that we look at. The most leading parameters are markers of the activation of circulating NK cells, as well as the occupancy of the CD16A receptor where we see values that are well above dose values needed for experimental activity in-vitro and in-vivo. So we feel very confident that we are currently working at pharmacodynamic reactive doses and this is our doses that we will take forward into Phase 2 testing, both as a single agent as well as in combinations. Irrespective of this, we may escalate one or two additional dose steps just to confirm that we have very good safety profile, a very good safety — but not necessarily to use these higher doses for further evaluation of clinical activity.

In terms of EGFR expression, we are collecting the data again for the highest dose levels. We have not all data in-house. Of course, the lower dose levels we could not see any correlation between the degree of EGFR expression and any of the clinical parameters. But again, the data for the two highest dose levels in terms of EGFR quantification are still pending.

Daina M. Graybosch — SVB Leerink LLC Research — Analyst

Got it. Thank you very much.

Operator

Our next question comes from Maury Raycroft with Jefferies.

Maury Raycroft — Jefferies and Company — Analyst

Hi, good morning, everyone, and good afternoon and congrats on the progress and thanks for taking my questions. Also, one question on AFM24. You mentioned additional inflection points for the program by the end of the year. Just wondering if you can recap what those inflection points are?

Arndt Schottelius — Chief Scientific Officer

Yes. So, as we’ve mentioned, we are now planning to start the dose expansion cohorts. So that’s an important milestone and we have also mentioned that there are two additional studies that are being initiated, the one is the combination study with natural killer cells and the other one is the study with atezolizumab. So, these are three very important inflection points in our mind. And in addition, we can provide updates as we proceed with the dose escalation study. You have heard from Andreas that we have expanded the cohorts 5 and 6 to include more patients. Those data will be collected and analyzed and once available, we plan to share this data with you.

Maury Raycroft — Jefferies and Company — Analyst

Got it. That’s helpful.

Adi Hoess — Chief Executive Officer

Maury.

Maury Raycroft — Jefferies and Company — Analyst

Yes, I’m still here and just wondering if you’re saying anything additional about — any more specifics on the activation markers and cytokines accretion that you’re seeing. You’re providing anymore [Technical Issues].

Adi Hoess — Chief Executive Officer

Arndt?

Arndt Schottelius — Chief Scientific Officer

Yes. Thanks, Maury. Good question. At this point, not specifically we would like to share that. I mean we have said, just to repeat, maybe what Andreas already said, we look at activation and exhaustion markers on circulating NK cells. We look at infiltration of the cells in some of the biopsies we have. We look at the cytokine levels and of course as we have reported in addition to exposure, so PK parameters also at receptor occupancy and we will share that in more detail once all the data as Adi also mentioned will be collected together and then we’ll also share the specific markers used/

Maury Raycroft — Jefferies and Company — Analyst

Got it. Okay. And then also wanted to ask about the AFM13 plus NK cell combo. Can you say if you have responses at the highest dose at this point? And how many patients total at the highest dose are planned?

Adi Hoess — Chief Executive Officer

So we haven’t disclosed any such details for the time being. As we are preparing for a presentation later in the year as outlined, so that we can see the composite, but in short, what the plan has been, is that we have in each cohort initially three patients and a cohort is always a certain number of NK cells, which has increased by a factor of 10 when the safety is warranted. And as I said, it’s 1×106 cells per kilogram, we move to 1×107 and 1×108. In these patients, we haven’t seen any dose limiting toxicities or any other side effects, appears quite safe.

And overall, what I can see here is that, we’re also very encouraged by the responses that we’re seeing after the first assessments. Frankly, additional patients are treated, so we have continued to enroll patients or MD Anderson has continued to enroll patients at the highest dose cohorts and that’s currently ongoing.

Maury Raycroft — Jefferies and Company — Analyst

Got it. Okay. That’s helpful. And then my last question and I’ll hop in the queue. In the prepared remarks, you said the program AFM13 plus NK cell combo program would be revised and could enable discussions with regulators for approval strategies. I’m just wondering if you think you’ll have enough data by year-end ’21 to enable these discussions?

Adi Hoess — Chief Executive Officer

In terms of timing, we’ve been — we will let you know as soon as we have such data [Indecipherable] so we’re dependent on MD Anderson to enroll these patients and so I would say that we have to wait for a little while before we can confirm any of this next activities. This is an important activity, but as we feel it’s not the only very important activity, the other one is that we can proceed with the NK cells and its manufacturing. And I wish sharing to news today that we have made good progress on this front as well first. We’re now working with the CDMO for the manufacturing of the cord-blood derived NK cells and we have generated first data of a cryopreserved AFM13 precomplexed NK cells and determined activities in preclinical experiment.

Maury Raycroft — Jefferies and Company — Analyst

Got it. Okay. Congrats again and thanks for taking my questions.

Adi Hoess — Chief Executive Officer

Thank you.

Operator

Our next question comes from Nick Abbott with Wells Fargo.

Nick Abbott — Wells Fargo — Analyst

Good morning and thanks for taking our questions. And rural Italy sounds delightful, I have to say. Just starting off maybe on AFM13. You mentioned that CDMO, Adi. Is this using cord blood from MD Anderson, however, I know there — you’ve licensed the technology from them, but are you restricted to where the cord blood cells come from, which bank they come from?

Adi Hoess — Chief Executive Officer

So yes, we have a license to the entire technology and this would also include indeed any work on cryopreservation that’s being conducted by MD Anderson. In terms of cord blood cells, we’re not restricted to any specific source. So, we can source this from MD Anderson, but also independent places. And so in essence, that’s how we are set up. Is there a specific reason why you’re asking?

Nick Abbott — Wells Fargo — Analyst

No, not a all. So, I was just thinking if you are going to be — I don’t — we don’t know where the CDMO is, but if you’re going to have a CDMO in Germany for example and shipping cord blood from MD Anderson is it convenient than sourcing it from somewhere in Germany.

Adi Hoess — Chief Executive Officer

Yes. No, it’s an international CDMO, so that has footprint all over the world. So, it’s obviously one of the very experienced one that was important to us. Again — and then CDMO that has already worked and developed in case of product. So, we’re tapping into specific know how already with this choice and at the moment our focus is to work with a site in the U.S.

Nick Abbott — Wells Fargo — Analyst

Okay. Great. Thank you. And then just on AFM24, terrific now, finally details of those expansion cohorts. And one thing that struck me in monotherapy there’s not a KRAS mutated colorectal cohort. The NK combo would appear to allow for KRAS mutated colorectal, but did you consider as the reason why there is no KRAS mutated cohort? Obviously, it couldn’t be EGFR pre-treated and that’s probably the reason, but I thought I’d ask.

Adi Hoess — Chief Executive Officer

Andreas, can you hop out here.

Andreas Harstrick — Chief Medical Officer

Yes. The good pick. As we’ve said, our selection on the expansion cohorts are based on a pretty sorrow analysis of the underlying tumor biology and the make up of the different players of the innate immune system. When we look specifically at KRAS mutated colorectal cancer, it’s not due to the KRAS mutation, but there appears to be a coincidence that many KRAS mutated colorectal cancers have very limited NK cell numbers and some other factors indicated to us that KRAS mutated colorectal cancer would be one of these indications where the patient would need support of an external NK cell source and that’s the reason why they ended up basically in study 103. We believe that once you are able to supply these KRAS mutant colorectal cancers with NK cells and with an appropriate engager all that you could see innate immune system in the best position to work against very difficult to treat tumors.

Nick Abbott — Wells Fargo — Analyst

Thank you very much and I’ll hop back in the queue.

Operator

[Operator Instructions] Our next question comes from Yale Jen with Laidlaw.

Yale Jen — Laidlaw and Company — Analyst

Good morning and afternoon and thanks for taking the question. The first question is for the AFM13 plus the cord blood NK cell which that — according to clinical trial that you have — expect to include about 30 patients. Is this target still or do you anticipate or how — has there any modification on that? And further that potentially could be a critical mass for a potential sort of registrations at discussion with FDA?

Adi Hoess — Chief Executive Officer

Andreas, you may want to take that.

Andreas Harstrick — Chief Medical Officer

Yes. So, first of all, I can confirm is that the protocol is written in a way that we in fact can recruit somewhere between 30 and 40 patients at the recommended dose level. This could be a mixture of Hodgkin’s and non-Hodgkin CD30 expressing lymphomas. Again whether this mass or whether this number will be sufficient for any registration package, of course, will depend on the effect level and definitely this study will allow us probably even earlier than — and going up to the full recruitment to engage in discussions with FDA and I think during these discussions, we will learn what kind of patient numbers they are expecting. So, I think it’s a robust study that will give you a pretty good data set. We will — it will enable us also to look at different biologies within the CD30 expressing lymphomas space. And everything else will really depend on our initial discussions with FDA.

Yale Jen — Laidlaw and Company — Analyst

Great, that’s very helpful. Maybe a quick follow-up on this, which is that, is the data anticipated reporting at ASH or other venues?

Andreas Harstrick — Chief Medical Officer

Again the disclosure policy is mainly driven by MD Anderson. Our expectation is that we’ll submit some of the data for ASH.

Yale Jen — Laidlaw and Company — Analyst

Okay, great. And maybe one general question for the AFM24. Do you have the monotherapy as well as the combo specifically with NK cell combo? I noticed that the renal cell carcinoma with only a monotherapy, but not on the combo. Is there any reason behind that or maybe more specific reason behind that?

Andreas Harstrick — Chief Medical Officer

Yes. The answer is — again it’s based on the analysis of biology and the setup of the different players of the innate immune system. Clear cell carcinoma, renal cell carcinoma, we know already, since the interferon time that this is a tumor that where our immune system can exert some tumor control. When we specifically looked at the players and we made immune system or we found that RCC is a good candidate that could benefit from monotherapy. So our first step here is to test monotherapy AFM24. We believe that several important pieces are in place in RCC, all that innate cell engager could work as a monotherapy. Of course, if we should see good data that would not preclude that at some point we may add combination of NK cell or PD1, but again for the first evaluation, as it still looks as well these tumors where monotherapy could be quite beneficial for these patients.

Yale Jen — Laidlaw and Company — Analyst

Okay, great. And then maybe the last question which is a housekeeping one. In the second quarter of this year, the R&D expenditure, as well as revenue has increased, particularly R&D expenditure increased quite significantly compared to the prior quarter. So, should we — for monitoring purposes, should we anticipate the second quarter R&D expenditure will be something more as a base moving — going forward for — at least for remaining of the year? Thanks.

Angus W. Smith — Chief Financial Officer

Yes. Thanks, Yale. So I mean a couple of comments there. I mean, one, we haven’t provided specific guidance on our expenses, but we have provided guidance on our cash runway and what we’ve said is that we expect our existing cash, which is about EUR200 million — a little over EUR220 million, will last us into the second half of 2023. So if you do the math on that, that’s kind of eight to 10 quarters out. That implies a cash burn in the low to mid EUR20 million excluding any impact of additional proceeds from loans or milestones, etc.

So just doing based on that math, you can assume that the expenditure levels that you’re seeing in Q2 of this year is probably more relevant as we go forward then the expenses you’ve seen in previous quarters, in particular, in the second quarter of last year. But having said that, we do expect that R&D expense will be lumpy. Right? This quarter, we’ve had, as I said on the call, we had an increase in AFM24, a lot of that’s associated with production of clinical trial material for our ongoing study and upcoming studies. We’ve also had ramp ups in our earlier stage programs like AFM28 and AFM32 and when it comes to CMC investments those can be a little bit lumpy, but long story short, fair to assume that the R&D expenditure this quarter is probably more in line where we’ll be in the future than where we’ve been in the past.

Yale Jen — Laidlaw and Company — Analyst

Okay, great. Thanks a lot. And again congrats for a lot of progress here.

Angus W. Smith — Chief Financial Officer

Thank you.

Operator

We have a follow-up question from the line of Nick Abbott with Wells Fargo.

Nick Abbott — Wells Fargo — Analyst

Thanks for taking the follow-up and just going back to the AFM24 trial. I believe that currently the trial is being conducted at four sites in the U.S., U.K. and Spain and Adi you mentioned U.S. CDMO. So can you talk maybe a little bit about the three expansion cohorts? How many sites that you expect to be running dose trials at? And whether they’re going to be international, all in the U.S. and will it be Simon, sort of two-stage design for each of the cohorts? Thanks.

Adi Hoess — Chief Executive Officer

Okay. Yes, thanks for this question, Nick. I’ll have either Wolfgang or Andreas jump in here if they can?

Andreas Harstrick — Chief Medical Officer

Yes, I can. So for the expansion cohorts of the monotherapy trial, we are looking to increase the number of sites from four that we are currently having probably to somewhere between 10 and 15, 16 sites, will continue to be a mixture of our U.S. side international sites, you mentioned, currently we have in Europe. We will add a couple of sites in Southeast Asia, mainly Korea, especially to recruit EGFR-mutant patients. Now, the same is true for the PD1 study where we will have also a mixture of our U.S. and ex-U.S. sites. Study 103, SNK01 study will initially be a U.S. only study where as up to four sites for the initial part and then expanding to couple of more sites, but currently the plans for this specific study ought to be a U.S. only study.

Now in terms of study design, all studies are designed according to Simon two-stage principles. We will have an initial place with defined number of patient, of course, as we are in different disease types, we — our go novel criteria will vary by disease type. And then also the definition of a response rate of interest will be a little bit different, but in general, as with the Simon two-stage designs with an initial cohort of probably around close to six patients, we are looking at a pre-defined success criteria and having the ability to enroll up to 30 to 35 patients per cohort to verify the initial assumption of Simon 2-stage design.

Nick Abbott — Wells Fargo — Analyst

Great. Terrific. Thank you very much.

Operator

[Operator Closing Remarks]