AIM ImmunoTech Inc (AIM) 2004 Q2 法說會逐字稿

At this time I would like to welcome everyone to the Hemispherx Biopharma special investor update conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer period. (OPERATOR INSTRUCTIONS) I would now like to turn the call over to Dr. William Carter, CEO of Hemispherx. Please go ahead, sir.

Good morning, everyone. My name is Dr. Bill Carter, and I'm the Hemispherx Chairman and Chief Executive Officer. I would like to welcome you to a discussion of our second-quarter results ending June 30, 2004 and also a clinical update. But before we begin, I would like Michael Wax (ph) who is our outside investor relations specialist to have a few words.

Good morning. This conference call contains forward-looking statements within the meaning and as defined in the private securities litigation reform act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those anticipated. Those risks are outlined, as well as other factors such as general economic conditions, geopolitical events and regulatory changes in the Company's filings with the Securities and Exchange Commission, including its annual report on form 10-K and its quarterly reports on form 10-Q.

The information discussed today is accurate as of the date herein, but the Company assumes no obligation to update the information discussed or outlined in this conference call. Now I would like to turn the call back over to Dr. William Carter, Hemispherx Biopharma's Chairman and Chief Executive Officer.

Thank you, Michael. As most of you know, we announced our second-quarter financial results yesterday evening. I will not go into detail on this as I expect most investors on the call have already read our press releases and have examined the 10-Q, which was filed yesterday. However, I would like to point out a few highlights about our balance sheet. As many of you know, many small biotech companies are struggling for financial survival in what is obviously a very challenging funding environments. But in contrast, Hemispherx has raised over $30 million since 2003, and while these financings have from time to time unquestionably caused some downward pressure on our stock, I personally believe that the trade-off was worthwhile for long-term investors in our stock.

For example, today the Company is in one of its strongest positions it has been in for many years. We have approximately $20 to $21 million in the bank. As you can see, our historic cash burn rates are in the range of about $7 million a year. That has been a rather consistent number. Therefore, we anticipate no need to return to the capital markets in the foreseeable future. And thus unlike many other biotech companies, they will have to face rather challenging capital markets in the coming months. Our management team really can now focus very squarely on the science, which is what I would like to speak about today.

Hemispherx is on the cusp of many exciting developments, especially the clinical programs, such as our potential treatment for Chronic Fatigue Syndrome have now progressed to a point where commercialization is squarely within our sight and within our near-term possibilities. As many of you I think know, our pivotal Phase III trial results have been announced in Chronic Fatigue Syndrome, and we met the primary endpoint with some ease. And so for those of you who may be unaware or new investors in Hemispherx, it is clear that Chronic Fatigue Syndrome is a serious debilitating disease in which a patient suffer from a variety of debilitating symptoms, the main one being fatigue and inability to ambulate. But they have many other symptoms which are flu-like symptoms which profoundly impair their physical performances.

Some of you may know that the Centers for Disease Control have estimated that there are at least 500,000 people in the United States who are affected by this disease. It has been added to various government lists as a top priority of disorder in the area of emerging infectious diseases. And there is a similar opportunity for treatment in Europe and the Far East, including Japan for which the markets are at least as large as they are in the United States.

Now I like to summarize for you the results of this Phase III trial in Chronic Fatigue Syndrome. As you know Ampligen is an experimental product; it is believed to modulate the immune system. And by agreement with the regulatory agencies, the endpoint, the primary endpoint at this -- for this study was to examine physical performance in patients after 40 weeks of treatment with either active compounds or a placebo. The trial did yield statistically significant increases in the physical performance as measured by treadmill exercise tolerance testing, and this statistical significance was obtained by a variety of different statistical methods, which are considered the rigorous manner by which statistically and medically significant data can be determined.

You may also be aware that one of our lead products, Ampligen, the same product that completed the Phase III study in Chronic Fatigue Syndrome is also being used in advance trials in HIV AIDS. This trial is continuing to enroll patients, and the promising results have been described as peer review international AIDS meetings. Now the trial in Chronic Fatigue Syndrome actually involves some 234 patients at about 12 medical centers across the country. And this study actually showed that in the patients who were receiving Ampligen for 40 weeks there was an improvement in their performance by 19.4 percent versus only 5.1 percent in the placebo group.

In other words, the results were greater than twice the minimum considered to be medically significant. Equally importantly there was no significant difference in the number of serious adverse events between those receiving Ampligen and placebo, suggesting that the drug was generally well tolerated. So the results that I have just given you are very consistent with our earlier Phase II results, which you may remember were also well controlled placebo-controlled study, albeit in a smaller number of patients between 90 and 100 patients and for a somewhat smaller period of study duration, 26 weeks versus the present study of 40 weeks.

Where do we go from here? I think that's the question that is foremost in everyone's minds. With these results we have begun aggressively discussing the CFS treatment and marketing arrangement with various pharmaceutical companies worldwide who could provide us additional marketing clout. Now at the same time, we have 40 to 50 medical centers in the United States who have collaborated with us over the years, and these medical centers already have within their practice a significant percentage of the patients and indeed a number of the patients in these centers have been already treated either under our compassionate program, our well controlled program, which is the study I just described, or our emergency treatment IND program, which is a means of getting reimbursement from certain patients who are not eligible for enrolling in our clinical trials.

Now in addition, we will be unfolding more results at the 44th interscience conference on antimicrobial agents and chemotherapy that is coming up in a few weeks. And this is one of the largest and most prestigious infectious disease meetings in the world. So we believe that this meeting will also serve to highlight the product in the infectious disease community. At the same time, we are actively organizing a regulatory team to prepare the elements of what will become a new drug application. The first major element is something called a CTD, which is a common technical document, which is now used internationally as a result of harmonization of regulatory rules, especially between North America and the European Union. In other words, common documents are used in various geographic areas.

Our team consists of excellent staff members, which we've acquired in the last year from our New Brunswick facility, which as you know already put a product over the goal line several years ago in our Alferon end product. Our Rockville staff, our Philadelphia staff and of course some of our outstanding regulatory people in Europe have rejoined our regulatory team and are already auditing our facilities around the world to make sure that these facilities do comply with the international regulatory requirements. So we got the program well underway.

The summer recess which is traditional in many parts of the world is not affecting the movement of our -- I can assure you -- not affecting the forward movement of our team and I am personally very encouraged about the work effort and the data that I am examining on a regular basis often seven days a week. The examining of clinical or preclinical data, which goes into the overall regulatory package. Now while CSF is our most advanced program, we are pursuing major clinical activities in other areas. For example, our Spanish partner, Esteve Laboratories has recently received import authorization from their Ministry of Health for Ampligen to conduct a trial in the co-infected patient, this is the patient who has both HIV and Hep C. Now this is another well-controlled study for a disease category in which at the present time no single product is recognized as safe and effective against both of these viruses when they coexist in the same patient. This is a major, major opportunity because roughly 40 percent of people who are living with HIV will be co-infected with Hepatitis C.

We have shipped the total amount of product Ampligen required for this trial recently to Esteve and most importantly they will be conducting these trials in their totality at their own expense. And yet, one of the primary beneficiaries of their results of course will be the shareholders of Hemispherx. For those of you who may not be too familiar with Esteve, it is a well-recognized company in Europe, one of the largest privately held Pharma companies in Europe and indeed the largest pharma company which domiciled in Spain and Portugal.

Now we are also conducting an HIV trial with our partner in Africa and earlier this year we did enter an agreement with the World Foundation AIDS Research and Prevention to launch a very innovative clinical trial in HIV with our experimental product Alferon LDO, which as you may know is a low-dose oral, fully natural interferon cocktail. Now this study is going to be performed at the internationally accredited center for virologic and immunologic research in the Ivory Coast. And this center is being recognized as one of the leading venues for treating HIV.

As you know, what we have done here is to take a commercial product Alferon N, commercialized for refractory venereal papiloma infection but we have produced it into a new delivery format, which we believe as an experimental product has very high in vitro potency because of its specific cocktail of multiple natural components. And of course we are very excited about the studies because they deal with a number of the issues which have potentially proven intractable in Africa which is the lack of infrastructure for providing parenteral medications or even oral medications and of course the economic situation in Africa is one which has to be reflected in the potential cost of a new therapeutic.

Now we have also announced and I will bring you up-to-date on this, our West Nile Virus program. As you have probably been hearing from the Centers for Disease Control and other health agencies in your newspapers that now more than 12 states which are reporting cases and they include Arizona which I will come back to in a moment, California, Colorado, Florida, Iowa, Michigan, Nebraska, New Mexico, New York which by the way is where some of the very first cases were seen, South Dakota, Texas and Wyoming. Just a couple of days ago we shipped our first drug to the sites in the southwestern United States for a well-controlled study, meaning a study which is going to give us a rigorous medical and scientific answer.

And we have begun hiring regional clinical research organizations, the first ones hired were in Arizona, the Arizona Research Center. In order to ensure that we are nimble and efficient and being able to have a rapid response time it is basically like chasing a tornado. You got to get to the scene very quickly if you want to get results which are definitive. And I believe that with our 24-hour, seven-day a week hotline and our identification of regional players here that we are going to be able to come up with some exciting results in the very near-term position.

The West Nile Virus has already infected some 28 people in Southern California and it is estimated that the number of cases may increase up to 10 times, and cases have been reported in Texas and Miami. Now for those of you who look at our news flow, you may realize that we have established an important relationship with Professor James Rahal who is Director of Infectious Disease at one branch of the New York Hospital and Professor of Medicine at Cornell; he is the creative force behind this well-controlled and randomized multi-center trial of Alferon N. Obviously this is a major unmet medical need. We understand that Bloomberg and others are going to be publishing major articles on the economic and sequelae of West Nile Virus, and I think we all agree that right now it is a significant unmet medical situation. So we are very excited about this study.

We have also recently received authorization from the FDA to initiate a Phase IIb trial with the same product, Alferon N in the treatment of refractory multiple sclerosis. Now this study is going to be an open label multi-center study to determine the safety and efficacy of the product. As you may know, there appears to be an increasing incidence of clinical progressions with interferon therapy. I should say with the interferometer beta therapy. Possibly because of neutralizing antibody or clinical intolerance to the product. This is causing a lot of concern within the physician community especially neurologists, and its causing major changes in the potential marketing of products for multiple sclerosis. There are over 400,000 people in the United States who have this disease and require treatment. And right now the estimated costs for these patients is about $4 billion. So there is at present no effective treatment for these patients who have developed antibody or clinical progression to the recombinant DNA derived interferon and we are looking to results with our natural interferon as a potential treatment for this problem.

In summary then, we believe that Hemispherx has never been in a better position to create intermediate and long-term value for our shareholders. Todate we have actually invested some $450 million in this technology. That includes our acquisitions, our federal grants, our off-balance sheet financing, etc. but obviously a very major commitment to clinical development of a new technology which is based on natural stimulation of the immune system. And we believe that we have a balance sheet that will strongly support these clinical programs up to the next three years or so. And that we also think there will be a series of major inflection points in the core performance which will allow the investors to clearly measure the value of our science.

Obviously I'm talking here now about our chronic fatigue program and these other programs that I describe a few moments ago. We think there is a real potential for a new drug application in CSF and data will be expected to flow later this year from our HIV and multiple sclerosis and West Nile programs. It is clearly an exciting time for Hemispherx. Now I would like to open up the call for a few questions.

(OPERATOR INSTRUCTIONS) Lou Rotino. (ph)

Lou Rotino calling from Philadelphia, Pennsylvania; my question is due that the company seems to be on the cusp of regulatory approval for the use of Ampligen for Chronic Fatigue Syndrome, my question is why haven't we been able to or why have not we gotten a marketing partner for the sales of Ampligen in the United States at this time?

Well, that's a good question. And I think that the answer is twofold. First of all, we do have up to 50 clinical centers with which we have established relationships and to which we have been shipping drug and in some cases being reimbursed. We think that these 50 centers represent a significant portion of the overall 500,000 patients which exist. And obviously as we look forward to potential marketing in North America, we want to be able to have a franchise that we can service ourselves. And tentatively our franchise is these 50 centers and a significant percentage of medical schools where there are chronic fatigue programs.

You know the key here is not just to have marketing partners, but also to determine how the cash flow stream is distributed between the partner and the company that was the innovator. And that has to be done very carefully because what you don't want to do is end up at the end of the day having a major blockbuster product but having only a small participation in the cash flow stream. That's one thing we can't allow. But we are as I indicated at the beginning actively talking to major companies, not only in the United States but also in Europe and in the Far East with respect to a comarketing arrangement. It all comes down to how the cash flow stream is distributed.

But I think I am convinced in my own mind that these relationships that we put in place over eight or ten years with as I said up to 50 medical centers, our peer review publications in this area and our relationships with the home health companies which basically service so many patients when they are chronically ill and need drug product delivered to their home, I am convinced that even if we froze the clock today and said okay, Hemispherx how much product can you sell with your existing relationships, I think that would be a very meaningful number.

And it is essentially because working in the vineyard with these same prescribers -- the same physician prescribers who have the big practices that we've been working with in our obviously in our Phase II and our Phase III studies but also in some cases even going back through Phase I. But again, the key is to be able to really penetrate the market as effectively as you can, and that may well require additional traditional sales representatives. We are actively looking at it.

Mark Staufferman. (ph)

I have several short questions for you. When do you expect to announce the secondary endpoints from the Phase III?

The secondary endpoints will probably be discussed at the upcoming ICAAC meeting, the 44th interscience conference on antimicrobial agents chemotherapy, which is in several weeks. I can tell you that there is an integration of the endpoints in that the correlations are very high between the primary endpoints and the secondary endpoints. We have not found any surprises here. The data are very consistent with the Phase II well-controlled study and by the way -- many of the medical centers that participated in Phase III were different. So it appears to us that the clinical results are consistent across a variety of geographic sites and a variety of clinical practices in the United States. And that the results flow all seem to flow in the same direction.

What is the date of the conference?

That is the end of September or the first week in October -- I don't have it here in front of me. I think it might be if you look up on our website, we've made an announcement about being accepted to present data at that conference but I don't have the exact date.

So simultaneously you would issue a press release on that?

Yes, we will. As is our custom on the day that the peer review data are presented at the meeting, then we actually present the peer reviewed results. We don't historically have had a policy that we don't present the peer reviewed results until it has not only been accepted but it has actually been contemporaneously presented to a medical and scientific audience. But the short answer to your question is yes, that will be done with the P (ph) values and all the detail.

The size of the Phase III with less than 300 patients strikes me as being rather small relative to most Phase III studies especially with half one million patients suffering from CFS. Was there any particular reason why the Phase III was such a small --

It is a good question. The study was powered to reach the endpoints and certain assumptions were made on the basis of the Phase II study. Now one of the things that was very important for the regulatory agencies was the duration of the study, to see how long the punitive benefit might last because that can obviously be of significant importance in the study of a chronically debilitating or life-threatening situation which is chronic. So the agencies agreed with us with respect to the size of the study and the duration of the study.

And during the discourse in this study as I recall at one point were even suggesting a larger study, and we were advised that this study was sufficient at the number that we had. And fortunately, it does appear to be sufficient because as you know when you look at the results either by what is called completers, which is everyone who completes the study or you look at it or it is termed "intent to treat" which is considered a somewhat more rigorous definition of medical advocacy, that is patients who may drop out and get one data point and for whatever reason they leave, it was still high statistical and medical significance.

The study was self-evidently powered sufficiently to meet the endpoints. Also I want to point out to you that the drug for this disease is considered an orphan drug disease. That is because of something that often can happen in federal regulatory law with infectious diseases when the disorder is first recognized the epidemiologist predict its under 100,000 cases and after a few years it may go up, as in this case it went from under 100,000 to over 500,000. Nonetheless, the innovator in this case Hemispherx has certain legal benefits, which accrue from the orphan drug designation and they deal with such things not only as market exclusivity which you are familiar with probably but they also deal with issues of how many patients in relative terms are needed.

We believe that we have reached the preponderance of cases that are necessary for a full and complete analysis of the potential of this drug by regulatory agencies worldwide. Just to give you an example, in this recent study there were over 17,000 drug administrations. So that is a lot of data to look at not only advocacy, but also to look for side effect trends, et cetera. And of course overall we have something between 60,000 and 75,000 patient observations. So what you are really looking at here is not so much the number of patients, but the number of observational periods in which one can make a determination of safety and efficacy. And we believe that in the totality we have reached that critical threshold, and most importantly when you look at the totality of our results it all goes in a similar duration with respect to the endpoints. So there is not a conflicting body of information so called subset within the clinical experience, which when that happens that can also be an impetus for further study. That does not seem to have happened in our case.

Do you have a follow-up period after the 40-week treatment period?

Yes, we do have a follow-up period of about six months, and that period actually ends sometime in August. That's disclosed in our recently filed 10-Q. Now that follow-up period is basically a period for gathering safety data because in the follow-up period everyone is given an opportunity to be on active drug. In fact, that's how we are able to recruit people to take a placebo for 40 weeks by offering a follow-up period of compassionate drug treatment. But even that period is over sometime in August, and that data will be folded in at some point to the application probably as an amendment or supplement to provide more insight into the safety profile of the product.

Would it be that after 40 weeks the drug would be discontinued and the patient would no longer require active treatment?

Well, with respect to the duration of treatment, of course our primary objective is to meet the statutory requirement of what we call the package insert, which is the package insert. The draft package insert which we have discussed with the FDA in the past is that this product is designed to increase physical performance when taken for up to 40 weeks by patients who are severely physically incapacitated. Now that is, of course, our gold standard is to qualify for that package insert indication. And that is why our studies are organized in the way they are. As a practical matter, we are aware of physicians who may treat patients for longer periods of time. That is a decision made by the physician, the patient, the insurance carrier, the so-called troika which is out there beyond the pharmaceutical manufacturer.

Our job, of course is to present all the data, to present it accurately and clearly and to achieve what we want, which is this package indication, indicating our desire this is the first drug that quantitatively improves the major symptom complex of this disorder. Beyond that, our job is simply to disseminate the scientific literature and let the doctors decide. However, it is common knowledge that patients may continue for longer periods of time. This is a decision made by other parties and a decision that we really cannot properly influence beyond putting out the literature.

And I have an important follow-up to that and something which I am not clear on from reading the results. After you discontinue the drug, which is relieved the symptom complex of CFS, does the patient revert back to their pre-treatment --?

That's a good question, and that goes to an issue of long-term follow-up post-marketing surveillance. These are issues that we do plan to first of all, as you will hear in a moment, we have studied them to the extent possible up to now, but we do plan in a postmarketing program to do these types of analyses. And obviously to present these results as they come forward to the medical, scientific and regulatory communities. We do know that in presentations that we have made at other meetings and I say we -- I am really talking now not about myself, but about the consortium of physicians who have interacted with us over these years and obviously have made a number of presentations internationally over this odyssey period of eight or ten years.

We do know from these peer reviewed presentations that there is a significant fraction of patients who continue to experience a long-term benefit. By that we mean two, three possibly four years. There is also a minority of patients who will relapse. We don't have a qualitative answer to that yet. It does appear to be the minority of patients who will relapse and where we've been able to intercede with drug treatment again, they appear to be susceptible to the benefits again. So it's not like they have -- not apparently like they have gained a refractory period.

But as you can imagine, when you're looking at results in two, three, four and five years, you are looking at something which is a long-term piece of work and really which is properly done in a post-marketing surveillance mode, which because of this company's interest in clinical research we will be pleased to continue that and we will do it. But that is elusive data to obtain, and it is generally not believed to be data required by regulatory agencies because it is very long-term follow-up data, and it is data that is really done under market -- what you call market surveillance rather then primary endpoint data. But nonetheless it is a question that is a reasonable one and anyone with a chronic disease that is getting relief from symptom (indiscernible) would like to know that.

And also by the way, as in any other chronic disease, occasionally what you will see is the physician and the patient will agree on a drug holiday, and this may be a period of 1, 2 or 3 months where they discontinue therapy and look at their clinical condition. This happens in HIV; it certainly happens in Chronic Fatigue Syndrome and it probably happens in many chronic debilitating disorders, especially those that are immunologically oriented and which may have a viral cause.

How large do you see the actual patient population? I understand the number half one million has been used except that there's really 50 centers treating -- are there really close to 10,000 patients per center being or is the actual patient population that is likely to take this drug much, much smaller?

This like many chronic disorders is a disease, is a disorder continuum. You will have patients who are profoundly debilitated, you will have at the other end of the spectrum patients who have the disorder but are able to work 10 or 15 hours a week. And then you have patients in between. Our impression is that somewhere between 30 and 45 percent of the patients who have this disorder will have prolonged periods of severe debilitation, that is they will you lose their ambulatory skills because of their fatigue.

And we believe that our drug based upon the results that we are presenting, we believe this would be the market for which this drug would be addressed. In other words it is not 10 percent; it is not 100 percent, it seems to be somewhere in between. It is not unlike for example the AIDS market or the Hepatitis C market. You may be looking there at 500,000 or one million people, but a lot of them are not symptomatic, and it is the symptomatic presentation which justifies their coming back to the physician, re-establishing the diagnosis and interventive therapy. But I believe that in this disorder based upon our ten years of experience and that there is a very significant percentage of the patients who are looking with their physicians for treatment.

So about 30 percent are going to be severe enough to actually be a likely candidate for the drug during the course of their illness, and in a given year how much is that 30 percent reduced?

Well you're obviously going into some interesting microscopic (multiple speakers). I would just say, I would stick with the numbers I gave you; I will say this, though, that it was widely believed a number of years ago that Chronic Fatigue Syndrome was not necessarily chronic, and then studies were done to look at the so-called spontaneous durable remission rates. And we now find the deaths under 5 percent. So once you have had Chronic Fatigue Syndrome for one year meet the Centers for Disease Control criteria you should not take bets that you are ever going to get completely better. Because the actuarial data shows that if you get that disease between 37 and 42 years of age, there is a 90 to 95 percent probability that you will be suffering from it for as far into the future as you can see. Albeit as with Hepatitis C, as with HIV there will be periods in which you will feel better than in other periods. But it seems to be for the vast majority of people a lifelong disease.

Now some of the new data that's coming out just in the last year, I do not think it is in our Q because we can't put all of the science in there, but there is now new data from the National Institutes of Health that patients who have Chronic Fatigue Syndrome do have a much higher incidence of cancer. In fact, certain brain tumors are 50 to 100 times increased in patients who have Chronic Fatigue Syndrome. This is perhaps not unexpected because we and others have reported immunological defects in the majority of these patients. But it is not like you sit around waiting for remission and there's no other sequelae. We know that there are other problems. We know as I said, the brain tumors and lymphomas and the less than 5 percent probability that you will have a durable long-term remission. Much like many other chronic diseases. Now I would like to -- if there is one more question I will take from another participant, then I am going to have to ask that we finish our session. Can we entertain one more question if there is one there?

Curt Fannenbock. (ph)

I have a question about the production of Ampligen. You made an analysis of the possible risk factors in the prospective NDA filing and to our analysis the NDA production factor is a possible risk factor for a delay in the NDA filing. Can you elaborate a little more on the production partners for the polymers and the finalization of the Ampligen? You are cooperating with for an NDA filing and are you 100 percent sure this chapter will not pose a threat to a fourth-quarter NDA filing and are you still on track for a fourth-quarter NDA filing?

You have asked several questions. Most important ones deals with our belief in our production partner, and what we are doing there and secondly, exactly what is our timeline. Let me try to deal them. First, with respect to our production partner, I really have I think two major comments. Number one, one of our colleagues has just come back from an extended audit of our production partner in South Africa. This industry called Bioclones, that report is still in the process of being written up so I have actually not seen his definitive audit of that facility with respect to the raw materials.

Historically they have produced material which met international specifications which we were able to use in our clinical trials. We have optimism with respect to that partner. It is always good to have redundancy in your manufacturing, and accordingly a number of months ago as a result of acquiring this 43,000 square foot facility in New Brunswick, which is GMP approved by the FDA and various other regulatory agencies worldwide for the production of Alferon, we have identified a portion of that facility which is going to be dedicated to the production of Ampligen.

We have already initiated Ampligen raw material manufacture in the startup processes at that particular facility. So eventually we want to have not simply one, but at least two facilities which are producing raw material at a grade which is acceptable in North America and in the European Union. And we have made significant headway in that respect and this has become basically coequal in importance with our production of Alferon N in the New Brunswick facility. There is a very detailed description of the Alferon N production in the recently, in the Q filed yesterday. And you can assume that there is an equal impetus, although it's not necessarily fully discussed in the Q, is an equal impetus to bring Ampligen online within that facility so that this strained staff which knows GMP which has successfully met every GMP standard, can apply to the Ampligen raw materials the same thing that they've applied successfully to the Alferon end.

So I am encouraged there. I know the staff is qualified. I know people like Mr. Hanson, Dr. Mei-June Liao and others there are right on top of this. And I'm getting reports from them every seven to fourteen days, not only on their Alferon progress, but on their Ampligen progress. So therefore I feel a significant level of comfort principally based on the ability to diversify the manufacture of the raw material. And the same thing would go with respect to preparing the finished product. So I am comfortable with it.

Would I like it all to be complete and would I like certification of both facilities that I could tell you that I have that? Of course I would, but I don't have that today. But I believe that the facilities are moving in the right direction and that we do have the staffing. We do have the economic potential easily to establish these facilities up to GMP's level. We have identified all the relevant subcontractors and have them in agreements. So I am comfortable that this is not going to be a showstopper in our commercial program.

What about your partner Schering-Plough and Sigma-Aldrich?

Sigma-Aldrich we are not presently working with Sigma-Aldrich, we are still working with Schering-Plough at least through the end of this year. And they have relieved themselves of some of their problems that were well described in the public literature. They had some infraction problems with the FDA. Interestingly enough even operating in the same facility we had a perfect record. So I believe that we will continue a relationship with Schering-Plough into 2005. If for some reason that didn't happen, again we would use the finishing capacity that we have developed with Alferon N. We would simply move our Ampligen program into another finishing plant. But I believe we will continue where we are.

On your point concerning the FDA filing by the end of the year, as you know we've disclosed in our Q that our intention is to complete regulatory filings within the fourth quarter. This is a target we have. It is a very aggressive target. I see no evidence today that we are not able to meet our target. Things obviously could change.

But in essence, as I mentioned in the early part of our discussion today, we've organized a regulatory team that we believe based on experience and depth and talent is sufficient to bring this product over the goal line. And indeed members of this team have brought numerous other products over the goal line both in the United States and in Europe, as well as other locations such as Canada, et cetera.

Perhaps there is more question to add on that. Are you working with Fujisawa on a prospective NDA filing, and are you still on track?

Right now -- that's a good question, and I encourage you to look at the disclosure concerning Fujisawa in the 10-K. There is a very detailed disclosure with respect to Fujisawa. And right now we are still in the process of answering scientific questions with Fujisawa as you will see when you read the Q, and we have not therefore commenced the formal presentation of a document with Fujisawa for their potential area of the European market. Having said that, I did mention to you early on that we already are preparing our common technical document which can be used in Europe, can be used in North America and I believe I may stand to be corrected on this, I believe it is also admissible in Japan but I am not as sure about that. Certainly widely it is certainly widely harmonized in different venues. We are actively putting those documents together; there will be a major meeting of our regulatory people looking at documents the third week of August, which I guess will be the week actually the week after next, we will be studying documents. So this is really moving forward very, very well.

And we have absolutely no doubt that the documents that we are preparing will be the types of documents which are admissible in the European Union, including the member country, obviously the major member countries which would include Germany, as well as in North America and potentially in some other markets like Japan, Australia.

So anyway I encourage you to read that section of the Q. It is a very voluminous Q this time, and has a lot of scientific and regulatory matter in it. If you have questions after reading that, I'd invite you to send an e-mail to Mr. Wax who is our outside Investor Relations consultant, and we will try to get you a further answer.

I would love to get more questions, but the conference has already gone over about 30 minutes over the planned time, and I've got some other important meetings which I think will enure (ph) it to shareholder value. So we are going to conclude this, but I do thank you for your support. It is deeply appreciated, and I personally am very confident about the future of this company for the reasons that I've gone over with you. We will try to be in contact with you on a regular basis. In the meantime, I hope you have a good day.

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