Brickell Biotech Inc (BBI) 2011 Q4 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 for questions and answers from invited participants after the presentation. I will now turn the conference over to Mr. Alan Engbring, Executive Director of Investor Relations.

Hello, everyone, welcome to our 2011 financial results conference call. Participating on the call today are Vical's President and Chief Executive Officer, Mr. Vijay Savant, 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 clinical 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 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 2011 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 Savant.

Welcome, everyone. We had a productive fourth quarter, a productive full year in 2011 and we are poised for an exciting 2012. We have made steady progress in our key development programs. I will provide a bit from each of these programs on the call today, but before doing that, let me pass on to our CFO Jill Broadfoot, who will start the call with a review of our latest financial results.

Our revenues were 2011 were $30 million, as compared to $8.7 million in 2010. 2011 revenues included $28 million from the upfront payment and initial contract services under our TransVax license agreement with Astellas. We are eligible to receive another $10 million milestone payment from Astellas as we advance towards initiation of the upcoming TransVax trials and continuing reimbursement of contract services, including development and regulatory support, as well as manufacturing of clinical trial materials.

The increase in revenues decreased our net loss for 2011 to $7.3 million, or $0.10 per share, compared with a net loss for 2010 of $30.4 million, or $0.51 per share. As a result, our net cash burn for the year was $4 million, and we ended of the years with cash and equivalents of $56 million, which was at the high-end of our guidance.

On January 6, we completed a $50 million follow-on offering that generated net proceeds of $46.6 million. Today, the underwriters exercised a portion of the over-allotment for an additional $2 million in net proceeds, for total net proceeds of $49 million. Combined with our year-end cash balance, we believe we have sufficient capital to support our ongoing operations and planned development and pre-commercialization activities through at least the end of 2013.

We are projecting a net cash burn 2012 of $17 million to $22 million. This includes the $10 million milestone payment from Astellas, along with contract services revenues offset by planned pre-commercialization preparations for Allovectin. It also includes pre-clinical studies and manufacturing of our HSV-2 vaccine and in preparation for a Phase I/II clinical trial. Vijay will discuss these efforts in more detail. With that, I will turn the call back to Vijay.

I will start today with our Phase III Allovectin program and the timing guidance we updated this morning. As a reminder, this pivotal trial for patients with metastatic melanoma was carried out in (inaudible). It involved 390 subjects from January 2007 to February 2010, and the enrollment is now complete.

They were randomized two to one to receive either Allovectin or the physician choice of dacarbazine or temozolomide, which are the standard chemotherapy drugs used for melanoma. We enrolled subjects with Stage III or Stage IV disease of 2M1B, excluding liver and brain mets with no prior chemotherapy and normal levels of LDH. These factors reflect the favorable experience gained from our Phase II study.

We had efficacy endpoints of this trial. The primary endpoint is objective response rate at 24 weeks or more after randomization, and the second is the endpoint is overall survival. The databases for these two endpoints can be processed separately, but Vical will remain unblinded until both are finished. This is a very important point.

We reach the end of the maximum two-year period later this month for the last subjects enrolled in the study. After the last subjects go off the study, we will complete the site audits and log the database of the primary endpoint, which is overall survival, which is our objective response rate.

An independent committee of radiologists and oncologists will then review the data in a blinded fashion with no involvement or access by Vical. They'll determine which subjects are clinical responses, which subjects had stable disease, which subjects progressed through the course of trial, but not knowing whether each subject was in the treatment arm or in the control arm.

This process typically takes several months. It's a very rigorous process. The results will remain completely blended to Vical in a third-party database until we reach the trigger for our secondary endpoint survival. Our goal is to announce both the endpoints and the top line data at the same time. For the survival endpoint, we are tracking the overall number of death events, but we are blinded to the number of events per study arm.

Based on the trial enrollment history and the assumed survival times for both arms of the study, we had expected to reach the target number of death events by mid-2012. But the subjects in our trial continue to live longer than we had assumed on the basis of our Phase II results and historical chemotherapy trial results. Based upon the latest information received, we now believe that late 2012 is the most realistic projection of reaching the target number of death events.

Of course, we are often asked if the delay in reaching the target number of death events is a good sign or a bad sign. What we can say with certainty that we are blinded to the results until the trial is complete, but we can say that reaching the target number of death events sooner than expected would be not encouraging.

We are taking advantage of this additional time to advance our preparations for VLA filing and potential commercial launch and planning for Allovectin's success. In the manufacturing and regulatory areas, for example, we are completing our commercial process characterization, proceeding to validation of our manufacturing process, as well as analytical validation.

This will include producing [executive] conformance logs at commercial scale to demonstrate consistency and comparability with clinical logs to finalize the expiration date. We are also creating our data management systems and preparing for our electronic VLA submission.

In our commercial preparations, we are securing our supply and distribution networks, including validation of our selected finished contract manufacture operations, developing a comprehensive launch plan covering detailed activities such as VLA submission, publication strategies, rising reimbursement, branding, distribution, identification of what (inaudible) will support Allovectin-7. Some of these activities will extend beyond year-end, but we intend to make good progress by the time the data is released, with the goal of filings of the VLA at the earliest opportunity.

I will finish the Allovectin-7 update by confirming our timeline so there's no confusion. Later this month, final treatment will end for any subjects still in study. We can then proceed with the final data collection and audits, log the database for the primary endpoint, and conduct the independent endpoint assessment and adjudication.

In late 2012, we expect to reach the target number of death events, at which point we'll unblind the data and release the top line results from both the primary and secondary endpoints. We will continue to provide status reports in our quarterly conference call.

Let me now move on to our CMV program, beginning with TransVax, our therapeutic vaccine designed to control CMV infection or reactivation in transplant recipients. In January, we published detailed results from our completed Phase II proof-of-concept trial in the Lancet Infectious Disease Journal. We've discussed the results and conclusions in prior calls, so I'm not going to go into that data today, but it is worth noting, however, the encouragement expressed in the associated editorial comment provided by an Austrian CMV expert.

And I quote, "In the transplantation setting, the efficacy of any CMV is probably even lower than it is in pregnancy. Immunosuppressive and (myelo inaudible) therapies diminish the response of preexisting immunity to antigens and immune maturation after primary infection and vaccination and its (inaudible). Despite these difficulties, use of TransVax reduced occurrence, duration, and the number CMV viraemia episodes in the present study." He goes on to say, "the results of this study are exciting, particularly in view of frustrating failures of previous vaccine trials."

We were of course quite pleased with these results, which were instrumental in securing the TransVax license deal with Astellas last summer. We were also pleased with our discussions with the DFD on the trial design.

We've recently participated in a public CMV workshop sponsored by the FDA and the other HHS agencies, which is the Human Health Services agencies. The workshop was designed as a forum for discussion on a proper clinical trial design and endpoints for the development and evaluation of CMV vaccine.

The primary focus of the workshop with the development and evaluation of prophylactic CMV vaccines designed to protect young women before they become pregnant, thereby protecting the fetus from transmission of CMV during pregnancy.

Because of strong involvement in the field going back several years, we were the only biotech Company participating in a roundtable discussion with four major pharmaceutical companies, addressing the regulatory issues surrounding congenital CMV vaccine development. The challenge in this indication is the low incidence of congenital CMV disease, and therefore the high cost of conducting very large long-term clinical trials.

We believe the workshop brought all the right parties together, provided DMB with the information needed for acceptance of appropriate bio markers as trial endpoints. Once the regulatory path forward is clear, [the lab IND for a Sivectin] program, which is our prophylactic vaccine, positions us to advanced directly with both clinical development and [bartering] efforts to address this major unmet medical need. This (target) from the commercial side is just like what we are seeing with Gardasil.

There was a small section of the workshop that wanted the therapeutic CMV vaccines for transplant recipients. The experts who were participating echoed the conclusion of the EMA in response to Vical's query last year that CMV disease in not a practical endpoint for trials in stem cell transplant recipients.

The incidence of disease are simply too low because of the heavy reliance on anti-viral drugs. We are actively engaged in discussions with the DMB, along with our partner Astellas about the primary endpoint for our Phase III trial in stem cell transplant recipients, and we're on track to start the trial as planned in the first half of 2012. A Phase II trial in [SOT] organ transplant recipients should begin shortly thereafter.

Let me move on to one of the most exciting developments at Vical, which is our Herpes Simplex 2 program. In our last call, we reviewed the latest data from our pre-clinical study, our Vaxfectin-formulated vaccines against HSV-2 provide complete protection in guinea pigs against both primary and recurring HSV-2 disease. The vaccines also significantly reduced genital lesion recurrence and viral shedding, as well as latent infection in the central nervous system.

These data were among the best ever seen in the pre-clinical HSV-2 vaccine model. We believe the ability of our vaccine platform technology to infuse both antibody and T-cell response is key, especially in a therapeutic setting.

Systemic antigen selection and formulation with the Vaxfectin antigen drive the right types of responses against the right targets to help control this chronic infection. These factors give us confidence to proceed towards the initial human testing, where other vaccine approaches have failed in the past.

Since our last call, we made the decision to advance the therapeutic vaccine into the clinic, and that is one of the reasons we raised money recently. We're currently preparing to conduct the safety/tox and biodistribution studies to support an IND application.

Our goal is to begin a Phase I/II trial, which is a proof-of-concept study, as soon as possible. We believe a relatively small study could be conducted in Herpes Simplex 2 positive symptomatic volunteers given the large number of people infected by this lifestyle-changing infection and the high level of demand, we should be able to recruit the study very quickly and get results rapidly.

The trials will enroll HSV-2-positive individuals with a pattern of recurring genital lesions. We will document the timing and severity of outbreaks and the amount of viral shedding for a defined period of time before vaccination, then again over a defined period of time after receipt of the vaccination was completed, subjects who thereby serve as their own controls, we would be able to compare results directly between vaccine and placebo groups.

This general design would provide initial human safety and proof-of-concept data and if successful, it could lead directly with a high confidence to a large safety and efficacy study. And effective therapeutic vaccine for Herpes Simplex 2 would serve a large and highly-motivated market and could generate peak annual sales of more than $1 billion. For the rest of the population, a prophylactic HSV-2 vaccine would be welcome protection against this genital sexually-transmitted disease.

Let me summarize the call today. We have covered three exciting programs, our Allovectin program, our CMV program, and Herpes Simplex 2 program, but I would like to take a minute and talk about what is happening in the remainder of 2012. In our Phase III trial of Allovectin, we expect to compete enrollment in February 2012, all patients still on study, and release the top line data for both the primary and secondary points at the end of 2012.

On our collaborative TransVax CME vaccine program with Astellas, we expect to initiate a Phase III trial in stem cell transplant recipients and a Phase II trial in SOT organ transplant recipients in the first half of 2012. We expect to conduct a pre-clinical safety/tox and a biodistribution study of our Herpes Simplex 2 vaccine in 2012 to advance the program towards initial human testing. We expect our net cash bond rate, excluding cash received from the sale of equity securities, of between $17 million and $22 million.

This concludes my prepared comments. Operator, we are now ready to open the call to questions from my invited participants.

(Operator Instructions)

Greg Farmer, Canaccord Capital.

It's George Farmer, thanks very much.

Vijay, can you give us a little more guidance as to what is going on? Why is this timing pushed out yet again to the end of 2012? Is it possible that this could extend into 2013? Given the fact that the trial had completed enrollment some time ago, what is going on here? What are you guys missing? In order to give us a better handle on the timeframe?

As I told you in the last call that we would be updating the guidance in February of 2012, and we wanted to make sure we have experience in the months of December and January. The way we look at it is, the monthly [enroll] rates are misleading. We normally lump them by three or four months, and see what kind of average we're getting, or enrolling three or four month basis, because that's a good indication of how we're approaching a target. We find that the latest rolling three-, four-month average is below what it is has been previously, and that is why we updated the guidance. Because we know we are not going to meet it by the middle of the year. I think we feel sufficiently confident that this stage, based on this rolling three-, four-month average that we have taken, that we should be achieving the goal by the year-end. But we will keep you posted if anything changes. But I think we are on track right now.

Is there any harm in unblinding the response rate data before OS?

There's not, but remember, right now, survival -- as you know, the response rate is the primary endpoint, and survival is the secondary endpoint. Both of them go hand-to-hand. As you know, the response rate data is not in our hands, as I covered in my call. The last patient gets off the study in February. There is a final, then a follow-up visit that comes in March. After that we lock the database. Then we do all of the radiological evaluations, which are done randomly by a bunch of radiologists. Then the oncologists and radiologists get to do the final adjudication.

I don't think we are going to have that data much sooner than the timing that we're projecting the survival data. And if we're going to get both data out on the same time, it is right to announce them at the same time, because if I announce one data and one data is as good as the other data, there will be all kinds of reactions to the data by putting both datas. Because survival is going to be a very important component of this data, we want to make sure we put in both our feet at the right time. The right feet forward.

And then a question on TransVax -- you're guiding here for a first-half Phase III start, yet it does not sound like you know what the right endpoints or trial design will be. What needs to happen? You've got to, again, [file an] FDA and decide on that, and what you think the right Phase III endpoints should be?

You're presuming that we do not know what the endpoints are. We have not disclosed that yet because we are in active discussion. It has taken a little bit longer for two reasons. First of all, as you know, we partnered the program in summer. We had a new partner, Astellas, which is now at the table, and we wanted to make sure they are fully-involved in our prior discussions and got their inputs. Because they also have a lot of expertise, knowing the transplant setting because they have the number one drug, Prograf, selling in that market. So it took us time to make sure, because it is their program right now, along with ours. They own the programs to make sure what we submit to the agency has their concurrence.

However, let me tell you that our discussions are going well. Astellas has a lot of confidence in us because we still hold the IND, we haven't transferred the IND. So we are actually the people who are dealing with the agency. The discussions are going well, and I just mentioned to you in the workshop where most of the [MPA] people who are in discussion with us were there. (Inaudible). So we're there. This is not -- we have submitted a piece of paper and waiting. There has been ongoing dialogue. So we have very good confidence that this is all going to come together.

Adam Cutler, Credit Suisse.

Can you remind us what your assumptions were for survival in the control arm? And on a related note, can you share with us anything you know or thoughts about how the availability of Zelboraf and Yervoy could be impacting things?

Excellent questions, Adam.

First of all, to give you a reminder of what our assumptions were, our assumptions were that the control arm, which gets the (inaudible) [liver] 11 months and the patients arm would leave 18 months, which is a lower bound of our number. Remember, we have made a number of changes from the Phase II study, and based on, if you take a look at what we're doing, we expect that number to be around 22 months, or north of 22 months. So I think those assumptions are pretty conservative. Those are the assumptions and that is where the modeling was done.

Now your question was, well what impact are these two drugs having on the study? First of all, when our drug was going on -- remember, our drug started in January of 2007. It's January of 2012 now -- it's February now, I'm losing track of time. It is five years since the study started. The time the Zelboraf study and the Yervoy studies were going on, their studies were in-treatment [NYE] subjects, so none of our patients who are in our studies could have gone into those studies. The earliest our patients would have progressed and gone into the studies -- as you bring in the case of Zelboraf, the entry criteria such as the BRAF gene mutation, et cetera, was when the drug got approved in the United States, in September 2011. That is almost 4.5 years after our study started. And in May, when Yervoy got approved in the US -- the European approvals are much later.

The [compassion user], there was not a lot of uptick, so I don't think any of the -- so if you assume that the chemo arm progressed sooner and died sooner, and the Allovectin arm stayed longer, the probability is on the Allovectin-7 patients (inaudible). But I don't know. We have no idea which patients post-approval are getting [warts], but that is the reason the study is randomized. However, the study's randomized two to one, so you can draw your own conclusions.

One other question. I appreciate the added color about the other activities that you are undertaking while you are essentially waiting to be able to disclose results. Assuming that these timelines that you are describing today hold, and you continue to pursue those other activities, how quickly do you think you will be able to file after you announce the data?

Our goal is to file VLA, obviously assuming everything goes well, within about two quarters after we get the data.

Stephen Willey, Stifel Nicolaus.

Vijay, I was wondering if -- I know you remain blinded to the data, obviously, but was there a cap on enrollment with respect to the percentage of stage IIIs that were allowed into the trial? And was that a stratification factor as well?

Go ahead, Alan.

It was stratification factor, but there was no cap. We took them as they came. So if the Phase II data or any indication, we would expect it to be about a 50-50 mix.

Jason Kantor, RBC Capital Markets.

Thanks for the update. I was just wondering -- can you give us some kind of qualitative sense of -- is it just that the event rate is continuing to slow over time? Because now you have pushed it out a couple times. Would you describe this as a flattening of the curve? Is there some possibility that you could go very far out without hitting the number of events at the rate you're going?

Your question was, are we in the flat nature? I don't think so. I don't think we're in the flat nature of the curve. I think the slope has slowed down, but I don't think we're in the flat nature of the curve. So your question was, have you reached that asymptotic level? The answer is no, to our knowledge.

Okay, and when you think through this, obviously the bullish view would be that it is because the drug is working. Is there any other reasonable explanation? Somebody thought about other drugs that people might be getting, and you debunked that. But is there any other external aspect that could be influencing the death rate in the study?

The only reason the survival and [the data] are being postponed, as I said, there are three reasons, right, without knowing the data. One is that the control arm is living longer; b, the treatment arm is living longer; or both the arms are living longer. I don't think there are, as far as interventions from Zelboraf during the conduct of the study, or Yervoy during the conduct of the study, we believe there were no interventions.

Okay, thank you.

Eric Schmidt, Cowen and Company.

Just had a question on the Allovectin Phase III study, Vijay. I understand, maybe from an investor relations standpoint, your intention to group together the primary and secondary endpoints as far as timelines. But, given the unpredictability here and overall survival, and from a corporate planning standpoint, I would assume you would rather know and not waste your time and money on, say, preparing for a VLA filing or pre-commercial activities in the event the primary endpoint was not achieved.

The agency has not told us directly; directly everybody knows that survival is going to be a very important element of the study. Because, given the fact that the landscape has changed since the original SP was approved, and two-thirds have been [approved of] survival. So we're going to have to come up with survival data, besides meeting the primary endpoint in order for us to get a good label.

So both of those endpoints are very important to us. How the agency is going to look at both of the endpoints collectively remains to be seen. And, as I said earlier, where we are right now, I do not think the timing between those endpoints is hugely a part, because of the adjudication activity that needs to go on, that there is any much to gain through announcing one single endpoint ahead of the other.

Well, maybe you're highly confident in meeting the primary endpoint, the response rate endpoint; but on the off chance that, that misses, then aren't you wasting time and effort?

Absolutely not. If indeed we do miss the endpoint, the question is how far we missed the endpoint. But if we hit a home run on survival, and hit a phi value of 0.00, whatever the number is, and show a significant change between (inaudible), that is really the ultimate proof of the success of the study.

Is there a potential possible outcome here where you cure so many of these patients that have cutaneous disease and never develop internal metastases, never die from their underlying metastatic melanoma, that you never hit a number of endpoints that drives power here to the study?

Eric, I think we will hit, because patients do die, as we have seen in our prior Phase II study. We are tracking deaths. It's not like there are no deaths occurring in the study. They are slow. So we should be able to hit the target.

Switching topics onto TransVax -- can you just talk about your latest discussions with your partner Astellas and the FDA on CMV viremia-based endpoint, and how close you are to nailing down that protocol?

We are very close, is all I can tell you. The discussions are with the agency, not with our partner, because the partner and I, we have already had our discussions, on the basis of which we're having the discussion with the agency. So, close. We said today that our intent is to start the trial in the first half of this year, and if we indeed want to do that, we need to be close.

Will be see that milestone paid even before the start of the trial?

I think so, once we got the protocol approved, we should get the milestone payment. There is not an issue there.

Ren Benjamin, Rodman.

Congratulations on the progress. Regarding Allovectin, have you disclosed or can you tell us what the target death events are?

No, we have not.

And then can you tell us why the DSMB might not be able to, even if there is no futility aspect built in for any of other looks that may or may not be happening, can they still not stop the trial for either a safety issue or an overwhelmingly good survival benefit?

Remember, they do not look at any efficacy data; it is primarily a safety committee. So they only look at safety. So obviously they can stop the study because of safety issues, but they don't have access to the efficacy data, and that is (inaudible) they can't make any recommendations as it relates to efficacy. They do not see any efficacy data.

And going off a question that Eric asked -- at one point, let's say even at the end of this year, let's take a wild assumption that the curves reach that asymptotic level, do you have a point in where you just have to unblind according to protocol? Or do you have to let the required number of events take place?

No, we don't, we are not forced to do that. But that is a decision that we have to look, if indeed that occurs, we're speculating at this stage, we need to look at it. We always have all kinds of contingency plans; but that should be, if a curve really flattens out, that should be good for the program.

Right. And switching gears to TransVax -- I understand you're in discussions with the FDA, especially regarding endpoints. But aside from the endpoints, can we talk a little bit about what sort of a trial this will be? How big, how long do you think it would last? And without giving away, let's say, what the endpoint is, how long you think this trial could progress?

We have not discussed the endpoint, so trying to speculate without the endpoint of the trial design would be undermining our discussions with the agency right now. That definition of endpoint leads to a definition of trial design. But I have said previously, the trial design would be around 500 or less than 500 patients. It will take us about a year-plus to recruit, and there will be a follow-up in another 9 months or 12 months. It is a 2.5 year program.

And switching gears -- we did not really talk much about the Collategene program that AnGes has. Can you give us any sort of update as to what might be happening there?

The only thing we can tell you from our friends in AnGes is they are actively working with two sources of money, because they want to make sure they -- I don't know what their current cash balance is, but they want to raise money so they have sufficient cash that allows them to complete the trial. They will be raising money both from some public sector monies and private sector monies, and that funding activities are very active right now and we should be hearing something from them by the end of this quarter. That is all I can tell you at this stage.

Just ending with the HSV-2 program -- you 'd mentioned that the Phase I/II would begin in 2012. Just to get some additional clarity -- by the second half of 2012? Or are you looking for something earlier?

I did not say that in the call, that it would start in 2012. What I said is, we will probably give you some granularity of the timing towards in 2012. Right now we are designing our biodistribution/tox studies. We need to have a pre-IND meeting to make sure the agency is on board, and once we have that behind us, we should be in a better position to tell you the timing. One thing that is important that you understand, which I've I said in the script, is this trial is like the influenza trial; it can be recruited in a matter of days because, given the number of patients who want to be in the trial. Then the trial conduct can be completed in about nine months -- three months of pre-measurement, of viral load shedding; three months of vaccination, (inaudible) three months of efficacy data.

So it is a short trial, which will give you a proof-of-concept that allows you to do a larger study. So we will give you some guidance in the second half of this year into the timing, but our goal is to move it on forward. My team is working around the clock, making the stuff, getting all the treatment studies lined up.

Thank you for the clarification. And you brought up influenza. Anything happening with the influenza program?

No. I have said this both publicly and privately -- there is no money in the influenza business, because the extracted price of influenza [tissues] are $6. The government is not committed to putting monies or procuring vaccines from smaller companies. They are relying on the existing technology. We use the influenza money to validate our technology, get proof-of-concept. Got back specs in two studies in humans to show that it is a safe vaccine, which allowed us to get the CyMVectin IND. So we are done, we are not spending any money in influenza unless there's a major crisis with SARS or something like that, where we have an active IND and we can make the SARS vaccine, which has been tested in humans and shown to be efficacious. But our focus right now on these real commercial targets where there is money.

(Operator Instructions)

Howard Liang, Leerink Swann.

Vijay, the readout of overall survival sounds like it will be about 30 months after the end of the enrollment. Typically, that means that the planted median survival is at least that, or is about 30 months. Is that the right interpretation, or can you help us understand how should we interpret that length of the time between end of enrollment and time overall survival readout?

It is hard to draw conclusions. And actually we will be working post this call in terms of analyzing that information ourselves. But remember, half of our patients were recruited in the first two years and half were recruited in the later part of the year. So that makes it a little complicated into the predictions. So, either way, it tells you that patients across the trial are living longer; and as I said, it is not clear to us at this stage whether it is the treatment arm or the Allovectin. We would like to believe it is the Allovectin-7 arm. I can tell you one thing, though, that as we are completing, we couldn't the study earlier than February 2012 because patients were still on study. Which is a good sign, meaning they are getting drugs. Again, we are blinded which arm they were in. So that is were I will stop. I won't speculate on what the number is until we are getting different statistical interpretations. But we will hold off on it at this stage.

And is the -- I guess we'll call [dropped], the rate of lost follow-up -- is that consistent with your assumptions?

The answer to that question is, yes; we are watching that like a hawk. We meet very frequently. Every patient has been followed, so that we do not have loss to follow. That's a minimal amount of censured data consistent with what the prior trials are. Otherwise we recognize if it was small trial and we be on top of the game.

Do you have visibility into what kind of patients that have been enrolled, and what is the breakdown between US and ex-US?

About 40% of the patients are in the US and about 60% overseas. Alan, is that a fair number?

Yes. I have not seen the exact numbers, but it is going to be in that ballpark.

It's it that ballpark. As Alan said, the patients we recruited are in normal LDH Stage III/IV M1b patients, and the question before somebody said, is what is the split between Stage III and Stage IV? We don't know that, but you should assume that it is what we got in our Phase II study, which is about 50-50.

Lastly, if the overall survival endpoint is the most important, should the primary endpoint be changed to overall survival? Just in case, in the event that the response rate does not hit, then you would technically have a negative study, even if survival --

The challenge here is that we're so late in the study, trying to change anything, we do not want the agency to feel like we know something about the study. We are blinded from the study. Unfortunately, all of these new drugs got approved very recently in the last six, nine months; and trying to change an SVA is not a one-month deal. It takes six to nine months. At this stage, trying to change anything and change the primary and secondary endpoint will, first of all, raise a lot of questions. I think the agency knows, we have told them the data is blind and they know the conduct of the trial. The data is going to stand on its own legs.

Great, that's fair. Thanks very much.

If there are no other questions, thank you very much. We look forward to seeing you again at the next quarterly call.

Ladies and gentleman, this concludes our conference for today, you may now disconnect.