Agenus Inc (AGEN) 2004 Q4 法說會逐字稿

Good morning. My name is Nicky (ph) . I will be your conference facilitator. At this time, I would like to welcome everyone to the Antigenic's fourth quarter and full year-end 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. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star, then the number two on your telephone keypad. Thank you. Mr. Howarth, you may begin your conference.

Thank you, Nicky, and good morning, everyone. Welcome to Antigenics conference call to discuss our corporate and clinical progress as well as our financial results for the fourth quarter and full year ended December 31, 2004. With me today are Dr. Garo Armen, Chairman and CEO of Antigenics; Peter Thornton, Chief Financial Officer; and Dr. Renu Gupta, Senior Vice President of Development. We hope all of you have had a chance to review our press release issued this morning. We will review these results, as well as highlights in the past quarter and then open the lines 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 regarding the Company becoming a successful commercial enterprise, as well as the timing of the final analysis of part one of our renal cell carcinoma trial, the final analysis of our melanoma trial, the completion of enrollment of our Phase II AG-858 trial, the filing of an amended IND for Aroplatin, and initiation of a new clinical study for this compound, and the time for filing an IND for AG-707.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among other things, the results from ongoing Phase III clinical trials, the need for and extent of additional clinical trials, decisions by regulatory agencies, timing and results of free clinical studies and the factors described in Exhibit 99.1 to our form 8-K as filed with the Securities and Exchange Commission on January 18, 2005. Antigenics cautions investors not to place considerable reliance on the forward-looking statements contained in this conference call. These statements speak only as of the date of this call and Antigenics undertakes no obligation to update or revise the statements made on this call. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Antigenics' business is subject to substantial risks and uncertainties, including those identified above.

When evaluating Antigenics' business and securities, investors should give careful consideration to these risks and uncertainties. I will now turn the call over to Peter Thornton, our Chief Financial Officer, who will review the financial results for the past quarter and full year followed by Dr. Gupta, who will update you on our research and preclinical programs. Then, Dr. Armen will discuss our recent corporate highlights and upcoming milestones, and finally we'll open the call for questions. I'll now turn the call over to Peter.

Thank you, Jack, and good morning to everybody. I will now review our financial results for the quarter and the year just ended. For the quarter ended December 31, 2004 Antigenics incurred a net loss attributable to common stockholders of $17.2 million, or 38 cents per share. This is compared with a slightly higher net loss attributable to common stockholders of $18.3 million, or 46 cents per share for the same period in 2003. For the full year ended December 31, 2004, the Company incurred a net loss of $56.5 million, or $1.26 per share. This is compared with a net loss for the comparable period in 2003 of 66.2 million, or $1.70 per share. I would point out that the reduced net loss for 2004, compared to that in 2003, reflects the recognized gain of approximately $14 million from the sale of our manufacturing rights for feline leukemia virus vaccine, which occurred in March 2004. In accordance with generally accepted accounting principles, this business has been accounted for as a discontinued operation in both the current and the prior year, resulting in the reclassification of certain prior year amounts.

Turning to our income statement and our revenues, our revenues are comprised primarily of revenue related to the sale and supply of QS-21, our vaccine, our (indiscernible), license fees and grants. Revenues amounted to $128,000 for the three months ended December 31, 2004 compared with $57,000 for the same period in 2003 after taking account of the reclassification of discontinued operations noted previously. For the full year ended December 31, 2004, revenues amounted to $707,000 compared to $985,000 in 2003. Again, after taking account of the reclassification of discontinued operations noted previously.

Turning to the expense side of the income statement, total research and development expenses for the quarter ended December 31, 2004 were $10.1 million compared with $12.1 million for the same period in 2003. For the full year, research and development expenses amounted to $41.7 million in 2004 compared to $46.3 million in 2003. The reduced level of research and development expense comparing the relevant periods in 2004 to 2003 primarily reflect completion of enrollment in our Phase III trials during 2004 and the positive impact of consolidating operations into our new facility during the first half of 2004.

Turning to general and admin expenses, total general and administrative expenses for the quarter ended December 31, 2004 were 7.3 million compared with $6.1 million for the same period in 2003. For the full year, general and administrative expenses amounted to $25.8 million in 2004 compared to $21.7 million in 2003. The increased level of general and administrative expense comparing periods in 2004 to 2003 primarily reflects costs related to increased head count and professional fees as we grow and develop our business towards being successful commercial enterprise.

Turning to the balance sheet, cash, cash equivalents, and short-term investments amounted to 87 million on December 31, 2004. During January 2005, we completed a private placement to third party investors of 5.25 percent convertible senior notes due 2025, resulting in net proceeds to the company of approximately $48 million. The notes are convertible into Antigenics' common stock at a price per share of $10.71. This transaction strengthens our balance sheet and positions us well to help achieve our key near term objectives. Given our current positive cash position and anticipated burn rate, we are happy that we have adequate cash to fund our operations into 2006. This concludes the financial portion of the call. I will now turn it over to Renu to continue.

Renu Gupta, MD: Thank you, Peter. Good morning, all. I will provide an update on the status of our development program beginning with our lead product, Oncophage. First, an update on the renal cell carcinoma program. We have completed randomization of over 800 patients in our first study of Oncophage in the Agilent (ph) study in patients with renal cell carcinoma. Patients are being followed for reoccurrence of disease as well as for survival, which comprise the primary and secondary end points respectively. We anticipate achieving the required number of events to trigger final analysis for the study in mid 2005.

We have just received approval from the FDA to commence enrollment activity for part 2 of the Phase III trial for Oncophage to treat patients with renal cell carcinoma. This is our second study for this indication. Each of these studies, part 1 and part 2, is designed and statistically powered to provide evidence of efficacy and safety of Oncophage. In addition to our discussions with the FDA, we are actively pursuing a registration strategy for Oncophage with the European and the Canadian health authorities. We have recently received approval for our registration plan for RCC, or renal cell carcinoma, from the Canadian health authorities, and preparations are underway to submit data from part 1 of the study later this year. Also, we have filed an orphan drug application and an application seeking scientific advice for the clinical registration plan for Oncophage in renal cell carcinoma with a European agency for the evaluation of medicinal products, or EMEA.

As you know, thus far, our development efforts for Oncophage have been as mono therapy. Recently, we have launched a program to study Oncophage in combination with other molecules for the treatment of metastatic kidney cancer. We also plan to expand this approach for other cancer indications in the metastatic disease setting.

Some words about our second program with Oncophage. The melanoma study, our second Phase III trial of Oncophage is in stage 4 metastatic melanoma. Enrollment in this study concluded in 2004 and patients are being followed for survival. We expect data for final analysis sometime in the second half of this year. Oncophage is also being developed for some other indications. A Phase II clinical trial of Oncophage in non-small cell lung cancer was initiated in London last year, and this year we plan to expand to include sites in the US and Canada. A Phase II study in breast cancer is projected to initiate in second quarter of this year.

And now I will review for you our second personalized cancer vaccine, AG-858. This vaccine is currently being studied in combination with Gleevec in a subset of patients with chronic myelogenous leukemia who have failed or relapsed completion on monotherapy with Gleevec. Completion of enrollment is projected for mid 2005. We also plan to expand the development of this molecule by initiating a multisensor randomized study of AG-858 in combination with Gleevec, or for Gleevec alone, in newly diagnosed patients with chronic myelogenous leukemia. The objective is to determine the benefit of adding AG-858 to Gleevec as first line therapy.

I will briefly review our infectious diseases program. AG-707 is a monovalent (ph) heat shock protein vaccine being developed for the treatment of herpes simplex virus 2 infection, also known as HSV-2 infection, also known as genital herpes. An improved formulation of AG-707 for the treatment of genital herpes has been identified and preclinical immunogenicity testing is completed. Our toxicology studies are underway, and we expect to file an IND during the second quarter of 2005, and begin a Phase I study shortly thereafter. We have recently demonstrated that some of the peptides in this vaccine are presented by human HLA molecules and recognized by human T-cells. This is consistent with our understanding of how AG-707 would simulate an immune response in patients.

Finally, a brief update on Aroplatin, our liposomal platinum molecule. A new formulation of Aroplatin has been identified, which has demonstrated improved activity in preclinical, in vitro and in vivo models, compared to existing platinum-based compounds. Toxicology studies have been initiated and we plan to file an IND amendment for this product in the second quarter of 2005 and initiating a clinical study shortly thereafter.

In summary, we continue to focus our efforts on the research and development programs, which will enable successful registration for Oncophage, while defining the clinical path for expanding the indications for our heat shock protein technology, as well as our investment and the full development of Aroplatin in humans. This concludes the development update and I thank you for your attention.

Garo Armen, PhD: Thank you, Renu. I'd like to make four points in conclusion. Firstly, as you may have gathered from Peter's comments, as well as our press release, we are financially in a sound position to see us through the data from our part 1 renal cell carcinoma trial and to see us through the critical preparations for our potential commercial launch of Oncophage in one or more geographies. As you know, our renal cell carcinoma part 1 is the largest such trial ever conducted in stage 3 kidney cancer patients, and is statistically powered to show a significant benefit in kidney cancer patients suffering from this disease, and as you know, these patients have no other treatment alternatives.

In addition, we have also undertaken a significant effort to key up for the launch of a number of programs which include medical education, precommercial and commercial activities. The aim of these undertakings is to spend sufficient amounts of money, very prudently to be in a state of optimum readiness at the time when our renal cell carcinoma trial results will be available.

The second point is that we are prudently investing in a number of our clinical and preclinical programs, as you have seen from Renu's presentation. We are pursuing our programs based on a substantial level of either preclinical research, as well as scientific research that has been generated, and as we have referred to previously, a lot of this work has been corroborated by independent scientists and clinicians.

The third point is we have made substantial progress to improve our yields in making Oncophage and AG-858 from human tissue. As well as in our efforts to bring Onco II into clinical trials and this will allow us, by the way, Onco II will allow us to manufacture Oncophage in sufficient quantities from core biopsy size tumor tissue, and we believe that when we complete our development work with Onco II, this will be a significant breakthrough for us to be able to expand (ph) the potential market reach for our product beyond the current generation Oncophage.

And the fourth point I'd like to make, in conclusion, is that our business development efforts have excelled in certainly divesting our cat leukemia business, which is not a core operation to Antigenics and this has generated in excess of $14 million worth of additional funding for Antigenics. But also most importantly, in making substantial number of companies aware of the fact that Oncophage is a blockbuster potential product once we generate positive data from our renal cell carcinoma trial because the product's potential will expand way beyond renal cell carcinoma, given the personalized nature of our product, it is theoretically applicable to essentially all cancer patients for whom we can make sufficient amounts of the product. So that concludes my remarks. I believe we're now ready for questions.

Nicky, would you please, once again, review the process for asking questions?

If you would like to ask a question, please press star, then the number one on your telephone keypad. Your first question comes from the line of Michael Wood.

Good morning. It's Michael Wood at Welsh Capital. You stated that the FDA has given you the go ahead to start enrolling patients in part 2 of the renal cell Oncophage trial. Can you confirm that the agency is now completely comfortable with the product characterization and that the assays for the product have been fully characterized?

Garo Armen, PhD: Yes. I-- let me make an introductory remark and perhaps Renu would like to expand on it. The answer to your question is that the agency is comfortable with all the major, if you will, product characterization issues and other product-related issues. But one word of caution, as you know, it is very, very customary that a company sorts out all details of product issues all the way through the commercialization process. So major issues are behind us and the agency has given us the go ahead based on their comfort level.

Thank you, and also, now that we're getting close to data on the part 1 Phase III trial, why would you not wait for results of that study and see if you can learn anything from it before going ahead and starting part 2?

Garo Armen, PhD: I think Renu may want to expand on this as well, but our protocol allows for us to make adjustments, if you will, should we expect something from part 1 that is not incorporated into our thinking at the moment. So, we have that flexibility. But let me address the, I think the implicit message in your question as to why we are starting it now as opposed to waiting six months or so to start it. I think it's fair to say that we're doing it to get a head start because the rational is that should part 1 be sufficient for either Canadian, European or U.S. authorities, should that be the case, having started part 2 will only have strengthened our position in making that argument, and should it not be sufficient, we would have a head start in the process. So time would be on our side, if you will.

Thanks, and just one last question. I know you said you would have enough cash to see you into 2006. What is-- can you give me an estimate on your burn rate for '05?

Garo Armen, PhD: I think, Peter would you like to elaborate on that?

I think we're not going to give specific guidance on the burn rate for '05, but I think we are very comfortable that we get into 2006 and can fund all the key activities that we need to fund to get to data and pre-commercialization activities.

Garo Armen, PhD: Right. I mean you will see some increase from last year's levels, but not a humongous increase by any means.

Great. Thanks for the update.

Your next question comes from the line of Ren Benjamin.

Hi, good morning, and thanks for taking the call. When exactly did you start the part 2 trial and have patients already started to be enrolled?

Renu Gupta, MD: This is Renu. Thanks for the question. We have just commenced enrollment activities and therefore there are no patients in the study yet. And essentially just this week.

Okay. And what are the key changes between part 1 and part 2? I mean clearly there's some changes regarding characterization. Can you expand on that a little bit and then if there are any other key changes.

Renu Gupta, MD: Okay. I can answer for you regarding some differences in trial design.

Okay.

Renu Gupta, MD: What I need clarification on is the part of your question related to changes in characterization. I'm not sure I quite understood that.

I was under the impression that in part 1 there were some assays that-- well, to rephrase, in part 2, there have been the addition of a couple of assays that will help the FDA become a little bit more comfortable with the characterization of Oncophage.

Renu Gupta, MD: I'm pleased to provide a clarification on that.

Thank you.

Renu Gupta, MD: The potency assays FDA approved were qualified potency assays in the fall of 2003. So we have been utilizing those assays as required by the agency with the (inaudible—background noise) vaccine for clinical studies from about November of 2003. And the same assays are going to be utilized part 2, which were utilized for part 1 in all studies of Oncophage, so there is no difference in the assays themselves. Okay.

Garo Armen, PhD: And we may want to add to that that the assays that we're contemplating on using for frozen samples are exactly the same assays that we are using since November 2003 concurrently.

Renu Gupta, MD: That's correct.

Garo Armen, PhD: So the difference is that we had frozen samples as opposed to fresh samples upon these assays (inaudible).

Renu Gupta, MD: So for the part 2 of the study all patients, who will be randomized into the study to receive vaccine, will have their vaccine relieve (ph) after having been tested for potency, as was the case in part 1starting November of 2003. And the other difference is that in the second study, we are requiring a minimum of four doses of the vaccine to be administered to the patients who get randomized into the vaccine arm. Which was not the case when we started part 1.

So is there a reason for why you decided that they should get a minimum of four doses? Have you seen some sort of data or some sort of a trend that--

Renu Gupta, MD: No. We remain blinded. The data has not been arrived at a point that we can initiate analysis. The FDA has a request to better understand a minimum dose and a maximum dose, and since this is a personalized vaccine, we have yet to learn from the outcome of the first study if there should be a maximum dose. So, the agreement was that we would have a minimum number of doses of the vaccine to be included in the study. I must remind ourselves that this is a personalized vaccine, and then there is a possibility based on the analyses we have pre-specified that we might learn about a dose response from the part 1 study, and as Garo mentioned earlier, we have an agreement with the agencies that as data from part 1 is analyzed, it may provide guidance to modify the trial design for part 2.

Okay. Is the placebo or the control group the same? Is it still the watch and wait arm, or do these patients now get, you know, a sham vaccine, if you will?

Renu Gupta, MD: No this, is not a placebo controlled study. The FDA did not require us to do that. It remains observation as in part 1.

Okay. I guess my final question is regarding the timing of the results. You said that the final events to trigger analysis would occur by mid 2005, so about July? Would it be safe to say that the results would be released sometime in the third quarter?

Renu Gupta, MD: I must, again, say, qualify this, that these are estimations we have always based on the cumulative number of events. This is an event-driven study and when we reach the final number of events required to trigger final analysis, we will then proceed with data lock. Our current projection is that it will be sometime in mid 2005. Once data lock occurs, we require some weeks to conclude on the analysis, so if this timeline is as stated, sometime in early fall, we expect to have data for communication.

And in the previous conference call, you guys had mentioned that I think 80 percent of the required events that occurred, do you have-- can you elaborate on that at this time point?

Renu Gupta, MD: I would refrain from putting a percentage right now. We are very carefully monitoring and cleaning the data, so I think we'll be in a better position when we are very close to the final number of events or have achieved the number of events.

Perfect. Thank you for taking my questions.

Renu Gupta, MD: You're welcome.

Your next question comes from the line of Lei Zhong.

Thank you for taking my question. We're just back to the Phase II, I'm sorry, part 2 of the RCC trial. How many patients do you intend to enroll?

Renu Gupta, MD: We plan to randomize 600 eligible patients.

So the same size as compared to part 1 of the RCC trial?

Renu Gupta, MD: I'm sorry?

It's the same size, similar size to the part 1 RCC trial, is that correct?

Renu Gupta, MD: About the same.

Do you intend to achieve 43 percent improvement in reoccurrence for survival as you intend in part 1 of the RCC trial?

Renu Gupta, MD: I think what I would like to say here is that the study is designed as part 1 is, to show a statistically significant difference and the hazard ratio is about the same.

All right. I'd like just to ask one more question with respect to the characterization. Previously, you had told us the two main assays that are in question, the [INDISCERNIBLE] assay and the antigen representation assay. You told us in a previous conference call that the FDA has agreed to the first assay and was looking at the second assay. The fact that the agency now allows you to proceed with the part 2 of the Phase III, does it mean that agency is now 100 percent on board with the antigen representation assay as well?

Garo Armen, PhD: Okay. Let me clarify this point. We never said, just for the record, that the agency was not happy with this second assay. We were waiting for them to get to a comfort level so that we wouldn't, you know, the whole idea of this is that we're dealing with a very precious material in the form of personalized vaccine, that we won't want to waste. So the purpose of our waiting was to make sure that the agency has worked out all the details, the product, you know, the test specifications, if you will so that we wouldn't have to take a chance with that precious vial that was slated for testing. So the agency in November 2003, and I know that this is a difficult, difficult point to really understand, and I'm not blaming anyone for it. It's a difficult point to understand because when the agency lifted the clinical hold, they accepted both assays. Now, going forward, we have to fine tune, if you will, the parameters, the specifications using these assays in order for us to start or commence the testing of our retrospective vials and certainly with the new trial, we did not want to commence the new trial without those specifications having worked out. And what the agency informed us is, as Renu said, a few days ago was that they were at a comfort level enough to give us the go ahead with the second trial, which meant that all the major issues were behind us and some minor issues, I'm sure, will continue to be addressed between now and a time hopefully when we get product registered.

Have you started to retrospectively analyze the part 1 [INDISCERNIBLE]?

Garo Armen, PhD: No, we have not, because as Renu said, this order from the agency came only several days ago.

Do you intend to do that?

Garo Armen, PhD: We will do that appropriately. We certainly expect to start the process and conclude it by the time we have a meeting with the agency to share our results with.

Thank you for taking my questions.

Your next question comes from the line of Gabe Hoffman.

Hi, good morning. Thank you for taking the question. I was just curious, what is your assumption for recurrence (ph) free survival in the comparator arm of the renal cell trial?

Garo Armen, PhD: There are no hard data on this that we're aware of. However, however, all the guidance has led us to believe that approximately, approximately half of the patients, approximately 50 percent of the patients that are performed a nephrectomy on, among those that are described in our trial population eventually relapse and die. Okay. And so what our trial is designed to capture is a significant reduction of that percentage, both in the context of recurrence, which is an end point that the FDA has accepted as our primary end point, as well as survival, which is the secondary end point that would be captured in this trial. Renu, would you like to add anything to that?

Renu Gupta, MD: No, I think you have covered it. All I would say is that we have used a conservative estimate for five-year recurrence-free survival as well as a five-year median overall survival for the observation arm, and a significant benefit with the treatment arm.

Thank you. I guess I was wondering, I was just thinking from a statistical point of view, granted you have taken conservative assumptions, but was just wondering if you could, you know, tell us what the assumption is for median recurrence-free survival in terms of, you know, number of months in the comparator arm and I guess as a follow-up, was just curious on last quarter's conference call, you had talked about that I guess the number of events being slightly greater than 200 at which you, you know, analyze the data and that you were over 80 percent there. Was wondering if you could update the number of, the number of events and how close you are?

Garo Armen, PhD: Okay. So, let me address that last question and Renu will address the first one. As we answered in the previous call, obviously we're closer to that and I think we're close enough now that we don't really want to go into the specific numbers. Suffice it to say that our current estimate is that roughly around the middle of the year, we should hit the required number of events. That's the, that's the expectation. Renu, why don't you--

Renu Gupta, MD: If I may just make an additional point also for the earlier question, related to events. A reminder to all of us that we are currently monitoring events as reported by the investigators. Our study requires an independent assessment of recurrence of disease through a body setup to do this independently, which comprises of three radiologists and an oncologist, called the CEC, or the Clinical Events Committee. So the final number of events required to trigger final analysis for recurrence-free survival will be based on the data generated by this independent committee, and as Garo was saying, we are in the process of data gathering and cleaning and then the -- then the independent review will begin, so we must await that data before we can say that it's time to begin analysis. So that's a very important point, and with regards to the trial design assumptions, I can share with you that what is in the public domain for a median five-year recurrence-free survival is anywhere from 40 to 60 percent for the stage and grade of disease that we have included in our study. This will be the first study to prospectively look at the true recurrence-free survival in a controlled setting. And certainly the study was powered to do that. So, what we did was we picked for our study a 60 percent, five-year recurrence-free survival rate in the observation arm and also picked a median survival of 6.8 years for the observation arm for our assumption. And a median survival for the overall survival in the observation arm of 12.2 years. So I, I think I would-- I'm sorry. The latter is not correct. The latter assumption for the overall survival is about 8.3 years. So, having given those as assumptions for the observation arm, we have powered the study with an adequate sample size to detect a significant difference with a good alpha to allow for providing substantial evidence of efficacy in this disease population.

Thank you. That's very helpful, and just finally, Garo, I might have been a little confused by your last statement and I apologize. I thought I had heard you mention that you would hit the required number of events around mid year and had just, you know, recalled that on last quarter's conference call, you had projected that you would hit the required number of events sometime late in Q1 or early Q2. Were you perhaps referring to having data mid year, or are you-- has the time at which you'll hit the required number of events, been pushed out a little bit?

Garo Armen, PhD: I think, I think it's fair to say that it's been pushed out by a couple of months relative to our last call. And the reason for that is exactly what Renu articulated. We wanted to make sure that we allow for a conservative overage of any potential dropouts of what would be labeled as recurrence as a consequence of this independent review. So we wanted to be ultra conservative, if you will. Since we have come this far, that level of conservatism was deemed to be prudent by the management.

Great. That's very helpful. Thank you.

Your next question comes from the line of Ed Daniel.

Garo, could you give us a time line of events that will occur, say, between now and the middle of the year? Am I right in thinking that the Phase III, part 1 trial results will be announced in March? Is that right?

Garo Armen, PhD: Phase III, part 1 results, no. I don't know if you were participating in our call prior to this.

I've been in and out answering calls.

Garo Armen, PhD: I empathize.

That's been pushed out.

Garo Armen, PhD: Okay. No. What we said was-- we never said we would announce the results in March or April. We simply said we would hit the required number of events either late in the first quarter or early in the second.

Early in the second.

Garo Armen, PhD: -- second quarter and my previous answer to the gentleman basically elaborated on the fact that for reasons that we have cited, we decided to be a bit more conservative because of the independent review and push the number of events to mid year and as Renu elaborated before, we would take some weeks to clean up the data and at an appropriate time beyond that, we would make a public announcement.

Now, these trials started 11 years ago, is that right? 1994?

Garo Armen, PhD: I don't know how long you have been on a call to have missed this one, but the trial started in 2001.

Okay. I was thinking Phase III-- Phase I trial started back in the 90s.

Garo Armen, PhD: No. Phase I trial in renal cell carcinoma started in 1997.

Okay. What is your expectation as regards the FDA's response? Once you reach this required number of events, the events, I assume, you're talking about the placebo group. There are no serious side effects to this treatment, is that right?

Garo Armen, PhD: There are no serious side effects in the context of cancer treatments as a consequence of Oncophage that we know. So besides that, the number of events we're referring to are events that occur in both arms of patients because we're blinded to the results up until the time we will be unblinded at the conclusion of the final analysis, and so we do not know how these events fall, and the trial is designed to capture a difference between events in the treatment arm versus events in the control arm.

All right. Thank you.

Your next question comes from the line of Derek Tang.

My questions-- Renu, could you just remind me, again, the five-year recurrence-free survival rate, was that 50 percent or 60 percent--

Renu Gupta, MD: Good morning, Derek. 60 percent is the five-year recurrence-free survival for the observation arm.

Okay. You mentioned a couple things in terms of-- progression-free (ph) survival over survival and the recurrence-free survival rate. I want to make sure the primary end point of the study is the progression-free survival, which is the 6.8 years that you assume for the comparative arm. Is that correct?

Renu Gupta, MD: Right. So the primary end point is recurrence-free survival, yes. The median recurrence-free survival for the observation arm in our assumption is 6.8 years.

Great. Thanks very much. And just one final question. Regarding the AG-858 program, when do we expect to see the data from the current (indiscernible) Phase II trial?

Renu Gupta, MD: So we are hoping that we will have concluded the enrollment later this year. We have also planned to extend the study by including patients who will receive 16 doses of the vaccine in addition to the patients who are receiving 8 doses of the vaccine. I expect that later this year we will have preliminary data from patients who have been in the study as of last year, but we are looking forward to analyzing that study next year after the additional patients have received the 16 doses of the vaccine as well.

Talking about dosing, could you remind us real quick, what are the current dosing schedules of the first part of the renal cell carcinoma trial?

Renu Gupta, MD: Both parts actually have patients for whom vaccine is prepared. They receive weekly doses for the first four weeks and thereafter every two weeks till the vaccine supply is repleted.

Great. Thanks very much. Thank you.

Your next question comes from the line of Robert Block.

Thank you. What does the ratio of the number of people receiving Oncophage versus the other group, that are (ph) both RC1 and the Phase II trial, not Phase II, but the second Phase III?

Renu Gupta, MD: Right. So both studies, the randomization ratio is 1:1.

Earlier you said you are going to be looking at other geographical areas for approval primarily Europe and Canada. Is it possible that we may see approval in those markets before we see approval here? And if the FDA does require a second Phase III study, is it still possible that we could see approval that the others would not require that second Phase III?

Renu Gupta, MD: I think those are possibilities one could contemplate, but we obviously cannot speculate on behalf of the agencies, but the possibility certainly exists. And I wanted to make sure that I answered your question accurately around randomization. Were you referring to renal cell carcinoma only or melanoma as well?

Well, originally just RCC, but how about the melanoma?

Renu Gupta, MD: Melanoma, the randomization ratio is 2:1 for vaccine versus physician's choice.

Okay. 2:1, okay. Thank you.

At this time there are no further questions. Are there any closing remarks?

Yes, thank you, Nicky. A replay will be available approximately two hours from now through midnight Eastern time on March 3, 2005. Please dial 800-642-1687 from the U.S. or use the international number, which is 706-645-9291. The access code is 4078413. The replay will also be available on our website approximately two hours from now. Thanks again for participating in today's conference call.

This concludes today's conference call. You may now disconnect.