Agenus Inc (AGEN) 2003 Q4 法說會逐字稿

Good morning. My name is Tony and I will be your conference facilitator. At this time, I would like to welcome everyone to the Antigenics Q4 and full-year financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. (OPERATOR INSTRUCTIONS). Thank you. Ms. Sripanich, you may begin your conference.

Good morning. Welcome to Antigenics' conference call to discuss our corporate and clinical progress, financial results for the fourth quarter and full year 2003. This is Tanya Sripanich from the Investor Relations department and with me today are Dr. Garo Armen, Chairman and CEO of Antigenics, Russell Herndon, our President of Commercial Operations, Dr. Renu Gupta, our Senior Vice President of Development, and Jeff Clark, our Chief Financial Officer.

We hope that all of you have had a chance to review the copy of our press release that was issued this morning. We will review these results as well as highlights of our past quarter and year in this call an then open it up for questions.

Before I turn the call over to senior management, I would like to remind you that during this conference call, Antigenics representatives will make forward-looking statements, including statements about expectations for development programs and clinical trials, anticipated regulatory filings and actions, and future financial performance. These statements are subject to risks and uncertainties and Antigenics' actual results may differ materially from those projected in these forward-looking statements.

Please see the Risk Factors section of the of Company's Form 424-B5 filed with the Securities and Exchange Commission on February 3, 2004 for a full discussion of these risks and uncertainties.

Antigenics cautions investors not to place considerable reliance on the forward-looking statements made on this call. These statements speak only as of the date of this call and Antigenics undertakes no obligation to update the forward-looking statements made on the call.

I will now turn the call over to Jeff Clark, our Chief Financial Officer, who will review the financial results for the last quarter and year. Then Dr. Gupta will report on our clinical program and the progress of our lead clinical candidates. Then Dr. Armen will discuss our corporate highlights. Finally, we will open the call for questions. I will turn it over to Jeff now.

Thank you, Tanya. For the three months ended December 31, 2003, Antigenics incurred a net loss of 18.3 million, or 46 cents per share. This is compared with a net loss of 16.3 million, or 49 cents per share, for the same period in 2002.

For the year ended December 31, 2003, we incurred a net loss of 66.2 million, or $1.70 per share. That is compared with a net loss for the same period in 2002, or for the full year 2002, of 55.9 million, or also $1.70 per share.

Revenues for the three months and year ended December 31, 2003 were 0.9 million and 4.5 million, respectively. That compared with 0.8 million for the three months ended December 31, 2002 and 3.4 million for the year ended December 31, 2002.

Total R&D expenses for the three months and year ended December 31, 2003 were 12.8 million and 48.5 million respectively, compared with 11.5 million and 40 million for the same period in 2002.

Total G&A expenses for the three months and year ended December 31, 2003 were 6.1 million and 21.7 million, respectively. That compared with 5.8 million and 19.5 million for the same periods in 2002.

The balance sheet, cash, cash equivalents and short-term investments amounted to 89.5 million on December 31, 2003. As you know, we added to this balance recently through the completion of a follow-on offering of common stock this month through which we have raised approximately $54 million of net proceeds before expenses, including yesterday's partial exercise by the underwriters of their over-allotment option.

In 2003, we also successfully competed a $62 million follow-on offering of common stock in January, as well as a private placement of convertible preferred stock with an individual investor for proceeds of approximately 31 million in September of last year. In addition to that, we also secured a 17.1 million credit facility with GE capital, which we use to finance the capital needs with regards to our new manufacturing and research and development facility in Lexington, Massachusetts. The buildout of that facility was completed on time and in line with our budget for the project and at the present time, we've completed the majority of our move to Lexington and we expect to be completely out of our former facility in Lilburn within the next few weeks.

Before turning it over to Dr. Gupta, I would like to provide you with some guidance regarding our expected net burn rate for 2004. For the calendar year 2004, we expect that our net cash burn will be approximately 70 to $75 million. Now, that number is inclusive of our nonoperating income, our budgeted opening expenses, capital expenditures, debt payments and interest payments, as well as dividends on our Series A Preferred Stock. As a result of the recently completed follow-on offering, as well as other working capital expectations, we estimate that we have over two years worth of cash on hand.

This concludes the financial portion of the call. With that, I will turn it over to Renu to continue.

Thank you, Jeff. Good morning, all. Today, I will update you on our lead clinical programs, as well as share some highlights regarding our presentations and publications over the last year. I will begin with the lead product, Oncophage.

In late November, 13 weeks after putting our Phase III trials of Oncophage in renal cell carcinoma and melanoma on partial clinical hold, the FDA informed us that they had lifted the hold and that we could resume enrollment of patients in both studies immediately.

The renal cell carcinoma program -- as you know, the renal cell carcinoma trial is designed to evaluate 650 patients and is the largest randomized, controlled trial to date conducted for kidney cancer patients in the Agilent (ph) setting, a patient population from whom there are no approved therapies and for whom the standard of care today is observation. Therefore, there is significant unmet need for these patients.

In late December of 2003, a planned interim analysis of the data from our Phase III trial of Oncophage for renal cell carcinoma was conducted by an independent Data Monitoring Committee, hereafter referred to as DMC. The DMC is comprised of four independent, distinguished experts in the field of oncology. At this meeting, the DMC formerly reviewed efficacy data for the first time. In addition, they reviewed safety, study designs and study conduct. Based on their review, the DMC recommended that Antigenics does not need to change the patient enrollment target for this trial and that the trial should proceed as planned.

Furthermore, the DMC informed the Company that the study designs and conduct were sound and that there were no safety issues with the product.

I would like to remind you all that this study is designed to seek approval based on the primely (ph) endpoint of (indiscernible) survival, which is acceptable as a surrogate endpoint in the Agilent setting. All patients will be followed for overall survival, which is the definitive endpoint of this trial.

It is our expectation that the data from this trial will fulfill the requirements for seeking accelerated approvals for Oncophage in renal cell carcinoma in the Agilent (ph) setting.

A few words about our melanoma program with Oncophage -- our next Phase III trial of Oncophage is in Stage Four metastatic melanoma. This is also a randomized controlled trial of Oncophage versus Standard Of Care, which for these patients includes Aisle Two (ph) and Dacarbazine. The trial is designed to evaluate 350 patients, and patients are randomized two-to-one in favor of the treatment arm with Oncophage. This is a very sick patient population with a median survival of about seven months with currently available therapies. The trial is designed to show a meaningful improvement in survival in patients receiving treatment with Oncophage. The current enrollment in this trial is approximately 190 patients, and we expect enrollment to be completed by the end of this year.

In addition, this year, we plan to initiate another Phase III trial of Oncophage in patients with melanoma. This trial will be in a population with less-advanced disease, specifically patients with Stage Three disease for whom the Standard Of Care is surgical removal of tumors, followed by observation. We plan for this study to be randomized, double-blind and placebo-controlled, evaluating approximately 750 patients.

A few words about other indications with Oncophage -- Phase I, II clinical trials for Oncophage in breast and lung cancer are planned to be opened for enrollment in the coming few months. The lung cancer trial to be conducted at St. Thomas' Hospital in London will be in the Agilent (ph) setting. The protocol for this trial has been approved by the Ethics Committee for this center and we expect to begin enrolling patients immediately. The breast cancer trial will enroll patients refractory to available therapies and will be conducted at the Memorial Sloan-Kettering Cancer Center in New York. This trial is in the critical design phase and we expect to begin enrolling patients in the second quarter of this year.

I will now review the AG-858 program. AG-858, as you recall, is being studied in patients with CML. We have updated data from the University of Connecticut-sponsored trial of HSPPC-70 in combination with Gleevec for CML, which was presented at Ascot in June of 2003 in which responses were demonstrated in seven of the eight patients evaluated. Further data on this HSPPC-70 study were presented at the Ashe (ph) meeting in early December, 2003. Of the 17 evaluable patients, 11 patients experienced a reduction in levels of cytogenetic or molecular disease burdens.

In April of 2003, we also initiated a single arm, Phase II study to evaluate AG-858 in combination with Gleevec. This study is being conducted at leading CML centers in the United States and in the United kingdom. We plan to enroll a total of approximately 40 patients in this trial; we have enrolled approximately half of this number and expect to complete enrollment sometime in the middle of the year. We also expect to have our first data available by the middle of 2004.

AG-702 and AG-707 programs -- I will now review our AG-707 heat shock protein vaccine program for infectious diseases. The genital herpes program continues to progress. As you are aware, our earlier studies with AG-702 vaccine, which is a mono-(indiscernible) vaccine, is currently being tested in a Phase I trial at the University of Washington in Seattle. We expect enrollment in this trial from all dose levels to be completed by mid-year with data from this trial available at the end of the year. We intend to launch the next phase of the herpes program by filing an IND by mid-year and beginning clinical testing soon thereafter (indiscernible) therapeutic herpes vaccine, AG-707.

Our next molecule, Aroplatin -- Aroplatin was presented at the ECCO (ph) meeting in Copenhagen in late September of last year. We reported the first data from our Phase II study of Aroplatin as a monotherapy for colorectal cancer. This trial, as you know, is being conducted at the Arizona Cancer Center under Dr. Dan (indiscernible). In this study of 15 available patients, one patient demonstrated a partial clinical response and two patients had (indiscernible) stabilization.

We are also studying Aroplatin as a monotherapy in a Phase I-II trial for advanced solid tumors and medical (indiscernible) therapy. This study is being conducted at the John Wayne Cancer Center and has enrolled 20 patients to date.

This year, we plan to conduct a number of preclinical experiments to improve Aroplatin's formulation. We expect to initiate new clinical trials of Aroplatin once we have completed this work.

Some highlights about our conference activities -- Antigenics has indeed had a very busy year with regards to conference activities, beginning with the Ascot (ph) meeting in early June, at which five separate abstracts were presented. Data from the pilot Phase I trial of HSPPC-70 in combination with Gleevec for CML was presented in an oral session. We also had four presentations at Ascot (ph) -- data from our Oncophage Phase II trial in renal carcinoma, data from our Oncophage Phase II trial in low-grade non-Hodgkin's lymphoma, preliminary data from a breast cancer study using QS-21 as an agilent and data from a Phase II trial (indiscernible) cancer also using QS-21 as an agilent (ph).

In September of this year, two abstracts were presented at the 12th Annual European Cancer Conference in Copenhagen, also known as ECCO (ph). Data from our Oncophage Phase I trial from nonmetastatic pancreatic cancer was presented in an oral session. Data from our Phase II trial of Aroplatin as a monotherapy for colorectal cancer, which I mentioned earlier, was also presented.

At the European School of Hematology, or ESH, meeting in Italy in October -- attended by global leaders in leukemia -- Antigenics presented on HSB (ph) clinical translation and hosted a satellite symposium on the immune therapy of CML. As I mentioned earlier, final data from the pilot trial of HSPPC-70, in combination with Gleevec, was presented at the ASH (ph) meeting in December.

Also presented at the ASH (ph) meeting were updated data from a Phase II trial of Oncophage for low-grade (indiscernible) non-Hodgkin's lymphoma. The study's lead investigator from this trial reported indications of clinical activity in 8 out of the 14 evaluable patients in the study, including one partial response, two minor responses and five disease stabilizations. Oncophage was reported to be well-tolerated and without significant adverse effects.

Recent publications -- along with building and maintaining our presence at conferences and meetings, Antigenics remained active on the publishing front this past year. In October, the Journal of Immunology published immunological data from our Phase II Oncophage trial for advanced melanoma and colorectal cancer in mid-August. Results from a Phase II clinical trial of Oncophage in patients with metastatic colorectal cancer were published as a featured article in clinical cancer research.

In summary, in 2003, we greatly increased the breadth of our clinical data, reached key milestones and overcame a significant hurdle. This year, we intend to continue forward towards our goal of product commercialization.

This concludes the clinical update. I thank you all very much for your attention.

Thank you, Randy. Renu has just reviewed our key development programs in some depth, and now I will summarize where we are as a company and what our key challenges are over the next twelve months, as well as what you may expect from us in the coming year.

Let me start with a quick review of where we are. Firstly, the preclinical and research work that has supported our clinical development programs are extensive and the results are conclusive. These results have been published in the most prestigious scientific journals.

Secondly, early clinical work in more than six different cancers in Stage Four patients with Oncophage used as a single agent has shown indications of activity in every single trial we have undertaken so far. All this work has been either published in prestigious peer-reviewed clinical publications or presented at major cancer conferences.

Thirdly, several of our clinical trials, which have looked at the mechanism of action via immunological markers, has shown that our product works through the same mechanism in different types of cancer, thus further substantiating our conviction that our product will be applicable essentially to all cancer types.

Fourthly, as Dr. Gupta reviewed with you, we are encouraged that we are on the right track with our Phase III renal cell carcinoma trial after the review of the interim data by the Data Monitoring Board, who reviewed efficacy, safety, trial design and trial conduct information.

Let me now outline what you may expect over the next year from us on the product side. Firstly, we're getting ready for a potential product launch, provided that the data from our randomized renal cell carcinoma Phase III trial is positive and that we meet all FDA requirements to file a DLA (ph) application.

Secondly, we expect that the final data from our Phase III renal trial will be available around year-end. If the data is positive, this will mark the first product which will have shown benefit in agivent (ph) renal cell carcinoma.

Thirdly, we will complete enrollment of our randomized Phase III melanoma trial, and we expect that the results from this trial will also be available in the first half of 2005 or sooner.

Fourthly, we will see data from our well controlled Phase II trial of AG-858 for CML patients in combination with Gleevec. If the data is positive, it will substantiate the results from our pilot study of activity in a well-controlled trial in Gleevec-resistant CML patients.

Finally, we will enter the clinic with our multi-valent herpes product, AG-707, which will be designed to overcome -- which is designed to overcome viral resistance by targeting 49 peptides of the genital herpes virus.

Now, in addition to these, we will also advance in a number of other fronts. Firstly, we are certainly ramping up on our market development programs in preparation of potential product launch next year, including developing of pricing and reimbursement strategy, validating our internal processes and systems, continuing to build a speaker bureau and developing thought leaders as well as implementing our publication plan. We will also have an expanded presence at conferences such as Ascot (ph) during this year.

In addition, we expect to advance our efforts in the business development area. We are currently in various stages of discussions with 7 of the top 13 oncology pharma companies, including 12 of the top 4. We also have currently two multi-drug collaborations with leading oncology pharma companies and one clinical collaboration with a major Japanese company.

I will now end our formal remarks. We will be happy to take questions that you may have.

(OPERATOR INSTRUCTIONS). Mark Monane.

Good morning. Thanks for taking my call. A couple of questions -- can you outline, for the Phase III trial, please, Garo, in renal cell carcinoma, what's the rate-limiting step for the data? In what form do you see best for presenting the standard to the financial community?

Firstly, as soon as the events -- the required number of events -- are at hand -- and the events that we're talking about in the context of the Phase III renal cell carcinoma trial is recurrences (sic). Recurrences of disease because in the agivent (ph) setting, after surgery, these patients are rendered visibly free of disease. When the disease recurs, radiologically when that is confirmed, we registered recurrences. When a certain number of specified recurrences for the final analysis is at hand, we will see the data. The Company, as you may know, Mark, is so far blinded. Even the Data Monitoring Board has seen the data, the Company has been blinded to the data. We've been guided in some areas by the Data Monitoring Board.

Now, when we are unblinded to the data, what will do is, as soon as practicable and as soon as permissible, we will provide a topline indication of that analysis to the public at large and the financial community. We will reserve the details for later on because it would be beneficial to us to present that at a conference, our clinical conference. But as soon as we have a topline analysis, we will provide you with that information.

Have you stated what the number of events you're looking for (sic), or has the Data Safety Monitoring Board come to a number that you feel will allow them -- allow you to unblind the data?

We have not stated that number. That number is known to both us and the Data Monitoring Board but we have not publicly stated what that number is.

So far, there's 620 patients that have been randomized. Is that right?

It's (indiscernible) that number actually.

Are you still randomizing patients at this point?

We will randomized up until -- well, two answers to that question. Firstly, on an intend-to-treat basis, we have already randomized the required number of patients, but we have allowed for certain cutbacks from the intend-to-treat analysis and for reasons of safety, if you will, to make sure that we have the appropriate number of patients in the event that, upon final analysis, certain patients are disqualified, and we are continuing to enroll patients on the basis. We're very close to the target enrollment for that patient population of 650 now.

One more question and then a general question -- what P value, in your opinion, would be acceptable for the Company and for the FDA? I know you've had multiple meetings with the FDA. What P value are you looking for here?

I will ask Renu Gupta to answer that question.

Good morning, Mark. We're not disclosing that P value at the moment. I would just like to remind all that we have built, in our statistical plan, the appropriate P value and the appropriate power to allow for a registration of Oncophage in renal cell carcinoma in the adgivent (ph) setting utilizing this trial.

The messenger is that we're not looking for any shortcuts in order for us to be able to file a DLA (ph) with this trial.

Okay, that was -- okay. One more general question then, please? Garo and Renu, could you step back a little bit and tell us what you think the state-of-the-art is in cancer vaccines now? We had some recent data from (indiscernible) presented -- (technical difficulty) -- companies now in the cancer vaccines base. Can you talk about what the state-of-the-art of the cancer vaccine (sic)?

Sure. Let me take a crack at that, Mark. Certainly, as you have mentioned, there are a number of companies that are advancing their programs in the cancer vaccine area. We believe, as a company in this field, that there will be technologies which will advance successfully to treat a number of cancers with the immunotherapy methods, namely cancer vaccine.

Now, we have always believed that our approach is the ultimate approach and it is scientifically the most validated approach out there. That has to do with the fact that our approach targets the individual uniqueness of every cancer patient's cancer. That's an important consideration.

That isn't to say that if you do not target the individuality of cancers appropriately, you will not see efficacy. We believe that you may see efficacy as defined by the criteria which is required for product approvals with other approaches. But we firmly believe that our approach is the ultimate in terms of the technology being able to target the individuality or the uniqueness of cancer patients. I must add also that we have a significant amount of scientific evidence to support this argument, perhaps more evidence than any other (indiscernible) or any other company has generated in the field of cancer immunotherapy.

But as you are very well aware, there are at least a half a dozen other companies who are rapidly advancing with very good technologies in this field.

Thank you for all of those answers.

Mike McGinley (ph).

Good morning, everyone. This question is for whoever wants to answer it, Garo, Renu. From your most recent conversations with the FDA -- maybe I missed this -- which is more likely, that with Oncophage for the renal cell carcinoma -- additional patients will be enrolled in the current Phase III, or you will do a new Phase III? There's been a large concern. I feel -- the people that I speak to at least on Wall Street -- that there's going to be a large delay from the way you worded it in your prospectus on the secondary.

Let me first take a crack at that question in very blunt terms. As you know, we disclose everything that should be disclosed in the prospectus, including what is required of us from a legal contingency perspective. So, in the context of any delay that you are referring to, let me point out the following -- the Phase III renal cell carcinoma trial, which are conducting currently, is a well-controlled, randomized trial of 650 patients. This is the largest trial ever done in this field, okay? If we meet all of the requirements of the agency with regard to this trial, we have a very high level of certainty that the trial -- provided that the data is good -- will be sufficient for product registration, as it would be unethical if the trial results are positive -- it would be unethical to continue to enroll patients in a randomized trial where you treat patients with no drugs.

So with that, the question that you are asking is, why are we planning on doing a second Phase III trial? The answer to that question is very straightforward; that second trial is a contingency for us, contingency for a number of reasons, and it is in a planning stage. However, we believe that if the first trial has positive -- (technical difficulty) -- that are statistically significant, it would be very difficult justifying to do that second trial.

Excellent. If you did do a second trial, how many people do you think it would take, and how long do you think it would take?

A similar number of patients -- probably it will take shorter than our first trial has taken because of several reasons. One, we are much more proficient in this area; secondly, we're much better-known. If you extrapolate the patients enrollment in the last year, year and a half in our renal cell carcinoma trial, the enrollment in that trial could take as little as a year.

You've over-enrolled that Phase III. How many people are you up to?

I should say we have randomized or intend to treat on an intend-to-treat basis, I believe approximately in excess of 700 patients.

Regarding AG-858, maybe I missed this, but I heard a number of 20 out of 40 (indiscernible). For AG-858 with Gleevec, how many people are enrolled out of 120 for this Stage Two?

Let me clarify that the 120 patient trial was restructured. The reason we have restructured this trial was because we want to get some initial data in order for us to justify to enroll additional patients. Because of that, we restructured that trial to 40 patients with some very stringent criteria that determines who is eligible to enroll in this trial and who is defined as truly Gleevec-resistant. So, we are now enrolling in that trial of 40, which as Renu said were essentially half enrolled in that trial and continue to enroll -- expect a complete enrollment of that trial by midyear and expect to have the first results from that trial sometime around midyear, at least the first results on the first batch of patients. If the results come out consistent with what we have seen in our pilot trial, that would be very encouraging because of the nature of the classification of these patients.

So, if the results are positive from this trial, because it's a very well-controlled trial, we will be able to make a statement that we are seeing activity in Gleevec-resistant patients. Renu, would you like to add anything to that?

I think you've covered it very nicely.

So, you feel that you'll be enrolled by midyear and be able to come out with results by midyear of this year, of 2004?

We will not have the final results of this trial but we will see results from the first batch of patients -- I would say about 10 patients or so that will give us three-month data.

Okay, that is excellent. Lastly, why do you feel the need to only raise $50 million in secondary (inaudible)? To me, it seems small.

Well, this is a two-edged sword because some criticized us for diluting shareholders too much; others criticize us for raising too little money. But at any point, we wanted to make sure that we have at least a year or more of cash in the bank, and this will provide us with two years of cash. We thought -- and I think we are correct in this assessment -- that, given our stock price, it would not be prudent for us to dilute shareholders beyond the amount that we have raised.

Secondly, we believe that the amount we've raised will be sufficient to take us to a comfort level of seeing data from our Phase III trial and/or a business development transaction where we expect, if that were to occur, additional cash will come into the Company. So, this will be sufficient so that we cover all bases through at least the generation of important data that will dictate what the next step should be for the Company.

That's exactly how I interpret it, as it's enough money to get you through a collaboration -- not that that's exactly what you said but that's how I feel. I'm very excited about the future. Thank you very much!

Robert Blanc (ph).

Thank you for taking my question. In the previous conference calls, you've made mention that there's going to be a next generation of Oncophage coming out, Oncophage 2 and 3. Are there any clinical trials planned to be initiated this year, and for which indications?

Yes, you have correctly remembered that we have made a mention of it. The reason we haven't covered it is in this conference call is because, as you see, we had a pretty crowded conference call. We had a lot of developments that we had to cover. But this is a very important program for us come in order to broaden the application of Oncophage beyond the first several cancer indications that we've targeted, which we consider the logical targets for us, at least for market introductions such as renal cell carcinoma, melanoma, and CML and so on.

But we do have a very active program which allows us to make Oncophage from a much smaller tissue samples -- specifically, enough tissue that is collected from a core biopsy, so presumably, without surgery, through a core biopsy, we will be able to get enough tissue to make Oncophage to treat patients. Now, that program is still in preclinical development and we expect that we will be in the clinic sometime early next year with that.

Thank you. So, for the breast and the lung cancer that you may be initiating, that will be the current version of Oncophage, then. Is that correct?

That is correct.

There are no further questions at this time. (OPERATOR INSTRUCTIONS). Chris Tanaka (ph).

Thanks for taking my question. I wanted to ask -- you had mentioned that Oncophage could potentially be useful in all different types of cancer. I was wondering, do you expect it to be used as a monotherapy, or if it would be combined with cytotoxic therapies, how would you imagine or envision making that combination in terms of timing the dosing?

Certainly. I think this is an excellent question -- excellent question because this topic is the subject of intense study right now in a preclinical setting. As you remember, I made references to the fact that we have some multi-drug investigation collaborations with major oncology companies, specifically in this field.

Now, let me first clarify one thing; in the context of some of the clinical trials that we are undertaking right now in the agilent (ph) setting, such as renal cell carcinoma, we believe Oncophage is going to be used as monotherapy, and it is used as monotherapy. In fact, if you recall, I made reference to the fact that all of the Phase I and II trials that we conducted thus far with Oncophage has (sic) been with monotherapy, meaning Oncophage used alone. That's why we have been encouraged that we have seen clinical activity with a product such as Oncophage that has shown no quality-of-life issues to speak of.

But in the non-agilent (ph) setting, meaning in the metastatic disease setting, while we are seeing activity with Oncophage when used alone, it is our opinion that when Oncophage is used in combination with something else -- and that something else could be a chemotherapy agent, or a biological agent, an antibody, and so on -- that its efficacy will increase because in the late-stage disease setting, patients are quite sick and the disease burden is quite high. For that reason, we are currently engaged in a very, very extensive preclinical program whereby we are testing ten different agents in combination with Oncophage to answer that exact question that you have asked. What is the best protocol to use these agents in combination with Oncophage so that we get the ultimate results? To do that properly, obviously we need to investigate (inaudible) in a preclinical setting. Based on the results, we will take those programs into the clinics sometime next year.

Ren Benjamin.

Good afternoon and thanks for taking my call. Congratulations on a good quarter and congratulations -- (technical difficulty) -- raising the funds. Two quick questions -- can you talk to us a little bit about any partnership talks that you may or may not be having, when you think you would like to establish a partnership? Then also, can you just once again just spell out the milestones for us as if when exactly -- for all the trials that are going on, when you expect data to be?

I will be happy to do that. In terms of the partnership question, we are in discussions, as I said, various stages of discussions with a significant number of oncology players out there. Approximately 7 out of 13 companies we are in various stages of discussions.

As to the best timing of a deal, we believe that the best timing may be at anytime between now and seeing data, depending on the terms that are offered to us. Clearly, we have expended a significant effort and significant monies in developing our technologies to their current status and that any partnership that we will undertake will have to be significant in terms of both consideration as well as the commitment of the partner for the rapid development of Oncophage and other heat shock protein technologies into many different cancer types.

So, in summary on that question, in the U.S., we are committed to making sure that we are prepared to tackle commercialization challenges on our own if that is the way things pan out. But outside of the U.S., we will partner our technology. The discussions that we're having right now cover both a potential U.S. partnership, which will allow us to be a major presence in the market on our own in partnership with some of else, as well as overseas partnership opportunities.

So, in essence, what I'm saying is that we may or may not partner in the U.S., depending on the terms of the deal, but we will certainly partner outside of the U.S.

In your second question, as far as the key milestones for the year, certainly, the completion of the final data analysis sometime in the next twelve months is a very key milestone for the renal cell carcinoma trial. Further discussions with the FDA in understanding and coming to terms for conditions for our BLA (ph) filing is an important milestone which we expect to undertake over the next several months.

We expect our renal cell carcinoma trial, the Phase III trial, to complete enrollment. We believe, because of the sicker nature of those patients, the endpoint associated with that trial will be at hand very soon thereafter or even before the completion of enrollment in that trial. So, we expect data out of the melanoma trial anytime between, say, the fourth quarter of this year into the first half of next year.

On the CML front, we certainly expect to see the first batch of data on patients in this very well-controlled trial, where patients are truly established as being Gleevec-resistant. That first batch of data will come sometime in the first half of this year, or I should say midyear.

We haven't spoken much about the AG-707 program, but this is a program where we have very methodically approached the challenges of the genital herpes virus; we have reviewed all of the efforts by many other companies thus far that been involved in this area and developed this product with a preemptive strategy of addressing all the weaknesses of past products that have not been able to conquer this disease thus far, from an immunological perspective. With that, we've developed this product and it's a very exciting product. We expect to initiate clinical trials of that in the next six months or so.

So those are the key milestones from a product perspective.

From a business development perspective, I've already outlined that we're moving rapidly. It is conceivable that we may see a business development activity in the coming year.

We have some other corporate transactions that we haven't really detailed, such as disposition of certain assets for cash. We expect that to occur in the not-too-distant future. While all of this is going on, we continue to engage in a very aggressive program of educating the clinical community, patient populations -- in fact, for those of you who have seen our Web site, have a very good understanding of the level of activity that we engage in in terms of preparation for commercial launch.

We expect to imminently start patient enrollment in our non small-cell lung cancer program -- that will happen any day -- and in our breast cancer program, which is a brand-new trial for us as well, in a larger indication in the next several months. So -- (technical difficulty) -- representative of a very busy schedule for us in order to prepare for potential product commercialization next year.

Perfect. Thanks very much.

Ethan Silverman (ph).

Good morning, Garo. How are you? I came on late, so I may have missed it, but did you spent any time talking about (indiscernible) proteins as a means for Adjivent (ph) technology (indiscernible) vaccines?

The question that's being asked is can heat-shock proteins be generically used as adjivents (ph)? The answer is yes to that question. They can be used as adjutants. In fact, in the context of our technology, one of their activities, one of their many activities, is in that context. But right now, we are not pursuing any major programs to explore the use of heat-shock proteins merely as adjivents (ph) because the value added to us right now is little compared to some of the major programs that are underway.

Thank you.

A follow-up question from Chris Tanaka (ph).

Thanks for taking the follow-up. I just wanted to ask another question following up on some of the business development comments that you made. With the renal cell trial, have you enrolled enough patients to potentially unblind the interim analysis, perhaps to show to potential partners or people that you're negotiating with? Would you be able to still achieve statistical significance at the end?

Okay, we cannot do that. We cannot do that, Chris, because I think it would be a dangerous course for us to unblind anyone other than the DMV, which is already prospectively built into the design of this trial at this point. Otherwise, we would jeopardize the statistical integrity of this trial. Given that the final analysis is not in the too-distant future, it wouldn't have been a prudent strategy for us to pursue. While there may have been some discussions on this subject by DMV privately, we thought it would be prudent for us to see the trial to final analysis, since it has taken a substantial amount of effort and we don't want to interfere with the integrity of the trial.

There are no further questions at this time.

Thanks very much for everyone. I think Tanya has some concluding remarks.

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