Achieve Life Sciences Inc (ACHV) 2008 Q4 法說會逐字稿

Good day, and welcome to the OncoGenex fourth quarter 2008 conference call. As a reminder, today's conference is being recorded.

At this time, I would like to turn the conference over to Jason Spark of Porter Novelli Life Sciences. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining us today for OncoGenex Pharmaceuticals fourth quarter and fiscal year 2008 conference call. The Company issued a press release today containing detailed results for the fourth quarter and fiscal year 2008, as well as an outlook for 2009. This release is available on the Investor Relation page of the Company's website at www.OncoGenex.com.

During today's conference call, we will be using a slide presentation, which provides details in the clinical data driving our regulatory strategy for market approval of OGX-011. The slide presentation for today's call is available for download on the Company's website, also the Investor Relations page under the Events and Presentations tab. As a reminder, this call is also being recorded and broadcast live on OncoGenex's website, a replay of the Webcast will be available on the website for 90 days.

Before we begin, I would like to remind everyone 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 materially from our predictions and estimates, as a result of various risk factors, including those identified in our Annual Report on Form 10-K for 2008 filed earlier today. A copy of which can be accessed on our website.

I will now turn the call over to Scott Cormack, President and CEO, of OncoGenex.

Thank you, Jason. Good afternoon everyone, and thank you all for joining us.

On the call with me today are members of the OncoGenex Senior Management Team, including Stephen Anderson, our Chief Financial Officer, and Dr. Cindy Jacobs, our Executive Vice President and Chief Medical Officer. 2008 was a tremendously active year for us. We announced data from our Phase II clinical trials, and began to prepare for the final stages of clinical development of our lead product candidate OGX-011 for the treatment of cancer, and to position for long term growth of the Company.

As the data from Phase II studies of OGX-011 have matured over the past year, we are getting a clearer picture of the potential clinical utility for OGX-011, particularly regarding the benefits of overall survival and pain palliation, for the treatment of castrate resistant prostate cancer, or CRPC. In December 2008 we released survival data from our randomized Phase II study, showing that patients with CRPC who received docetaxel as first-line chemotherapy in combination with OGX-011, had immediate survival duration, that was 10.6 months longer than patients who received only docetaxel. We will discuss this trial in more detail, and the results from our other Phase II trials in a moment.

Slide 3 of the slide presentation shows you the content for today's call. First we will update on our current cash position and financial results for the fourth quarter and fiscal year 2008. Then, summarize the results of our Phase II clinical trials for OGX-011, present an update on our clinical development strategy for OGX-011 marketing approval, provide an update on our other product candidates, which are currently under clinical investigation, and review the milestones that we have set out to achieve for 2009. When we conclude the formal part of our presentation, Steve, Cindy and I will respond to your questions.

Now I will turn the call over to our Chief Financial Officer, Steve Anderson, to review our financial results for the fourth quarter and fiscal year 2008. Steve?

Thank you, Scott.

Before I present the financial results on Slide 4, I would like to remind listeners that our consolidated results reflect the operations of OncoGenex Technologies prior to the August 21, 2008 reverse takeover of Sonus Pharmaceuticals, and the consolidated results of OncoGenex Pharmaceuticals from August 21, 2008 onwards. This is consistent with Generally Accepted Accounting Principles for a reverse takeover.

For the fourth quarter of 2008, we reported a loss attributable to common shareholders of 5.0 million, compared with 3.0 million in the fourth quarter of 2007. The increased loss in Q4 of 2008 was primarily due to increased R&D expenses, resulting from manufacturing costs for OGX-427 to supply our ongoing Phase I trial, and increase G&A expenses, resulting from higher employee costs, and increased costs associated with operating as a public company.

These increases were partly offset by other income in Q4 of 2008, resulting from gains on the sale of excess equipment, compared to other expenses in Q4 of 2007, resulting from interest on convertible debentures, foreign exchange losses, and preferred share accretion expense. The interest in accretion did not repeat in Q4 of 2008, as all of the debentures and preferred shares were eliminated, as a result of the reverse takeover.

For the year ending December 31, 2008, we reported a loss attributable to common shareholders of 6.2 million, compared to an 11.5 million loss for the year ending in December 2007. The decreased loss in 2008 was primarily due to the impact of an extraordinary gain on the reverse takeover, a reversal of tax expense associated with the change in capital structure of OncoGenex Technologies, and lower preferred share accretion from the elimination of the preferred shares. These reductions were partly offset by increased Q4 manufacturing costs for OGX-427, that I discussed earlier.

We finished 2008 with $12.4 million in cash, cash equivalents, and short-term investments, compared to 5.1 million at the end of 2007. We expect that our operating expenses for fiscal 2009 will remain consistent with those of 2008, and believe our resources are sufficient to fund our operations through February 2010, and achieve the objectives that Scott will address.

That completes our financial review, and now I will turn the call back to Scott.

Thank you, Steve. We are currently evaluating three product candidates in clinical trials. These products are OGX-011, OGX-427, and SN2310.

Slide 5 is a summary overview of our most advanced product, OGX-011. OGX-011 is designed to reduce the production of clusterin, a protein that is associated with cancer treatment resistance. By knocking down clusterin, we believe we can facilitate tumor cell death. The mechanism of action of OGX-011 is well described in the scientific literature, and is only highlighted in this slide.

Clusterin is expressed in many human tumors, and is frequently overproduced with patients are treated with standard anti-cancer therapies, including chemotherapy, radiation, or hormone ablation therapy. When clusterin is overproduced, tumors are resistant to a very broad array of treatment strategies.

In the scientific literature, you will find that clusterin is associated with treatment resistance in multiple cancers, including prostate, non-small cell lung, breast, ovarian, and bladder cancer, as well as other cancers. An extensive pre-clinical data package using multiple tumor models, supports the clinical use of OGX-011 in combination with anti-cancer therapies, to improve their activity. OGX-011 has been evaluated in five Phase II clinical trials. Enrollment is now complete, and interim data is available for each of these trials.

I will now have Dr. Cindy Jacobs summarize results of our Phase II for OGX-011. Cindy.

Thank you, Scott. I will now present data from three of our Phase II clinical trials evaluating OGX-011, since these data are providing guidance on our clinical development strategy for product marketing approval.

The first Phase II trial that I will be discussing is outlined on Slide 6. This study evaluated OGX-011 in combination with first-line chemotherapy, in patients with hormone refractory prostate cancer, now termed castrate resistant prostate cancer. In December 2008 we announced the survival results from this trial, with a longer survival benefit observed in the OGX-011 treatment group.

This was a randomized control trial of patients treated with only docetaxel versus patients treated with docetaxel and OGX-011. Docetaxel and Prednisone has become the standard of care for these patients requiring first-line chemotherapy. Survival is one of the secondary end points of this study, thus all patients were followed to determine survival duration.

On Slide 7 we have provided baseline patient characteristics by treatment group for this trial, to demonstrate that the treatment groups were well balanced with regards to baseline disease characteristics, thus we believe the survival benefit observed is not due to any imbalance in baseline characteristics between the treatment groups.

Slide 8, in the first row, shows the median survival reported in December by treatment group. The median survival for the treatment group that received docetaxel in combination with OGX-011 was 27.5 months, versus 16.9 months for the control group that received docetaxel only. As we indicated in our press release on December 3, 2008, a few of the patients in the OGX-011 treatment group have less than 27.5 months of follow-up, so the median survival for that group is not yet mature.

To provide a worst-case scenario, we calculated what the median survival would be if all patients in the OGX-011 group passed away as of their last date of follow-up. This analysis determined that the median survival for patients treated with OGX-011 and docetaxel could not be less than 22.7 months, which would still result in a median survival benefit of 5.8 months. By comparison, docetaxel was approved for first-line treatment in CRPC, based on a 2.4 month survival advantage over mitoxantrone.

Other measures also indicate an advantage for patients receiving OGX-011, first note the increased number of treatment cycles with the OGX-011 combination, since patients are treated until disease progression, unless otherwise withdrawn from therapy, the increase in the number of treatment cycles, suggests that the combination is well tolerated, and patients have delayed disease progression.

Also note the difference between the treatment groups and the percentage of patients who discontinued early during the first three months of therapy, previously published studies similarly show a high portion of patients discontinue therapy early, usually because of disease progression. However, the OGX-011 treatment group had only one patient who discontinued early representing the 2.5%.

Finally, note on this slide the decrease in progressive measurable disease, or PSA progression is best response, with a corresponding increase in stable disease, in those patients treated with docetaxel plus OGX-011. These data support that OGX-011 in combination with docetaxel decreased treatment failure.

Slide 9 shows the reasons for treatment discontinuation, more than twice as many patients treated with docetaxel alone, discontinued for death or reasons associated with disease progression, compared to patients treated with OGX-011 and docetaxel. Note that the 17 versus 8 patients are bolded in the table. Although more patients in the OGX-011 group discontinued due to adverse events, it should be noted that 7 of the 9 patients discontinued within or after Cycle 8 of their treatment, so this is not due to any issue of early toxicity.

Slide 10 shows the knockdown of serum clusterin levels by OGX-011 treatment. The serum clusterin level for the control patients treated with only docetaxel are represented in red. As you can see there is an increase in docetaxel clusterin during the first cycle of the treatment period, in contrast, in patients treated with OGX-011 and docetaxel represented in blue, there is a significant decrease of serum clusterin. These results are evidence that OGX-011 is affecting it's target, clusterin, as early as the first cycle of treatment. After the first cycle only infrequent samples for serum clusterin levels were obtained per the protocol, and therefore no other correlations can be made after the first cycle.

Slide 11 shows selected adverse events. The most common adverse events thought to be related to OGX-011 were increased frequencies and mild neuropathy, rigor, or chills, fever, diarrhea, rash, and sweating. The only increase in moderate of Grade 3 adverse events, was in lymphopenia, lymphopenia is a decrease in lymphocytes, a type of white blood cell involved in the body's defense against infections.

To-date this has been a laboratory finding, with no clinical evidence of a problem with infections. An abstract featuring more complete data from this study has been selected for oral presentation at the American Society of Clinical Oncology 2009 Annual Meeting, which will be held between May 29 and June 2.

I will now review the results from our trial in patients with prostate cancer requiring second line chemotherapy. This is a different patient population than the patients in the trial I just summarized. As shown in Slide 12, we enrolled patients who had already received first-line docetaxel, and who had disease progression while on, or within six months of first-line treatment.

Patients in this study were randomized to receive second line chemotherapy, consisting of either mitoxantrone or docetaxel in combination with OGX-011. Patients were followed through to disease progression and ultimately to death, in order to determine survival duration. After completing the randomized study, 25 additional patients were allowed to be treated with docetaxel plus OGX-011, based on the encouraging results in this patient group.

Slide 13 shows the baseline patient characteristics for this study population. The first two columns represent the randomized patients on the study, with 22 patients receiving mitoxantrone plus OGX-011, and the 20 patients receiving docetaxel plus OGX-011. The third column represents all of the patients treated with docetaxel plus OGX-011, and includes the 25 additional patients who are enrolled in the docetaxel plus OGX-011 group, after randomization was completed.

While I do not intend to review all of the baseline characteristics on this slide, I draw your attention to the bolded row showing the median time from end of first-line docetaxel treatment to disease progression. Most of the patients on this study had progressed while on or within two months after completing first-line treatment. This type of patient population is generally viewed by physicians as having possible docetaxel resistance, and a poor prognosis.

Slide 14 shows our survival data compared to two published studies. On the left side of the table are the survival results from those patients treated with OGX-011 and docetaxel in our study. The patients treated on the randomized portion of the study with OGX-011 and docetaxel, have a median survival of 15.8 months, with a median follow-up of 26 months. All of the 45 patients treated with OGX-011 and docetaxel, currently have a median survival of 13 months, with a follow-up of 18 months. To the right of these columns are the median survival data from two studies that used docetaxel and second-line chemotherapy in prostate cancer patients.

Our median survival of patients treated with OGX-011 and docetaxel, compares very favorably to the two published studies that reported median survival durations of approximately 10 months. As we have seen in our clinical trial treating patients with first-line chemotherapy, patients in our study treated with OGX-011 and docetaxel receive more cycles of chemotherapy by comparison to the two publicly available studies, again suggesting the combination with OGX-011 is well-tolerated, and the disease progression appears to be delayed.

On the right side of the table, you can see that we observed similar trends in those patients treated with OGX-011 and mitoxantrone. In these patients we also saw an increase in survival duration, and an increase in the number of chemotherapy treatment cycles, as compared to the other publicly available study using mitoxantrone alone and second-line chemotherapy.

Slide 15 shows the duration of pain palliation for the 27 patients who entered the study, with prostate cancer related pain, and were treated with OGX-011 and in combination with docetaxel in second-line chemotherapy. As can be seen from this graph, 12 of the 27 patients, or 44% of patients experienced pain palliation for three months or longer.

These data compare favorably, even when compared to pain responses observed after first-line chemotherapy. This is clinically relevant, because patients receiving second-line treatment have more advanced disease, and are thought to have more profound or resistant prostate cancer related pain.

The data on Slide 16 represents an analysis of the 67 patients treated on this Phase II study, to determine whether there is a long term survival benefit correlated to reducing serum clusterin levels during second-line chemotherapy with OGX-011 treatment. The graph shows that patients who had low average serum clusterin levels during OGX-011 treatment, had a median survival of 15.2 months, in contrast, patients who had high average serum clusterin levels had only 8.5 months of survival. As you can see, these data are highly significant. And give us further encouragement that reducing clusterin levels can improve survival.

Similar data has been generated in our clinical trial with patients with non-small cell lung cancer, treated with first-line chemotherapy plus OGX-011. Seeing this type of trend in two separate clinical trials and in patients with different cancers, further strengthens our confidence in moving forward to Phase III clinical trials.

The graph shown in Slide 17 is an example of data, which we believe provides other evidence that OGX-011 may restore docetaxel sensitivity in some patients with prostate cancer. This graph is a plot of one patients prostate-specific antigen values through their first-line and second-line chemotherapy treatments. For reference, prostate-specific antigen, or PSA, is a blood test that is one of the many tools that may be used by physicians, to help determine whether a patient may be experiencing treatment and response or disease progression.

As you can see from the graph, this patient had increasing PSA levels before being treated with docetaxel as first-line treatment. Upon treatment with first-line docetaxel, you can see that the patient's PSA values decreased. Unfortunately while still being treated with docetaxel, this patient's PSA began to escalate. This is indicative of disease progression.

The patient was then enrolled in our clinical trial, and was retreated with docetaxel in combination with OGX-011. As you can see, this patient had a very deep and durable PSA decline to almost zero. We believe these data also provide evidence that OGX-011 potentially restores docetaxel sensitivity.

The importance of this, is that there are very few therapies that are available for the treatment of advanced prostate cancer. If we could improve the activity of docetaxel, or make docetaxel continue to be effective for a longer period of time, we believe this could be a meaningful benefit in the management of this disease.

Referring to Slide 18, I will now very briefly review our clinical trial evaluating OGX-011 in combination with first-line chemotherapy in patients with non-small cell lung cancer. Patients enrolled in this trial receive treatment with gemcitabine plus a platinum regimen, in combination with OGX-011 for up to six cycles, or until disease progression, or unacceptable toxicity. All patients are followed for survival.

As shown in Slide 19, although the patients enrolled in this study were receiving chemotherapy for the first time, they had an advanced form of the disease, in fact 82% of the patients had Stage 4 disease, which is an extremely advanced stage of cancer. Also 16% of patients had squamous cell carcinoma, a type of non-small cell lung cancer that is well-known to be associated with short survival duration. Similarly to our prostate cancer studies, the survival duration data in this study on Slide 20 is longer than expected. Since the median follow-up for this study is 33 months, the data presented on this slide is mature data.

The median survival results of 14.1 months in our study, compares very favorably to the survival duration in published studies using the same chemotherapy combination without OGX-011, where survival duration has been reported to be between 8 and 10.8 months. Last month we updated the 2-year survival rate for this trial, at two years 30% of these patients remain alive. Our survival results are better than expected for this patient population, because of their advanced disease.

In conclusion, we believe that the pre-clinical and clinical data generated to date, support the combination treatment with OGX-011 can improve the activity of chemotherapy in both CRPC and non-small cell lung cancer indications. We will initially be focusing our resources on CRPC. The end points of survival and pain palliation from our Phase II studies in patients with prostate cancer, directly translate into the primary end points of our Phase III development plans. We believe these are the only critical and relevant primary end points for Phase III trials in these patients, and for ultimately obtaining our market approval.

I will now review FDA highlights for OGX-011 in 2008 referenced in Slide 21. We have reached an agreement with the FDA on the design of a Phase III trial via the Special Protocol Assessment process. This Phase III trial is a randomized control trial, evaluating whether OGX-011 provides a survival benefit, when administered in combination with second-line chemotherapy to men with CRPC.

In the FDA's response to our Phase III trial, the FDA stated that they agreed with the design and planned analysis submitted by OncoGenex, and that the study design adequately addressed the objectives necessary to support a regulatory submission. In August, OncoGenex received fast track designation from the FDA for our development of OGX-011 in combination with docetaxel for progressive metastatic prostate cancer. Fast track designation was granted on the basis that OGX-011 may provide a significant improvement, in the treatment for the serious or life threatening disease.

The benefits from fast track designation have already been evident. We have observed prompt action from the FDA in response to our request for meetings, and a thorough review of another possible Phase III trial, evaluating durable pain palliation as the primary end point. Both in a meeting and in a response, the FDA agreed that durable pain palliation is an acceptable and desirable study end point to support market approval for OGX-011.

In addition, the FDA provided detailed guidance on the protocol that we submitted, including recommendations on other study end points, the appropriate patient population, entry criteria, and issues related to study conduct. We have revised the protocol based on their recommendations, and have recently submitted this protocol for a Special Protocol Assessment with the FDA.

I will now review our plans on Slide 22, on how we intend to move OGX-011 forward into future clinical trials, and towards potential market approval. Our clinical development strategy is to obtain an indication for OGX-011 in combination with docetaxel for the treatment of metastatic CRPC. We have designed three possible trials to evaluate the clinical benefit of OGX-011 and CRPC. We believe that two of the three studies listed on Slide 22 will be required for initial product approval.

The three possible Phase III trials are first, a survival benefit with OGX-011 in combination with first-line docetaxel treatment, second a survival benefit with OGX-011 in combination with docetaxel retreatment and second-line chemotherapy, and third, an increased pain palliation benefit with OGX-011 in combination with docetaxel retreatment and second-line chemotherapy. We plan to discuss with the FDA the proposed Phase III trial evaluating first-line docetaxel with OGX-011, and a strategy of combining this first-line trial with one of the second-line Phase III trials for our initial new drug application for OGX-011.

The Phase III trial evaluating first line docetaxel in combination with OGX-011, would be similar in design to the Phase II study, which is currently showing a 10.6 month survival benefit. This protocol has been drafted and we anticipate that this study will enroll approximately 800 patients, though file determination and sample size will be dependent upon discussions with our advisors, the FDA, and for the statistical analysis.

Determination of which of the two second-line Phase III studies would be conducted in addition to this trial, is dependent upon our discussions with the FDA. As mentioned we have already reached an agreement with the FDA on a Phase III trial evaluating the survival benefit for OGX-011 in combination with second-line chemotherapy, and are currently in the process of reaching an agreement with the FDA, on the design of another Phase III trial evaluating a pain palliation benefit for OGX-011. Initiation of our Phase III trials is also subject to availability of additional capital.

I would like to now turn it back to Scott, who will continue to update you on our other two product candidates. Scott.

Thank you, Cindy. I will now summarize our status for OGX-427 and SN2310, two of our other product candidates in clinical development.

Slide 23 summarizes the status of OGX-427, which is another product candidate being developed for cancer treatment resistance. OGX-427 acts by blocking the production of a specific protein, Hsp27. Increased production of Hsp27 has been observed in many cancer cell lines, and promotes survival of tumor cells by a number of pathways. Treatment with OGX-427 in pre-clinical models has been shown to inhibit production of Hsp27, and decrease tumor cell survival, as well as leading to increased sensitivity of tumor cells to chemotherapy. OGX-427 is currently being evaluated for safety in Phase I trial.

The safety profile is first being assessed when OGX-427 is administered alone, and then in combination with docetaxel. We have completed the monotherapy portion of this trial, and we are encouraged that the maximum tolerated dose, or MTD, for OGX-427 as monotherapy was not reached, even at the highest dose.

We are currently evaluating the safety of OGX-427 in combination with chemotherapy. An abstract providing more complete data from this study has been selected for an oral presentation at the American Society of Clinical Oncology 2009 Annual Meeting. As will be discussed shortly in our review of our 2009 outlook, we are intending to initiate an investigator sponsored trial, to further investigate OGX-427 in bladder cancer patients.

Moving now to SN2310 on Slide 24. We previously announced that the Phase I trial is complete, and we have defined the maximum tolerated dose on the occurrence of neutropenia. Based on advisory input, it has been recommended to also perform an abbreviated Phase I study, to determine the MTD in patients who have had less prior chemotherapy.

OncoGenex also achieved a number of corporate milestones in 2008, two of which I would like to briefly mention. OncoGenex and Isis amended the development agreement for OGX-011, providing OncoGenex with increased economic interest in OGX-011, and increased flexibility to further develop this product candidate.

In August, an exclusive in-licensing agreement was signed with Bayer Healthcare, for the development of a family of compounds, known as caspase activators, which are presently in pre-clinical developments. Caspase proteases have essential roles in programmed cell death, and therefore they offer the potential for the development of therapies in the treatment of various cancers. This program is well-aligned with our interest in therapeutics and target mechanisms, involved in the programmed cell death of tumor cells.

Before concluding our prepared remarks and opening the conference call up to questions, I want to provide guidance on our key objectives for 2009, as shown on Slide 25. At ASCO during May 29 to June 2 this year, we expect to report on data from two studies. First, the final survival data and additional results from the randomized Phase II trial evaluating first-line docetaxel with OGX-011 in CRPC.

And second, the data from our Phase I clinical trial evaluating OGX-427, as a monotherapy in patients with solid tumors. In the second quarter we expect to reach a Special Protocol Assessment agreement with the FDA, on the design of a second Phase III trial evaluating OGX-011 for durable pain palliation in patients with CRPC. In the third quarter we expect to discuss with the FDA a possible Phase III trial evaluating first line docetaxel with and without OGX-011, and the strategy of combining this first-line trial with one of the second-line trials for an initial NDA in patients with CRPC.

In addition we believe that the consistent and mature results from across our completed Phase II trials for OGX-011 has the Company well-positioned to secure a development commercialization partnership for OGX-011. And in the second quarter we expect to initiate an investigator sponsored Phase I clinical trial evaluating OGX-427 in patients with bladder cancer.

In summary, we are very pleased with the clinical and business objectives we have achieved during the fourth quarter, and for fiscal year 2008. We believe that the clinical and regulatory objectives achieved, and those we intend to achieve in the near term, may increase the interest that potential partners will have in our product candidates, due to decreased clinical and regulatory risk. That concludes our formal comments.

With that, I would now like to open up the call for questions. Operator?

(Operator Instructions). We will go first to Mark Monane with Needham & Company.

Hi, good afternoon and thank you for reviewing the results with us and thanks for the slides.

Thanks Mark.

I have a couple of questions. You are measuring serum clusterin levels. Could you refresh our memory please, and tell us what you think the relationship is between the serum levels, and the levels that you think are actually going on in the tissue?

Well, first of all I don't think we can say what is functionally going on in the serum, versus what is in the tissue. With our Phase I study we know in the tissue, that the dose that we are giving OGX-011 we are getting at least 92% decrease in messenger RNA expression of clusterin. Now how that relates to serum clusterin in our Phase I study, we saw up to about a 30% decrease in serum clusterin, so we know that the decrease in tissues is far greater than what we are seeing in the serum.

That is helpful. And in terms of a very popular biomarker, recently in the literature is circulating tumor cells. Did you look at that as part of this trial and are you able to also correlate it with clusterin levels, or other outcomes?

Yes, hi, Mark. Good question, with the randomized Phase II in first-line prostate, this trial was initiated before really the CTC momentum was picked up, so that data was not collected in this study. However, in our 427 program, we are collecting CTC data, and are looking to present that data at ASCO.

Got it. And then regarding the Phase III outcomes that are acceptable to the FDA, generally survival has been one that has been the focus for the FDA going forward. There were a couple of clinical trials, but other companies looking at survival. Do you feel that this is the current standard of care, in terms of the real world, and do you think that this is the regulatory standard of care, are you using that to plan forward?

The quick answer, yes.

Okay. (laughter). Thank you very much for that information.

Thanks a lot Mark.

We will go next to David Martin with Dundee Securities.

Hi there, Scott, Stephen, Cindy, a couple of questions for you. The first one is at ASCO this year I am wondering what the additional data we can expect to see from the randomized study.

I think you are going to report on median survival in the OGX arm, if you have reached the median, and I guess you will report on statistical analysis as well. I am wondering in particular whether there will be a report on the treatments that the patients received, after they relapsed on the first-line, which either included docetaxel and OGX-011 or docetaxel alone?

And the quick answer is yes, but in a little more detail, NCIC is planning on doing another survival update just prior to that ASCO presentation, so more updated survival information will be given at that time, and the statistical analysis and multi-variant analysis on the survival data, as well as yes, the chemotherapy and other treatments of second-line treatment paths, that study.

Okay. And has there been any other data sweeps since December, and will there be any other near term data sweeps before you do the final one at ASCO?

No. The next one is planned just prior to that ASCO presentation.

So you don't know at this point, whether the experimental arm has reached the median survival then?

No. And NCI won't collect that data until just prior to the ASCO presentation.

Okay. Moving to 427, you have a plan to go ahead with a bladder cancer trial this year. I am wondering, is that going to be monotherapy or combination, and did you reach a go/no go decision on the base of the first Phase I trial, and is that why you have made the plans for the second Phase I in the bladder cancer, and what was that go/no go trigger if you reached it?

First of all we did not meet a no go decision, obviously it would be a go. The MTD was not reached with the monotherapy, and the bladder trial is actually going to be similar to what we did with OGX-011. We are going to be delivering OGX-427 intrabladder, and getting tissue samples for hopefully a PDPK kind of like analysis.

Okay. The current Phase I it is systemic delivery though?

Yes, it is. It is just similarly IV infusions in a loading dose period, and then weekly thereafter.

Okay. Just a quick question, I think you may have explained it but I didn't really catch it on Slide 14 for your second line prostate trial, you have two median survivals 13 and 15.8 months for the OGX-011 plus docetaxel arm. I don't understand why there are two mediums there?

This is mainly due to the survival follow-up for the randomized trial, obviously these patients have longer survival follow-ups of 26 months, and then the additional 25 patients added to that obviously are survival follow-ups, is less 18 months, so we just separated it out, so you had both.

Yes, just to give you additional history on that Dave, when this trial was first designed it was designed with the randomization between the combination with docetaxel and mitoxantrone, and then as the results started to come through, particularly with respect to the docetaxel retreatment arm, it was sufficiently encouraging that we wanted to have additional patients in that treatment group, so we could further assess the impact of treatment, so we added another 25 patients, so since that was done afterwards, we have less follow-up time with those other 25 patients, which is why we are reporting two separate median survival numbers.

And just to clarify, once we hit two year for all patients, and we won't be separating them out, we will be reporting it altogether.

So is there a possibility that 13 will increase then?

There is a possibility.

Okay. And then I had one housekeeping question for Steve. How much of the 4.2 million R&D was the manufacturing cost for the OGX-427, and what do you expect the quarterly R&D to be going forward in 2009?

Yes, we are not giving specific backward looking funding, or how much we spent on 427, but going forward, we have said that we expect kind of operating expenses to roughly match what we saw in '08, both G&A and R&D, and the combination will roughly match in '09.

Okay. Because of the Sonus acquisition midway through the year, it roughly matches what you reported today?

Yes. So the '08 results which were a combination of Tech and then the consolidated results afterwards for '08, those results will continue roughly for '09.

Okay, thank you.

Thanks, David.

We will go next to Simos Simeonidis with Rodman & Renshaw.

Hi, thanks for taking the question, and congratulations on doing a lot of stuff, despite being a public company for what, six months now.

Thanks.

Just to make sure I am clear on your, one of your last slides where you talk about your plan for 011, the three trials, so are you saying that you are going to do one of the trials will definitely be the front line trial, and then you will pick among the two second line trials, whether it is going to be survival or pain palliation?

That is currently our plan.

That is your plan, okay. Are you going to try to get an SPA for the front line trial?

I think we will certainly have that discussion with the FDA, especially since the FDA on the survival trial in second-line would be very easy, to basically turn that trial and get FDA for a first-line patient population.

Okay. A follow-up to Mark's question earlier. I am not sure if Cindy already answered this, but did you say that you may incorporate tracking CTCs in the Phase III trials?

We are looking at doing a small sub-study with some of the sites that would do CTC. Obviously, the cost of doing it within the Phase III is problematic, so we are looking at a sub-study.

Okay. Cindy, another quick question for you, on Slide 16 when you show, you separate the curves between low and high clusterin. Could you tell us when were you measuring the clusterin? Was it before, during, after the treatment?

So we had baseline samples before the patient started treatment, and then during treatment, every cycle prior to the day one treatment, we took blood samples for serum clusterin levels, so some of these patients that went out seven, eight, nine cycles, we have each cycle a serum clusterin. We did not take serum clusterins after treatment ended.

Okay. Again I apologize if you have already addressed this, but what about the plan for OGX-011 in lung? First of all, are you focusing on, you have your hands full with prostate this year. Are you putting the lung development on hold for now, not on hold but in the back burner, or are you planning to do another Phase II with it this year?

Yes, it is a good question Simos. Currently the focus as we have stated is on CRPC, and that is mainly because of allocation of resources. The Company and the investigators are very interested in pursuing non-small cell lung cancer, based on the results we have seen particularly with respect to survival, but because of access to capital, we are simply going to have to prioritize our efforts.

Our belief is that as we get into discussions with corporate partnership interactions, that the non-small cell lung will probably come back into those discussions, as we have better availability to capital through that exercise.

Okay, and Scott finally a question for you. In terms of partnership, first of all I don't know, maybe you cannot say anything, but are you pursuing discussions right now, and if you can't answer that, can you tell us whether you, would you be willing to partner OGX-011 for just prostate, and keep lung for example, and potentially what about the geographic breakdown that you would consider? Would you give ex-US and keep the US here, or could you do a worldwide deal?

Right, on the status, you are right, it is a little tricky to give you very much guidance on that, other than we are very much in active discussions with a number of parties as you could expect, following survival data from a randomized trial in the Phase II space. There is a lot of enthusiasm on the program.

Beyond that, I obviously can't give you much scope, and again just for the benefit of all listeners, the process of partnering is typically a fairly lengthy process, because partners have to go through the usual review of everything from manufacturing, toxicology, clinical, reviewing all of the patient records, so that is quite a process obviously, so I can't really speak to either time or terms, or anything.

As far as going into splitting I guess the indications, our review that would be difficult to do from a perspective of ,we keep one of the indications and a partner would go forward, and actually split the marketing efforts that way, because the intent is that the product candidate would effectively be viled and utilized in the same way, and so to track sales by indication, particularly since marketing would be through medical oncologists, would be at least difficult and probably impossible.

So I think the idea would be this would be more of an all rights in the oncology setting, with respect to partnership. Now that said, that doesn't preclude us from being able to take on more directed responsibility for each of the indications. I think as everybody knows we have very good bench strength in the area of prostate cancer in the clinical field, so maintaining a responsibility in that area, while a partner took on say the lung indication, certainly could make some sense.

I think your last question was consideration of geographic distribution. Certainly it would be of interest to us. In fact we are considering a number of different transactions in that category where we look to obviously global, as well as separate transactions that might contemplate, say Europe or even the Japanese markets, while we maintain the US markets, and North America I guess more specifically, and it is a balance of economics and effort, and we have not turned down any of the considerations in those kinds of strategic options.

So you wouldn't preclude a situation I guess, where you could give a lot of the rights to a partner or partners for 011, and you get royalties and up fronts and milestones, and you focus on 427, the cash basis, 2310, or would you want to be more directly involved in the 011 development?

Yes, again, that is a very good question, as I think you can probably tell from the data that has been presented, we very much believe in the activity of this program, and would like to maintain involvement in it, to the extent that that makes sense for shareholders and financially, so I think we are considering both, to take dollars off the table now, and then direct them into the 427 program and other earlier stage candidates, certainly is a possible alternative as well.

And we have talked about on other conference calls, 427 has as much capability and potential as 011, so we could certainly utilize the dollars in a very diversified program, so I think it really comes down to the balance of the economics that we would achieve in say an 011 licensing program, and how we could best utilize that for advancement of shareholder value.

Great. Thank you very much, and congratulations again on great execution in '08.

Thank you Simos.

We will go next to Greg Wade with Wedbush Morgan Securities.

Good afternoon and thanks for taking my questions. Cindy, with respect to the powering assumptions for the first-line study in prostate cancer with docetaxel, obviously what looks to be a statistically significant result on survival with a very limited number of patients, can you just tell us what hazard ratio you are assuming, and whether the variability that has been seen in the randomized study is different than that in tax 327, or some of the larger prostate cancer studies? Thanks.

Well first of all, in the Phase II study, the hazard ratio is 0.6. Now in the Phase III, we are looking at currently the calculations we are looking at powering it for a hazard ratio of 0.725, and that would give us approximately 800 patients, these calculations are also based on how fast they can be enrolled, and the number of events or deaths, and those are all kind of counted in, as far as how fast we could enroll, so we are kind of looking at a two year enrollment for that 800 patients to get a hazard ratio of 0.725.

I don't think we are really would want to go less in hazard ratio, because there is always, you look at a great Phase II and the worst thing to do is underpower a Phase III based on that.

Right. And that, Greg, is fairly consistent with say the tax 327 study hazard ratios. They were slightly below 8. There were two separate numbers that were provided, so I think the number that Cindy just gave you for the powering for the hazard ratio, is consistent with the expectations from previous trials like tax 327.

(Operator Instructions). We will take a follow-up question from David Martin of Dundee Securities.

Thanks for taking the follow-up. I am not so surprised you have got an oral presentation for 011 at ASCO, but for the things won for 427, an oral presentation for that too, is it part of a symposium of related presentations on maybe stress proteins, or do you think you were awarded this oral presentation on the basis of maybe some efficacy that was seen in the clinical trial, or can you comment on that?

Well, they are in two different sessions so it is not just both of them are in a session on anti-sense, and the 427, it is always hard to say how and why they pick abstracts for oral presentations, so I don't know how to answer that.

My crystal ball is a little cloudy, but we will be presenting CTC data on 427, and that may be a component of the decision.

Okay. And then last question, the SM2310, the first Phase I trial, are you going to be presenting that data?

No. We didn't actually have that data fully completed in time for doing an abstract. We are still collecting data on the Phase I study.

Will it be presented at some time in the future, a press release, or at another conference?

Yes. I think when we get the final numbers really what we are talking about in 2310 analysis currently is the safety profile, again it is really difficult to assess activity data in these kinds of all-comer trials, and particularly in that one, because these were extremely heavily pre-treated patient populations, so I think all we can really basically reveal is the safety information, and much of that has been conveyed in the 10-K as filed today.

As we have also indicated though, we had a separate advisory meeting, that is suggesting to continue to push the evaluation of dose in a better patient population that has had less exposure, and experience with pre-treatment, to see if we could perhaps push the dose escalation even further than what we have got, so I think generally what we are saying is we have got some more work to do on that one.

Okay. Thanks and congratulations on a good year.

Thanks, Dave.

Thanks.

That does conclude our question and answer session. I would now like to turn the call back over to Jason Spark for any additional or closing remarks.

We thank you for joining us today, and we look forward to updating you as the quarter continues. Any questions, or if you would like a copy of the slide deck, please feel free to contact Scott Cormack or myself. Thank you.

Thank you, everyone.

And that does conclude today's call. We do appreciate everyone's participation. You may disconnect at this time.