Agenus Inc (AGEN) 2009 Q3 法說會逐字稿

Good morning. I will be your conference operator today. At this time, I would like to welcome everyone to the third quarter 2009 earnings conference call. All lines have been placed on mute to prevent any background noise. After speakers remarks there will be a question-and-answer session. (Operator Instructions). Thank you. Mrs. Sharp, you may begin your conference.

Thank you, Bobby Joe and good morning everyone. Welcome to Antigenics's conference call to discuss the financial results for quarter ended September 30, 2009. With me today is Dr. Garo Armen, Chairman and CEO. We hope all of you have had a chance to review the press release that was issued this morning. During this call we will review the financial results as well as provide a corporate update, we will then have a Q&A session.

But, before we continue, I would like to remind you that this conference call will contain forward-looking statements including statements regarding the Company's cash position, programs, and products and development using QS-21, the Company's application for marketing authorization for Oncophage in the EU. The Company's efforts to market Oncophage in Russia and to pursue main patient and similar programs. And the Phase II trials of Oncophage and Glioma. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Reference to these risks and uncertainties is made in today's press release and they are disclosed in more detail in our more recent filings with the US SEC. When evaluating Antigenics's business and securities, investors should give careful consideration to these risks and uncertainties.

Before we move on I would like to note that for the purpose of this call, the phrase "net cash burn" means cash used in operating activities plus capital expenditure, debt repayments and dividend payments.

With that, I will now review our financial results for the quarter ended December 30, 2009. For the third quarter of 2009, Antigenics's incurred a net loss attributable to common stockholders of $10.8 million or $0.13 per share. This is compared with a net loss of $11.4 million or $0.17 per share for the same period in 2008. Antigenics recognize revenues for the quarter ended September 30 2009 of $896,000 compared with $685,000 during the same period in 2008. This increase in revenue was primarily driven by an increase in QS-21 license fees, royalties, and product shipments to a number of our corporate partners.

R&D expenses for the quarter ended September 30, 2009 were $3.7 million compared with $5.4 million for the comparable period in 2008. G&A expenses for the three months ended September 30, 2009 were $3.5 million compared with $5.1 million in 2008. Our net cash burn through the third quarter of 2009 was $21.3 million compared with $24.4 million for the same period in 2008. The 2009 results reflect among other things the Company's efforts to support Oncophage in Russia, Europe and other territories while also executing cost containment efforts. Having raised net proceeds of $18.6 million through private placements of common stock we had $34 million in cash, cash equivalents and short-term investments at the end of the third quarter. We believe our current cash balances are sufficient to fund our operations into 2011, at the current rate of net cash burn.

Finally, to date we have extinguished $30 million in face value of our 2005 convertible notes in exchange for approximately $3.3 million in cash and 5.6 million shares of common stock, which should result in annual cash interest saves of $1.6 million. This concludes the financial portion of the call. I will now turn the call other to Dr. Garo Armen.

Thank you, Shalini and good morning, everybody. Last week, as you know we announced that the European Medicines Agency, the EMEA had advised us at an oral hearing to anticipate a negative opinion on our application for marketing with RCC for Oncophage, in the treatment of stage one and two high-grade renal cell carcinoma, which is known as RCC. While we are of course disappointed with this outcome, we are in the process of evaluating our strategy on how to best go forward with respect to Oncophage in RCC in Europe. This includes pursuing the main patient program in various countries in Europe, while simultaneously, with this we will also evaluate the risk benefit of withdrawing our application followed by potential refiling or the possibility of an outright appeal.

We, along with a number of key specialist who treat these patients remain convinced that there is substantial scientific and clinical evidence which supports the conclusion that Oncophage would provide a meaningful benefit for a large segment of RCC patients. These patients have a significant unmet medical need particularly given the fact that there are no other treatment options for surgery. It is also important to note that the benefit seen in the earlier stage patients is persistent for a long period of time. We will provide you of course with regular updates as we clarify our next steps in Europe.

In the meantime, prelaunch activities continue in the Russian market. We remain engaged in discussions with the Russian Government regarding potential reimbursement of Oncophage and I realize this has taken a while. At the same time, we continue with our efforts of enabling local centers of excellence to treat patients with Oncophage by equipping them with freezers, integrating Oncophage into their treatment protocols, and so on. Once again, we will provide you as we have with better guidance once the time line for launch and market potential in Russia become clearer to us.

Moving on to the glioma program, as you know earlier this week we announced that the principle investigator over Phase II trial in Oncophage in recurrent glioma, provided a clinical update at the Society for Neuro-Oncology Meeting in New Orleans over the weekend. Data from this first 20 patients enrolled in the trial showed immediate survival of approximately 10.1 month when the normal expectation of survival in this patient population historically has been 6.5 months. Simular patients treated with Avastin which is the recent standard of care in these patients has shown immediate survival of 9.2 months in recent trials. We remain optimistic about the prospect of advancing the development of Oncophage in this area also of high medical unmet need. The trial is expected to enroll approximately 30 additional patients. In addition to this trial, we, in glioma we have another trial on going which is also a Phase II trail with Oncophage with Timodar in newly diagnosed patients and that as I said is actively enrolling now.

Turning to our, turning rather to the QS-21 program, as you're aware, there are currently 15 different vaccine products containing QS-21 in clinical development by our partners. This includes GlaxoSmithKline Phase III programs in malaria, melanoma and non-small cell lung cancer. Our key partners also include now, JANSSEN Alzheimer's Immunotherapy, which is our wholly-owned subsidiary of Johnson&Johnson, which recently acquired substantially all the assets of Elan's Alzheimer's Immunotherapy program. As you can see between GSK, GlaxoSmithKline and JANSSEN products, the portfolio vaccine is containing QS-21 is extraordinarily diverse including prophylactic therapeutic vaccines spanning across preclinical Phase I, Phase II and Phase III stages of development and offer of course infectious disease, cancers and Alzheimer's disease.

We anticipate that the first vaccine containing QS-21 could launch as early as [2001], 2012 time frame. We are entitled to royalties on commercial sales for at least ten years plus product launch, and potential revenues to Antigenics at peak are in the hundreds of millions of dollars with little or no cost associated with the realization of these revenues. Currently, we are reimbursed for any expenses associated with QS-21, on costs plus basis. Additionally, we get various milestone payments.

We recently renegotiated our QS-21 license and supply agreement which is now held by JANSSEN. This covers the supply of QS-21 for the Alzheimer's disease vaccine which is ACC-001. As as a result, we are in the process of transferring to the wholly-owned subsidiary of J&J, the technology to supply QS-21 in exchange for modest undisclosed payments. All other royalty obligations and clinical development milestones remain economically equivalent as before. This, as you can see is an exciting program for the Alzheimer's Disease community and we are pleased that J&J has recognized the potential and has sold to secure its supply of QS-21 as a key component of their vaccine. With this, I will now end my prepared remarks and we will again questions and answers.

(Operator Instructions). Your first question comes from the line of Ren Benjamin.

Thank you. The questions, I guess you know first thing's first regarding the EMEA decision or the opinion. Have you been able to get any sort of if not when might you get that information and what are the sort of choices going forward, I know early on in the call you mentioned that you can go through some of the other countries in the EU and I guess go after them individually. But maybe we can just go through a scenario now.

Sure. In terms of your first question, as to why they gave us a negative opinion, as you know, we filed in October of last year for conditional approval which is a relatively new provision perhaps about 4 years old and there have been a hand full of products approved under conditional provision, and we went under that because of specific attributes of the patient population, the unmet medical need, and perhaps the un -- unclear guidance on cancer vaccines in general. It is very, very much a debate as in Europe as in the US, and how to improve guidance for the approval of cancer vaccines because this is a novel area. It targets a newer patient population meaning those that are not by typical oncology drugs, earlier stage and the guidance in this area are interest. And the patient there, these products, in these patient populations should be required to meet the same kinds of requirements as the typical oncology products in late stage patients is an open question. So there are lots of question marks because we are treading a novel area, and the typical requirement for two well controlled clinical trials that shows statistical benefit is something that will have to be clarified and debated in future.

Now, having said that, we went in for conditional approval because we had substantial support from the clinical community who was either exposed to Oncophage or with the results subsequently and thought it would be important to have Oncophage for battling prevention of recurrence in this patient population. It has a relatively high growth recurrence. So, the rules are for this novel area, need to be clarified and they declined the product based on rules that apply to oncology products in general. And products for approval in general.

Now, in terms of our next steps, the country by country strategy that I outlined really refers to the main patient program, main patient program is a special provision in Europe specifically and perhaps in other geographies as well. But in Europe, that allows one to be reimbursed for products that have not been approved if physicians request this product specifically for their patients. So the Companies cannot go and promote the product as you would for an approved product but can educate the community and based on that if there are any requests, we can fulfill those requests and get paid for the product. That is a strategy that has been on going with us in Europe and we will have to visit this on a country by country basis.

With regard to the future of Oncophage's approve in Europe, the two pathways that I spoke about for that specific purpose we can pursue the strategy of withdrawing our application and then evaluating the potential of refiling, or we can pursue the strategy of appeal, and there are benefits and risks associated with either one of these strategies and currently we are in the process of evaluating them. And as soon as that evaluation is complete and our go forward strategies clarified, we will make that known to the marketplace.

And it seems like there's some precedence to the whole appeal process. I don't know what the exact statistics are, but I think just last year alone, there were several drugs that had a negative opinion in the appeal process and then got positive opinion and subsequent approval. In Europe, so, hopefully that's an option. Very quickly QS-21, it is a program that is pretty much on auto pilot and you're a little bit similar to your partners. But I guess more of a big picture question is you know, the whole development of Antigenics in general and correct me if I am wrong has been, I don't know call it a slog fest or a slow going process. Is that just something that is particular to the Antigenics field? Is there something that is you know much harder with than with other types of compounds in development? And I guess looking at something that has been in the news lately regarding the flu vaccine and things around the H1N1, is there any sort of an interest, has anyone express any interest of QS-21 with any of those vaccine .

Certainly, let me address separately, just to clarify the point, about withdrawing potential reapplication versus an appeal, these strategies are going to be pursued in the spirit of keeping Oncophage alive for regulatory consideration in Europe. So we are weighing the risks and benefit of the each one of these strategies and rightfully you pointed out there are appeal presence dented, each one has a specific reasons why as to why they may have appeals. But, the clear message I would like to convey here is that we are at this, as of this moment, we are going to pursue potential pathways for registration of Oncophage in spite of this decision. So that's why.

In terms of [Avastin], let me take two issues separately. The development has been as you said a slow process, and there are companies, like GlaxoSmithKline who have put in a lot of effort historically in the development of optimal [Avastin]. And they are I think by all standards, . The most advanced company in having fine tuned the optimal [Avastin] based on today's technology, and we are happy of course that QS-21 has been included in the number of their [Avastin] formulations which spans across a very significant proportion of their vaccine development program whether it is prophylactic vaccines or therapeutic vaccines. If you talk off the record to any of their competition, you will find that the respect for GSK [Avastin] portfolio is very and they are considered the most advanced in this field in the world as evidence by the fact they have the most vaccine in the country. And once again we are happy that our product is in included in the great majority of the programs in clinical development. So, I think [Avastin] absolutely critical for the activity of vaccines. And the field is coming to a point of maturity with these products, as by the fact we have the first product to be launched into 2011, 2012 time frame followed by a significant number of products beyond that.

With regard to the flu vaccine, whether or not to include QS-21 in there is not an issue because the swine flu vaccine has had to follow a very rapid time line for delivery, and a regulatory authorities have accelerated the deferred and lowered the hurdles for demonstrating the effectiveness of this vaccine. We don know if the final vaccine will have any efface, we are just basically doing it because there is a level of panic out there because of the implications of not protecting at all. I am not really privy as to whether or not QS-21 has been considered for this, but suffice it to say that QS-21 manufacturing for commercial applications is not yet up and running . So it will take a little more while if this was another year or so perhaps QS-21 would have been considered because it makes vaccines very, very important because of its attributes but I don't know anymore information than that. So hopefully, in GSK's hands, the larger manufacturing capability will be in

Got it. Thank you for that. Just circling back one last question on Oncophage, as clearly there are more countries that you could potentially be talking to and potentially pursue regulatory approval and Russia just being some of that out of the box thinking that you guys, are there any additional countries that you may be looking at right now, maybe more advanced stages of discussion and could file for regulatory approval.

There are countries we have been exploring. And because of the level of effort that has got into the European filing and subsequent follow up, we haven't had the resources internal resources for. We are a small company as you know we haven't had the internal resources to really pay attention to other countries, other than having some preliminary discussions either directly ourselves or through potential partners. So, we will be evaluating those options also a bit more rigorously over the coming months.

Great. Thank you very much. Good luck.

Thank you very much.

Your next question comes from the line of Jeff [Bumetts].

Good morning.

Good morning.

Yes. Question, in the last 18 months I have reviewed the material and it that I haven't seen anything negative and have been pleased with the progress. The question is why hasn't the EMA seen the same thing?

Well, I don't know what you're expertise is, if you have any regulatory expertise, I appreciate your comments. In the filings, there is considerable detail as to the product, its rational, the clinical information, its product attributes and so on and so forth. And one of the things that has come out, which is positive with the EMEA process is there were considerably more questions in the beginning of the process, in beginning of the review. As compared today how we ended up. So a number of various quotations have been addressed through this process. But a number have still remained open, and I think given the time frame accelerated time frame considered, EMEA has done its best to evaluate and make a determination. We would like to pursue this for reasons that relate to additional information that has come to light and some additional information that we expect to come to light over the next months, and that is one of the reasons we are evaluating the two separate options to see which is more advantageous before us for a timing perspective. And we will have hopefully additional deliberations with the to see what the best way forward may be. Having said that, it is generally, generally accepted and the advisors, that that guidance for r the approval of the vaccine, our deficient and need to revisit it, they deficient not because the agency regarding these. But because the agency hasn't had to deal with many applications in this field. And so we are to some extent learning as we go along. And my hope is and the Company's hope is that learning process will get fine tuned as we continue our efforts.

So, in your estimation, how long do you think the depending upon the answer that this would slow us up on our approval process just to say my guess is a year?

It is too early to really make a determination for that. But once we get classification on what strategy we will pursue and get a bit better view of the specific processes and specific steps associated with that process, we will provide you better guidance on that.

I'm assuming you will have a conference call?

Either a conference call or a press release but certainly any interested party is always welcome to all the Company and speak to our Investor Relations department.

Cash burn rate sufficient?

Well, I don't know what sufficient really is per se. But we have provided financing usual guidance in terms of our cash burn has been this year. And we are now going through the budget process for cash burn next year. Clearly, our agenda is to try to retain cash burn as much as possible. We can't stop full of our efforts, probably we will contain cash burn as much as is possible. Which we by the way, our historical track record is a very good job at cash the last few years, and continue to do so. So, we will contain cash burn while maintaining our capacity to be able to follow these programs to pursue these programs, and try to stretch it as much as possible. So, we certainly have cash to go through next year, and then some. As we get to our budgeting process we will provide you with better guidance in terms of exactly how much more than next year will be satisfied with our current cash position.

Thank you very much. I appreciate it.

Thank you.

Next to Brian Harris.

Hi.

Hi.

My question is how is the deal to EMEA in the vote, now there was 58, 50 some odd members there. Can you give us some flavor of how that I mean are close in the vote, or way off, can you give clarification on that.

Okay. So just to clarify, the number of votes are only 35 even though there are 58 members of CHNP or 54 that are present from member countries. There are 35 votes, 27 countries and 35 votes, you wonder how the that works out. There are certain countries that have two votes not because of the size or covenants but because of the specific function they're involved in. So, now it is a fact that we don't know by the way how the voting went because the formal voting hasn't taken place. We, what we have is an expression, and we don't know exactly how the switch is, but, the way European agencies work is by encouraging unanimous votes on everything, and I'm not aware of any voting this has gone on which had not been unanimous. So, they basically try to get consensus on a decision. Whether or not there are centers that matter for reasons of protocol, the votes generally are unanimous.

Okay. Well, so, usually on those votes are usually unanimous or can it be like one over, two over. I mean does it usually, is it always unanimous pretty much.

I don't know because these are not publicized.

Okay.

But what I heard is that especially in the last several years, all decisions have to be unanimous. Even if there are the seniors, the final vote has to be unanimous.

Okay. All right. Over back on QS-21, and with JANSSEN Alzheimer's Immunotherapeutics, J&J Division, are we still in the 3 to 5% royalty range even though that contract was renegotiated?

Our royalty ranges, think about the Company are a function of the type of product, the type of agilent mix used, and the patent life of agilent mix. So generally speaking our royalties range from 2% to 4.5%, with our being specific to what company or what have you. No agreement that we have been engaged in recent years, starting by the way with GSK re negotiated agreement several years ago which redefined the royalties to a higher level to a more certain higher level. Nothing else has changed. So to answer your question, the royalty related compensation to Antigenics be the same as a result of this negotiated agreement with JANSSEN, the answer is yes.

All right. Great. The next question I will ask you is the color on how these royalty payments are broken down? I mean is a therapeutic vaccine worth more than a prophylactic vaccine?

Okay. So, generally speaking what I can give you guidance is that the products that we have discussed by in large are toward the high end of the royalty range. In other words, we would discussed and highlighted, which are Phase III programs, tend to be on the higher end of the range. Some of the prophylactic vaccines that don't use extended patent life technology are toward the lower end.

Getting back to the renal cell carcinoma study and European approval, in past conference calls you have many times alluded and suggested you were in partnership talks. Can you give us some color on how that is going? I guess my comment is, in my opinion it would be prudent to get a big pharmaceutical, deep pocket guy to navigate the political and regulatory agency, and I was just curious if you can expand on that because it just seems like going alone is not in the long-term health of the Company when we have to continually go to the well with private placement and their warrants.

I agree with you. I agree with you entirely. The fact is that we don't have a deal yet that. It is most likely not because we haven't made an effort but because of the novelty of the product, of the business model because of the product. We have pursued, I think the substance has materialized just yet. We cannot continue to have partnerships talks, although I would caution against anticipating a partnership that's going to be $500 million or a large amount of money up front. That's unlikely. The partner that is we have been working with recently are local players, that can help us in more than one way if you will not just financially but also through their own efforts being driven by their own spending, and we do have these underway right now, and some of these partners, potential partners are spending their money already without agreement in place because of their faith in the product and because of their belief that this product once we get the first break could be a very large potential for them, and for us and could change the treatment paradigm for cancer. I cannot tell you that in the near-term we will not have something substantive where our burn rate will be effected . That's one reason we try to increase your run rate as much as possible to improve management of our expenses. But I agree with you entirely. There are other benefits as well if you were to -- with a large or permanent European player, that has also political benefits with regard to the approval

So the, so the parties you have been talking with have been more of the small regional companies, not the big, big GlaxoSmithKline or Roche, they have been the smaller ones, right.

Lately. Prior to the last year or nine months, we have had talks with the larger partners as well.

Over the last what now?

Prior to the last 9 to 12 months, we've had discussions with larger partners.

Okay. All right. Has the Company learned anything or is there any light you can share on the meeting last Tuesday between the national cancer institute and the FDA on what direction they're going in with cancer vaccines? Has there been any light there?

Well, I mean we have learned a lot through our efforts with the EMEA. We have learn a lot both in terms of the agencies issues, what their concerned about the most. We have learned because we have interacted with a number of experts in Europe, and have got to know their more intimate believes and sentiments regarding Oncophage . Although it has been beneficial we have still learned how to position the uniqueness of the product from a product perspective, addressing a number of issues that are addressable with science and technology. All of those have been positive. With regard to the specific deliberations that you are talking about with the FDA, other than more confusion, I don't know what is really come out of it because most of the discussions are being driven by people whoo have driven the field in the last 20 to 25 years. And so I don't know how much they can add specifically to enlighten the regulatory agency on this issue. I think, I think the field requires a leadership, I am not sure if that leadership has yet step forward, but it definitely requires a leadership. We are working with organizations, particularly in Europe inside of the US as well, who understand the scientific, clinical, and practical development challenges because they're doing a trial in early stage. You are talking about a 6 to 10 year undertaking If you look at the efforts by pharma companies in the field of cancer, oncology drugs, I don't know of any development program currently, I am sure there is one somewhere. But I don't know of any development program that targets agilent patients in oncology where you potentially could have maximum benefit.

In other words, essentially all drug development programs are targeting metaphytic disease where things are too far gone, provide benefit other than perhaps anywhere from two week to several month extension of life. If you want to have a more profound impact by preventing relapse in patients, that's a very long undertaking and I don't know of any major company working in this field. So, the whole field needs to be revisited. By patients, chemical trials to and how we get through the requirements of the regulatory system with these long drawn out trials to meet expectations. So those are challenging issues. And we haven't been shy to tackle those challenges, but we can do it more

Right. One last question I would like is with the Russian Government in April, the 2008, do we have like a time frame to tell them to put up or shut up? Tell them to, we need a certain time frame to execute on this or else drop the whole thing?

Well, I mean firstly I share your frustration with a couple of clarifications I should point out. We have no right to tell anybody to put up or shut up because we need to respect the process that they follow in this regard. We do get frustrated at types but we still need to respect the process. Typically in Europe, to the point of launching product, having worked our reverse, typically is 12 months. You can do it in about 9 to 12 months. Some extend longer than that. So now, in about 18 months. It is longer than it would have taken in Europe because at some point we long to pull back if we don't get any resolution, but suffice to say that our expenditures to pursue this in Russia are negligible. So we did the up front expenses. We slowed that down very, very significantly, and going forward, I would be surprised annualized if we spent more than $100,000 to get to the next level. So we have chosen some very good people to work with, credible people who understand our product. And we are hoping that we will get a resolution, but there is no guarantee we will. But are we ready to throw in the towel, no. But it makes no sense given how little we are spending.

I should are used a less harsh phrase, so I apologize for that. Have the Russians given you a time line, parameter or kind of a sequences, that need to be to execute on this, this time of the year.

As you know, when I first hurdles is the export, import. So we are in the process of right now testing with license so that we have no glitches in the system. I hope that test be be completed in the next month. And that test basically involves a number of shipments back and forth to make sure we are comfortable with it because it will be terribly embarrassing if we enroll our first patient and then something got hung up in the exportation office. So we want to make sure that issue is addressed before we can enroll patients. Is there a cure for patients even with having government reimbursement? Which we can execute? The answer is yes. There are several patient who is have been awaiting surgery to be, to get the product. These are private pay patients, but without testing the import, export import, we will not enroll because this is in a commercial setting, we will not get any patients from the commercial perspective. But at least by the end of the year, we will be in a better position having tested the import exportation pathway, and perhaps having gotten patients commercially.

Do you know if the simple government is allocating funds for the 2010 calendar year.

We have no notification of that, but this is what we have been hoping to accomplish.

Okay. All right. Well, thank you very much for your time, and good luck to you.

Thank you very much.

Your next question comes from the line of Joe black.

Hi. I would like to kind of maybe work upon I guess shut the line on. It has been about six months of leave. The last update, I know you had a conference in June, I guess relaying information from the February or March RCC, that time line of trials there with the subset group. We have got another six months under our belt here. Are we still trending hopefully, even better with the subset group. That being said and hoping for, is it some of the additional information that has come to light here with either refilling or going for the appeal?

We expect -- I have to be careful in terms of what we have disclosed publicly on this issue. But suffice to say that if we had any negative signals we would be more discouraged in terms of moving the program forward. Secondly we have official look at the survival registry around March or April of next year. And at that point we will make, we will make the next data analysis public. I am hoping obviously that the trends will get stronger even.

Okay. That being said, the time line for refiling is that some information that would certainly guess would if you wait for the final results, or again we are kind of in the midterm and I know you may or may not be able to answer it there obviously. But taking upon the fact that you just mentioned that there hasn't been anything negative. So one would assume it is still positive. That being said, added in the new information, through all of this. The appeal process might be a little quicker than the totally going for the refile.

I think you're right. That's why we are looking at the risk and benefits at appeal process will be quicker although it may not be the best pathway, and because of the quickness of it --

Sure, sure.

But I think as we get internal classification we would be happy to share it. There are a number of issues, it is not just next data coming out of this survival registry, but other things that need to be attended to and addressed to optimize the probabilities of success. So bear with us and as we go through this analysis and get clarity we will share that with you.

Okay. I appreciate that. Another quick question here. The trials going on with Temodar and I don't know if I pronounced that right, a little research I guess certainly, doesn't allow me to be any kind of an oncologist here but in layman's terms, adding that with Oncophage, I know we are looking obviously for all kinds of positive things. But is it my understanding that is a pill form that is given to patients after they've had surgery removal and helping with the I guess non-recurrence?

It has become sort of a standard. In this patient population. That's why the trial is Oncophage, Temodar. In terms of does it prevent recurrence, the answer is no it doesn't. It seems to delay or extend survival a bit. So it is not something that really changes the course of the disease in any meaningful way. And the question is if we combine it with Oncophage could we do better.

Okay. Is QS-21 being involved also?

No, Not in that.

The last question I have got is I believe there was one or two new positions that you guys were looking for internally. Are those -- again, I didn't understand them at all. Okay. But in layman's terms here, I guess is this to help us to go forward with any EM (inaudible) any questions or any other approval of are those new or replacement positions I guess?

We have,, I mean there is natural attrition with our company that occurs, you know, people leave from time to time.

Sure.

And some times we restructure positions, some times we let people go based on performance issues. Although we are down to a pretty core team now, and the competence level of our professionals at the company is extremely high. So I do not expect any performance we make on a massive scale or anything like that. The head count has gone down steadily, and any positions that we add on from time to time are mostly as a result of replacements for people that leave or some restructured positions where we change the responsibilities and bring in other people to fulfill them.

Okay. Very good. Hey, appreciate your time. Thank you.

Thank you.

There are no further questions. Do you have any closing remarks?

I would like to remind listeners that a replay of this call will be available approximately two hours from now through midnight Eastern Time on November 12, 2009 by dialing 800-642-1687 from the US or use the International number which is 706-645-9291. The access code is 37318218, and the replay will also be available on our company web site in approximately two hours. If you have any additional questions after today's call please call 1-800-962-AZEN or 2436. Thank you.

This does conclude today's conference call. You may now disconnect.