Brickell Biotech Inc (BBI) 2008 Q2 法說會逐字稿

Good day, and welcome ladies and gentlemen to the Vical, Inc. financial results conference call. At this time I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. (OPERATOR INSTRUCTIONS)

I will now turn the conference over to Mr. Alan Engbring, Executive Director of Investor Relations. Please go ahead, sir.

Thank you, Sean. Hello, everyone. Welcome to our second quarter 2008 financial results conference call. Participating on the call today are Mr. Vijay Samant, our President and Chief Executive Officer, and Ms. Jill Church, out of Chief Financial Officer. I will begin with a brief note concerning projections and forecasts. This call includes forward-looking statements including financial expectations and projections of progress in our research and development program that are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including the risks set forth in Vical's annual report on Form 10K and quarterly reports on Form 10Q filed with the Securities and Exchange Commission, as well as the specific risks and uncertainties related in Vical's news release on second quarter 2008 financial results.

These forward-looking statements represent the company's judgment as of today. The company disclaims, however, any intent or obligation to update these forward-looking statements. Now I would like to introduce Vical's President and Chief Executive Officer, Mr. Vijay Samant.

Thank you, Alan, and welcome to all our participants. Since our last conference call, one of the most important developments of Vical was the release of our flu data. We achieved a true breakthrough for DNA vaccine technology with these results and most of our call today to that particular data in greater detail. But before I get to that, I would remind everybody that Vical is in great shape, and particularly to our listeners and analysts that we have more advanced programs and partnerships than lot of our peers, okay. Let me remind you of those, because we're not going to spend a lot of time on these today.

We have two partner animal health products on the market and three programs, not animal health, human health, in Phase III. We have multiple independent partner programs in earlier stages of development rounding out our pipeline, so we have animal health products and human health products. Animal health products are approved, human health products are in Phase III. We have world class manufacturing facilities sufficient to launch our first independent commercial product. A lot of the companies don't know how to do their manufacturing. We have been doing manufacturing for the last seven years in this facility. Finally, we have a strong balance sheet with no outstanding warrants, minimal debt, sufficient cash to continue advancing our clinical programs. In short, Vical is well positioned for moving into the next stage, particularly in commercialization of our programs if they are successful.

Let me now go and highlight some of the key programs, which are not going to be covered in a lot of detail in today's call. In our Allovectin-7 metastatic melanoma program, we received $6.3 million of combined cash and equity payments from our Japanese investor, AnGes, for continued funding for Phase III registration trial. Just a reminder, AnGes is our partner, which has license for Allovectin-7 in Japan and the spending of the entire clinical trial in the United States. So far, AnGes has paid $15.3 million of the $22.6 million total commitment. Vical is conducting a multinational trial at nearly 50 sites under an SPA with the FDA. Achievement of the primary end point in this study, which is objective response rate at 24 weeks or more after [anamization]. Remember, the end point in the study is response rate, not survival, and this would qualify for accelerated US approval for this product candidate. As a reminder, some of you may have forgotten Allovectin-7 already has an designation for metastatic melanoma should be eligible for fast track review if we so request.

The next area I want to talk about is angiogenesis. Again, we have an advanced collaboration with our partner in Japan, AnGes. The receipt of a $1 million milestone payment in July which reflected the continued progress of Collategene, which is the trade name for the angiogenesis program. To remind you, AnGes filed an NDA in Japan in March of 2008 for the use of Collategene as a treatment for PAD, or Burger's disease, if approved, Collategene could become the first commercial product for human use based on our technology. We have a dual strategy here. We have another company working in the same field, Sanofi-aventis, which is currently conducting a 400 patient multinational phase III registration trial for the primary endpoint of preventing amputations in PAD patients, and Sanofi, according to the last analyst day meeting, expects to file a BLA in 2010. We are pleased to have two Vical articles published in June 15th issue of the "Journal of Infectious Diseases," or JID. One expanded on the data from our prior released Phase I CMV vaccine trials. We had multiple Phase I trials and one of our H5 N1 pandemic influenza preclinical animal studies, and I want to spend a few minutes going over each of these articles because they are very important. The CMV data will be presented in the issues lead article which was accompanied by a favorable editorial commentary by independent CMV experts. They noted that the optimal dose and regimen tested in our Phase I study holds promise based on its ability to illicit persistent immune responses in the majority of CMV CO negative subjects.

They also recommended further evaluation of this vaccine's potential to prevent infection and disease. The vaccine is currently being tested for its potential to prevent CMV reactivation and CMV disease in hematopoietic stem cell transplant patients. Our Phase II CMV vaccine trial is enrolling well. I said enrolling well, and we are on track to conduct an interim efficacy analysis before year end. CMV's the next major commercial vaccine target for females and adolescent females of child bearing potential and this editorial provided confirmation that we are on right track with our approach.

The second article in JID was for flu, particularly the studies that we completed last year in mice and ferrets. We demonstrated in that study that mice and ferrets can be protected against a lethal challenge with a highly pathogenic Vietnam strain when vaccinated with our vaccine. To remind you, a single injection of our trial H5, which is the hemagglutinin and the two internal proteins, nuclear protein, and N2, which is a trial DNA vaccine, provided complete protection from death and disease in ferrets. The same vaccine is also significantly decreased viral shedding, which is the primary cause of disease transmission, and could be critically important in limiting the scope of a pandemic, if and when that occurs. While other pandemic influenza vaccine developers are pursuing variations of the same old conventional subunit protein vaccines, we are developing a radically different approach with potentially significant advantages, which I will detail later in the call, because this call is going to be devoted our flu data. But before I do that, I want to turn over the call to Jill Church, our CFO, to give you highlights on our second quarter financial performance. Jill?

Thank you, Vijay. We reported financial results for the second quarter of 2008 earlier today. These results were consistent with the results for the same period in 2007. The second quarter results reflect our ongoing activities in all of our clinical stage development programs, including our Phase III trial with Allovectin 7, our Phase II trial of our CMV vaccine, and our Phase I trial of our pandemic influenza vaccine. Our cash burn for the quarter was $2.7 million, which reflects the $6.3 million funding of our Phase III trial by AnGes. Our results are in line with our expectations for full year 2008 net loss and net cash burn.

We ended the quarter with $58 million in cash, which is sufficient for our anticipated needs through at least 2009. Further details of our financial performance through the first half of 2008 will be available by the end of this week when we expect to file our quarterly report on Form 10Q. I will now turn the call back to Vijay.

Thank you, Jill. I would like to discuss today the significance of our recently reported Phase I data from our pan flu trial, but before I discuss the data, I want to remind the listeners that this is not just flu data. This is beyond flu data. This is really validation of our DNA vaccine technology platform. We have, now with the defined assay, by defined assay, I mean assay that's recommended by the FDA shown that our technology can perform equal or better than conventional vaccine technologies when dealing with a poor immunogen like H5.

As you know, the pandemic influenza immunogen H5 is poor immunogenic and the vaccine that's been approved requires 19 micro grams times two doses, which is 12 times the normal influenza dose, so it's really a poor quality immunogen. We expect with a good immunogen we'll probably even do better. Also, the second important element of this data is that this is the first successful step towards the goal of establishing Vaxfectin as an adjuvant. It has been now tested in humans and so far has been well tolerated and has been an enabler in getting this technology to perform at this level. Now, let me focus on the data.

The Phase I trial goes, I'll just take a moment to remind you that our specific goals behind the design of our trial, so that everybody has a clarity of why we conducted this trial, our [monorolin] vaccine contains DNA and H5 hemagglutinin, which is a surface program from a Vietnam strain of influenza virus. It is designed specifically to elicit antibody responses toward the H5 protein, so that's the first element. Second, with our trial vaccine, we used the same H5 component mentioned previously, but we are testing two components, nuclear protein, and M2, which are internal proteins for cellular immunity. The [triovelin] vaccine is designed to provide broad cross-protection against severe disease and mortality. Both vaccines were formulated with our nonadjuvant Vaxfectin and our trial is designed to test its safety and utility for the first time in humans.

Let me talk about the Phase I trial design. The Phase I trial design enroll patients in the age -- healthy volunteers in the age of 18 to 45. We recruit at three clinical sites in the United States and there were about 100 healthy volunteers. The trial was designed to test two different delivery devices, a needle and a syringe, which is a needle-free device known as Biojector, so two devices, a plain needle and a needle free device known as Biojector, and we evaluated both the [monorolin] and the [triovelin] formulations when we evaluated both these devices. The dose escalation trial with H5 DNA dose increased from .03 milligrams, or 30 micrograms up to one milligram, so we are testing H5 from 0.3 milligrams to one milligram, and the highest doses of nuclear protein in M2 that were tested were .33 milligrams each, and there were two injections given, one on day zero and the second one given on day 21, and the immune responses were evaluated at day 21, day 42, day 56 and day 84, and then again, we have final follow-up at six months. So the trial is fully enrolled, but the trial is still continuing.

So let me go over the preliminary results as it relates to safety. First, most subjects dropped out of the trial for tolerability reasons and no significant safety issues were observed at any of the vaccine doses tested. There were no clinical or laboratory vaccine-related serious adverse events. Safety is important in this trial because it was a first time we tested this novel adjuvant Vaxfectin in humans. The predominant side effects in this trial included local reactions at injection sites, such as pain, redness and swelling. These effects typically were low grade in resulted in a day or two oral -- the trial showed a well tolerated safety profile.

Let me now move on to the results on immunogenicity. In our preliminary evaluation for immune response, the reason we say preliminary is there's a lot more data that has to come out, particularly all across production data. We focused only initially on the antibody responses as measured by hemagglutinin inhibition antibody titers, this is the recommended assay that I mentioned earlier on, which is the standard accepted by regulatory agencies for influenza vaccine. In our trial, responders were defined as those subjects achieving H5 hemagglutinin inhibition titers of at least 40 and achieving at least a four-fold increase or baseline HI titers. By day 56, at least 50% and up to 67% of the valuable subjects or responders in each of the cohorts receiving the two highest doses of H5 DNA there were no responders in the placebo cohort, very important. These groups included one milligram [monorolin] vaccine delivered with needle and syringe and half milligram and one milligram [monorolin] vaccine delivered with the Biojector device.

For comparison, just to remind the listeners and the analysts, the Sanofi pasteur H5N1 vaccine currently being stockpiled by the US government, I think about $1 billion or so, was approved with 44% of the subjects achieving HI titers of 40 or more by day 56 after two doses each using 90 micrograms of protein. And again, this has a shelf life of two years. In addition to review the HI responses we observed some specific encouraging data that requires further analysis. Even at the lowest dose, which is .03 milligrams of plasma DNA, or 30 micrograms of plasma DNA, not protein, one of the six subjects was a responder by day 56. This is, this is an incredibly small amount of dose in humans and speaks well to the stem cell Vaxfectin adjuvant which has been a big enabler in this particular clinical trial. Also, 25% of the responders who achieved the highest dose of H5 DNA dose were responders at day 21 after single injection, so 25% of the people responded after one injection.

In the event of an outbreak, early responses could be a significant value in showing or preventing a pandemic. Preliminary analysis of HI titers also showed evidence of cross strain immune responses against an H5 and when not matching vaccine -- remember, we have a Vietnam strain. We did some early cross-protection studies with a different H5 strain and found cross-protection. We expect the pending microneutralzation data to give us better insight cross strain protection activities, so we expect more microutilization data next year. Further validation is ongoing to evaluate Dcell immune responses to convert antigens, which are the nuclear protein in M2 internal proteins, cross-strain response against other H5 claims as I mentioned before, a long-term follow up at 16 and 26 weeks. As a reminder, because of the multiple variables included in this trial design, the size of each cord was relatively small, ranging from six to 15 subjects per group. This trial, therefore, is not powered to evaluate minor differences between the groups.

Overall, we are very encouraged by the preliminary results, which clearly demonstrate potential of a Vaxfectin formulated DNA vaccine to provide new alternative to pandemic influenza, but potentially now that we have shown with Vaxfectin that our technology can deliver broader applications of this technology to other targets. Competitive landscape, why DNA vaccines are needed, so in the context of pandemic influenza vaccine developers, what is the relevance of this data? Is there an unmet need that the DNA vaccine could fulfill? The answer is absolutely yes. Pandemic influenza vaccine approach is designed to work on some of the major short comings that exist with the current vaccine. Our first advantages in vaccine developing, before conventional influenza vaccines can be manufactured from the virus, they must be genetically engineered into a safer form and tested for its ability to grow in chickens and eggs. This process takes valuable time during the early critical stages of the pandemic. Vical's process or Vical's technology completely bypasses this step.

We only need the gene secrets from the selected target proteins and pathogens. For example, during the SARS outbreak several years ago, we simply downloaded this genetic information from the internet and created our vaccine from this public data source. So we don't have to handle the pathogen, neither do we have to wait for the genetic modification of the pathogen to a different back bone. Our second advantage, which we are preaching all the time is manufacturing, conventional influenza vaccine production depends on chicken eggs, which may or may not be available on short notice if at all during a Avian-based influenza pandemic and pan flu strains of influenza may be toxic to eggs and may not grow in a sufficient productive manner, are easily scalable bacterial fermentation. Fermentation, guys, not cell culture. And purification process of standardized unit operations and we can produce any DNA vaccine without changing the equivalent of processes.

Conventional vaccine manufacturing cycles are long, typically six months or more with chicken eggs, newer approaches, such as the [melon] cell culture, which have their own inherent problems, still require about three to four months and also require significant optimization, but Vical's manufacturing approach we can develop vaccines from emerging strains faster than any other approach, we can manufacture vaccine in six to eight weeks. Our third advantage is in shipping and storage. Conventional influenza vaccines which are essentially proteins must be shipped and stored under refrigeration within a very narrow range of two to eight degrees centigrade. Any deviation from these temperatures range can result in loss of effectiveness. Even when stored at proper temperatures, these vaccines have limited shelf life, about around two years. DNA vaccines on the other hand can be stored for extended periods in the frozen state, we have successfully stored frozen plasma DNA vaccine for more than five years. This ability could be an important advantage for stock piling, so that you don't have to keep replenishing the stockpile every two years.

And our fourth advantage, which is very important advantage, is the potential for broad cross strain protection. Conventional kill vaccines primarily provide antibody mediated protection against hemagglutinin surface protein from closely related influenza strains within the same subtype. They will offer little or no protection against more distant strains from other subtypes. There is no way to know in advance whether an existing vaccine will protect against a new emerged strain. DNA vaccines, because of their ability to (inaudible) antibody and cellular immunity and the way they present the antigens to the immune system may provide broader cross-protection than conventional vaccines. In our preliminary Phase I analysis we noted evidence of cross strain antibody response to HI titers, we are conducting further evaluations of antibody responses against other strains of H5 influenza virus. In addition, we are evaluating cellular immunity against the two nuclear proteins, which is included in our [triavolin] vaccine, nuclear protein and M2. Cellular immune responses could provide particularly important in protecting against severe disease and mortality for closely matching if hemagglutinin-based vaccine is not available. Importantly, the short comings of conventional vaccines apply to the currently licensed and stockpiled pandemic influenza vaccine as well. As most other pandemic influenza vaccines under development.

The focus for conventional vaccine development has been on increasing immunogenicity against a matching strain of influenza, demonstrating cross-protection within the same immediate family of influenza viruses and pursuing marginally better alternative manufacturing methods. Even the most successful of these efforts would not allow development and production of a vaccine matching newly emerged influenza strain in time to prevent a pandemic. In summary, there are three major platforms driven by a preliminary Phase I results. These results encourage further development of our pandemic influenza vaccines and we are currently exploring potential funding or partnering alternatives from a variety of sources. These results support advancement of additional Vaxfectin formulated DNA vaccines toward clinical testing. I'm not talking influenza. Vaxfectin supports formulated DNA vaccines towards clinical testing against another disease and we expect to reach specific decision to that effect in coming months. These results lead to pursuit of additional Vaxfectin applications. Remember, we have two core intellectual property positions.

One, the Vaxfectin usage discovered in DNA vaccines, and then there's another intellectual property coverage we have of Vaxfectin used with conventional vaccine. So Vaxfectin has a much broader application beyond DNA vaccine and we hope that this could be an important contribution to the rapidly growing field of adjuvants where Vaxfectin could excel. We look forward to providing additional immunogenicity data from this breakthrough trial by the early fourth quarter of this year. So as I told you, we'll have cross-protection data, cellular immunity data and other data, and that should be available at various additional time points beyond the time points that we have published so far.

Let me quickly review the 2008 outlook so far for the next six months. We expect to release, as I told you, additional data from our Phase I pandemic influenza trial early in the fourth quarter. We expect to complete an interim efficacy analysis in our Phase II CMB vaccine trial to remind you that's being conducted in -- it's a double-blinded study being conducted in a hematopoietic cell transplant patients. We expect updates from some of our Vaxfectin collaborators. We told you we're working with a variety of players, both public and private, who are using Vaxfectin both in preclinical and nonhuman primate studies and we expect some of the data to come out in the near future. We expect an update by a licensee, Sanofi-aventis in the company's four R&D meeting in the status of its phase III angiogenesis trial. Remember, this is the second trial. The first trial, which is waiting for approval in Japan is the AnGes trial for the drug Collategene, which was filed in March of '08. We expect publication of data from the NIH trial on SARS. Now, everybody is providing SARS, but that data is going to come out and we're the only company that has done a trial in the field of SARS. Again, to remind our listeners and analysts, Vical is in great shape, driving forward with all of our programs. This concludes my prepared statements. Operator, we are now ready to open call for comments and questions.

Certainly. (OPERATOR INSTRUCTIONS) Questions will be taken in the order they are received. Please stand by for your first question. Our first question comes from Alan Carr of Needham.

Hi, good morning, everyone.

Hi, Alan.

I would like to address the flu program a bit. Can you elaborate on your partnering strategy and then also, I guess go over the regulatory hurdles that are in this area, both in the US and abroad, focusing on where you see the biggest revenue opportunity.

I can't really comment to you on the partnering strategy because partnering is not done till it's done, okay. But obviously we are in discussions, both on Vaxfectin and our flu programs, with potential partners, but I don't have anything to report on that front. But more importantly, the important question is what's the regulatory strategy. First of all, the guidance for pandemic influenza in the United States, if you go onto the FDA website clearly applies to DNA vaccines, so I think that's -- so DNA vaccines will be treated -- the guidance applies not just to conventional vaccines, but to immunogenicity, so that's a very positive development.

So we have to follow basically the same hurdle that's been set as it relates to immunogenicity as it relates to conventional vaccine. As it relates to safety, it's a discussion with the FDA we haven't had that discussion with the FDA, but if we expand the phase -- if we do a Phase II study, the Phase II study primarily will be a safety study with a small segment to replicate the immunogenicity, it's really -- the FDA on the Phase II's more focused on safety than is focused on the immunogenicity, I think that kind of holds up in Europe as well. I'm not very familiar with regulations in the rest of the world, because most of them piggyback on the US and Europe regulations.

Well, getting back to partnering strategy, it would help if you could clarify what sort of work would be done internally and what you would expect a partner to do.

Well, I think in the partnering strategy, there is variety of spectrums when you deal with partnering strategies. One element of partnering strategy would be just using Vaxfectin to prove the immunogenicity of conventional flu vaccine. That could be one extreme end of the partnering strategy. The other extreme end of the partnering strategy, where the partner would like the DNA vaccine platform because of its potential cross-protection capabilities and take that program on its own and fully fund the program and take it forward. So those are two spectrums of it.

Okay. Thanks very much.

Our next question comes from Tom Shrader of Rodman.

Good afternoon.

Good afternoon, Tom. There's a plane going over from the San Diego airport space, so bear with us.

Okay. I had kind of a general question. We've seen interesting data from your flu program obviously and then from the RapidResponse platform. Should we start to think of this as one program, or do you think that you're making a vaccine that would be stockpiled as well as building a capability to use this very RapidResponse? Can you give us a sense of what we should think about going forward?

Excellent question, first of all. They are related, but they are not identical programs. Remember, the RapidResponse grant that we got was specifically to prove that we can manufacture large quantities of linear expression DNA cassettes very quickly, in large quantities, okay. It is not a flu-specific grant. As the grants we received from the US government for flu program was specifically for pan flu. So right now, that uses the circular DNA ring, whereas the linear expression so at some point can be bridged? The answer is yes. But right now one program is focused on demonstrating we can make large quantities of that vaccine and that VCR reactor and the second program is to make sure we can get clear clinical data with efficacy. We'll have to create a bridge between linear expression and a circular cassette to make sure they work in tandem. If that occurs, then those programs can be joined at the hip. Right now, we are treating them as two independent activities.

Okay. Thank you. And you made comments about cross protection. That's obviously a huge thing. Can you -- how general is the idea that a DNA vaccine will produce cross protection? What I really want to know is, if you show good cross protection in your trial over the next few months, how confident will people be that's general and not just this antigen-specific? Can you walk us through how good the case is that you will get better cross-protection based on kind of the lay of the land?

Well, the easiest way to make sure that you have good cross protection is you have to take their pandemic strains that are available and test against the [serial] responders who have responded well in this trial and to make sure that the antibodies generated in the [serial] of those individuals are actually neutralizing those pathogens, why is that pathogen in a biosafety level lab III. So it is not -- it's data-driven. You have to prove it is truly cross protecting. Me saying that it's cross-protecting is not enough, okay?

Do you have to do it for every vaccine, or do you think if you show it here, people will generally accept that for other vaccines you might make, say, by RapidResponse?

If we demonstrate with this particular vaccine that it's cross-protecting and applies to any other DNA vaccine that we make, whether we use an H7 strain or H9 strain.

Other flu strain.

Other flu strain.

Okay.

And also don't forget the other element of cross protection is we'll have some cellular immunity data on nuclear protein and M2. We haven't got that data yet, and if that data shows that we rarely boost nuclear protein in M2 responses from the baseline in a significant fashion, that could be a very important determinant of cross-protection.

Right. Okay, and just to switch gears, in the AnGes filing, are there milestones that you can talk about? For instance, do the regulatory authorities go back to the companies with questions or are there manufacturing inspections? Are there any of the things we're used to thinking about that you can comment on with regard to that filing?

There are no officially described milestones, but the same concept that CNC. For example, there will be a thorough review of the CNC data, there will be a thorough review of the manufacturing, there will be a preapproval manufacturing inspection. There's always back and forth between the companies and the regulatory agency at acquiring clarification on certain data, whether clinical data or analytical data or release data. So that dialogue is going on right now as far as I understand.

So you can't point to any things that have happened? Are you allowed to say anything?

No, all I can tell you is that dialogue is ongoing. The agency's actively engaged with them.

Okay, okay. Thanks a lot.

And our next question comes from Brian McCarthy of Merriman Curhan Ford.

Hi, congratulations on your very validating flu vaccine data.

Thanks, Brian.

And I wanted to ask regarding again development plans for that program in the future, to what extent would you be considering governmental development contracts in addition to corporate partnering? And the second question would be regarding Merial and what they may be doing to moving from a conditional approval onto a full approval for the canine melanoma vaccine.

Okay, so let me take your question -- and I know where you're coming from on the government funding. Our goal is to get government funding in such a way that we can run the trial on our own. There's obviously lot of government funding available where you can actually run the trial through their vaccine trial evaluation unit and that's not our desired pathway, because then you lose control in terms of the size or the timing of the trial, which is really a slow process. That would -- that's not the desired pattern we are seeking. We are seeking, if successful, to get funding from the government so we can run the trial and recruit it rapidly. So that's the answer to your questions, but we are also looking for other sources beside the US government. In terms of Merial, we haven't heard an update from them. We expect to hear an update sometime in third quarter from them. The last update we heard, they were compiling the data to file to the US Department of Agriculture to change that conditional approval to full approval, but I think hopefully by third quarter, next earnings call, if we have some data, we'll be able to give you an update, but that's all I can tell you at this stage.

Okay. Thank you very much.

(OPERATOR INSTRUCTIONS) We'll go next to Davis Bu of Goldman Sachs.

Hi, sorry for the background noise. I have a couple of kind of housekeeping questions across your program. First, on the AnGes filing, so I think you mentioned it, but I didn't quite catch it. What is the exact indication that they filed for?

I didn't get -- you're breaking -- it's for, it's for PAD, peripheral arterial disease and Burger's disease -- b-u-r-g-e-r, Burger's Disease, a special genetic condition.

All right. So it's for both.

Yes.

The second is just in terms of the Allovectin program, is it still -- are you still looking to complete enrollment by mid-2009?

Well, that's sort of -- that's the guidance we are giving, middle of '09, correct.

Okay, great. Then a couple of housekeeping questions on the flu. So you tested the needle versus the needle-free injection. How should we be thinking about the -- about those two delivery devices and how should we think about this going forward?

Well, right now to be honest with you, as I told you, the numbers in the trial were small. As we told you, there are six to 15 patients in each arm. There really is not a statistical difference between both devices, okay? What we really need to examine the data more carefully before we decide what's the right approach, okay? And the needle could be a much more viable alternative for Biojector because it's much simpler to use, but right now there's no statistical difference between both the devices.

Great. And I'm sorry, I know you mentioned this, but I couldn't quite catch it. What was the dropout rate in the trial?

The dropout rate was zero.

Okay, great. And -- okay. That's it. Thank you.

And we'll go next to Greg Gordon of Cowen and Company.

Hi, good afternoon, congratulations. A quick question. You had mentioned on the last call that AnGes was considering a Phase III US program for Collategene. Is that still planned? Do you have any update on that?

All I can tell you at this stage is now that the filing in Japan is complete, all the resources by AnGes is being devoted in terms of working with the FDA and outside experts in terms of scoping the trial design and coming with the best pathway to move forward. So the answer is yes, lot of activity going on there on that front, but I don't have any timing predictions at this stage.

Okay, and then I guess another question is, when do you see the flu program moving forward in terms of phase II, do you think that's an H1 '09 event?

Well, first of all, our Phase I trial is not yet complete, okay, and I think we will probably lock up all the Phase I data before we start the Phase II trial. We have -- remember, the last lead is going to be six months in all the patients, so that trial actually -- practically the last six-month reading goes almost to the fourth quarter of this year. Then we have to compile the data, put the clinical trial report together before we meet with the FDA. The more important thing, is the two important elements, we got to complete the trial and get all the data organized and have a discussion with the FDA, but the second thing, we need to make sure we secure sources of funding, so it's not going to occur, I'll tell you, in '08.

Okay, great. Thank you very much.

All right. And we have no further questions. I'll now turn the call back over to the speakers for any additional or closing remarks.

Well, if there are no other questions, I would thank all of you for joining us this morning, and we look forward to seeing you individually at one of our scheduled presentations before the next conference call. Thank you.

Ladies and gentlemen, this concludes our conference for today. You may now disconnect.