Agenus Inc (AGEN) 2010 Q2 法說會逐字稿

Good morning. My name is Eunice and I will be conference operator today. At this time I would like to welcome everyone to the Antigenics second quarter 2010 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. (OPERATOR INSTRUCTIONS)

Thank you. I will now turn the call over to Miss Sharp, Vice President and CFO. Please go ahead, ma'am.

Thank you Eunice and good morning everyone. Welcome to Antigenics conference call to discuss the financial results for the quarter ended June 30, 2010. With me today is Dr. Garo Armen, Chairman and CEO.

We hope that 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 without limitation, statements regarding the Company's cash position, timing of potential royalty streams and development and commercialization efforts, timelines, availability of data and potential efficacy with respect to products and product candidates of the Company and/or its licensees and partners.

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 most recent filings with the US SEC. These statements speak only as of the date of this call and Antigenics undertakes no obligation to update or revise these statements.

All forward-looking statements are expressly qualified in their entirety by this cautionary statement. When evaluating Antigenics business and securities, investors should give careful consideration to these risks and uncertainties.

For the purpose of this call, the phrase net cash used in operating activities plus capital -- are cash used in operating activities plus capital expenditures, debt repayments and dividend payments. As a reminder, this call is being recorded for audio replay.

With that, I will now review our financial results for the quarter ended June 30, 2010.

For the quarter ended June -- sorry June 30, 2010 -- for the quarter ended June 30, 2010, Antigenics incurred a net loss attributable to common stock holders of $5.2 million or $0.05 per share. This is compared with a net loss of $12.3 million or $0.17 per share for the same period in 2009.

For the six months ended June 30, 2010, the Company incurred a net loss of $14.2 million or $0.15 per share compared with $22 million or $0.31 per share for the comparable period in 2009.

Antigenics recognized revenues in this quarter of $805,000 compared with $1.3 million during the same period in 2009. The decrease is primarily due to timing of shipments of QS-21 to our licensees.

Research and development expenses in the second quarter of 2010 were $2.6 million compared with $5 million for the comparable period in 2009. General and administrative expenses in the second quarter of 2010 were $2.8 million compared with $4.2 million in the second quarter of 2009. These decreases reflect among other items our cost containment efforts.

Cash, cash equivalents and short term investments amounted to $28.7 million as of June 30, 2010. Our net cash burn for Q2 2010 was $3.5 million compared with $5.7 million in 2009. This reduction primarily reflects our cost containment efforts. We continue to anticipate that our net cash burn for the full year 2010 will be in the range of $16 million to $18 million.

This concludes the financial portion of the call. I will now provide a brief corporate update.

I'll be with an update on AG-707, our off-the-shelf genital herpes therapeutic vaccine. Just this past Tuesday, data from a phase I trial measuring safety and immunogenicity was presented at the International Herpes Workshop. The data showed that all evaluable patients treated with AG-707 and our proprietary QS-21 adjuvant matches a CD4 positive T cell response and 63% matches a CD8 positive T cell response. This finding was the first of its kind in genital herpes therapy according to our investigators.

The trial was conducted at the University of Washington Virology Center, which is the world leading center for herpes therapy, and the investigators involved with the trial are considered among the top world experts in this area.

According to the Center for Disease Control genital herpes affects more than 60 million Americans. There is no cure and there's increasing resistance to current therapies. AG-707 may hold promise in managing outbreaks and disease transmission. Current antivirals require typically daily administration and only work while the patient is taking the medication. A vaccine approach potentially offers a fundamentally new way to treat this virus by eradicating it all together, not just suppressing it. Additionally, a vaccine approach could address significant potential compliance issues associated with current approaches.

AG-707 consists of recombinant human heat shock protein-70 complexed with 32 distinct 35-mer synthetic peptides in the HSV-2 proteome. This extraordinarily broad spectrum of herpes antigens have intended to allow for more accurate immune targeting and surveillance. Further, the diversity of antigens in AG-707 increases the chance of providing efficacy for a wider segment of the patient population.

Potentially this product concept of combining antigenic peptides and heat shock proteins could be applied to many infectious disease pathogens. This data represents our first human proof of concept for this entire infectious disease platform. It also corroborates what we've seen to date in a number of cancer indications with HSV based therapies.

Antigenics plans to submit a manuscript for publication in a peer review journal. Now that the data is public, we are beginning efforts to seek a partner to continue further development of AG-707 and the associated platform technology.

Moving on to Oncophage, our investigational therapeutic cancer vaccine, we currently have two investigator-sponsored phase II clinical trials ongoing testing Oncophage in recurrent as well as newly diagnosed glioma or brain cancer. These trials are being run by Dr. Andrew Parsa at the University or California at San Francisco and are externally funded by patient advocacy groups and the National Institutes of Health.

The trials will evaluate overall survival, progression free survival and immunological response. On May 20, 2010 data from the phase II clinical trial testing Oncophage in current and recurrent glioma was presented at the International Conference on Brain Tumor Research and Therapy.

Data from the first 32 patients showed median survival of 44 weeks compared with a historical median of 26 weeks. Approximately 70% of these patients survived beyond 36 weeks and 41% survived for at least one year. All patients tested exhibited significant generalized innate immune response and 92% showed an adaptive tumor antigen specific immune response, demonstrated by significant increase in CD4 positive and CD8 positive T cell responses.

In the first eight patients with newly diagnosed glioma trials, no serious adverse events have been associated with combination therapy with temozolomide, the current standard of care. Additional data should be forthcoming from one or both of these trials by the end of the year. Based on the survival and immunology data observed to date and on Oncophage's tolerability, we are hopeful that Oncophage will have a place in the treatment of this disease which represents an area of high unmet medical need.

We plan to review the phase II data as it matures and evaluate potential registrational pathways for Oncophage in the treatment of glioma. In addition, Antigenics is working with the pediatric brain tumor consortium to explore initiation of a phase I trial testing Oncophage in pediatric brain tumors.

At the same time we've continued to work towards commercialization of Oncophage in the treatment of renal cell carcinoma, RCC, or kidney cancer. This product has been approved in Russia in this indication and the patients have been treated -- and patients have been treated with Oncophage in a commercial setting.

We continue to explore local distribution partners who might support potentially broader commercialization as well as efforts to obtain government reimbursement for the product.

Antigenics continues to evaluate (inaudible) in Europe with respect to Oncophage for adjuvant RCC. Potential outcomes include discontinuation of efforts in Europe, planning for resubmission of a marketing authorization application, implementation of (inaudible) or similar programs and/or most local partnership agreements. We expect to make a final decision by the end of the year.

Meanwhile we have closed the INSPIRE survival registry following patients from our phase III trial testing Oncophage in non-metastatic RCC. Final data analysis is underway. Enrollment continues in a small trial testing immunology endpoints in RCC patients.

We are contemplating further preclinical and/or clinical work testing Oncophage in potentially synergistic combinations, for example, with anti-CTLA-4 antibody.

We continue to explore potential partnerships with Oncophage in order to seek additional resources to bring the product into broader late stage clinical development. The sessions are still ongoing with respect to potential or R&D oriented collaborations and local commercially oriented partnerships in various territories.

Moving on to QS-21, our proprietary investigational adjuvant or ingredient added to vaccines to boost immune response, our licensees such as GlaxoSmithKline and Johnson & Johnson continue clinical development of multiple vaccines containing QA-21 investigational adjuvant. Phase III programs include vaccines for malaria, melanoma and non-small cell lung cancer.

Antigenics is typically entitled to milestone payments as these programs progress as well as royalties for at least ten years after commercial launch, with little associated costs.

The cost of developing and marketing these vaccines is assumed by the Company's licensees. Any costs of Antigenics are typically reimbursed on an cost plus basis. The latest guidance we have received is that the first products containing QS-21 could be launched in the 2013-2014 time frame. This is an important asset for the Company as it diversifies our pipeline, it minimizes execution risks and key clinical programs are being run by large pharmaceutical companies, and Antigen does not bear any of the expense related to these programs.

We hope that you've found this update to be helpful and I will now conclude my remarks.

We are now ready to take any questions.

(OPERATOR INSTRUCTIONS) We will pause for just a moment to compile the Q&A roster. Our first question comes from the line of Ren Benjamin with Rodman.

Hi, good morning Shalini. Thanks for taking the questions. Maybe we could start off with Oncophage first. You mentioned that there was a handful of patients that have already been treated in the private affairs setting. Can you tell us how many patients have been treated and is there any clarity at all regarding what the pipeline looks like or is it more sort of -- or is it just hard to tell this early during this launch?

Sure. Ren, let me take a crack at this. The first few patients, and there are only a handful, we have been just to make sure that the system is working as we would have anticipated in a full commercial setting. So this -- I would not characterize this as a commercial effort rather than the fact that we have actually received payment for treating patients in the commercial setting in the private pay market.

But the true effort cannot start until we have a full partner on board or a full distributor on board. And the hope is that that will commence sometime in September, perhaps toward the end of September and within the first six months of that effort well will have a better guidance on what the true private pay market is in Russia and based on that that, we'll have also more accurate guidance on how we can tap into the government pay market in addition to the private pay market.

So this is an exploratory effort and I know that everybody has been very patient in this regard. We have been approaching this brand new market with a very novel product. There's no precedence for what we're doing in terms of a logistics of what's going on with Oncophage in any commercial setting so bear with us. We're not giving up but -- and we have an interested partner who is working with us. Our distributor is working with us to explore the market and see if it makes sense for us to launch a full commercial effort in Russia.

Got it. And I guess in regards to partnership with a distributor, you mentioning around the September or late September time line, is that in any way -- could that in any way be impacted by the progress being made with the government in terms of reimbursement? For example, is reimbursement -- the guidelines for reimbursement need to be in place in order for that partnership to take place or is this a group that will help you in obtaining government reimbursement?

And if you could talk to us just a little bit about the steps that are in place and maybe still need to be completed in Russia to get reimbursement.

Sure. So the first question, this initial effort is not contingent on government reimbursement, so the initial effort will be based on the target paying market exclusively, nothing else.

Now what we know is that the distributor that we're working with has already generated demand or inquiries by physicians who are familiar with Oncophage in Russia. You may remember that in the last two years we have done methodically and quietly a very good job of increasing physician awareness. That includes both physicians who were part of our clinical trials. You may remember approximately 25% of the patients enrolled in our renal cell carcinoma trial did come from Russia, 25% of patients came from Russia and so there's a fair amount of local experience with the product and liking of the product.

So the distributor has been further exploring demand and generating initial demand before commercial launch and none of this is contingent on government reimbursement.

We need to make sure jointly with them that there is a commercial market because the government reimbursement is never a certain thing and so if we wait until we get government reimbursement, it may be a while longer and it would be prudent for us to see if there's a viable market in the private pay market -- private pay area and if there is, then there will be even more justification to pursue government reimbursement and this local Russian company or an affiliate of a European company which is in Russia will be able to be in a much better position to secure government reimbursement. But again, it's preliminary.

Okay.

Very preliminary and it requires patience and methodical plotting of the next steps.

Okay. And can you talk to us a little bit about the progress or your thoughts regarding the EU and potentially submitting an appeal. Is that something that is still on the table? And then I think at least previously you were thinking about some of additional countries, maybe like the [Brit] countries. Can you give us your latest thoughts as to what's happening with new applications?

Certainly. One thing, just a general statement, given the resources of our Company, given our carefulness about how much monies are being spent, and as you could see from the results of this quarter, there has been terrific progress made in reducing costs, okay, while also advancing a number of programs including the AG-707 program, among others.

So we'll approaching things rather conservatively, which means that we are bringing in, we're not spending monies and much effort on any of these programs with regard to the renal cell carcinoma field without having other stakeholders in the game.

So both in Europe and in some of the Brit countries that you're talking about, we are actively exploring the next steps with potential collaborators. So for example, in Europe we have been working with a local company. It's a small company. They're very interested in the product and we have been waiting for them to put in their cash resources, which now they have potentially are taking the right steps to do that, to explore Europe further.

So it's very important for everyone to understand that Antigenics monies are going to be spent very sparingly to further explore the renal cell carcinoma opportunities. Luckily we have a number of parties in Russia, Europe and South America. Some of them have come to us unsolicited to further investigate opportunities in renal cell carcinoma and so we will work with them further.

Now in terms of the regulatory steps in Europe, it will be contingent on our agreement with the local partner as to how much additional work needs to be require -- is required on the regulatory side and how much resource they will be able to bring into the party to take these steps. And it's prudent for us, particularly in Europe to work with locals. That's true everywhere, to local companies -- to engage local companies, because they have more leverage, better understanding of the local politics and what have you.

Got it. Just switching gears to AG-707, congratulations on the results. I would like to explore -- you mentioned that you'd like to move forward in this program with a partner and I wanted to get a sense, since the data's been announced, what the partnership level or interest has been and one point with every company, one has to sort of juggle the relative valuation and earliness of a program versus the monetization of that program.

And so at what point for Antigenics does it become a decision where you guys decide that you want to take the trial on yourself, the next trial instead of partnering because it's either taking too long or the monies they're offering is too low? Or is it something that you will only move forward -- either a program that you will only move forward with a partner?

Okay, so your first question was what is the level of interest. You must remember that we debuted this program for the first time, in fact no one knew about this development outside of the Company except the investigator community that we have been working with very intimately. No one knew about the results and the implications of the results including partners or any commercial entities, until Tuesday.

So this was just recently debuted. There has been no leak on this. There's been nothing that at least I heard of from the trade. So it's brand new and since it's been debuted in the last two days, do we have people who are interested in it? The answer is yes. We prepared very carefully all the materials because this was debuted at a very important herpes conference in Salt Lake City dedicated to herpes simplex.

And so there has been a fair amount of initial interest. Part of the reason is, as Shalini mentioned, this is the very first time that one has observed a very powerful dual immune response with a herpes vaccine with such a multivalent reach to the herpes genome.

It's not an insignificant early advance. The herpes field has been quiet for a while. In the '90s there was a lot of [asserting] with herpes vaccines. All of them had limitations. We were aware of what those limitations were when we designed this product.

The addressing of these limitations were factored in very carefully, both the multivalency and the CD8 plus CD4 immune activation component and so we are very heartened that experts in the field fro the world's top center are very excited about these results. They're much more qualified than we are and the excitement is more important than ours is. So we're very heartened with that and if they're excited about it, it deserves further advance.

Now in terms of your question is further advance in the clinic contingent on a partnership? The answer is no for the following reason. Could we potentially manage a second trial? Yes we can because we're not talking about humungous costs. But still, important costs. I am reasonably confident that the money will be available most likely through a partnership of some sort or licensing arrangement of some sort, but potentially also without it.

And so we're now looking at, in fact we've been already in discussions with the key people in the field, on what the next trial design should be. It will be a randomized trial of some sort. Not randomized, but it will be a trial most likely where the patient will be used as their own control and it will look at more importantly both immunological endpoints as well as clinically meaningful endpoints.

Also you -- we -- you may, if you dig into the details, you will see that this trial that we did was a four arm trial, so it was a very unusual phase I trial. A four arm trial that very carefully looked at immune response with each component of the trial. That's one of the reasons people are excited about it.

Okay. Just switching back to Oncophage for a second, in the glioma studies, those were also very impressive results that were published in May, presented in May. Can you tell us when is the next data update from the ongoing two studies that we should look forward to and what are the plans to initiate a phase III program, if any, in glioma or is this something that, again, you would be looking to or currently talking to partners about?

Right. So certainly by the end of the year there will be more information, okay, because as you said, there are now quite a few patients who have been on treatment in several different settings and the results continue to come in and the investigators are very eager to continue with the program and as you may again know, the investigators who are involved in this, in these trials are among the top people in the field, also Columbia as well UCSF and so on.

So with regard to the phase III program, here the phase III program would be -- would involve a meaningful investment and at this moment Antigenics doesn't have the resources to do a phase III trial. We wish we did but we do not. So a phase III program initiation in glioma will certainly be contingent on a partner's contribution.

At this moment we are in active discussions specifically for glioma. How do we advance the glioma program? With several potential partners including 400 domestic companies.

As Shalini mentioned, glioma does represent a major unmet need. Very importantly the pediatric glioma consortium is very interested in this product partly because of the initial results we're seeing, also in part because of the safety profile of the product.

There's really not much going on in the field in pediatric glioma so in both settings, both in pediatric glioma, which is an exploratory study, but for the phase III program we're engaging others and we're in discussions with others.

Now, the next steps for the registration of glioma may be a phase II randomized study. In glioma it has to be a randomized study otherwise it will give us limited information. It could be in an expanded phase II randomized study that will be rolled into a phase III registrational study. So that's something that's under active discussion.

Okay. And I guess this is one final question regarding QS-21, am I -- did I write it down wrong in my notes that -- I thought originally we were hoping that QS-21 but there could be a potential for QS-21 to launch in the 2012 time frame. Am I remembering that incorrectly or has there been a slight delay due to whatever, it could be the enrollment of trials by your partners. Can you just reupdate me? Is this pretty much staying on track?

Your memory is correct so there's no slippage there in terms of your memory. We get updates from our partners on their status. These are written updates we get once a year, sometimes more often but once a year they're required to do that. And there's a tendency to move timelines back and forth. So the numbers that we're giving your are very conservative numbers. There could be opportunities where based on earlier looks these will shift to earlier dates.

But what we have guided you on this call and the earnings release are very conservative numbers based on the guidance we're getting from them, not our own predictions.

Perfect. Thank you very much for taking the questions and good luck.

Thank you.

Your next question comes from the line of [Arsen Barrett].

I have a question. Are you going to (inaudible) Oncophage in US (inaudible)?

Are we going to present Oncophage where, I'm sorry?

In US?

In the US?

Yes, (inaudible).

Oh, at the moment we have no plans to pursue renal cell carcinoma in the US with Oncophage, however as we spoke about, for example with the glioma program, any registration plans will involve certainly the US.

Sure, okay. Thank you so much. Good luck. That's pretty much it for me.

Your next question comes from the line of Joe [Bidlack], private investor.

Hi, Dr. Garo, again congratulations on great results so far this year. A couple of quick questions kind of following up on what [Randy] was asking there. You mentioned that you've had a couple of people come forward to you as far as maybe partnering down in South America or wherever there. Are there any other companies I guess on the partnership trail here that are approaching you? Is there more excitement with the glioma or the -- I know the AG-707 are just current results here but I guess maybe where's the excitement right now out there going forward here?

Sure. I didn't catch your name. Could you repeat it one more time?

Oh, my name is Joe.

Joe, you may have heard in our previous discussions that I mentioned we are in discussions with regard to the next steps with glioma involving several potential partners or licensees that include US companies as well as multinational foreign companies.

Okay, I did hear that. I guess then my question is, in your negotiations with some of these folks here, I guess what are the positives -- I guess we don't have the positives, (inaudible) the results are here. Are you looking I guess for partners that bring other technologies in addition to what's been -- your platforms are telling you here or is it product and also obviously some cash?

So our number one priority is to advance the program so a partner who's willing to invest in advancing the program is probably will be our top priority. And in addition to that, there will be additional considerations but foremost in our mind is to put in the resources to advance the program so that we can bring this very valuable product to patients and the commercial setting.

Other than that, it would be premature to guess right now.

Okay. As far as timelines here, is there one of the products that may be a little more fast tracked, if there is such a thing with the FDA, actually? And I know in (inaudible) there is but in actuality, I mean like maybe in glioma or the new herpes vaccine, is one of those maybe would be a little quicker to market? I know there's a lot of things behind the scenes, partnerships and more trials and all that but between the product line is there one that possibly could get to the head of the class a little quicker?

Quicker to market is really a function of many things. It's a function of how quickly you can enroll your trials, how good the results are and how quickly the regulatory consideration will materialize. In terms of the first component of it, how quickly we can enroll, that is very much dependent on the enthusiasm of the investigators involved and whether or not they can bring patients to the trial.

Now both for Oncophage in glioma particularly as well as for AG-707, we have amongst the top investigators who are very enthusiastic about that product so presumably that will help the first enrollments they sort of track and enroll quickly and the results could come out quickly.

With regard to the robustness of the results, there is no way to speculate on that. Based on what we have seen, we hope that the results will be as robust going forward as what we have seen in our preliminary findings so far.

With regard to the regulatory process, if you're talking about an orphan indication like glioma where there's a huge unmet need, one would presume the regulatory process would be quicker than not, but it depends on the FDA and the officials at the FDA.

With a product like herpes which is much more wider in terms of its reach to the population, I'm sure the process will be much more carefully managed by regulators because you're dealing with tens of millions of potential people that could be targets for this product and there they need to be very careful that the product like that is considered fully and not rushed.

Quick question along those lines, since you obviously deal with these things every day, has there been any loosening, I don't know what the right words are here exactly, I guess loosening up I guess in laymen's terms here, of the thinking for new technologies with the FDA or is it still kind of for the most part status quo or have you seen a [semblance] of them being a little more receptive to new technologies, new thinkings within the industry amongst -- if you're having a conversation amongst your peers there instead of slugs like me, kind of what's the conversation behind the scenes, is there any loosening up or is it same old-same old?

So is there any agency-wide change in policy that we have noted, then the answer is no.

Okay.

Are there individuals within the agency that understand issues and are interested - interested in working to further the science and technology, the novel technologies, not just ours but other novel technologies? The answer is yes. But we're dealing with a big agency --

Sure.

-- and individuals cannot drive the process on their own.

Sure. One last question. Financing going forward, I think Randy kid of hit upon that. Enough monies going -- it looks like going forward into what, the second quarter of 2011. Am I kind of doing my math here correct or I guess maybe if you could touch upon that issue just for a second or (inaudible)?

So as Shalini mentioned, we closed the quarter with approximately $27 million in cash.

Correct.

And our projected burn rate, annual burn rate, is about $16 million to $18 million conservatively. So you can project from that how much money will be available for what. However, we also have balance sheet challenges coming up and, not immediate but in the next year to two years and as you may be aware, we have done a fair amount of purchasing of our publicly traded debt --

(Inaudible)

-- down from $50 million to $17 million, but $17 million is still not chump change --

Sure.

-- so we need to make sure that we take the appropriate steps to not allow any balance sheet issues to get in the way of our operations.

Okay, very good. I appreciate the time, thank you.

(OPERATOR INSTRUCTIONS). We will pause again to compile the Q&A roster. Your next question comes from [Eric Warrick], private investor.

Good morning. I have a question about the RCC survival registry. I came a little bit late into the conference call so you guys may have already gone over this but when do you expect the final results to be published or to be forthcoming? And whom is, or who is reviewing the data?

Okay, so the final results are in the process of being tabulated now and analyzed. They will be submitted for publication, formal publication. As you know we have informed the world of the interim survival results and so what we -- what you can expect is a formal application that will be submitted in the next six months or so and sometime next year it will be available in the form of a scientific setting.

Okay, and then are there any --

So to your question, by the way, who is looking at it, it'll be peer reviewed clearly.

Okay. Is there -- do you guys have a [statistician] on board to analyze the statistics of the study?

Yes. We do.

Okay, sorry. And then the second question is with this data that you're going to gather in the next six months to a year, are there plans to resubmit to the EMEA?

Right, that's the question I addressed.

Okay.

The answer is that all will be contingent on our local partner, potential partner in Europe. There's one party that we have been working with for the next steps with regard to renal cell carcinoma in Europe specifically but we are not expending the Company's resources on it going forward. It will be strictly based on the contributions of a local partner.

Okay, and the I found something online about the EMEA evaluation of medicines for human use and there was something in there that said that they had -- they questioned the means of which the company is quantitating the heat shock factor protein-96.

Right.

Has -- I know you guys proposed to do reverse phase HPLC. Have you guys had a chance or an opportunity yet to address this issue?

We're in the process of addressing whatever outstanding issues there are on the product side but frankly our concern is not on the product. I think we have put to rest the majority of the questions on the product side and we continue to work with the agency obviously to make sure that we're completely compliant on the product side and we hope to get there within the next six to nine months.

Okay. And now I have a couple of questions about AG-707. You said that, you know, I see that you have a CD4, CD8 immune response but do they ever look for outbreaks, I mean immune response, just because you have an immune response does not mean correlation that you're not going to have outbreaks of herpes or shedding of the virus. I mean, you would hope so but is there any correlation? Have you guys looked at that?

So let me -- you're absolutely right, by the way. The only thing we can say about these findings, and I'm not an absolute expert in the field. I'm going by what the key people from the University of Washing Virology have sent or are saying to us and we defer to them because they are the key experts.

Two, or three important attributes of this product. One is that they have never seen a dual immuno response the way we have seen in this trial, meaning the combination of CD8 and CD4 response, so that's a first, okay. That's number one.

Number two, this is a massively multivalent product. As Shalini mentioned, we target 32 different peptides that are representative of the herpes genome, so if let's say some of these peptides or sequences become irrelevant immunologically, it doesn't really matter because you're targeting 32 of them.

The third issue is there is some recent studies, completely independent of all of this work, that have come out that talk about the criticality of both the CD4 and the CD8 immuno response in combating this disease immunologically.

So that's all we know thus far. In the next trial that will be undertaken, as you mentioned, we will look at, in addition to immunological endpoints, we will also be looking at things like viral shedding, the frequency of outbreaks and so on and so forth.

Are there any plans to compare that to antivirals at the same exact time?

No.

No. Okay. All right. Thank you very much.

Thank you.

At this time there are no further questions.

Thank you. I'd like to remind listeners that a repay on this call will be available approximately two hours from now through midnight Eastern time on October 29, 2010. Please dial 800-642-1687 from the US or use the International phone number, which is 706-645-9291. The access code is 69675455. The replay will also be available on our Company website in approximately two hours.

If you have additional questions after today's call, you may call us at 800-962-(inaudible).