Alnylam Pharmaceuticals Inc (ALNY) 2010 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Alnylam Pharmaceuticals conference call to discuss the third quarter 2010 activities and financial results. There will be a question-and-answer session to follow. Please be advised this call is being taped at the company's request. I would now like to hand the call over to Alnylam.

Good afternoon. I'm Cynthia Clayton, Senior Director of Investor Relations and Corporate Communications at Alnylam. With me are John Maraganore, our Chief Executive Officer; Barry Greene, our President and Chief Operating Officer; Akshay Vaishnaw, Senior Vice President, Clinical Research; and Patty Allen, Vice President of Finance and Treasurer. In addition, Lawrence Reid, our Chief Business Officer, is also on the call and available for Q&A. For those of you participating via conference call, the slides we have made available via webcast can also be accessed by going to the Investors Page of our website www.Alnylam.com.

During today's call, as outlined on slide two, John will provide some introductory remarks and general context. Akshay will summarize our clinical and pre-clinical R&D activities, Patti will review our financials and guidance and Barry will summarize our business highlights and goals. We will then open the call for your questions.

Before we begin, as you can see on slide three, I would like to remind you that this call will contain remarks concerning Alnylam's future expectations, plans and prospects, which constitute forward-looking statements for the purposes of the Safe Harbor Provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements, as a result of various important factors, including those discussed in our most recent quarterly report on file with the SEC. In addition, any forward-looking statement represents our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. I will now turn the call over to John.

Thanks, Cynthia. Welcome, everyone, and thanks for joining us this afternoon. I will be referring to slides four and five during my introductory comments. As you know, we made some difficult decisions this period related to the transitions in our Novartis partnership after completion of our fifth and final year of this collaborative effort.

These decisions were important steps in building our company for the long-term, which Barry will discuss in more detail momentarily. But to provide some perspective at the beginning, the corporate restructuring that we effected allows us to transition certain historical, service-based resource allocation activities toward a more product focused and higher value commitment of effort. And while difficult decisions were made at a personal level, we feel they will enable us to optimally position our Company for continued growth, success and value creation for the future.

In the meanwhile, we continue to lead the translation of RNAi therapeutics to patients as a whole new class of innovative medicines, and we are very confident about the progress we are making across multiple dimensions. In this regard, Alnylam had a very productive third quarter, one in which we continue to make significant progress in advancing RNAi therapeutics through human clinical trials as Akshay will detail for you shortly. I think it is very important to keep in mind that progress on our clinical pipeline remains the critical determinant in our company's value creation strategy.

Rest assured that we are very focused on this activity accordingly. Importantly, with three RNAi therapeutic programs in clinical development we continue to be at the forefront of RNAi, R&D. Indeed, we are positioned today more than ever to deliver on this technology's enormous promise with important human data emerging in the months to come.

Notable during the quarter was the initiation of our Phase I Study of ALN-TTR01 for the treatment of transthyretin-mediated amyloidosis or ATTR, our company's third clinical program. In addition, we continue to enroll patients in our Phase I study for ALN-VSP for liver cancer and our Phase IIb study for ALN-RSVL-1 in RSVL infected lung transplant patients.

We also have a product opted right on Techmera's PLK-1 program, which is in Phase 1 clinical development in cancer, so we eagerly await progress and success in their efforts. Moreover, we expect to have two or more additional programs in clinical development in the next year, which includes our PCSK9 program, our second generation TTR program and our anti-mirror 122 program for the treatment of HCB infection being advanced with Regulus in collaboration with GlaxoSmithKline.

In short, it's all about the pipeline and human data. We are very focused on this overall clinical objective with appropriate urgency and enormous passion.

I would like to close my introductory remarks on the organizational front. In this regard, we were very excited to strengthen our management team this past quarter with the promotion of Ken Koblan to Chief Scientific Officer and the appointments of Steve Bossone as Vice President of Intellectual Property and Garvin Warner as Vice President of Pre Clinical Development. Ken Koblan is an outstanding choice as the Company's CSO.

As a reminder, he joined our research group earlier this year from Merck where he played a major leadership role in their drug discovery efforts over an 18-year tenure. Steve Bossone joins Alnylam from Shire and Garvin Warner joins Alnylam from Pfizer. In addition, we also expanded our board of directors with the election of Steve Paul who is the former president of Lilly Research Laboratories of Eli Lilly and Company. We're very fortunate to have been able to attract such an outstanding team of management and directors to Alnylam. And the passion that they bring for our company's mission is shared by all of us here at the Company.

With that introduction, I will now turn the call over to Akshay for a review of our clinical activities, our pipeline and our scientific progress.

Thanks, John, and hello, everybody. As John mentioned, we made important progress during the past quarter across our pipeline and scientific activities. As you can see on slide seven, we now have three RNAi therapeutics currently actively enrolled in human clinical trials. Starting with ALN-TTR01, we initiated a Phase I randomized placebo controlled dose-escalation study of ALN-TTR01 in patients, which is summarized on slide eight.

The primary objective of this study is to evaluate the safety and tolerability of a single dose of intravenous ALN-TTR01 with patients being enrolled into five sequential cohorts of increasing doses ranging from 0.01 to 0.4 milligram per kilogram. We also believe we have the opportunity to assess preliminary human prudent concept based on measurements of serum TTL levels in patient samples. We're currently actively enrolling in this trial, and we will update you on potential timing for completion as the study continues to advance.

Turning to ALN-VSP, we continue to make progress in our Phase I multi center open label dose-escalation trial in patients with liver cancer. The primary end point to this study is to evaluate safety, tolerability and pharmacokinetics in patients with advanced solid tumors with liver involvement. This study has not yet reached the maximum tolerated dose, and so we're still continuing to enroll patients in a dose-escalating manner.

We've also enrolled several patients in an accompanying extension study with patients who have completed four months of dosing and achieved designation of at least stable disease remain eligible to continue receiving ALN-VSP. All this progress is very encouraging, indeed, and we will be presenting additional interim data from this study next week at the Chemotherapy Foundation Symposium being held November 9th through 13th in New York City. We also continue to make progress with our Phase IIb study of ALN-RSV01 in RSV infected adult lung transplant patients. This study is progressing well and has enrolled double digit numbers of patients.

We're just entering the northern hemisphere's RSV season and expect to be able to provide greater clarity on timing for completion as the season progresses. We continue to be encouraged by the progress we've made in our pre clinical programs, which are outlined on slide ten. In the case of our PCSK9 program, we are on track for a 2011 IND filing and believe that RNAi therapeutics targeting PCSK9 in contrast among the clinical antibodies, represent the optimal strategy to silence both intra cellular and extra cellular PCSK9 levels, thereby [pheno] copying the human genetics, where loss of function PCSK9 mutations have been associated with low LDL cholesterol levels and protection from coronary artery disease.

Regarding our Huntington Disease program, we were pleased to announce this morning that we formed a new collaboration with Medtronic and the CHDI Foundation to advance this effort. CHDI brings a tremendous amount of disease expertise that will prove invaluable to the advancement of this program toward the clinic. CHDI also brings an important connection to patients where we have a commitment to advance such an important disease modifying therapy.

In this new agreement, CHDI will initially fund approximately 50% of the program's IND enabling activities, representing more than $10 million in funding. Beyond our development pipeline we've also made significant advancements in the delivery of our RNAi therapeutics, and by all accounts our progress of delivery this past year has been astounding. For example, we presented new research on the discovery of a new lipid called mc3 that has been formulated with siRNA into novel LNPs to better achieve effective in vivo gene silencing activity at single digit microgram to kilogram dose levels.

This systemic delivery performance is the best in the industry by far, highlighting Alnylam's continued leadership and establishing a new benchmark. In addition, we are achieving delivery beyond the liver. For example, we reported on data showing target gene silencing with novel LNPs in both immune cells and also in the vascular endothelium. Moreover, just earlier this week at the liver meeting we presented new data on novel LNPs that effectively deliver siRNAs in hepatic stellate cells, which are intimately involved in fibroticpatho physiology. In aggregate, the key point here is RNAi is evolving with broad-based potential where we can target a very large number of disease genes in multiple tissues and cell types.

Lastly, we continue to demonstrate our scientific leadership through the propagation of our research, including peer journals of presentation of our research at scientific meetings.

As you can see on slide 11, we've now published 31 peer review papers this year, well exceeding our goal of 15 or more by the year's end, and marking the largest number of peer review papers that our scientists have ever published in a single year by far. We certainly congratulate our scientists on their continued innovation, which is the heart of our business. And with that, I would like to turn the call over now to Patty for a review of our financials. Patty?

Thanks, Akshay, and good afternoon, everyone. Please refer to slide 13 in our deck. I am happy to report that we continue to maintain a very strong financial profile. At the end of the third quarter, Alnylam had cash, cash equivalents and marketable securities of $371.9 million. Our net cash position is in the top 10 across the entire biotech industry and, therefore, provides us with significant financial flexibility and a runway of several years to come. It also continues to enable us to invest prudently in our pre clinical and clinical pipeline, our efforts in delivery and the overall scientific platform.

Importantly, we also continue to have no writeoffs related to our cash and fixed income portfolio to date. We recorded very strong GAAP revenues of $27.7 million in the third quarter of 2010. As you know, a continued amortization of upfront payments from the strategic alliances we have formed which Roche and Takeda account for a significant and recurring portion of our quarterly GAAP revenues. Our revenues this quarter were higher than previous quarters, due primarily to significant resource allocations to the Novartis collaboration, which totaled $4 million for Q3 and certain milestones from licenses, including Quark.

We expect future revenue from current partners to be closer to levels just prior to the Takeda alliance. We will continue to report quarterly GAAP revenues, primarily from our alliances with Roche, Takeda, Cubist and other ongoing alliances.

Moving to expenses, I will once again compare our results from this quarter to Q2 of this year, which I believe is a more informative way of comparing our financial results.

R&D expenses were $27.5 million in the third quarter of 2010 as compared to $28.1 million in the second quarter of 2010. The decrease in R&D expenses in the third quarter is due primarily to the timing of costs related to manufacturing, which can be lumpy from quarter-to-quarter. The decrease in R&D expenses was partially offset by a restructuring charge of approximately $1.9 million related to employee severance, benefits and related costs incurred in connection with our corporate restructuring, which included a workforce reduction. G&A expenses were $8.9 million in the third quarter of 2010 as compared to $10.1 million in the second quarter of 2010.

The decrease in G&A expenses through the third quarter was due primarily to a reduction in professional service fees in association with business activities, primarily legal fees related to our litigation. We expect to see our G&A expenses also continue to be a bit lumpy from quarter-to-quarter until the precise timing of the trial related to our ongoing litigation is known. With respect to guidance for 2010, we continue to expect our cash position at the end of 2010 will be greater than $325 million.

And lastly, I will point out that we received notification earlier this week that all eight of our applications for the therapeutic discovery project tax grant with the federal government were awarded, resulting in nearly $2 million of cash grants for Alnylam this year. In addition, Regulus was also awarded two grants totaling approximately $500,000, which will support pre clinical development of their micro RNA therapeutic approaches to treat HCV infections and fibrosis. So in aggregate, Alnylam and Regulus received maximal funding for our applications totaling approximately $2.5 million. This concludes the financial highlights and I will now turn the call over to Barry.

Thanks, Patty. Hello, everyone. As John mentioned, we had an important quarter on the business front as you can see on slide 15. Notably, Novartis notified us that they affirmatively selected their full and final list of 31 specific gene targets for which they have exclusive rights to discover, develop and commercialize RNAi therapeutics using our intellectual property and technology.

Novartis has been very clear to us that they intend to diligently advance their RNA efforts on these targets using Alnylum IP and technology, and we certainly wish them well in these efforts. In return, we are eligible to receive $75 million in milestone payments for every successful developed product, resulting in greater than $2 billion in potential aggregate future payments in addition to royalties on product sales.

Also, as we previously announced, Novartis notified us of their decision to decline their option for adoption license to gain broader non-exclusive access to Alnylam fundamental and chemistry IP. Although, we certainly hope to benefit financially in this option for broader license, the completion of our Novartis alliance now allows us to transition our activities away from service-based research activities, such as the historical resource allocation of research services to Novartis.

Further, we now have significantly greater degrees of freedom as it relates to future partnerships that we will form and where we have multiple active discussions. To affect the needed changes, we fully implemented and completed a corporate restructuring with an approximately 25% reduction in our overall workforce.

This restructuring will enable us to optimally position our company for continued growth, success and focused on the highest value activities, such as the advancement of our own pipeline, as John and Akshay reviewed. It goes without saying that we are extremely grateful to our people, both past and present, for their dedication, passion and commitment in advancing RNAi therapeutics to patients.

Also, during the period, we announced that Sanofi-Aventis, as part of their alliance with Regulus, completed their $10 million equity investment in return for approximately 9% equity ownership position in Regulus. The investment by Sanofi continues to strengthen Regulus's balance sheet, and as a result, Sanofi becomes the third largest investor in Regulus behind Alnylam and Isis.

Importantly, Sanofi's stock purchase values Regulus at a greater than $130 million post money valuation and marks a 100% premium to the Series A investment Alnylam and Isis made in Regulus just in 2009. Clearly, we are building significant value in Regulus and the business development success of the Regulus team is allowing us to maintain a very high level of ownership in the world's leading micro RNAi therapeutics company without further need for investment from Alnylam in the foreseeable future.

Lastly, as illustrated on slide 16, we continued to strengthen our intellectual property position during the third quarter through the issuance or grant of new patents worldwide, which are listed today in our press release. It goes without saying that our IP estate remains dominant in the field of RNAi therapeutics. So reviewing our goals from now through around mid 2011, which you can see on slide 17, we expect to have four RNAi therapeutic programs in clinical development and advance our pre clinical RNA and microRNA therapeutic programs including both proprietary pipeline programs and partnership based programs.

Continue advancing and developing novel delivery solutions for the systemic delivery of RNAi therapeutics, form additional new alliances across our efforts at Alnylam, Regulus, Alynylum Biotherapeutics, and through formation of new ventures. All of which will provide near term potential value creation, and we also expect to further strengthen our scientific leadership and intellectual property position. And lastly, we fully expect to finish 2010 with greater than $325 million in cash.

With that, I would like to turn the call back over to the operator for your questions. Operator, Jonathan, we will take questions now.

(Operator Instructions). Your first question comes from the line of Marko Kozul with ThinkEquity.

Hi, Good afternoon and congratulations on your progress during the quarter.

Thanks, Marco.

The question I have concerns biotherapeutics. Can you give us a preview for the next sets of data presentations in terms of timing and possibly significance to potential commercial applications?

Yes, happy to do so and Barry can also add some additional color, as Lawrence Reid who's here with us can do as well. The Alnylam biotherapeutics effort, as you know, is an exciting effort that we initiated about a year or so ago, focused on using all the advances and delivery that we have engineered with human applications of RNAi therapeutics for applications in manufacturing of biologics. And the progress there has been, actually, very encouraging. We have now shown that we can scale the technology up to 40 liter scale. We have applied it to modified manufacturing cell lines in Chinese hamster ovary cells, and we're applying it to other applications as well that we haven't yet discussed with the outside world, but will.

There have been a number of scientific presentations that have been made by our scientists at meetings. We'll, obviously, continue to update people as new and important new data come out from those efforts. We have a lot of discussions going on in the -- across the biotech industry with manufacturers of biologics who are very interested in using this technology. All I can say right now, Marco, is really stay tuned as all those discussions materialize into what we expect to be a significant number of agreements over time. Lawrence or Barry, if you want to make any further comments.

John, I think you just summarized it well. The only thing I would add is to add some color is virtually all biologics manufacturers when seeing scientific presentations have called to get updates. And we're having very many, very good robust discussions. As the data and the partnerships emerge, we will certainly fill you in, in the future. We fully expect that to occur.

Good. Any other questions on that, Marco?

No, That's perfect. Thanks. I'll jump back in queue. Thank you.

It is getting a lot of traction is the bottom line.

Your next question comes from the line of Ted Tenthoff with Piper Jaffray. Please proceed, sir.

Great, thanks very much. Nice to hear your guys' voice and congrats on the quarter. Two quick updates. I had heard rumblings that there may be preliminary parts of the hearing this week. Is there anything scheduled for this week?

Well, there is a hearing, and this is public information, there is a hearing on a number of different motions that had been brought forward before the court on Friday of this week. And there is not much we can comment on in terms of that other than what is publicly available which you can take a look at. But these are motions that have been made by both UMass, Whitehead, and Alnylam Mox Planck in the different matters related to the case.

And -- but this isn't any final decisions or anything like that, is it?

No. These are the judge hearing specific motions that had been brought forward by the related parties.

And not to dwell on this, but if you could just real quickly remind us what the hearing is about, and what the goal is here. Are you guys basically suing Mox Planck to try to accelerate the prosecution of Tuschl I? Is that a fair way to characterize it?

We're co-plaintiffs with Mox Planck. So we're not suing Mox Planck. Mox Planck and Alnylam have joined in a suit against Whitehead and University of Massachusetts related to the -- at the end of the day related to the use of data from Tuschl II in the prosecution of the Tuschl I application, and disagreement as it relates to that path forward. And that's about all I could really say on that, Ted, given that it is a matter of litigation.

That's super helpful, John. Just one more on that data coming next week on VSP. I think from spending time with Akshay and the guys at the poster in Chicago I think the next dose that you guys were going to was one mg per kg. So will we get patients on that? And also, I think I'd written a note down that we might get liver biopsy data, which I think would be very interesting. So will we get -- can you tell us a little bit more about what to expect next week?

Yes, Akshay do you want to handle that?

Hey, Ted. So we are excited about this presentation next week. I think it's a great opportunity for us to update everybody on the progress we have made towards further dose-escalation from that ASKO stage in June where, as you said, we [haven't] hit 1.0 mgs per kg. We have, indeed, gone there and beyond, and we'll be updating folks next week on the safety data associated with that. I don't want to preempt, but I think it definitely is worthwhile updating folks at this stage. We have, as you said, also been conducting biopsies, and as those data come together, we will also be sharing that with folks on the outside. But, definitely it's a significant update, and we have gone to the dose that we indicated and beyond, and you'll be seeing a lot of data associated with that.

Just to add to that a little bit, Ted, I think the key thing is that we are now getting -- we now have the most extensive experience with systemic delivery of RNAi therapeutics using lipid nano particles that is by far, both in terms of numbers of patients and numbers of doses that have been administered to these patients, a very extensive experience. And it provides critically important de risking for our entire pipeline of systemic RNAi programs. And that's a big, big step forward. So you'll hear more about that next week. I don't want to preempt the actual results that will be shared, but I hope you will be able to attend or at least see the release as it comes out.

I look forward to it too and TTR data next year. So thanks so much for the update, guys.

Here, here.

(Operator Instructions). Your next question comes from the line of KeayNakae from Chardan Capital. Please proceed.

Yes, thank you. Barry, just a follow-up on your comments. Once we see the data next week, what's your anticipated timeline for completing the studies?

This is John. Maybe Akshay should comment on that.

So we -- next week's update I think is an important one outlining the safety at significant dose levels, and, as John just discussed, we are very excited about the progress we made and continue to make as the dose-escalation is ongoing.

You will see the status next week, how far we have gone. And with dose-escalation continuing I think that's great news and it is wrong at this time to forecast the end of the study. Clearly, we have estimates forming, but until we, actually top out at a maximum tolerated dose, and it is great news we haven't as of yet, it is wrong to preempt that. But I think as we hit a maximum tolerated dose, we will certainly be able to give more accurate guidance on when that study completes.

Thank you, Akshay.

Okay, thanks for that. And with respect to Huntington's, and we saw today's announcement, how does that affect the amount of R&D spending you might incur?

It certainly decreases it. CHDI is, basically, funding 50% of the overall development expenses for the Huntington's disease program all the way through the IND filing. That's a very significant investment they're making in the program. They are an incredibly committed group of patient advocates, physicians, scientists that really looked at the Alnylam Medronic program, and we believe appropriately recognize it as being one of the most exciting programs for potential breakthrough therapies for this, obviously, devastating neurodegenerative disease. So their commitment and what they bring to the table beyond the funding is, obviously, quite significant for the company. We are pleased to have their support. But, obviously, that helps offset the costs of that program in a significant manner.

And at what stage do they get involved with providing capital? Does that happen right away?

Yeah, Patty, do you want to comment on that?

Yes, right now the program we entered into with them today will pay for the costs from the beginning of this year up through IND.

So it's, actually, retroactive.

Yes; and, as we said in the release today, it will be greater than $10 million. If you recall we are 50/50 with Medtronic on this program.

Right, okay. Well, very good. Thanks for that.

You're welcome.

Your next question comes from the line from Mr. Alan Carr with Needham & Company. Please proceed, sir.

Hi, good afternoon. Thanks for taking my question and congratulations on your progress.

We appreciate that.

Question around -- let's see, the clinical pipeline. It looks to me like the PCS is the next one to get into the clinic then.

Yes, it should be.

And the HTT after that. Is that right?

What did you say, HTT? I think that what we are saying right now and as we look at next year the programs, PCSK9, the second generation TTR program that uses our second generation LLP's and potentially the anti-mere 122 for HCV infection are the three programs from which we expect to have two or more INDs next year. The Huntington's program is likely to be a 2012 IND filing.

Okay. I was wondering -- you've made some progress you mentioned with the mc3, this new lipid systemic delivery system. I wonder if you could tell me about how that might have worked its way into some of your candidates and timing for that getting into the clinic.

Well, Akshay can comment further, but it is being used in our PCSK9 program at the get go, right? So that's the new lipid LMP formulation that's achieved remarkably improved potencies and just beautiful overall biological activity, including results in rodents and nonhuman primates.

It is, obviously, a very exciting second generation LMP, and with the improved LMP and with the improved potency and the lower exposures, that's all great to put into development in a number of programs beginning with PCSK9.

Last one, Patty, with guidance for 2010, you say greater than $325 million, which is a big decline from you're around $375 million now, I think it was. Are you just being extremely conservative there or is there a chance that you might have expenses actually -- I mean, that would be a big ramp up for the fourth quarter.

So what we have said, Allen, from the beginning of the year is that we will have a number of greater than $325 million in cash at the end of 2010. We still feel that's appropriate, and that it will be greater than that number.

Yes, but we are not expecting any unusual change in our expense profile from now through the fourth quarter.

That's right.

We don't -- we didn't feel it was appropriate to change guidance at this point in time given that we're still within guidance in terms of greater than $325 million.

Oh, I see. And then for 2011, can we expect any substantial deviations from the trends we have seen through 2010?

No, we will provide guidance in the beginning of January, as we do every year, for what our cash guidance will be for the end of 2011, but we wouldn't expect any significant deviation. We did do a restructuring, so we have said that we will have some lower costs in 2011, but the pipeline progresses.

Great, thanks for taking my questions.

Sure, Allen, thank you.

And the final question in queue is Stephen Willey with Stifel Nicolaus. Please proceed.

Hi, thanks for taking my questions.

Sure. Thanks, Steve.

On the VSP front, I know that you had mentioned I think in your comments that you have not observed the DLT to date. So I guess knowing that and knowing that you seem to be well above the one mg per gig, how high do you continue to push that dose? And is that something you gleaned from the biopsy data that comes in as to whether or not you are saturating those complexes, I guess, with RNAi?

Great question. Akshay, do you want to handle that?

It is a great question and the biopsies as we get all of the data together, Steve, you're absolutely right, they're going to be very important in helping us estimate drug delivery and bio distribution to the target organ, in this case, the liver. So that's to come yet. But the most important thing in this kind of study is to keep escalating the dose until safety precludes. And the great news so far, and as you'll see in more data presented next week, is that we continue to dose-escalate. The protocol prespecifies a top dose of 1. 7 milligram per kilogram, and we haven't hit that yet. Implicit in that is that safety has been going well, as you will see. So we're very excited by just how far we've come with this program and look forward to sharing the data.

Again, Steve, I think the important thing is the significant level of experience now that we are generating in man with this platform in that trial is very substantial, and I think it is going to -- it's, obviously not just relevant for the liver cancer program that is very, very important to us, but also the advancement of other systemic delivery programs like TTR1, PCSK9 and other programs in the future.

And then just a question on the delivery front. I know that you showed some pre clinical data at the liver meeting over the weekend with respect to a carbohydrate-based formulation. And I think you may have made some comments before about how you are -- I don't want to say married to the LNP front, but that was your bread and butter, for a lack of a better term. And just given the fact that the systemic data that we've seen in the RNAi space was done on more of a carbohydrate-based system, is that now something you guys are thinking about internally?

Well, we have always had a very active program on the conjugate effort. And the carbohydrate that you're referring to relates to the use of small molecule carbohydrate ligands that are directly conjugated to SRNAs for delivery. We made, actually, this past year some pretty encouraging progress on that whole delivery strategy.

So across our delivery efforts, it is really the work on LNPs and the work we are doing on conjugates that really defines our two leading systemic delivery approaches. So the updated delivery meeting on the [gall-nit] conjugates, which is this carbohydrate attachment, is what you are referring to, and we are pretty excited about this data. We are hoping to update people in the months to come on some important progress on that front.

And then just lastly on the IP, and not to beat it into the ground, but just wondering, I guess, what the ultimate objective of the proceedings is. Is it to actually get those mammalian claims that were issued in Tuschl I out of Tuschl I?

Yes, it is to rightfully have the data that come from Tuschl II rightfully removed from Tuschl I.

Okay, thanks for the explanation.

Thank you. Good. Operator?

At this time, there are no further questions.

Okay, good. Well, thanks, everyone. We made a lot of important progress this past quarter. We are positioned to continue to focus on building a significant company here based on RNAi therapeutics. We are excited about our progress and we look forward to updating you in the weeks to come and the months to come. So thank you very much. Bye-bye now.

Ladies and gentlemen, thank you for your participation in today's call. The presentation has ended. You may now disconnect. Have a good day.