Immunomedics, Inc. (IMMU) Q2 2019 Earnings Call Transcript

Immunomedics, Inc. (IMMU)
Q2 2019 Earnings Call
Aug. 7, 2019, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon ladies and gentlemen. Thank you for standing by. As a reminder, this call is being recorded. Today is Wednesday, August 7, 2019. At this time, I would like to turn the conference over to Chau Cheng, Senior Director of Investment Relations at Immunomedics.

Chau Cheng -- Vice President of Investor Relations

Thank you, Lara. Before we begin, I would like to remind everyone that during this call, we will be making forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Such statements may involve significant risks and uncertainties and therefore actual results could differ materially from those expressed or implied on this call. For factors that could cause such differences, please refer to our regulatory filings with the Securities and Exchange Commission.

With us on the call today with prepared remarks are Dr. Behzad Aghazadeh, Executive Chairman, and Usama Malik, Chief Financial Officer. Also on the call for Q&A is Scott Canute, Executive Director. Following the prepared remarks, we will open the call up for questions. Thank you, Behzad.

Behzad Aghazadeh -- Executive Chairman

Thank you, Chau. Good afternoon, everyone, and thank you for joining us. First and foremost, let me begin with an update on our BLA resubmission efforts. I'm pleased to report that we remain on track to meet our guided resubmission timeline of early fourth quarter of 2019. As noted by Scott in our last earnings call, our goal is to have not only a high quality resubmission, but also a successful reinspection. I'm very thankful and appreciative of the hard work our manufacturing, quality, regulatory, and clinical colleagues have delivered so far as we move toward our objectives and timelines.

While Samsung is not part of our BLA resubmission plan, they are nonetheless important in our overall strategic plan to scale our global supply capacity for long-term supply of sacituzumab govitecan. To that end, I'm also pleased to report that the work being conducted at Samsung biologics is progressing and we remain on track to establish Samsung as a primary source of commercial antibody in time to meet the anticipated demand of this valuable asset after its FDA approval of RBLA.

A quick update on the CEO and CMO search. We are in active search mode and are looking for the right candidates with a current arrangement of me stepping into the Executive Chairmanship and Scott spearheading our BLA resubmission efforts. The company continues to execute well against our key strategic priorities, giving us the opportunity to take our time to fill the CEO position. We are going about the search very thoughtfully to make sure we get the right person, one who can build on the potential of our unique ADC platform and take the company to the next level.

For the CMO position, we have moved quickly to bring on board an industry veteran who previously helped us on various projects as a consultant and has now stepped into an advising Interim CMO role supported by a very strong, fully staffed clinical team. While our robust clinical programs are advancing extremely well under this set up, we are eager to fill the CMO position on a permanent basis and that search is ongoing.

Moving on to clinical updates, we are very pleased to have reached our target enrollment in the Ascent Study in less than 20 months and are grateful to the patients, their families, and caregivers who have participated in our studies. We believe this rapid pace is a testament to the unmet need in late stage metastatic triple-negative breast cancer and the confidence of our investigators in the safety and efficacy of our ADC to provide a meaningful clinical benefit to patients.

Based on our current projected event trajectory and timelines associated with central review, database lock, and analysis, we expect topline readout from Ascent to occur mid-2020. Building on the Ascent momentum and leveraging the existing relationship with breast cancer specialists, we have launched the registration of Phase 3 TROPiCS-02 in HR+/HER2- metastatic breast cancer, which accounts for 70% of all breast cancers. This randomized global study has dosed the first patients who have failed at least two prior chemo regiments for metastatic disease. With progression-free survival and overall response rate serving as co-primary endpoints, the study allows for an analysis of overall response rate on a pre-specified number of patients as a basis of potential accelerated approval submission. Enrollment of the target of 400 patients is expected to take approximately 18 months.

For TROPHY U-01 in urothelial cancer, the study is evolving as expected and we remain pleased with the progress toward a 2019 year end enrollment completion. As a reminder, once we've recruited the pre-specified number of patients with sufficient follow-up, we will have the opportunity to conduct an interim analysis. We anticipate reporting these results at an appropriate scientific venue. The successful interim analysis will provide us the opportunity to file for breakthrough therapy designation.

To further unlock the potential of sacituzumab govitecan we have initiated for the first time a TROP-02 enrich study in very difficult to treat cancers. Dosing of the first patient in the non-small cell lung cancer cohort is expected in the third quarter.

Finally, we have two updates on PARP inhibitor combination studies to report. The first one is that rucaparib, the collaboration with Clovis and second-line metastatic triple-negative breast cancer and other cancers that study is now open for patient enrollment. The second study is a new Phase 1 B2 study and is headed by Dr. Aditya Bardia and sponsored by the Massachusetts General Hospital to study sacituzumab govitecan in combination with Pfizer's PARP inhibitor talazoparib in patients with metastatic triple-negative breast cancer previously treated with no more than one prior therapeutic regiment for metastatic disease. With that, I will turn the call over to Usama for an overview of our financials before opening the call for Q&A.

Usama Malik -- Chief Financial Officer

Thank you, Behzad. As with our last earnings call, I will provide topline results, here, and ask everyone to refer to our quarterly filing, as well as this afternoon's earnings release for additional details. Total cost and expenses were $67.2 million for the quarter and $146.8 million for the six months ended June 30, 2019, compared to $52.8 million for the comparable quarter and $90.9 million for the six months ended June 30, 2018. The increases were due primarily to additional expenses in research and development and sales and marketing, partially offset by decreases in GNA expenses.

The increases in R&D costs were mostly attributable to activities related to preparation for the approval and commercial launch of sacituzumab in metastatic triple-negative breast cancer and expanded clinical development of sacituzumab in other indications. That loss attributable to stock holders was $76 million, or $0.40 per share for the quarter ended June 30, 2019, compared to $117 million, or $0.68 per share for the comparable quarter ended June 30, 2018.

That loss attributable to stock holders was $163.3 million, or $0.85 per share for the six months ended June 30, 2019, compared to $152.6 million, or $0.91 per share for the six months ended June 30, 2018.

As of June 30, 2019, we had approximately $433 million in cash, cash equivalents, and marketable securities, which included the $65 million upfront payment received from the licensing agreement with Everest Medicines for greater China. The number of outstanding shares was 192 million and the fully diluted count was 205.

We believe our projected financial resources are adequate to support our clinical development plan for sacituzumab, further build our clinical and manufacturing infrastructure, and fund our operations through 2020.

This concludes our second quarter 2020 financial results. Operator, please open the call up to questions.

Questions and Answers:

Operator

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

We have your first question coming from the line of Paul Choi with Goldman Sachs. Your line is now live.

Corrine Jenkins -- Goldman Sachs -- Analyst

Hi, this is Corrine Jenkins on for Paul. I was just hoping you could talk a little bit about how you see the competitive landscape evolving with CO2 ADCs, particularly as you start to study sacituzumab and SL CLC and with Daiichi. Thank you. Presenting data for their trip to ADC at World Lung this fall.

Behzad Aghazadeh -- Executive Chairman

Sure, thinks. I think not much really has changed in the triple-negative setting. We've seen, as you just touched on the data from the TROP-2 ADC from Daiichi which was on the early number of patients with limited follow-up. And I think on the one hand, it was comforting to see TROP-2 as a validated target, which we, I think, spearheaded that with our asset. But beyond that, we haven't seen the follow-up data and we look forward to getting an update on that, I think, in early September in the lung setting.

In the triple-negative setting, however, I think, clearly we just announced today that we've reached our target enrollment in our randomized Phase 3 study. We have over 500 patients treated. We are on track to file for extended approval on our Phase 1 cohort in that setting. So I think in terms of just experience and timelines, I don't really foresee anything changing for the foreseeable future in that lead indication.

With respect to, I think there have been, other updates with checkpoint inhibitors in earlier lines of settings, some positive, some negative developments in the quarter, again, none of that really reads into our initial target indication. In fact, some of the positive developments, I think, might just perhaps lend themselves to an earlier adoption of our asset as the majority of patients, unfortunately, will progress after initial lines of therapy checkpoints, or otherwise. So I think in that regard, again, not much has dramatically changed since we last spoke.

Corrine Jenkins -- Goldman Sachs -- Analyst

Great, thank you.

Operator

Thank you. We have your next question coming from the line of Phil Nadeau with Cowen and Company. Your line is now live.

Phil Nadeau -- Cowen and Company -- Analyst

Good evening. Congrats on the progress and thanks for taking my questions. A few on upcoming events. First on the manufacturing issues and work that you're doing with it just, perhaps, a couple months until you complete the filing. I'm curious if you'd be willing to give us any more information on what work you are doing and what are some of the issues that remain to be solved before you can refile?

Scott Canute -- Executive Director

Yeah, thanks for the question. The short answer is, we put a comprehensive, deep, and broad plan in place shortly after we got the CRL, as we communicated on the previous call, last call that we had and we're sticking to the timeline. We're tracking very well with it. We're getting the things done that we needed to. We've not had to add anything, really, to the plan that we put together several months ago and it's just execute, execute, execute.

Phil Nadeau -- Cowen and Company -- Analyst

Has there been anything unexpected as you've done your work? Any unforeseen challenges that, maybe, you weren't aware of after immediately filing the CRL?

Scott Canute -- Executive Director

Nothing that you wouldn't see in normal manufacturing operations. Things do happen from time to time in manufacturing, but you have an organization that is built to deal with those, identify them and deal with them and has not impacted their timelines. I'm still very highly confident that we will be able to refile in early fourth quarter.

Phil Nadeau -- Cowen and Company -- Analyst

Perfect. Second question is on the timelines for the Ascent study. As I'm sure you're aware, there's a lot of concern that those could come up before the PDUFA date. Behzad, just to play devil's advocate, why wouldn't the data be out beforehand if the trial is fully enrolled now, you add, maybe four months for the median PSS event to be hit, a couple months to clean up the data. Is it possible that we get the results in the first quarter of 2020?

Behzad Aghazadeh -- Executive Chairman

No, again, I think today we gave guidance on when we expect the results to read out. What's important is, first of all, this is based, as we said previously, we will take another sweep of the data and provide the update as soon as practical. So I think, clearly, that now has occurred. And based on where we see the events and where we see the triggering event to occur, it's a little more involved than what you laid out. I think you've, broad strokes, got the moving parts, but just to walk you through the sequence of events, it's going to be that on a local review, we will get a triggering event that will then trigger that the final set of scans to be sent for central adjudication, you have to factor in the timeline it takes for that to occur. There are multiple reviewers on a central basis that need to review it. That work needs to be completed, sent back to us. And that will then establish when, in fact, we will declare the trigger to have occurred, namely, an event based on central review, not local review.

That then will trigger a series of steps, iterative steps, of database cleanup, followed by the analysis period. And when you piece those parts together, we arrive at that mid-2020 timeline and not what you proposed, which would be substantially sooner than that.

Phil Nadeau -- Cowen and Company -- Analyst

Perfect. Okay, that makes sense. And then the last question is just on the interim urothelial data. Have you decided upon a venue in which to release that data to investors and is it possible that we don't see it, actually, the second half of this year, it's maybe early 2020 in some place like AskoGU?

Behzad Aghazadeh -- Executive Chairman

Yeah, Phil, I think what we'll probably do in that regard is just await when and if the venue has been identified and the conference would allow us to reveal that. It would be inappropriate to speculate on which conference until we have that clarity or are allowed to speak to it. So I'd ask to stay tuned and when we have the update, we'll be certain to provide it.

Phil Nadeau -- Cowen and Company -- Analyst

Perfect. That's very helpful. Thanks for taking my questions and congrats again on the progress.

Behzad Aghazadeh -- Executive Chairman

Thank you, Phil.

Operator

Thank you. We have your next question coming from the line of Raghuram Selvaraju with H.C. Wainwright & Co. Your line is now live.

Edward Marks -- H.C. Wainwright & Co. -- Analyst

Good afternoon. This is Edward Marks on for Ram. I appreciate you taking the questions. Just a few clinical ones from me. Looking at CDK46 usage in the first-line setting for HR+,HER2- metastatic, could you talk a little bit about your current thoughts regarding, maybe, potential combinations with volkstrant in the second-line setting post CD46 inhibitor use? And if you are, just maybe what timetable that could look like?

Behzad Aghazadeh -- Executive Chairman

I missed -- sorry. You weren't very clear which drug you were proposing a combination study with?

Edward Marks -- H.C. Wainwright & Co. -- Analyst

I'm sorry, I was talking about volva strand in the second-line setting.

Behzad Aghazadeh -- Executive Chairman

Volvastrand. We don't have a specific trial planned in that setting. So beyond the TROPiCS study that we've now announced that we can enroll patients, there's really nothing to report on the study that you're proposing.

Edward Marks -- H.C. Wainwright & Co. -- Analyst

Okay. And could you provide a little more color onto any of the combinations with Imfinzi for NCSLC, TMBC, and urothelial? Just when they're slated to begin and what, maybe, some potential timelines are looking like, since we really haven't seen anything on CT [audio cuts out] yet?

Behzad Aghazadeh -- Executive Chairman

Yeah, those trials, I would say, are run by AstraZeneca. So beyond just giving you just broad stroke guidance, which I believe they will be starting in the fourth quarter, they're not really under our control. So I can't, unfortunately, give you more clarity around that.

Edward Marks -- H.C. Wainwright & Co. -- Analyst

Okay, I understand. That makes sense. And then my final question , just looking at the recent Phase 1-2 trial with talazoparib and TMBC, on the CT.gov, it looks like the inclusion criteria does not really stipulate whether these patients need a BRCA or HRR mutations to be included in the trials. I was just wondering if you could clarify whether or not these patients actually have to have these mutations to be included.

Behzad Aghazadeh -- Executive Chairman

They do not. Some of those parameters are of interest and so that information will be collected, but there is no perquisite that they need to have BRCA mutations or others. It's an all-comer study.

Edward Marks -- H.C. Wainwright & Co. -- Analyst

Okay, so do you imagine doing, maybe, a substantive study later on or a substantive analysis?

Behzad Aghazadeh -- Executive Chairman

Certainly, I think that depending on what the data, where they lead us to, but our hope is that we -- the combination will sensitive non BRCA tumors, as well, and so that's the information that we're looking to glean from these studies, both with Pfizer and with the Clovis asset.

Edward Marks -- H.C. Wainwright & Co. -- Analyst

Right, I understand. Okay, that's all from me. Thank you for taking my question.

Operator

Thank you. We have your next question coming from the line of Shanshan Xu from Berenberg Markets. Your line is now live.

Shanshan Xu -- Berenberg Capital Markets -- Analyst

Hi, guys. This is Shanshan Xu from Berenberg Capital Markets. So following Phil's path, I would like to play the devil's advocate, as well. Given that Ascent is truly the confirmatory trial for IMMU132 in triple-negative breast cancer, so even if the timeline for this Ascent readout is pushed out to mid-2020, if the readout on the PSS is negative, what could be the regulatory implication on IMMU132, granted that it could have been approved by the FDA by then?

Behzad Aghazadeh -- Executive Chairman

Yeah, Shanshan, I just want to clarify that we didn't push out timelines. This is the first time we're announcing timelines. So that is, in fact, when the study will read out. With respect to what might occur should the trial read out negatively, it's really hard for me to speculate, given that, A, first of all, we would anticipate and we continue to anticipate a positive readout. But obviously, the scenario you're painting would be one that the FDA would, likely, won't understand, perhaps, the data, whether there were subsets that would be positive. It's really a speculation to suggest that we would be able to predict what would happen. Our expectation would be that if we file on time, we should receive approval and that that study should, in fact, be the supportive confirmative study for a full approval in the US and to be the basis of the European submission for full approval in Europe.

Shanshan Xu -- Berenberg Capital Markets -- Analyst

Great, thanks. So another question for your urothelial carcinoma pivotal trial, do you expect it to recapitulate to what has happened in terms of efficacy in your prior Phase 1-2 trial?

Behzad Aghazadeh -- Executive Chairman

Yeah, there's really no reason to believe that the drug would behave differently, given that we've studied it now in a number of tumor types in the Phase 1 study and these were a meaningful number of patients. But the TROPHY study, just to remind you, requires a prior checkpoint. And we had a number of patients in the study in Phase 1 that had prior checkpoints and there was really no discernible difference in efficacy, but we look forward to presenting that data and hopefully recapitulating what was previously presented. But we remain blinded to that study until reported again no reason that, given the safety profile and the efficacy has been established in a variety of settings. But until we have that data in hand, it's obviously, speculation.

Shanshan Xu -- Berenberg Capital Markets -- Analyst

Thanks, that's helpful. Maybe the last one from me. Can you please remind us what is the cutoff value of the PROP2 expression in the basket trial and is it the same for non-small cell lung cancer versus small cell lung cancer versus other types of metastatic solid tumors? Thank you so much.

Behzad Aghazadeh -- Executive Chairman

Sure, the trial is designed so that we will start with a 25% cutoff, but we have the ability to then raise that to higher levels. Beyond that, I think the way to design is the study is going to enroll -- is that we will start with a pilot cohort in non-small cell lung cancer and then expand into the other subgroups. Likely, based on what we see, we'll then establish the right cutoff for the other tumor types.

Shanshan Xu -- Berenberg Capital Markets -- Analyst

Thanks a lot for your time.

Behzad Aghazadeh -- Executive Chairman

Thank you, Shanshan.

Operator

Thank you. We have your next question coming from the line of Chris Howerton from Jefferies. Your line is now live.

Chris Howerton -- Jefferies -- Analyst

Great, thank you. Congratulations, as well, on the progress and thanks for taking the question. I think the first for me is, maybe, for Scott or Behzad. After you resubmit the BLA, could you remind us what we can expect in terms of the review cycle time and what required activities might need to happen from the FDA's perspective, such as a facility inspection?

Behzad Aghazadeh -- Executive Chairman

You want to take that?

Scott Canute -- Executive Director

Yeah, sure, absolutely. So we'll refile the BLA. The FDA has two weeks with which to accept the resubmission. The review clock starts when we refile. It's in the FDA's hands how long that review clock takes. Given where we're at and the fact that we do, in fact, need a preapproval inspection, they can schedule an inspection any time after that point. So they could come in very quickly and we would -- ultimately, the FDA's decision. We're hopeful that they'll come in quickly. We're trying to make this as clean as we possibly can. Again, they're very willing and have shown substantial interest in making this -- to get this drug approved.

We're very confident in what we've done so far. We're going to make this submission very clean, so it's easy for them to review. The preapproval inspection should go very well, based on our plan and how we're executing against it. While, ultimately, it's in the FDA's review in terms of how long they take, we're optimistic that while they could take up to six months, that the review clock, and review time, and approval time would be shorter than that. Ultimately, it's the FDA's call though.

Chris Howerton -- Jefferies -- Analyst

Got it. Okay, sure. And then as a follow-up on the urothelial carcinoma program, obviously, Seattle Genetics recently submitted in that indication. So just curious if anything's changed from a strategic perspective within that indication and, maybe, speculation in terms of competitive advantages 132 might have in that space.

Behzad Aghazadeh -- Executive Chairman

Yeah, Chris, I think we've known for some time that these two assets would, likely, one day be on the market, potentially side-by-side. And I think we've talked in the past about having different targets, in our case, targeting TROP-2, which is, obviously, distinct from where EV targets, as well as a different toxin safety profile. And I think, from what we hear from the clinical community, is that there will likely be a role for both and possibly for both in the same patients if they progress, unfortunately, due to disease progression with the use of one, they will likely be relegated to the other drug.

And the question then becomes which one first? And I think that there is a group that might think if Seattle is earlier then they would have that benefit. On the other hand, there is also a big desire on the part of the physician to make sure they use the safer product first in this particularly frail population of elderly men. This is a particularly challenging patient population. I think in that instance, the safety profile of our drug, the longer duration that patients can benefit from, if that were to recapitulate from the Phase 1 study that we saw, I'll remind you our response rates were in the 30-some % rate with a DOR north of 12.5, thank you.

Beyond that, the neuropathy is a big differentiator between the two. I think it's important to understand in a pivotal study, in the case of EV, I believe, baseline neuropathy was an exclusion criteria. We are treating an all-comer population. So there are clear differences between the safety profiles of the drug. There'll be differences likely in the efficacy profile of the drug, whether it's response rate, duration. And we'll just have to see how the market sees the two. But I really don't foresee a situation which is a one product takes all because we already are encountering patients that'll progress on EV and they'll likely encounter patients that have progressed on TROP-2 from prior studies that we've treated patients in.

Chris Howerton -- Jefferies -- Analyst

Okay, great. That's helpful. And maybe last one for me for Usama. Obviously, you're able to get a really attractive deal Everest in China. Any updates on thinking of other ex-US deals? Any updates you want to provide on that aspect with respect to business development?

Usama Malik -- Chief Financial Officer

Sure, thanks, Chris. Yeah, we're very happy with the deal with Everest and as I reported in my remarks, we did get the $65 million in upfront payment. We continue to work with them to file their IND and start a number of trials so that we can get the product to greater China in additional indications, as well. Beyond that, we've previously commented that we are continuing to look at other opportunities in what I'll call the rest of the world, which is ex-US and ex-Europe and we're continuing to pursue those.

As it pertains to Europe itself, we've also previously mentioned that we have a registrational approach there that we've been discussing with regulators in Europe. And as it pertains to commercialization there, we'll continue to explore our options, there. Whether we go it alone or we seek partnership will be dependent on a number of factors, including the types of terms, the economics, and the risk associated with the market at the appropriate time.

Chris Howerton -- Jefferies -- Analyst

Got it, OK. All right, well, thank you so much for taking the questions and I really look forward to the updates over the next 12 months, or so. Thanks.

Usama Malik -- Chief Financial Officer

Thanks, Chris.

Operator

Thank you. We have your next question coming from the line of Michael Schmidt from Guggenheim. Your line is now live.

Deedee -- Guggenheim Securities -- Analyst

Hi, good afternoon. This is Deedee on for Michael. Thanks for taking our questions. Our first question is on the Ascent trial. Since overall survival isn't the secondary endpoint of the study, just wondering what is the hurdle for the overall survival in this patient population? Also, can you guys provide some color on the powering assumption of this study? And we also have a question on financials, since both R&D cost and SGNA were down compared with last quarter, can you maybe provide some color on the reason and how should we think of the operating cost into 2020? Thank you.

Behzad Aghazadeh -- Executive Chairman

Sure, I'll take the first two and hand it to Usama for the spend. Quickly, in reverse order, on the powering, we have not previously provided powering, nor will we do that on this call other than to say that we are very well powered for the primary endpoint. Likely well over-powered in order to also have something worthwhile to see on the secondary endpoint LOS. With respect to the hurdle, it's a secondary endpoint, so there is not a specific hurdle, per se. Obviously, you don't want that signal to go in the wrong direction so that's important to see and, hopefully, be supportive on the other extreme of the PFS signal that you see. But there's no hurdle, per se. I would say that it, obviously, if you have a good trend or strong supportive evidence of the PFS benefit also reflected in the OS that would be important, especially for the European market where pricing does look at the totality of the data beyond just the approved indication or the labeled indication.

So while PFS forms the basis of both regions in terms of what the regulators would like to see from an approval standpoint, we believe OS is likely going to be helpful, especially on the pricing side in Europe.

And on the question of spend, R&D and SGNA, Usama?

Usama Malik -- Chief Financial Officer

So quarter-on-quarter, as we just mentioned in the prepared remarks, this quarter was about $15 million more than what we'd spent in the similar quarter last year, predominantly driven by additional R&D expenses. We just launched the ER-positive study. We just had, as Behzad just mentioned, the TROP-2 enriched basket study that's around the corner. So investments there. And as you know, the state that we're in, we are expensing development costs across TMC and manufacturing. And given the fact that we're also in a refiling period, there's also some additional expenses there that account for the increase.

As it pertains to forward-looking spend, we have not given guidance on that. I think you can look at the trajectory over the last six or eight quarter and see where we're trending. Once we have approval and we go to market commercially, we'll think about how we want to provide guidance with that.

Deedee -- Guggenheim Securities -- Analyst

Great, that's very helpful. Thank you.

Operator

Thank you. And we have your question coming from the line of Matthew Harrison from Morgan Stanley. Your line is now live.

Matthew Harrison -- Morgan Stanley -- Analyst

Great, thanks for taking my question. Two from me. I guess, first, can you broadly talk about how we should think about commercial ramp and when? I know you've had these people and you, obviously, have got the partnership with J&J for the year. I'm just trying to think about how we should think about any of that changing once you refile and if there's anything that happens there. And then I have a second follow-up on the urothelial study.

Behzad Aghazadeh -- Executive Chairman

When you talk about commercial ramp, you're talking about the ramp in commercial spend once we file? Or are you talking about the...

Matthew Harrison -- Morgan Stanley -- Analyst

Yeah, I'm just trying to understand if there should be any significant change to the commercial spend that you already have in place, I guess.

Behzad Aghazadeh -- Executive Chairman

Yeah, I think we, basically, are fully staffed, more or less, on the sales front, in terms of sales reps, I should say. In terms of just launch preparation costs, as well as in the launch period, there are always additional marketing spend that you incur, which are third party activities. We're not in a position to really provide guidance, but there certainly will be increased activities. But in terms of headcount, there will be additional hires to build out the marketing organization. But certainly the heavy lift, if you will, the larger organization remains intact. As you referenced the J&J relationship we have, which is, obviously, a very productive way to keep our team together. That should not dramatically change on the spend front.

Matthew Harrison -- Morgan Stanley -- Analyst

Okay, thanks. And then the follow-up question is on the urothelial study, can you just talk to what the hurdle rate is to declare efficacy, here? I guess what I'm asking is, my understanding is this is a sign and two-stage design and I thought the ability to declare that you can stop the study at the interim is quite high in sign and two-stage. So maybe you can just direct that a little bit. Thanks.

Behzad Aghazadeh -- Executive Chairman

We haven't really gone into details on what the interim hurdle is. What I would say is that the hurdle is -- perhaps the more insightful or the best way to think about it is, if you think about what you would expect to see in this setting, high single-digit, low double-digit responses on, if you will, background therapy. Anything that separates meaningfully from that would, I think, be viewed by the regulators and the community as beneficial. And that's what we hope to have, obviously. Our prior data significantly surpasses that level. So there's a lot of room between what background would be and what would be meaningful to the clinical community. Having said that, we certainly hope that we can recapitulate prior data. We'll just have to see how it shakes out.

The design, it's two-stage is, sort of, our enrollment is going pretty well. So I don't think we would, at this point, anticipate any sort of interim would prevent us from completing enrollment. We'll have to see how that plays out. Does that answer the question, Matt?

Matthew Harrison -- Morgan Stanley -- Analyst

Yes, it does, Behzad. Thank you.

Behzad Aghazadeh -- Executive Chairman

Okay, thank you very much.

Operator

Thank you. At this time, I would like to hand the conference back over to Chau Cheng for his closing remarks.

Chau Cheng -- Vice President of Investor Relations

On behalf of the entire leadership team, I would like to thank you all very much for joining us this afternoon. We look forward to updating you in the future on our ongoing progress.

Operator

That does conclude today's conference call. You may now disconnect. Thank you and have a great day.

Duration: 36 minutes

Call participants:

Chau Cheng -- Vice President of Investor Relations

Behzad Aghazadeh -- Executive Chairman

Usama Malik -- Chief Financial Officer

Scott Canute -- Executive Director

Corrine Jenkins -- Goldman Sachs -- Analyst

Phil Nadeau -- Cowen and Company -- Analyst

Edward Marks -- H.C. Wainwright & Co. -- Analyst

Shanshan Xu -- Berenberg Capital Markets -- Analyst

Chris Howerton -- Jefferies -- Analyst

Deedee -- Guggenheim Securities -- Analyst

Matthew Harrison -- Morgan Stanley -- Analyst

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