BeyondSpring Inc (BYSI) Q2 2021 Earnings Call Transcript

BeyondSpring Inc (NASDAQ:BYSI) Q2 2021 earnings call dated Sep. 10, 2021.

Corporate Participants:

Monique Kosse — Investor Relations

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Ramon Mohanlal — Executive Vice President, Research and Development, Chief Medical Officer

Rich Daly — Chief Operating Officer

Elizabeth Czerepak — Chief Financial Officer

Analysts:

Josh Schimmer — Evercore ISI — Analyst

Jason Gerberry — Bank of America — Analyst

Maury Raycroft — Jefferies — Analyst

Andy Hsieh — William Blair — Analyst

Joel Beatty — Baird — Analyst

Joe Pantginis — HC Wainwright — Analyst

Presentation:

Operator

Good morning, welcome to BeyondSpring’s Second Quarter 2021 Financial Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, September 10, 2021.

I will now turn the call over to Monique Kosse of LifeSci Advisors.

Monique Kosse — Investor Relations

Thank you everyone for joining today’s call. I would like to advise listeners that comments made on today’s call may reflect forward-looking statements that are related to such matters as BeyondSpring’s clinical and preclinical research and development activities and results, regulatory and commercial plans, industry trends, market potential, collaborative initiatives and financial projections, among others. While management believes that its assumptions, expectations and projections are reasonable in view of the currently available information, you are cautioned not to place undue reliance on these forward-looking statements. The company’s actual results may differ materially from those discussed during this call for a variety of reasons, including those described in the forward-looking statements and risk factors sections of the company’s 20-F and other filings with the SEC, which are available on the Investors section of BeyondSpring’s website.

Joining us on today’s call is Dr. Lan Huang, BeyondSpring’s Co-Founder, Chairman and Chief Executive Officer; Dr. Ramon Mohanlal, Executive Vice President, Research and Development and Chief Medical Officer; Richard Daly, Chief Operating Officer; and Elizabeth Czerepak, Chief Financial Officer.

It is now my pleasure to turn the call over to Dr. Lan Huang. Lan?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Hello, everyone and thank you for joining today’s call. We’re very pleased to be here today, reporting our second quarter results and providing an update on the many meaningful events in the recent weeks. Everyone here at company is very excited as we have accomplished so much, but most importantly, we’re most excited for patient who are our north star [Phonetic], who can be helped by our lead asset Plinabulin.

Plinabulin is a first-in-class, selective immunomodulating microtubule-binding agent or SIMBA. With clinical evidence from DUBLIN-3 and our CIN studies, we have revealed the dual benefit of Plinabulin and the direct anticancer benefit of significantly extending overall survivor, while also significantly reducing severe neutropenia induced by chemotherapy, which would be beneficial to patients in need.

From the execution point, we have much more to look forward to in the next six to 12 months, including, first, our PDUFA date is on November 30 this year for Plinabulin and two sets of combination in CIN prevention and upcoming commercial launch in first quarter next year. Second, a planned NDA filing for Plinabulin in non-small cell lung cancer in the first half of 2022. And third, continued development of our rich and deep pipeline including Plinabulin in triple IO combo in various cancers. Each of our upcoming milestones has the potential to provide significant shareholder value.

Let me begin today by recapping the very meaningful events and data from the recent few months. I would then provide a few highlights of what to expect for us in the coming weeks and months, before handing over to Ramon and Rich to provide more detail on our scientific and clinical accomplishments and commercialization plans.

Again, the past few weeks have truly been transformational for us at BeyondSpring. Most importantly, we were thrilled to announce positive data from our registrational trial of DUBLIN-3 in Plinabulin in second and third line non-small cell lung cancer, which showed significant improvement in overall survival, especially in doubling the two-year and three year survival in the Plinabulin and docetaxel combination arm versus docetaxel alone. This underscores Plinabulin’s immune durable anti-cancer benefit and makes us optimistic for its potential in other cancer combinations like triple IO combos. We have always believed Plinabulin to be a pipeline in a drug with the potential for approval in several indications with the direct anti-cancer data in non-small cell lung cancer we are well on our way to realizing our vision for Plinabulin.

I’ll let Ramon provide more color on the study and some high level data. We are presenting additional data in 10 days as a late breaking oral presentation at ESMO on September 20. We are planning to host the call after the ESMO presentation. Another meaningful recent announcement was our strategic partnership between Wanchunbulin, our 58% owned China subsidiary Hengrui, a leading R&D and a commercialization company with top expertise in oncology in China for the commercialization and co-development of Plinabulin in Greater China. This landmark partnership serves as a validation from a well-respected leading pharma for Plinabulin as a pipeline in the drug. Over the past 40 years, Hengrui has successfully grown to become the largest oncology drug sales company in China with the top selling PD-1 inhibitor and Docetaxel product and one of the top three G-CSF products.

Plinabulin’s potential for use in combination with this agent represent significant synergies and facilitates the development of Plinabulin in additional indications, thereby accelerating an increasing achievement of big [Phonetic] cells in Greater China. Important to note, not only have we partnered with the most respected company with the widest and deepest reach in the oncology space in China, we have done so at favorable terms for us. We retain manufacturing rights and have the right to receive 100% sales proceeds, while paying a reasonable percentage of the net sales to Hengrui and having all the commercialization cost covered by Hengrui. Additionally, we will receive a significant upfront and 50% cost sharing of development costs. Of note, we will retain a 100% of our Plinabulin rights in all other global markets outside of China.

Finally the deal has attractive financial terms, which gives us more cash runway. This includes an upfront payment of around $30 million and milestones of up to around $170 million, plus the $15 million investment in Wanchunbulin at a pre-money valuation of around $560 million. As you are aware, our NDA for prevention of CIN had been accepted by China NMPA and the US FDA with prior to review. Rich will provide more details on our plans for commercialization and launch in the US in early 2022, assuming approval by the FDA, our November 30, PDUFA date. Looking forward I mentioned the most important dates, PDUFA date of November 30, 2021 for Plinabulin in CIN prevention, additionally, our regulatory team are in high gear preparing for our NDA filing for non-small cell lung cancer indication which we anticipate in the first half of 2022.

Finally with Plinabulin’s unique immune mechanism as a SIMBA and it’s durable anti-cancer clinical evidence shown in the DUBLIN-3 Study, we have a well-planned path of development for Plinabulin in IO combos in various cancers to target unmet medical needs which PD-1/PD-L1 could not help. First in PD-1/PD-L1 failed patient, second the CIN issue in PD-1 and chemo combination. Third, immune-related SAE for IO combos. Fourth, the cold tumors and fifth, first line cancers which needs better efficacy in IO combos. We have undergone a few investigator-initiated studies to help to assess Plinabulin’s role in addressing this unmet medical needs. Ramon will talk more about this in his presentation.

To summarize, I would like to thank our team for their commitment and tireless efforts. Everyone here believes in our mission and their passion has been driving us forward towards raising the standard-of-care for cancer patients in the largest global markets of our first-in-class treatment. We’re closer than ever now to achieving this mission and we will all look forward to advancing Plinabulin and realizing upon our many opportunities to succeed.

I will now turn the call over to Dr. Ramon Mohanlal, for a brief review of our recent clinical developments. Ramon?

Ramon Mohanlal — Executive Vice President, Research and Development, Chief Medical Officer

Thank you Lan. As Lan indicated, we are eagerly awaiting the PDUFA date for the CIN application later this year. We were naturally awaiting the results from DUBLIN-3 to obtain confirmation of Plinabulin’s anti-cancer activity, which we have now. It was exciting to see that the Plinabulin Docetaxel combination in DUBLIN-3 have met both the primary endpoint for overall survival and the key secondary endpoints for ORR and PFS. The significant reduction in Grade 4 neutropenia by cycle [Phonetic] with the combination versus docetaxel alone supports Plinabulin’s CIN prevention benefits. The four year OS rates at 10.6% for the combination with Plinabulin versus 0% with Docetaxel alone underscores the durable anti-cancer benefits for Plinabulin and is consistent with its immune mechanism of action.

I also would like to mention that we conducted DUBLIN-3 at high quality centers under US GCP. We used quality CROs for the conduct of DUBLIN-3. ICON was our global CRO for site selection, patient enrollment and monitoring. All blood samples were sent to Covance Central Laboratory for pharmacokinetic and hematology assessments, including neutrophil count. ICON pharmacovigilance was used for safety processing.

As Lan mentioned, Plinabulin’s next focus in our clinical development program is to develop IO combinations in multiple cancer indications. Earlier this year, we presented Phase 1 clinical data with Plinabulin in combination with nivolumab and ipilimumab in small cell lung cancer, demonstrating a doubling of the anticancer results normally seen with nivolumba and iplimumab alone. In that study we also demonstrated that Plinabulin could reverse resistance to prior checkpoint inhibition therapy, specifically in the small cell lung cancer Phase I data, which was presented at ASCO earlier this year, patients from US sites had an ORR of 46% in second and third line and ORR of 43% for PD-L1 inhibitor failed patients which also had a long duration of response as long as 18 months.

And at MD Anderson, we are conducting an investigator-initiated trial in seven different cancer evaluating the safety and tolerability of Plinabulin in triple IO combination therapy with both PD-1/PD-L1 antibodies and radio therapy in PD-1/PD-L1 failed patients. The first patient was enrolled in this Phase 1b/2 trial in June of this year. As was mentioned before, resistance to immunotherapy is fear unmet medical needs and we believe Plinabulin may have a potential synergistic anti-cancer effect when combined with checkpoint inhibitors and radio therapy. Based on Plinabulin’s unique mechanism of action and early clinical data, we believe that adding Plinabulin to checkpoint inhibitor therapy with or without chemotherapy has the potential to improve anti-cancer efficacy, while reducing toxicity with IO and/or chemotherapy. We believe that these early trials are providing collective evidence of Plinabulin’s role in addressing the unmet medical needs in immuno-oncology therapy.

On the organizational side, we are rapidly building our medical affairs [Phonetic] capabilities in support of the upcoming commercial launch ever [Phonetic]. With that I will now turn the call over to Rich, who will discuss our commercial preparations. Rich?

Rich Daly — Chief Operating Officer

Thank you, Ramon. Our pre-launch activities and preparations for commercial launch in the CIN market are building with our PDUFA date set for November 30. Over the next several months, our seasoned commercial leadership team is preparing to deliver a fully integrated market preparation and launch program to support a successful launch of Plinabulin early 2022. To complete with elements, such as driving awareness of the unmet medical need, or what we call the neutropenia vulnerability gap, continuing our large account outreach, preparing for NCCN guidelines submission, KOL development, speaker mobilization, key stakeholder outreach including patient groups and federal, state and local legislative initiatives, educational symposium, targeted advisory boards, and finalizing our patient support services to ensure broad access at launch. Specifically we plan for dedicated and focused team for the US market. Importantly, we will have a field reimbursement liasion team supported by a patient services hub in place to ensure effective reimbursement from day one to provide support for both providers and patients. We believe this extensive commercial strategy will position us well to successfully launch Plinabulin combination therapy to capture long-term commercial success. We look forward to updating you on our progress with our pre-launch activities in the coming months.

And now, I’ll turn over to Elizabeth to take you through the financial results. Elizabeth?

Elizabeth Czerepak — Chief Financial Officer

Thanks, Rich. I will now briefly discuss our second quarter 2021 financial results. For greater detail related to these results, I refer you to our press release issued this morning and to our 6-K filing, both of which can be accessed under the Investors section of our website.

With that, I will now highlight some of the key financial results. R&D expenses in the second quarter of 2021 were $11.3 million compared to $11.0 million in the same quarter last year. The increase of $0.3 million was primarily due to an increase in personnel costs and non-cash stock-based compensation expense, partially offset by lower clinical trial expense.

G&A expenses were $9.0 million in the second quarter of 2021 compared to $2.6 million for the same quarter of 2020. The $6.4 million increase was primarily due to higher personnel cost, non-cash stock-based compensation expense and higher costs associated with pre-commercialization activities for Plinabulin.

Net loss in the second quarter of 2021 was $19.3 million compared to $12.8 million for the same period last year. Our cash balance at the end of second quarter was $51.3 million and we had short-term investments of $25.0 million, which we believe will be sufficient to support our ongoing clinical programs over the next year, including our immune oncology pipeline and to prepare for the potential launch of Plinabulin in CIN in early 2022.

In addition to reported available cash, we will also receive from Hengrui approximately $45 million for a $30 million upfront payment, plus an equity investment into the China subsidiary related to the Plinabulin partnership in China which Lan described. I do also want to mention that in the US, Rich has updated on our efforts to prepare for our own launch of Plinabulin in CIN, and we are also evaluating potential partnership opportunities in the US, Europe and other parts of Asia outside of Greater China. We are only considering the very top companies who could bring great synergies and help us optimize the value of Plinabulin globally.

With that, I will now turn the call back over to Lan for closing remarks. Lan?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Thank you, Elizabeth. We’re very proud of our accomplishments thus far. We have had extremely busy and productive period recently, but we’re just starting. Everyone feels the momentum is building and our excitement grows as our vision of commercialization Plinabulin and expanding our indications comes closer with the potential to help many patients in need. We invite everyone to watch for us at ESMO on September 20, where we will make a late breaking presentation on our DUBLIN-3 Phase 3 data in non-small cell lung cancer. And our partners for their continued support as we work towards improving the current standard-of-care for cancer patients worldwide.

This concludes our prepared remarks today. I will now ask the operator to begin our Q&A session. Operator?

Questions and Answers:

Operator

Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question is coming from the line of Josh Schimmer with Evercore ISI. Please proceed with your question.

Josh Schimmer — Evercore ISI — Analyst

Great. Thanks for taking my questions. First what type of information should we be looking for from the DUBLIN-3 trial at ESMO and specifically are we going to be getting the subset analysis which investors have been very focused on? And then second, investors are clearly concerned that the DUBLIN-3 trial may not suffice for FDA approval given that the trial was run mostly outside the US and in PD-1 naive patients. As you’re discussing the program with partners, do you expect that you’re going to need to wait for full approval by the FDA to capture the full value of the program and some kind of partnership deal? Thank you.

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Thank you so much Josh, for your continued support and thanks for this great question. So let me just touch on both of the questions. Number one is, with the ESMO presentation, we are going to show the whole data the ITT population with all the specific numbers with it. And in addition, we’re also going to show the subset analysis everyone is so eagerly waiting to see, including the PD-1/PD-L1 exposed patients and also the western patient subset. So that’s number one question.

Number two is, regarding your question on the relevance of the study with limited patients from US, how it relate to the US population, right? So we think that currently our patient poplulation does capture the current landscape of treatment to the biggest extent, because we do have patients who has exposed to PD-1/PD-L1 and from the previous experience in FDA approvals for oncology drugs, there were incidents of approval using limited patient data from the US. According to the IQVIA report, 27% of the US FDA oncologic drug approval actually used less than 10% data from the US. So, of course this is a review issue. So we will be eagerly discussing this with FDA in our planned pre-NDA meeting. We’re planning for quarter four of this year. Regarding the partnership discussion, I think this of course is a very important topic to discuss, but we cannot give any details at this moment.

Josh Schimmer — Evercore ISI — Analyst

Okay, super. Thanks very much. I’m looking forward to the ESMO presentation.

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Yes. Thank you.

Operator

The next question is from the line of Jason Gerberry with Bank of America. Please proceed with your question.

Jason Gerberry — Bank of America — Analyst

Hey guys, thanks for taking my questions. Two from me on DUBLIN, not a big surprise, but just can you, Lan maybe walk us through the history of the trial, the interim analysis and whether median OS or Kaplan-Meier OS, were the pre-specified primary endpoint and whether there were any protocol changes that occurred during the trial? And then my second question is just, there isn’t much debated Kaplan-Meier OS is a gold standard for measuring OS, but I think investors believe that supportive median OS is needed to ensure that the clinical benefit is meaningful. So just love to get your thoughts on the regulatory implications of supportive median OS, particularly if it falls in a more gray area or even a negative P value? Thanks.

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Yes. Well, thank you so much Jason for your great question regarding the more detailed in the history, also had DUBLIN-3 and also the primary endpoint questions. So first is DUBLIN-3 has been ongoing for almost six years. So it has been a long trial because it is 550 patient enrollment globally in US, China and Australia. So along the way the achievement landscape has also changed, right and there are PD-1/PD-L1 treatment approved during the study. So we did — during the study, we did update the protocol to include that allow lines to have PD-1/PD-L1 trial patients in the study and stratify them. So that’s why we are confident with the balancing of two arms with the PD-1/PD-L1 exposed patients.

And then secondly, regarding the primary endpoint. So the primary endpoint like always being overall survivor. It has never been changed. It is just analysis of the data mastered [Phonetic] right. So why is using the log-rank P value looking at the whole Kaplan-Meier OS curve by including in there, it will be median OS shown, and in addition, we’re also putting the resrticted names of that time which is looking at median OS because Plinabulin is an immune agent. The median potentially captures more of the OS benefit for Plinabulin arm, but those are going to be shown in the ESMO and also with the NDA filing. So everything is transparent and everybody can see what is the profile for Plinabulin. So in the end the drug is the profile from the KM-OS graph and that’s the key.

So along the way, we did have two interim analysis, right. So — and so there is a little hit — P value hit which is hedged for the final P value which we need to meet for the log-grant P value, which is 0.046 and what we have set in top line is what rank P value for the DUBLIN-3 in the Plinabulin plus docetaxel versus a stress arm is less than 0.04 so that it does meet this statistic skin sense in extending overall survivor in the primary endpoint. So of course everybody were seeing more details in the ESMO. Thank you.

Operator

Thank you. Our next question is from the line of Maury Raycroft with Jefferies. Please proceed with your questions.

Maury Raycroft — Jefferies — Analyst

Hi, good morning and thanks for taking my questions. Do you tie the subset analysis together for PK bridging data between Western and China patients? Is it possible you could disclose some of the PK bridging data at ESMO or at some other point prior to filing the NDA?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Yes, thanks for this great question, because this is very important for us to be able to combine the Western and Asian patient data for the NDA submission, not only for — you asked, but also for China FDA. So we have done extensive population PK, everybody in our CIN studies and also in lung cancer study, everybody has a population PK. So we have rich data for almost over like 700 [Phonetic] patients on the — on those data. So currently, we have — maybe those data to the regulatory agency and this is not the PK comparative data usually is not in the presentation or for the registration study or in the publications. Of course if everyone is very interested covering the future, we should have some kind of public review on this later. But this is not, it’s not going to be discussed in the ESMO. But it is consistent. We’re very confident with.

Maury Raycroft — Jefferies — Analyst

Got it. So you’re confident in the consistency that you’re seeing between the patient population?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Yes, yes. They are comparable to similar in the population PK in Asian versus Western patients.

Maury Raycroft — Jefferies — Analyst

Got it.

Lan Huang — Co-founder, Chairman & Chief Executive Officer

We have shown that in many studies. And all the PK data came from Covance, right. We use Covance has our central lab.

Maury Raycroft — Jefferies — Analyst

Okay. And then one other question, just for the CIN NDA that’s under priority review. Can you talk more about the regulatory interactions and feedback and whether you’ve got a mid-cycle review communication and any label discussions yet?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Yes. Thanks for this great question. Everyone is eagerly waiting for the final dates which is November 30. Yes, so FDA has been communicating with us very, very — infrequent manner and they are supportive of our submission, because we did have KOL [Phonetic] meeting before the document has been successfully received by FDA. We also had mid-cycle review and we haven’t got to the label discussion yet, because it is usually is one to two months before the PDUFA date and there will be a label discussion.

Maury Raycroft — Jefferies — Analyst

Got it. Okay, thank you very much for taking my questions.

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Thank you.

Operator

Next question is coming from the line of Andy Hsieh with William Blair. Please proceed with your questions.

Andy Hsieh — William Blair — Analyst

Great. Thanks for taking my questions. And again, congratulations to the team on — as you said transfer — transformative first half and a great start to 2021. So I have two questions really related to Jason’s questions before. One is, is really Lan maybe you can comment on just how DUBLIN is conducted from a quality control standpoint, data integrity standpoint. I think there is a lot of questions regarding that? And also since Lan, you talked a little bit about the P-values, I wanted to kind of get your clarification in terms of the P-values listed in the presentation, back several weeks ago following the DUBLIN-3 top line results. I noticed that there were a lot of the P-values that basically provided a range and not basically like a single number. I just want to clarify that that is due to the fact that analysis was still ongoing and that was kind of like the top line results and we’ll basically get detailed exact P-values at the ESMO conference?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Yes, thank you so much Andy for your great questions and also always your great support. So let me answer your three questions in sequence. So number one is, we are very confident with our quality of the data, because we are using the quality CROs to conduct the study as what Ramon just related to you. So our global CRO is ICON, which in charge of site selection and patient enrollment and also the monitoring. And secondly, we’re also using Covance Central Lab to look at all of our blood samples to evaluate the PK and also blood chemistry, including the ANC [Phonetic] numbers, because you know the ANC achieved important for our secondary end point looking into the Grade 4 neutropenia reduction in Plinabulin versus the docetaxel arm. And thirdly, we also use ICON PV [Phonetic] to — actually do the SAE reporting and also collect all the AE betas for all the studies, including DUBLIN-3 and also CIN studies and all the ITT studies.

And the last part, at least I also want to mention, we’ll also use ERT [Phonetic] which is central lab company and they actually send all the ECG machine to all the sites to look at, to take triplet for ECG to look at cardio safety for the drug. So all of this is validated CROs and also our conduct under US GCP. So that answers your first question and the number two is the data integrity so, actually we do use independent statistical company to do the analysis of the data and so — and also this — it’s also single blinded study to the patients right. So the patient, when you look at quality of life data, it will be very trustworthy because patient do not know which arm they are on. So that’s the second question.

The third question is great question, a clarification, for the P-value in — or some of the primary, and also the secondary endpoint, which we actually had released in the top line, because this is a top line right. So and really we cannot disclose much because we are saving it for a big major medical conference, which is coming at the ESMO. So, that’s why we were just only showing the range.

Andy Hsieh — William Blair — Analyst

Okay, great. Thanks for all the detailed explanations Lan. Maybe just one more, kinding of heading into the ESMO conference, I wanted to get your perspective on how you would view the PFS data. Obviously, whenever you look at OS it’s always kind of confounded by subsequent therapies. So maybe kind of a two-parter, one is, maybe can you comment on based on the geography, what are some of the subsequent therapies that patients could get on DUBLIN-3? And also, how would you kind of interpret and look at the PFS results in the context of the positive OS?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Yes, that’s really a brilliant question. Because for the clinical studies, I think the gold standard is OS, right, because in the end, we want to provide long-term survivor for patients and that is — or the patients and the FDA and also physicians are looking for. So OS is the gold standard. But in the end — but in addition, we also want to use PFS and ORR, also to look at drug effect right, and there is no noise from the later treatment. So that is what we’re getting at. So do we see a drug effect adding to the benefit of docetaxel in the PFS and as you see, the P-value is less than 0.01 right from the directional P-value which we shared in the top line. So we are seeing better improvement in Plinabulin, adding to docetaxel, not only in the PFS benefit, right and also in the ORR, which also showed statistical significance.

And your last question also asked about what’s the later treatment after the patients out of the study, as you know, it is a randomized study. So both arms are balanced and patient after they get out, they — of course, they’ll do have a desire to live. So have a good therapy to be treated. So after what they usually use PKIs and also they do have PD-1 and PD-L1 exposures, but limited. And also they are balanced.

Andy Hsieh — William Blair — Analyst

Got it. Okay, that’s helpful. Thank you very much.

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Yes. Thank you.

Operator

The next question is coming from the line of Joel Beatty with Baird. Please proceed with your question.

Joel Beatty — Baird — Analyst

Hi, congrats on the progress. For the CIN indication, there has been a recent attention among investors that most of the patients in the trials were from outside the US. Could you discuss that FDA is okay with the number of US patients in the CIN studies? And then also, can you discuss how closely the chemotherapy regimens used in the CIN studies resemble what’s currently used in the US?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Well, thank you so much, Joel, and thanks for initiating the report for us recently. Yes, so this is a great question. So for the CIN indication, as you know, we’re going after a broad label for Plinabulin combined with G-CSF, in preventing CIN in chemotherapy and all solid tumor, right. So it is a broad label and the Study 1 of Phase III of Protector II is a pivotal study which supports this label, any additional also have five other clinical studies to support this label. It’s almost a team [Phonetic] point of view and also from Plinabulin’s oncology in its working — in protecting neutrophil in week one after chemotherapy as what — which [Technical Issues] 96% to 100% according to literature, right. So there is a lot of room to improve there. So, but then — so in a way, it’s not so relevant to show if TAC is still used in the US, it’s more like it’s using as a template to evaluate the drug effect for Plinabulin’s combination with docetaxel or any current — any new agent in development with the CIN prevention.

So coming back to the [Indecipherable] Phase 3 patient population, it is mainly coming from two countries, around 50% in China, around 50% in Ukraine. So Ukraine patients are representing the Western patient and FDA agrees with that, China represents Asian patients, because US is just really used TAC, because TAC was just as I said, still have such harsh equation for neutropenia as high as 100%, so, it’s not really used very much and a lot of therapy that is used for breast cancer.

And then for the Western, for the Eastern Europe and China dual case is used. That’s why we can enroll patients to really evaluate Plinabulin’s drug effect. And so far FDA hasn’t had any issues with this write down, because they have seen our raw data. They also look at our clinical conduct and also look at the ETMF and everything. And then this has not been an issue and they have successfully accepted our filing with priority review and also with no [Indecipherable].

Joel Beatty — Baird — Analyst

Got it. Lan, thanks for all those helpful details. Maybe one more question related to discussions with potential partners for the US and other countries. How much of the focus on those potential partners is on marketing versus clinical development of additional indications?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Well, so I think this probably — it’s still ongoing with the potential partners for the US global market potential partnership. And this is of course it’s a combination of all of that, right, because it is very importantly, Plinabulin is strong as potentially now has this will do a benefit in the anti-cancer, benefiting extending survival and also in reduction of chemotherapy neutropenia. So with that profile it is really is a gateway into multiple indications and we believe in the IO combination therapy. So of course, partner will be very interested in the — in those additional development, which will give a lot of attention for Plinabulin and in the end, is to help many patients. Of course, commercialization is near term. So that’s also in the discussion points. But as you see from our recent partnership deal with Hengrui, which is a well — very respected company in China in the oncology space and we do think the synergy is also giving us a one plus one with the two in their discussion as you see from the terms, right. So, commercialization we are very much greatful to their support, because they have top sellers of PD-1 and also top sellers of docetaxel and top reseller of Pegfilgrastim, but also they have a lot of other agents in their pipeline actually which could potentially also in combination with Plinabulin, because Plinabulin is a very interesting and multi-talented trial being our way. So those are going to have more indications and more differentiated therapy regime potentially for patients in need.

Joel Beatty — Baird — Analyst

Thank you.

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Thank you for the great questions.

Operator

[Operator Instructions] The next question is from the line of Joe Pantginis with HC Wainwright. Please proceed with your questions.

Joe Pantginis — HC Wainwright` — Analyst

Hey, everyone. Good morning. Thank you for all the details. And I think you’ve done a good job really addressing a lot of potential concerns that are out there. So, thanks for that. So I actually have a couple of logistical questions. First, with regard to Hengrui. Just wanted to see what are some of the rate limiting steps right now? I mean you have some tech transfer to do. What other things are outstanding to make sure that they could efficiently launch Plinabulin officially?

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Yes, that’s a great question and that’s what we are currently actually doing with Hengrui. Our China team is working with them, starting from the second day from the signing. So around August 26, we have been working daily with our partner at Hengrui and they’re very eager to get all of their medical scientists on team, on board, understanding and also making the messaging, right. [Technical Issues]

Joe Pantginis — HC Wainwright` — Analyst

[Technical Issues] Just regarding like the milestone payments. How are you looking to account for these and amortize or recognize upfront or what have you?

Elizabeth Czerepak — Chief Financial Officer

Yes, thank you for that question, Joe. And we are very actively discussing that with Hua [Phonetic] who’s our global auditor and we for sure will be booking all of the money that come in. We’ve not given up booking of revenue. And yes, we’ll have to go through the dance with them on deciding how to book the revenue.

Joe Pantginis — HC Wainwright` — Analyst

Understood. And thanks for all the detail and looking forward to ESMO. Sorry, please go ahead.

Elizabeth Czerepak — Chief Financial Officer

Yes, and I was going to say, as far as the milestones go of course, those will receive I’m sure very normal accounting treatments and hopefully some will be problems of booking that we’ll have to deal with sooner rather than later. We expect that.

Joe Pantginis — HC Wainwright` — Analyst

Sure. Thanks again.

Operator

Thank you. There are no further questions. And I will now turn the call over to Dr. Huang for her closing remarks.

Lan Huang — Co-founder, Chairman & Chief Executive Officer

Thank you, operator. Thank you again everyone for joining us for the call today. Your time is precious. And thank you for being on this meaningful journey with us to support us and together you’re all partnering with us to help many patients in need. Thank you and have a nice day and have a nice weekend.

Operator

[Operator Closing Remarks]