Achieve Life Sciences Inc (ACHV) 2003 Q1 法說會逐字稿

Good afternoon. My name is Leslie and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Sonus Pharmaceuticals 2993 First conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be Q&A period. If you would like to ask a question during this time simply press star then the number 1 on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you.

I will now turn the call over to Mr. Michael Martino, President and CEO. Mr. Martino, you may begin your conference.

Thank you Leslie. Hello and welcome everyone. Joining me today are Dr. Michael Stewart, Chief Medical Officer; Dr. Nagesh Palepu, Chief Science and Technology Officer; Rick Klein, Chief Financial Officer; and Pamela Dull, Investor Relations Manager.

Recent months have been productive and exciting here at Sonus. We have continued to focus on the key objectives that we have shared with you in our prior conference calls. Specifically, to finalize the regulatory strategy for TOCOSOL Paclitaxel based on discussions with FDA, to advance the clinical development of the product consistent with that strategy, and to secure a corporate partner for the product.

I am pleased with our progress on these three objectives and collectively the team and I are excited to provide an update today on the clinical development of TOCOSOL Paclitaxel and to describe our regulatory strategy for the product. Michael will provide the detailed clinical update in a moment.

We continue to be delighted with the performance of the product in the clinic and based on this performance, we believe we can say that TOCOSOL Paclitaxel is a convenient, well tolerated and pharmacologically active improvement over the currently marketed products. And today, for the first time, our clinical update will include reports of a number of complete responses.

Michael and I will also provide the details on the regulatory strategy in a moment. However, I would like to preface those details by saying that we are pleased that productive discussions with FDA have put us in a position to finalize a comprehensive regulatory strategy for the product. Including one tactical path that could put us in a position to file an NDA by late 2005. Later in the call, I’ll also provide a brief update on partnering discussions for TOCOSOL Paclitaxel, as well as the development status of our second cancer drug, TOCOSOL Camptothecin.

Before getting into any of these details, however, I’d like to ask Rick to provide a review of our financial results. Rick?

Thanks Mike and good afternoon everyone. Before we begin, it’s important to note that some of the statements made today may include predictions, estimates, and other information that might be considered forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ from our predictions and estimates as a result of various risk factors, including those identified in our Form 10-K and other SEC filings, all of which can be accessed on our web site at www.sonuspharm.com.

Turning to the financials, we reported a net loss of $2.3m or $0.17 per share for the first quarter of 2003, compared with a net loss of $2.4m or $0.18 per share for the first quarter of last year. Total operating expenses were $2.4m in the first quarter of 2003, compared with $2.5m in the prior year. The first quarter spending is on track with plan and reflects the continued investment in the TOCOSOL Paclitaxel Phase 2 clinical studies and new product development activities.

On the balance sheet, we ended the quarter with $13.9m of cash and no debt. Looking ahead, we expect that our net cash burn during the balance of the year will increase to an average of approximately $1.2m per month, as we initiate additional clinical studies for TOCOSOL Paclitaxel as part of the regulatory strategy that we’ll outline in the moment. And also, as we continue to invest in new product development.

While our existing cash is sufficient to fund to planned expenditures through 2003, we’re optimistic that additional funding will be available to us in the coming months in the form of a corporate partnership on TOCOSOL Paclitaxel and/or from additional equity financing.

That's a quick review of the financials and I now turn the call back to Mike.

Thanks Rick. Let me start out with some background on why we believe that TOCOSOL Paclitaxel is an outstanding product with an exciting market opportunity.

As most of you know, TOCOSOL Paclitaxel is a novel re-formulation of Paclitaxel, a member of the Taxane family of chemical entities that, taken together, represent the most widely prescribed class of chemotherapeutic agents in the world. Even in the face of generic competition to Taxol in the United States, Taxane sales are in excess of $2b globally and continue to grow at double-digit rates.

Taxanes will continue to play an important role in the fight against cancer and we believe that the features, advantages, and benefits of TOCOSOL Paclitaxel will position it as the Taxane of choice in this lucrative market. Now, this belief is based squarely on our clinical experience with the product to date, which we believe supports the following value propositions.

First, TOCOSOL Paclitaxel is a ready to use formulation that does not require any preparation on the part of the clinician or the pharmacy. It is simply drawn out of a vial into a syringe and administered in a short 15-minute infusion. This feature will facilitate use across the broad spectrum of care settings including the physician’s office, the infusion therapy clinical and the hospital, and represents a real convenience for the patient and better economics for clinicians and payors.

Second, TOCOSOL Paclitaxel is very well tolerated when administered by the short 15-minute infusion and does not require the use of steroid pre-meds. Clinically significant toxicities are not common and patients generally receive their full planned dose on schedule. Getting intended doses of any chemotherapy drug into cancer patients on schedule is a tough challenge, but an essential element of successful therapy.

Third, the observed response rates in our ongoing Phase 2 studies compare favorably with what has been reported for other Taxane products currently on the market, as well as those under development. We are particularly pleased that since the last update, physicians have reported a number of complete tumor responses in the Phase 2 study and this is obviously great for those patients and encouraging for us.

Finally, we believe that because our product uses and delivers unmodified Paclitaxel in a very stable form that the manufacturing costs and associated margins of TOCOSOL Paclitaxel will be an important competitive advantage.

Now, with that overview, I’d like turn the call over to Michael Stewart to provide you with a very exciting update on our Phase 2 clinical results.

Thanks Mike, it’s a pleasure to be with all of you again today to share the latest information from our ongoing Phase 2 clinical trials program. The clinical results that I’ll summarize were to have been presented at the American Association for Cancer Research (AACR) annual meeting in Toronto a couple of weeks ago.

However, as many of you know, that meeting was cancelled on short notice. So, we’ve been delayed two weeks in presenting the data publicly, but we’re pleased to be doing so today. The AACR annual meeting, by the way, has been rescheduled to July 11-14 in Washington, DC and we will present another clinical update then.

Enrollment in our Phase 2 clinical trials with TOCOSOL Paclitaxel for the second line treatment of non-small cell lung, ovarian, and bladder cancers has been robust during the past year since those studies were initiated. Based on the anti-tumor responses reported, including complete and partial responses in each study population, as Mike has noted, and on the overall safety demonstrated across all studies and dose levels, we’re pleased that the expanding data for TOCOSOL Paclitaxel show it to be well tolerated and active in these diseases.

As of March 21st, response evaluations were reported for 114 of 127 patients enrolled in the Phase 2 programs. As a reminder, to be evaluable for response a patient must have been treated for at least eight weeks and must have undergone a CT scan to compare post-treatment tumor size to pre-treatment images.

The Resist Criteria are used to assess antitumor response in our Phase 2 programs. Complete response is defined as no physical or radiographic evidence of remaining tumor confirmed on two CT scans at least four weeks apart, while partial response is defined as a reduction in the sum of the longest tumor dimensions of at least 30%, persisting for at least four weeks. That reduction is equivalent to the old measurement that used to be used, of a cross sectional area reduction of at least 50%.

In our non-small cell lung cancer study, which completed enrollment about two months ago, 39 of 43 enrolled patients have had response evaluated; eight (or 21%) have been reported as having objective responses, including one complete response and seven partial responses. Seventeen additional patients have been reported to have stable disease.

In the ovarian cancer study, 23 of 29 enrolled patients have been evaluated for antitumor efficacy. Six patients or 26% were reported as having objective responses, including one complete and five partial responses. Another six patients in the ovarian study were reported as having stable disease and that study is on track to reach it’s full enrollment by mid-year.

In the bladder cancer study, 24 of 27 patients are now evaluable. Seven objective responses have been reported, including two complete responses and five partial responses, for an overall rate of 29%.

We believe that these response rates are encouraging. When one considers published response rates for the use of Taxanes in second line treatment and particularly including literature reports of dose dense treatment with weekly schedules of taxol. We’re also seeing excellent tolerability of TOCOSOL Paclitaxel over multiple treatment cycles, evidenced by the fact that patients typically do not need doses reduced or delayed.

At the dose of 120mgs per square meter per week or 360mg per square meter over each three-week period, about 80% of doses are being given on time, at full dose. As Mike noted earlier, delivering chemotherapy as planned is critical to successful treatment.

In addition to the very good efficacy results, we also continue to be pleased with the relatively low rates of clinically important adverse events that are being observed in this Phase 2 program. Patients are being monitored closely for key types of adverse events such as peripheral neuropathy or transient reductions in blood cell counts. Grade 3 neuropathy has been observed rarely and no Grade 4 neuropathy has been reported. Indeed, most patients have not had any neurotoxicity.

Brief reductions in neutrophilic white blood cells are, of course, expected from treatment with Taxanes, but only 30% of the patients in this program have had had Grade 3 or 4 neutropenia and only 2 patients developed fever while their white cell counts were low.

Paclitaxel induced infusion reactions are seen with all Taxanes. They are sometimes called hypersensitivity reactions and typically involve pain, flushing, shortness of breath, or chest tightness. These are not to be confused with allergic reactions to [cremifor] [ph], which are very rare. In our studies, Paclitaxel induced infusion reactions have been observed infrequently and less than 1% of them were of Grade 3 severity. No Grade 4 infusion reactions have occurred. Again, this compares favorably with reported rates of infusion reactions upon administration of Taxol or taxotere.

It’s clear to us that TOCOSOL Paclitaxel is very well tolerated, given on a weekly schedule, by 15-minute infusions. Clinically significant toxicities are uncommon and most patients received full doses on the planned weekly schedule. The picture emerging from our clinical data is that TOCOSOL Paclitaxel is an innovative and efficacious reformulation of Paclitaxel. We believe it offers meaningful advantages to patients and physicians because of the simplicity of its administration compared to Taxol and the fact that treatment is not limited by side effects in most patients.

On a final note, the clinical results contained in the poster presentation that we prepared for the AACR meeting will be available on our web site later this week. That concludes the clinical update. Mike?

Thank you, Michael. As both Michael and I have said in our earlier comments, we continue to be very pleased with the performance of TOCOSOL Paclitaxel in the clinic. Based on this performance, we are understandably eager to get the product approved for use by physicians and patients. So, the questions we’ve asked ourselves and FDA, as clinical data have emerged from the Phase 2 program, are threefold.

First, in the initial registration of TOCOSOL Paclitaxel, can we accomplish sooner than would be expected with an NDA for a typical new molecular entity program? Second, if so, can this be accomplished in a way that preserves our opportunities to further differentiate the product following this initial approval? And finally can we pursue this aggressive initial registration strategy without sacrificing time on a traditional development program if our data does not turn out to support an accelerated filing?

I'm pleased to report that the answer to all three questions is yes. Based on productive discussions with FDA, we have defined a comprehensive regulatory strategy for TOCOSOL Paclitaxel that has the following tactical components.

The first component is based on getting TOCOSOL Paclitaxel to market as expeditiously as possible, based on it pharmacokinetic comparability to Taxol via 505b2 NDA filing. The second component is focused on getting TOCOSOL Paclitaxel approved for a new indication, thereby extending the use of Taxanes and further differentiating the product through an NDA. The third component is to initiate small comparative trials in one or more approved indications.

The data from these studies will support future sNDAs if the product is approved on a 505b2 basis. But it would also support the design of pivotal studies if the pharmacokinetic comparison does not support the 505b2 filing.

Now Michael’s going to fill you in on the details of the strategy in just a moment, but I want to emphasize that these components of the strategy are not mutually exclusive, nor are we trying to cut any corners. In fact, Michael will point out that we believe we have preserved the traditional filing route and we’ve given ourselves the upside of potentially an accelerated filing. In fact our intent, together with a partner is to pursue all options to get the product to market as quickly as possible and to maximum the differentiation of the product in the competitive space.

Now, Michael, if I could ask you to fill us in on the details, please.

Sure Mike. Thanks again. As Mike just indicated, on the basis of discussions with the FDA, we’ve reached agreement about a development strategy for TOCOSOL Paclitaxel to generate data that may result in an NDA submission one to two years earlier than originally anticipated. We have defined the elements of that strategy and clarified the results required to support each element.

Specifically, FDA’s oncology division have agreed that if we demonstrate pharmacokinetic comparability between the active amounts of Paclitaxel delivered for treatment by TOCOSOL Paclitaxel and Taxol and confirm the linkage between Paclitaxel pharmacokinetics and antitumor effects, we will need to do only one confirmatory clinical trial to assure that the clinical efficacy provided by TOCOSOL Paclitaxel is comparable to that for which Taxol has already been approved.

Further, the requirements for the single confirmatory efficacy trial, in terms of number patients required and endpoints to be achieved may be relatively limited if the pharmacokinetic comparability is robust. As with all drug development strategies, the successful outcome of this approach will be data driven, including clinical and non-clinical data.

We believe this agreement represents an excellent opportunity for producing data that could be submitted in an initial NDA in late 2005 or early 2006. In such an application, we would request claims and indications essentially similar to those approved for Taxol, with appropriate modifications to the label for the specific method of administration of TOCOSOL Paclitaxel and listings of our product’s safety profile.

Now that there is concurrence with FDA on the feasibility of this approach, we anticipate opening a clinical pharmacology study to compare TOCOSOL Paclitaxel and Taxol in the late summer or early fall of this year. That will position us to review the comparative pharmacokinetic and pharmacodynamic data with FDA and to finalize the design of the confirmatory efficacy trial. Pursuing this potentially timesaving approach does not detract from or interfere with the traditional product development model, as Mike inferred.

At the same time as we conduct the clinical pharmacology study, we will continue further clinical development in the indication for which we already see good results for TOCOSOL Paclitaxel. The data generated from those studies will provide additional support for an earlier NDA, as outlined, and could also be part of a larger traditional NDA program such as was envisioned in the original development plan.

We have not increased our risk by securing FDA agreement to a development plan that could lead to an earlier NDA submission. What we have confirmed with FDA is that there is potential opportunity to bring the advantages of TOCOSOL Paclitaxel to patients and physicians even sooner, thus enhancing the value of the product, the technology, and the Company.

Finally, as the same time as we aggressively pursue development of TOCOSOL Paclitaxel for the treatment of cancers where Taxol is already approved, our emerging clinical data indicate that TOCOSOL Paclitaxel is active in at least one disease for which Taxol is not approved, namely advanced bladder cancer. Indeed, no drug is currently approved in the US for the treatment of that disease.

Thus, we have a simultaneous opportunity to development TOCOSOL Paclitaxel for an unmet medical need, not limited to its comparison to Taxol. In this particular case, compelling clinical data would not need to demonstrate superiority or non-inferiority to an approved product. And once again, it may be possible to obtain a claim for TOCOSOL Paclitaxel sooner and at less cost than would be required by the traditional approach for developing a new product.

Our strategy is to pursue this comprehensive development program in order to obtain the broadest claims in the fastest time. We believe this regulatory strategy provides clear tactical development objectives and well-articulated pathways to both the initial registration of TOCOSOL Paclitaxel and to its subsequent differentiation as the Taxane of choice.

We’re genuinely excited about the excellent results that are being seen with TOCOSOL Paclitaxel and about the possibilities for bringing it to registration and commercial reality.

Mike, I’ll turn the floor back to you now.

Thanks Michael. I hope we’ve conveyed our enthusiasm about the progress with our clinical trials to date and the regulatory strategy for TOCOSOL Paclitaxel. Let me quickly summarize expected milestones with the product for the balance of this year.

First, we will continue to collect data from our ongoing Phase 2 studies with the goal of completing patient enrollment by the end of 2003. We look forward to providing another update on the results of these studies at the rescheduled AACR meeting in Washington, DC in July.

Second, to implement the regulatory strategy that Michael has detailed for you, we will initiate the clinical pharmacology study to show PK/PD comparability between TOCOSOL Paclitaxel and Taxol in the late summer or early fall.

And then finally, we’re completing a protocol to study TOCOSOL Paclitaxel in the indication where Taxol is not approved, namely advanced bladder cancer, and intend to initiate a Phase 2b study in this indication in the second half of this year.

As you can appreciate, we’ve updated prospective partners on both the clinical results with TOCOSOL Paclitaxel and the details of our discussions with FDA and the resulting regulatory strategy and of course, all of this under confidentiality. They share our enthusiasm and we remain optimistic that we can close a corporate partnership for TOCOSOL Paclitaxel in 2003.

We believe that this agreement will provide up front and milestone funding in the short-term and commercial success in the long-term. We also believe that the capabilities and resources of the partner will facilitate achievement of the aggressive regulatory milestones that we have outlined. As we reported on our last conference call, we have entered into collaborative discussions with a number of prospective partners and we are well on our way to securing an agreement.

Turning our attention briefly to our second cancer drug, TOCOSOL Camptothecin, I am pleased to say that we have positive communications with FDA about their requirements for proceeding with our first and manned study under the IND that was submitted late last year. FDA has clarified the issues and I’m pleased to say that we are back on track to initiate a Phase 1 clinical study during the second half of 2003, when financial resources permit.

Before concluding our prepared remarks, I’d like to take a few minutes to elaborate on the theme for our 2002 annual report and for those of you that have seen it, you know that theme is emergence.

Our efforts in 2002 and thus far in 2003 have focused on three objectives. Accelerating the clinical development of TOCOSOL Paclitaxel, defining a registration strategy for the product, and securing a corporate partner to fund the remaining development of the product and maximum its commercial potential.

As our progress on these three objectives continues to converge over the next several months, our vision, frankly, anticipates the emergence of a new and stronger Sonus, a Company with a promising cancer drug in late-stage clinical trials, a corporate partner to develop a commercialize that product. A second cancer drug in early stage clinical trials, a development pipeline with the potential to move one new drug candidate a year into clinical trials, and a strong balance sheet, all managed by a leading team focused on maximizing the value of the investments you’ve made in us.

This is the vision we’ve been working towards since we redefined this Company at the end of 2000 and we sincerely appreciate the confidence and support of those of you who have invested in us along the way. We believe that the people and programs are in place to deliver further value and in the next several months.

This completes our prepared remarks and we’d be pleased to answer any questions that you may have. Leslie, could you please open the line for the first question?

Yes sir. At this time, I would like to remind everyone, in order to ask a question, please press star and then the number 1 on your telephone keypad. We’ll pause for just a moment to compile the Q&A roster.

Your first question comes from Matt Kaplan.

Hi guys.

Hi Matt.

Congratulations on ironing out a strategy with the FDA and also the positive update in clinical data for TOCOSOL Paclitaxel.

Thank you.

Just a couple of quick questions, maybe two or three, with respect to the partnership. Could you give some detail of what you’re thinking there in terms of structure and timing?

And then, with respect to the regulatory strategy, Mike Stewart, could you give some color with respect to -- give some more detail in terms of the strategy and the trials needed to be executed with respect to the one confirmatory clinical trial? Number of patients and endpoints that you would look to and how that trial would be designed?

Yes, Matt thanks. We will be happy to answer both questions. Let me start with the partnership question. You know I believe in the last conference call I indicated that I believe that the discussions, in fact the three elements would converge, a clinical trial update, the discussions with FDA, and the resulting registration strategy for the product and the partnership. And I indicated my belief that the registration strategy would impact the value and the timing of the value for Sonus shareholders of that partnership and in fact, I believe that will be the case.

So, without going into details on what I think the specifics of those terms will be I would say that I would expect a significant up front fee that could be splint between the license fee and equity. I would expect milestone payments tied to the detailed clinical development plan that would support the strategy that Michael has outlined, and the tactics from that strategy as agreed with that partner. And I would expect a royalty rate that would be in a pretty aggressive range.

Now, in addition to that, we would expect the partner to pay for the clinical development costs that remain on the product and to pay the remaining cost of scaling and validating the manufacturing process, which if you’ll recall we’ve indicated are in the neighborhood of less than $2m. So, it’s not a lot of money, but it’s real money and that’s what we’d expect the deal to look like.

In terms of timing, you know I continue to be confident that we’ll get it done this year and if not, by the middle of this year. We certainly are working hard on it and we think now, that with the clinical update and the clarity on the registration strategy, the momentum should be there to get something done.

Great.

Michael?

Yeah, on the question about the confirmatory efficacy study, again, this is something that we’ve certainly looked at a variety of designs, endpoints, etc. We had done all of that as we embarked on this strategy and before we ever went to talk to the FDA. But the final choice of the study design and the endpoints and the number of patients is going to be very much dependent on how clear the answers are from the thing that precedes that.

Uh-huh.

Which is the comparative clinical pharmacology of the two products. So, as I mentioned, it’s going to be data driven. The final design will be a comparative design between the two products, but it might be something that is certainly very different from what would normally be required with the traditional NME approach where there must be two well-controlled randomized trials. And I think that the final design on that, the final issues are going to be determined once we get the results of the first part and that’s where we’re focused right now.

Okay and then just one other quick question. Can you help us work through kind of an apples-to-apples comparison of the side effect profile that you’re seeing here with respect to Taxol on a weekly basis? And the side effects profile that you’re getting with respect to neuropathy and neutropenia with TOCOSOL Paclitaxel?

Well, Matt, I’d love to give you a simple answer to that, but as you know from reviewing the pretty extensive literature on weekly Taxol, it’s hard to dig out the data of similar quality and similar completeness as what we’ve generated for TOCOSOL Paclitaxel.

There are many reports in the literature of Phase 1 and 2 experiences with Taxol, but again, those are papers that were prepared for publication and so, some of them have differing degrees of completeness. When we look at all of that, we certainly think that -- and look at the completeness of the data set that we have, we actually are very pleased.

Uh-huh.

I hesitate to draw comparisons, because we don’t yet have comparative data, in the sense that the FDA would like us to be talking about, so I think that we’re looking very good.

And when you do the PK/PD trial, is that going to be on a weekly or an every three weeks basis?

Well, the comparison that we’re looking at there is one against the approved regimen of Taxol, which is 175mg per square meter, given every three weeks. That’s the commonest of the approved regimens for Taxol. And we’re going to be looking at a similar dosage and a similar dosing frequency, but obviously the big difference is that our product is going to be given over 15-minute infusions, compared to a 3-hour infusion for Taxol.

Uh-huh.

Matt, on the question of the comparison to Taxol, I might add the following. And it’s to repeat that one of the most encouraging things for us from the study is the tolerability of the percent at 120mg per square meter weekly, where 80% of the doses are delivered at full strength and on schedule.

What’s encouraging about that, and I will be talking anecdotally here and ask Michael to fill in any blanks, is that we know on a weekly basis that Taxol is typically administered in the 80-100mg per square meter range. And that the big issue, of course, becomes comparability in either the reduction of therapy because patients can’t tolerate the full dose, or the interruption of therapy

Now, it remains to be seen whether the tolerability that is reflected in most patients receiving planned doses on schedule results in better efficacy or not. But keep in mind that the reason for going to weekly dosing with Taxol was the theory that delivering a higher dose density over three weeks would result in better efficacy. And you know there are at least some published papers out there, which claim that to be the case.

So when you put all of that together, we are very encouraged that this could well represent a significant basis for differentiation of the product.

Great. Thanks guys.

Your next question comes from Shakur Basu [ph].

Thank you. Good afternoon Mike and Mike, I was wondering if I could just clarify something. The PK/PD equivalence would be - what? - plus or minus 10% on the C maximum Siemens? Is that right or are there some other parameters that we need to be focusing on as well?

I think that the overall issue and I don’t want to get us derailed on a detailed discussion of clinical pharmacokinetics. The C Max values are going to be different, because the infusion durations are different.

Right.

If you gave Taxol by one-hour infusions versus three-hour, you’d see very different C Max.’s. What we have to look at is the overall extent of exposure on the full pharmacokinetic profile and how that results in predictable and reproducible pharmacologic effects.

So add in to the curve what the C Max Seimen only?

Well, I think that we and the FDA will look at all of the various pharmacokinetic parameter values and determine to what extent one can have comfort that the full disposition of Paclitaxel, delivered by either product, is comparable.

Okay and a quick follow up. The equivalence trials that you’re going to be doing, in the event that the PK/PD trials are considered comparable, to show non-inferiority, did you say two independent randomized studies?

No.

Okay.

No. Precisely the issue that we were able to secure concurrence with FDA was that with a strong clinical pharmacology and frankly, it also involves strong non-clinical pharmacology packages as well, that we would need to do only a single confirmatory trial. And that has to do with the issue of simply confirming what would already be presumed from comparable pharmacokinetic and PK/PD relationships. So, one would confirm efficacy in the minimum number of patients required. It’s simply an issue of getting some multiple cycle experience.

I see. You don’t want to show equivalence in survival in, say breast cancer or ovarian cancer, in a second line regimen, where with Taxol [inaudible] a certain efficacy rate?

That’s the sort of standard that one would need to meet by the traditional NME approach.

Right.

And one of the reasons we’re very pleased about the discussion and the agreement we’ve had with FDA is that they can rely on their previous findings of the safety and effectiveness of Taxol and not need to reproduce anything unnecessarily for the approval of this product.

I understand. Thank you very much.

Now, at the same time, I want to reiterate something that Michael said earlier in the call. And that is that while we have proposed in great level of detail the specifics for that confirmatory trial, those specifics will have to be revisited with FDA when we have the PK/PD data.

Your next question comes from Vincent Ayta [ph].

Hi Michael, congratulations on a good quarter and successfully walking us through FDA.

Hi Vin.

Hi.

Thank you.

The question I had was about the 2005 timeline that you had given for the possibility of a filing here. Given there’s a couple of different routes to approvability, I’m wondering what went into your assumptions of an ’05 filing. Was that the timeline for 505b2 or was that the timeline for the possible accelerated bladder filing? What is your guy’s thinking on that?

Well, it is most clearly the timeline for a 505b2 registration where the PK/PD data is robust and the confirmatory trial that Michael has described is relatively straightforward.

Okay and then so what would be the timing on it if the PK trial, by when would we see whether that would be viable and a confirmatory trial would be started?

Well, we’re looking at - if in fact you’re still talking about the 505b2, I think what we’re looking at is that, again, if the clin-pharm package produces the kind of strong results that we’re hoping that it may do. We would be in a position to start the confirmatory trial maybe a little more than a year from now. It depends on how quickly we can get there and how long it’s going to take us to generate the results and discuss them with the FDA.

But I think that what we’re looking at is that if that confirmatory trial is straightforward, that we should be able to accomplish it expeditiously and have it reviewed expeditiously. I guess just to remind, the previous expectation for the NME passing, when this product entered the clinic, was looking at a filing sometime in 2006 or 2007. So, that’s why we think we have an opportunity to do something that might move faster with the initial cycle.

Okay, thank you.

Thanks, Vin.

Again, at this time, if you would like to ask a question, please press star and then the number one. We will pause for just one minute. And you do have a follow up from Shakur Basu [ph].

Yeah, hi. Would you consider doing all three strategies all at the same time in parallel as you progress through the PK/PD studies A and then B? Would you then start the confirmatory non-inferiority trials immediately and also do the third trial, the superiority trial, in the event that the first strategy didn’t work for whatever reason?

I’m sorry, I’m confused about your terms, non-inferiority and superiority trials.

Well, the confirmatory trial, the non-inferiority trial would be in the event of the PD/PK study would be acceptable to the FDA.

Right.

That trial you’d mentioned you’d probably start a year from now.

Right and that is a confirmatory trial, but the design may be very different from what people typically refer to when they’re discussing non-inferiority studies.

Now why would that be any different, a randomized trial in breast cancer might take several hundred patients, I suspect, and obviously the confidence interval so wide. You’ve seen certain studies in the past and so forth. Is the FDA -- I’m just trying to determine why this trial would take a small number of patients. Are you picking certain disease groups that are --?

No. The issue is that the FDA, under 505b2 applications, the agency relies on a previous finding of safety and efficacy for the known drug.

Right.

In this case, Paclitaxel formulated as Taxol. And so the standard, if you’re able to show very close correspondence between the innovative formulation and the previous formulation, then it’s a very different kind of approval path from what’s required for standard NME that is comparing two very different drugs.

Okay, I understand. In terms of the way you’ll be doing these things, you’ll be doing them in sequence? So, first the PK/PD and then a year from now start the confirmatory trials and then, if that doesn’t work, do the superiority trial? Or would you do them all in parallel together in the event that the first strategy didn’t work?

If I understand the question, Shakur, it would be different. On the 505b2 path, comparative PK/PD study and then the confirmatory study would be in sequence.

Okay.

However, in parallel or as closely in parallel as resource permit, we would intend to initiate the PK/PD comparatory trial, the 2b trial on a new indication and a 2b trial looking at a head-to-head comparison in an approved indication.

Okay. All in parallel?

As close as resources permit.

Okay, so this is part of the negotiation with your partner, obviously, right?

Well that’s correct. You know again, we’re going to be asking them to pay for this and so one would expect that they’d want a significant say in the exact timing and design of the trials.

Can you estimate as to how much the clinical cost might be to embark on the PK/PD, the non-inferiority, and the second strategy in parallel?

Rick?

Yeah, hi. If you look at just the 505b2, as Michael has outlined and take a two to three year window, you might be looking at somewhere in the neighborhood of $5-10m.

Okay.

So a very low amount relative to a standard, traditional NME development programs.

Okay.

And Shakur, I want to back up and clarify something I just told you, that Michael has rightly pointed out to me. What we would intend to pursue in parallel, resource permitting, are number one the PK/PD comparative study. That’s the first step in the 505b2 strategy.

Right.

A 2b study in a non-approved indication for Taxol, namely bladder and by definition a 2b study is a single arm study.

Right.

And in addition, is really not a good comparator. It’s not an approved drug. And third, a 2b study in an approved indication for Taxol, namely or most likely at this point ovarian, although that is the one that is probably most open to discussion and agreement and therefore finalization with a partner.

I understand. Thank you very much for that clarification.

At this time there are no further questions.

Well, thank you Leslie. If there are no further questions, again, I want to thank you for joining us today. I really believe that we are entering into a sweet spot here over the remaining months in 2003. Where the elements that we first put in place in redefining the Company a little over two years ago are about to converge on a value proposition that we think is significantly greater than our approximately $35m market cap today. And we always appreciate your support and we’ll look forward to updating you as we continue to make progress.

That concludes our call. 1