Brickell Biotech Inc (BBI) 2009 Q1 法說會逐字稿

Good day and welcome, ladies and gentlemen, to the Vical Incorporated 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. At the request of the Company, we will open the conference up to questions and answers from the invited participants after the presentation. I would now like to turn the conference over to Mr. Alan Engbring, Executive Director of Investor Relations. Please go ahead, sir.

Hello everyone. And welcome to our first quarter 2009 financial results conference call. Participating on the the call today are Vical's President and Chief Executive Officer, Mr. Vijay Samant, and Vical's Chief Financial Officer, Ms. Jill Broadfoot.

I will begin with a brief notice concerning projections and forecasts. This call includes forward-looking statements including financial expectations, and projections of progress in our Research and Development programs 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 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. As well as the specific risks and uncertainties noted in Vical's news release on first quarter 2009 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 everyone. In today's call I'll provide an update and progress on our key programs and some comments on the Swine Flu collaboration with the US Navy that we announced yesterday. We'll then open up the call to questions. Before that I'll ask Jill Broadfoot our CFO to read our first quarter 2009 financial results. Jill?

Thank you, Vijay. Our financial results during the first quarter of 2009 reflected our ongoing progress in two of our key development programs. Our Phase III trial of Allovectin-7 in patients with metastatic melanoma continued to progress toward our expected completion of enrollment at year end. And our fully enrolled Phase II trial of TransVax, CMV vaccine in patients undergoing bone marrow transplants advanced towards the expected release of clinical efficacy date during this current quarter.

Our first quarter revenues of $2.3 million were driven primarily by funding from our Japanese partner, AnGes, for our Phase III Allovectin-7 trial activities. Our strategic restructuring which we began in the fourth quarter resulted in our focus on key development activities and led to a reduction of $1.5 million in operating expenses, compared to the first quarter last year. From $12 million down to $10.5 million. Our net loss was also reduced by $1.3 million for the same periods. Going down from $9.5 million down to $8.2 million, consistent with our guidance. We ended the first quarter with $34 million in cash and marketable securities. Our first quarter 2009 net cash burn was consistent with our prior projections for a full year 2009 net cash burn of between $19 million and $23 million and sufficient cash through 2010.

I will now turn the call back to Vijay.

Thank you, Jill. Next I'll provide a quick update on our key development programs. Beginning with our Phase II TransVax therapeutic vaccine program for patients undergoing bone marrow or stem cell transplants. As a reminder, these patients typically sufficient from advanced cancers that require eradication of the immune system. A transplant from a healthy donor can then start to rebuild their immune system. The use of immuno suppressive drugs to prevent transplant rejection. Allows latent CMV to react to -- complicating their recovery. Our TransVax therapeutic vaccine is intended to help control CMV during this period.

In the fourth quarter last year we reported results from an interim analysis of immune responses for the first group of transplant recipients enrolled in our trial. These results indicated significant enhancement of CMV specific immunity as measured by T cell responses to both CMV antigens targeted by the vaccine. BP-65 and GB, both with T values of less than 0.05. Our trial is fully enrolled and we are currently analyzing serum samples from all transplant recipients through their four month follow-up.

Literature suggests that immunogenicity results, should translate into clinical benefit for these patients. We plan to report expanded safety and immunogenicity results and initial clinical efficacy results during the current quarter. Our analysis will use multiple efficacy markers relevant to these transplant patients, including frequency or viral-reactivation, total anti-viral therapy, viral load and others.

We recently introduced the TransVax name for our CMV therapeutic vaccine both to reflect its advanced status and to differentiate it from our prophylactic CV vaccine which we are calling, [Timovectin]. TransVax is formulated with poloxamer to drive a predominant T cell immune response and is intended as a therapeutic vaccine for transplant patients, hence the name, TransVax. Timovectin is formulated with Vaxfectin , the same catonic lipid formulation used in our pandemic influenza vaccine to drive a predominant anti-body immune response. It is intended as a prophylactic vaccine to prevent CMV primary infection in women before or during pregnancy to protect their unborn child from transmitted CMV infection.

Next I'll more to our lead independent development program, our Phase III registration trial of Allovectin-7 in patients with advanced metastatic melanoma which is being funded by AnGes our partner for commercialization in Asia. During the first quarter, we announced the successful completion of the trial's second scheduled safety review by an independent safety monitoring board. And the clearance to continue the trial per protocol. I want to emphasize that there are no planned interim efficacy analysis in this trial and that all data will remain blinded until after the trial is completed.

The study's power to detect differences in durable response rates, this end point was negotiated with the FDA through a special protocol assessment process. We are actively enrolling patients at 85 sites worldwide including our newest sites in Brazil. We expect to complete enrollment of the plan 375 patients in this pivotal Phase III trial by the end of 2009. We believe that Allovectin-7 is now a leading candidate for the first approval in over 15 years as a first line therapy for patients with metastatic melanoma. Next I'll provide a brief update on some of our independent and partnered programs.

In April of this year our Vaxfectin adjuvant was recognized as one of the 100 great investigational drugs in the annual ranking by R&D Directions magazine. This was a significant achievement for a compound that recently completed its initial Phase I testing in our H5N1 pandemic influenza vaccine program. We are actively engaged with a variety of collaborators in testing Vaxfectin. With a broad range of initial applications. This includes our CRADA with the US Navy for development of an H1N1 Swine Flu vaccine, which was announced yesterday. And our NIH funded program for the development of a DNA vaccine for herpes-simplex type-2

HSV-2 is a highly prevalent sexually transmitted disease for which there is no current effective vaccine. We announced in April the publication of preclinical results which identified potential targets for development of our HSV-2 vaccine. These targets are now being pursued under a two year, $2 million NIH grant. In our angiogenic program, we maintained active discussions with our Japanese partner, AnGes and we are confident that the regulatory review of Collategene product which lead to a approval in Japan. Perhaps early as late as this year. The latest update from second angiogenesis partner Sanofi-Aventis indicates that FGF1 angiogenesis product is advancing well towards completion of a multi national Phase III trial for which a filing is expected late 2010.

I'll devote the remainder of my prepared remarks to the recent outbreaks of Swine Flu. As you know a new strain of H1N1 influenza has emerged with components of swine, avian and human influenza of strains. Because humans have not previously been exposed to this new strain we have little or no prior immunity. Existing seasonal influenza vaccines, do not protect against the Swine Flu, that is the current season H1N1 vaccine. The H5N1 influenza vaccine currently stock piled by the US Government would not protect against the H1N1Swine Flu and therefore a new vaccine is needed.

Current capacity for production of seasonal influenza vaccine is not sufficient to manufacture both seasonal and a pandemic influenza vaccine. If seasonal flu vaccine production capacity is devoted for making Swine Flu, they will not be ready for at least six to nine months. Therefore, a faster method for vaccine development and production is needed.

Vical's vaccine approach is well suited to emerging infectious disease like H1N1 influenza, or the Swine Flu. The potential of approach was demonstrated through successful completion of our Phase I human trials of Vaxfectin formulated DNA vaccines against H5N1 avian flu. It was also demonstrated through NIH successful completion of a Phase I human trial of DNA vaccine against SARS which set a new speed record for advancement from concept to clinic. We are talking of production time of six to nine weeks rather than six to nine months with conventional vaccines.

Some experts have compared the current outbreak to the 1918 Spanish influenza pandemic which was also caused by a H1N1 strain previously unknown in humans. In its initial outbreak, the spring of 1918, it infected a relatively small number of people, with relatively mild set of consequences before disappearing through the summer. When it returned in the fall of 1918 it rapidly spread worldwide and killed some 50 million people before eventually running its course. It would therefore be prudent to prepare for the worst.

Our success with our Phase I H5N1 avian flue vaccine trial last year allows us to move directly into production and clinical testing of H1N1Swine Flu vaccine. We announced yesterday that we have entered into a CRADA that NMRC Biomedical Research Group within the US Navy for expedited development of an H1N1 vaccine. The Navy is an ideal partner for this program. First of all, they've full understanding of the DNA vaccine technology. Through our prior collaborations for vaccines for malaria and dengue. They have the ability to conduct large clinical trials quickly and they share our sense of urgency in advancing development of Swine Flu vaccine.

To keep the program moving, while we are pursuing the CRADA, Vical secured the genetic sequence for the new H1N1 Swine Flu strain last week. By the end of this week we'll have turned that sequence into a protype vaccine. By next week we'll have the master cell bank established which will allow us to start manufacturing vaccines suitable for clinical trials. Before we advance to the more expensive stages of development we expect that the government funding for this program will be in place.

In summary, we're advancing towards completion of our Phase III trial of Allovectin-7 in patients with metastatic melanoma. We are approaching the release of initial clinical data from our Phase II trial of TransVax in CMV positive transplant patients. We have sufficient cash to continue development of these key programs. We are working under a new CRADA with the Navy to advance a Swine Flu vaccine and expect to secure committment for government funding soon. We believe our platform technology continued to position us well for multiple successes.

That concludes our prepared comments. Operator, we are now ready to open the call to questions from our invited participants. Thank you.

Thank you, Mr. Samant. The question-and-answer session will begin at this time. (Operator Instructions). Please stand by for your first question. We'll take our first question from Stephen Dunn with Dawson James.

Hi, thanks for taking my questions and congratulations on a very strong Q1 for investors.

Thank you.

Yes. I want to touch base first on CMV and then we'll go on to the H1N1, et cetera. On the CMV on the TransVax, we're going to have the Phase II data sometime this quarter. Can you give us a little bit more granularity on will that be like June 30th or will that be June 1st or can you give us a little color on when that would be?

I think it's an excellent question that you're asking. I think the data will be ready for before June 30th. We are right now looking at an appropriate forum to release the data. We generally don't like to release the top line data in a press release because it then takes the [impedicent] presenting it at a conference. So whether it's June 30th or a little bit earlier or a little bit later, the data is going to be ready. We just want to find the right forum. Unfortunately, I don't have the forum yet lined up. But hopefully we'll do that in the next few weeks and we'll announce it.

And I guess, let's assume it's --

I can't hear you. You need to speak a little louder, sir.

Let's assume that it's satisfactory. Can you hear me now?

No.

Now can you hear me?

Yes, I can.

Let's assume that's all satisfactory. What are your plans to progress further into a Phase III? Are you going to wait for a partner or are you going to do that yourself like you're doing with Allovectin or -- ?

Again, an excellent question. I think first of all, we need to look at the outcome of the data. And assuming the data is good, the real next step is then to get together and design a Phase III study and negotiate the trial end points with the FDA. And that's going to take some time. My guess, it will take at least six months. Okay? And the trial, we can start after that.

So the answer is in that interim period we'll be looking at opportunities in both partnering as well as doing the program on our own. So it's hard to predict. And remember, this is the first set of data that's coming out of SME. This is after four months follow-up. The real data is going to be also the second phase data which is going could come after November, for six months follow-up after the final injection to make sure the second reactivation seven is accounted for.

So we need to take this data along with the next set of data that's going to come before we go to the FDA. So we are open to partnering but if the data looks outstanding and we raise more money obviously we'll do it on our own.

Well if I could put words in your mouth, then, you're going to go you ahead and design the Phase III study and I guess under an SPA on your own without waiting for a partner to provide input? So you're going to bring it at least to that point yourself?

The answer to that question is the thought process of how the Phase III study will be designed and what the end points are something that we're going to have to do it on our own. Because the partner expect us to do. The partner doesn't have the expertise.

Exactly. Okay. Let's talk a little bit about the prophylactic approach on CMV. I guess could you give us a little more color around your thoughts there?

I think it's the last big target for infectious disease, okay? Because this could be a universal target for females of child bearing age. These are really adolescent females and if you see the success of Gardasil, this is really the last big target. All the big pharma companies are excited. We are a step ahead because we own a lot of intellectual properties surrounding the gene sequences in application with the DNA vaccines. And we believe that the IND that we have filed, are going to file, I think we have filed it. Am I correct? Yes, we have filed it.

Will allow us to get to a Phase I/II study to develop a proof of concept. We obviously not going to proceed with the Phase I/II study until we have real partnering lined up to go with this program because that study will only be a proof of concept study. The real efficacy study will be a large study, with certainly we need a big partner to help us.

Okay. Great. I want to jump over to the -- let's just say the H1N1 a little bit. You were going a little bit fast for me. I know it was the genome was sequenced for H1N1 about two weeks ago I'm trying to underscore the speed as which we can begin development with your technology. So the US Navy got the gene sequence last week. I guess can you walk me through exactly what worked -- the start time and what work has been done.?

Well, first of all, the genome was sequenced by a lot of people but the real official sequence comes out of CDC, okay. Because a lot of private people have sequenced it. We [realigned] the sequence from CDC. The Navy did not get the sequence. We got the sequence from the CDC. We'll have the plasma synthesized and ready which is the vaccine construct by this Friday. So the speed it amazing. It takes about four, five days after you get the sequence to synthesize the vaccine, if that's what you're looking for.

Right. And could you -- did the Navy approach you or did you approach the Navy or how did that relationship go?

The Navy approached us.

And I'm going to -- I'm sure you're aware that there is some hints based on some patients in Canada that perhaps the lethality that we've seen in Mexico City may have actually been attributed to H3N2. If that is the case, do you think it's a possibility or a probability that the Navy would also want to do in parallel an H3N2 version with you?

Well, I mean there's a lot of news, unconfirmed news reports. We don't know really what the facts are, okay. We don't know why the mortality in Mexico was so high, was it the standard of care in Mexico or were there other compounding factors. I think it's premature at this stage to say whether it's H3. But in case there was another strain involved obviously we will have to work on it with the Navy. And if that really bears out, okay?

All right. Well, again, congratulations for a great Q1, investors really did well. I'll jump back in the queue.

Thank you.

We'll take our next question from Eric Schmidt with Cowen and Company.

Good morning, Vijay. Just one more question on the CMV vaccine data that we're expecting I guess towards the June time frame. Could you just remind us on the efficacy end points that you mentioned, is the trial powered to show any improvement in viral load reductions or number of viral reactivations? And if not, what would you generally expect from the control arm in a study of this sort?

I think the trial is powered, if I'm not mistaken. I can get back to you with with the specifics on it. It is powered to measure viral reactivations. Also the total amount of anti-viral therapy -- the end point that I mentioned. We're hoping that we're going to get some level of P values, Okay?

I'll follow up with that powering with Alan offline, then, thanks.

We'll take our next question from Ren Benjamin with Rodman.

Hi, good afternoon. Thanks for taking the questions. Can you give us a better sense as to this CRADA announcement with the US Navy, is there any funding involved in this at all? Or is it more just collaboration where you will have to do some of the initial funding and they'll conduct some of the trials? Can you just give us some color as to how this works?

Excellent question again. The CRADA is really the first step in terms of securing funding. By getting the CRADA in place, the Navy then lets the authorities for which they're going to secure funding, let them know that they have a private Company ready to partner to go with them. So that they have the sources, including the access to the technology to move forward. So the CRADA is really the vehicle that allows them to secure funding. Okay?

Having said that, we are spending some amounts of money until the Navy secures funding to keep this process moving. As I mentioned, in terms of getting the construct made, to making sure the master cell is laid. We're not going to spend enormous amounts of money on our own until the full funding comes from the appropriate government sources.

In terms of the roles of the two organizations, Navy primarily will conduct the clinical trial because they have access to the patients. They have a clinical trial set up. We will be responsible for filing the IND and manufacturing and doing the clinical assay. Obviously, we will be reimbursed for those activities.

Right. Will you also, on the side or separately, apply for any government funding that may be available? And along with that, has there been an RFP or something going out from the government to companies?

No, I think you need to understand the Navy obviously has always an inside track in dealings with government resources, much better than a Company like us. So we are not going to go out and secure funding for this activity outside our collaboration with the Navy. We're going to rely on the Navy to secure that funding for us.

Okay, great. And then I guess along with this, whether this becomes a pandemic later on or not, what is the path forward as far as stockpiling may be concerned? We hear lots of different reports. The animal rule, the -- you acquire at least human Phase II data, what is your understanding as to what needs to be complete in order for the government to come in and potentially stockpile this vaccine?

Again, an excellent question. It all depends, Ren, in terms of how severe the crisis is. If the crisis is really bad, the pandemic really gets bad, the mortality is really high, then the FDA under the Emergency Use Authorization has the ability to approve anything on done on simple animal data. If it's serious enough but it is not as serious as I mentioned earlier, they can approve it on the basis of limited Phase I immunogenicity study If it's not serious, business as usual, and it's a new full vaccine it may take the full gamut of approval. So, it's hard to predict what's going to be required.

Knowing what I'm seeing, and the way that this H1N1 is going around the world, don't be surprised that pandemic is declared. Declaration of pandemic is to do with some specific mortalities and how the strain is spread in different zones of the world and how much sustained human to human transmission. It has nothing to do with the mortality of the patients exactly. So the declaration of pandemic doesn't mean that a lot of people are dying. So you can still get the declaration of pandemic, I would call it a class II seriousness and it would accelerate the development of such a vaccine.

And can you just review for me or just reconfirm that the manufacturing facilities that you have in place are certified and that anything coming out of that would be ready to not only enter the clinic but also go into stockpiling or any other uses?

Well, as well certified as any Company of our size is. Remember, the amount of clinical trials that we have done here including making the Phase II material for the NIH, for the HIV trial. We had made material earlier they went into Ebola, SARS, West Nile, Anthrax, Allovectin-7 in a Phase III study. So it has been inspected by the California FDA, we have outside agencies, groups who have come in and inspected it. The answer is yes, the facility is in great shape. We pride ourselves in maintaining a good cGMP manufacturing facility here.

And just regarding -- you had mentioned how fast you can manufacture the vaccine. Can you give us a sense as to the capacity that can be generated right now?

The capacity in our own facility is going to be limited. If you -- depending on the productivity, how productive is this strain is in the fermentor, say half a million doses in a few months' time. Okay? But remember, we don't make the vaccine. All we make is the plasma. The vaccine is made in the human muscle cell when we inject the plasma. So when people say how much does it take to make your vaccine, we are not a vaccine manufacturers, we make a genetic fermentation plasmid.

Given that simplicity, we have the ability to go and contract out at large fermentation contract manufacturers who can make this vaccine easily. So when you're talking about people are competing cell culture manufacturing process, they're making a vaccine externally. We make a plasma which is injected in the muscle cell which makes the vaccine in the muscle cell. So we use the body to make the vaccine. That's where the capacity is.

Right. Switching gears quickly to the CMV program, I guess just to follow up on a previous question, it's powered to detect a statistically significant result. Can you just give us a sense as to what would be a clinically meaningful result for you outside of the let's say statistics? What sort of numbers are you looking for, either in reduction of reactivation or viral load decrease? Can you give us -- ?

I think the first one is that the vaccine has to be immunogenic between the placebo group and the vaccine group. So the first starting point is the I'm immunogenicity data. That if you can show that the vaccine is immunogenic in these immune compromised patients, between the placebo group and the vaccine group, you have crossed the first hurdle.

Right. That we've already seen, right, correct me if I'm wrong, from the interim results?

In the interim results it was immunogenic. But it has to bear out now for all the 80 vaccines that we have in the recipient group. Once you crossed that hurdle, then you need to titrate. That immunogenicity with correlation with reduction in viral load, the total number of reactivations, the amount of anti-virals that are being used. So that's the process.

Okay. Regarding the timing of the prophylactic trial and I may have missed this when you were going through it, but clearly this is a huge market opportunity. And so did you mention that you would conduct the proof of concept trial and then try to secure a partner before conducting the pivotal trial? Or would you try to secure a partner after these data from the bone marrow transplant come out in order to do that entire prophylactic program?

I think first of all, these are independent programs so they actually proceed in parallel. They're not connected to each other. One is based on a poloxamer base. It is a very different set of patients. One is based on Vaxfectin in much healthy volunteers.

Having said that, given our financial resources right now and the fact that we are going to prepared for, assuming the Allovectin-7 data is good, prepare for a BLA we are not going to expend money on the CMV congenital Phase I/II study. We hope that we either get money from governmental sources or a partnering effort to do that study. And until we get that money we're not going to start. But in order to facilitate partnering, we have laid out the study design. We have filed an IND. So we'll be prepared if somebody's willing to go with us.

Got it. And I guess just one final question regarding milestones for the remainder of 2009. You mentioned some of it in the press release but could you just go over all the milestones you expect to hit in 2009? We have some things like you mentioned in the call the AnGes expecting to receive Japanese marketing approval. But is the Phase III, the potential Phase III in the US still on track for 2009? Is there still Phase III trial results being expected from the Sanofi collaboration? Can you just go through what we might expect for the rest of 2009?

Sure. So the important highlights first of all, number one is completion of our Allovectin-7 trial, 375 patients. Okay? That's a big milestone. We've been working on it for almost a dozen years now. Nothing has been approved for melanoma. We are very excited how the trial is going. So we're hoping to announce the conclusion or completion of the 375 subjects in the aim trial as we call it.

As I told you we should have data on the CMV TransVax study, after four month follow-up again by the end of this quarter. We expect approval of Collategene approval, which is the angiogenic program by AnGes, hopefully by the end of the year. Our discussion as I said in my conference call is their discussions with the agency are going well and they seem to be very confident that it will get approved. So I'm going to count on their advice. Sanofi-Aventis in their Analyst Day had given an update and we understand that they will file their BLA in the year 2010. So we are expecting data either late 2009 or early 2010. We don't have granularity on exactly when the data is going to available.

We expect full approval of Merial's melanoma vaccine for dogs. Everything is on track. The data is being submitted. So it's going to happen. It's just a matter of time. We expect AnGes to at least make an announcement in terms of timing of the start of the trial. I'm not at liberty to state what the timing of that is but I think their interactions with the FDA have gone well and they continue to do well. This would be the Phase III study for angiogenesis in the United States.

Okay. Is there anything regarding the pandemic flu vaccine that's ongoing now?

Pandemic meaning H1N1 or H5N1?

Sorry, I guess H5N1.

We've already done all the work on it. We've released all the data on it. And we're still in active discussions on funding with a variety of groups. And unfortunately with the Swine Flu outbreak, everybody's attention has been distracted to the H1N1. But if you go to the World Health Organization site even this morning, there are still outbreaks of H5N1 in Southeast Asia. So that's going on. The fact that you have H1N1 Swine Flu, the threat of avian influence has not gone away. If anything the cumulative cases of H5N1 over the last several months are significantly higher than the H1N1.

Well, great. Thank you very much for answering the questions and good luck.

Thank you.

(Operator Instructions). And we'll take our next question from Alan Carr with Needham & Company.

Hi, good afternoon, everyone.

Hi, Alan.

Wondering if you could give us a little more detail about what's involved in this CRADA in terms of what work you're going to be doing? Is this -- I understand that you're going to be making the vaccine. How much clinical development does this agreement with the Navy entail?

So a little bit on this H1N1 flu that I can did not capture in the call. We have a head start because we got the gene sequence. As I told you, we'll make the H1N1 plasma by this Friday which is a couple of days from now. As compared to the conventional flu guys actually need to C seed stock off the H1N1 from CDC. We understand that that's going to take at least another three to four weeks before they get it. Simply because as you were able to understand, what they do is they take the Swine Flu, the wild types that's available right now or which is in their possession and they put it on through a reassortment process on a backbone so it's attenuated. Do it's not -- it doesn't require handling in a BSL-3facility. Other wise if you give the wild type, the manufacturers need a BSL-3 facility to make the vaccine. And that I understand is not going that smoothly and it's going to take them some time before they get it. So we've already got a month's head start.

Then we make a master cell bank which we intend to complete next week. And the master cell bank is the one that allows us to make -- start running -- making a fermentation runs. In parallel we'll run small animals studies before we make large fermentations to make sure that vaccine plasmid construct that we made is immunogenic in mice just like H5N1 was. We have sufficient baseline data and we can demonstrate that that vaccine in be immunogenic in mice while we are ready to go in a full scale fermentation run that will go into the clinic. You can in parallel have a quick IND meeting with the FDA. It can be expedited.

Because remember the IND that is going to be required for H1N1 is identical to the IND that we filed for H5N1. It's a comparable product. We don't need any preclinical tox work because we have done a all that work with H5N1. And remember, plasma are much bio-- they're comparable as a -- for the same -- if you have the insert of the same variety, okay. So in terms how hard it would be to get the master cell bank, make sure that the vaccine indeed is immunogenic in mice and then wait for further funding which we expect the Navy will be able to secure.

When could -- assuming that your preclinical work in mice goes fine, when would you be able to start a Phase I study with this? Three months out or -- ?

If everything goes well and we get good cooperation from the FDA, you can start as early as July.

July.

That's fast, huh?

Yes. And what scale would this -- what sort of -- what scale clinical studies would you be doing here under this?

Again, we need to have a discussion with the FDA. So you can take two approaches, right? You may ask the FDA a question, hey, we want to do a study in 150 patients to demonstrate that the vaccine is immunogenic. Or. an alternative question would be hey we want an emergency use authorization. Assuming this crisis continues and if you want emergency authorization what kind of study will be required. In that case the study would be my guess would higher than the 100, 150 study than we did previously. It could be as high as 400, 600, I don't know the answer to the question. Can't really answer until we have that discussion with the FDA.

For emergency use authorization, in all cases would you need to show immunogenicity or just safety?

Again, as I -- I don't know whose question I answered, was it Eric Schmidt or whose question. The emergency use authorization requirements all depend on how serious the crisis is at hand.

I see, I see.

You can get approval on the basis of animal data. Remember, every year the flu manufacturers don't do any human study. They basically get approval of the seasonal influenza vaccine based on animal data. So in flu, there's sufficient precedence for that, okay?

Okay. And a big picture question for you. Have you seen in your conversations with government and non-governmental organizations over the last few weeks, have you sensed any sort of shift in openness towards non-traditional vaccines?

I think the answer to that question is yes. I think there's a recognition that they have to really think out of the box to deal with these new sets of crisis that are coming on. As I mentioned earlier, the threat of avian influenza, H5, has not gone away. If anything, it's even -- it's lurking out there and the fact that there's an H1N1 recirculating that doesn't mean an H5N1 can't come. So the answer is there's recognition because of the emergence of H1N1. And with the limits of capacity and the issues with the conventional technology, we really need to think outside the box is what we're hearing.

And there are no further questions at this time. I would like to turn the call back over to Mr. Samant.

Well, ladies and gentlemen, thank you. This concludes our conference call for today. All parties may now disconnect.

Ladies and gentlemen, thank you very much for your participation.