BioCryst Pharmaceuticals Inc (BCRX) 2010 Q4 法說會逐字稿

Good day, ladies and gentlemen and welcome to your BioCryst fourth quarter 2010 conference call. (Operator Instructions). I would now like to introduce Mr. Rob Bennett, Executive Director of Investor Relations and Business Development. You may begin.

Good morning and welcome to BioCryst's fourth quarter and full year 2010 financial results conference call and corporate update. Today's press release and accompanying slides for this call are available on our website at www.biocryst.com. At this time all participants are in a listen-only mode . Later we will open up the call for your questions and instructions for queuing up will be provided at that time. Joining me are today on the call are Dr. Bill Sheridan our Chief Medical Officer and Stuart Grant our Chief Financial Officer. Our Chief Executive Officer, Jon Stonehouse, is fulfilling a civic obligation of jury duty at this time so he is not available to join us on today's call.

Before we begin I will read a formal statement as shown on slide two regarding risk factors associated with today's call. Today's conference call will contain forward-looking statements including statements regarding future results, unaudited and forward looking financial information and Company performance or achievements. These statements subject to known and unknown risks and uncertainties which may cause our actual results, performance or achievements to be materially different from any future results performance expressed or implied in this presentation. You should not place undue reliance on the forward-looking statements. For additional information including important risk factors refer to BioCryst's documents filed with the SEC which can be found on our Company website. With that I will turn the call over to Bill who will recap the year and provide a clinical update.

Good morning. And thanks to everybody for joining us today. 2010 was the most productive clinical and regulatory year in the history of BioCryst. With the approval of Peramivir in two countries and the completion of five late stage clinical studies as well as the initiation of a large Phase IIB gap study. We also selected a candidate from our in-house research portfolio BCX-4161 a highly selective kallikrein inhibitor for the potential treatment of hereditary angioedema to move into preclinical development.

We are very pleased with the progress made within the Peramivir program. In addition to rapid approval following regulatory filings in Japan and Korea, Peramivir was used to treatment over 1,000 hospitalized flu patients on an emergency basis in the United States during the 2009 to 2010 H1N1 pandemic. Last month we announced results from our Phase III Peramivir safety and virology study, 303, the largest prospective study of an IV influenza antiviral in a hospital setting ever completed. I will summarize the conclusions from this study momentarily. We have submitted a contract modification request to HHS BARDA and expect to receive their response soon.

The US government has made a large investment in Peramivir and we believe that that investment is a good indicator of the high unmet medical need and the opportunity for both stockpiling and seasonal use of Peramivir in the hospital. The Peramivir Phase III program funded by HHS BARDA in September, 2009, consisted of two studies in the hospital setting. Our efficacy study 301 is ongoing.

In mid January we reported results from study 303, an open label, randomized trial of the antiviral activity, safety and tolerability of IV Peramivir administered either as a once daily infusion of 600 milligrams or a twice daily infusion of 300 milligrams to adult and adolescent patients hospitalized with influenza. Treatment was planned for five days with an extension to ten days in patients who needed additional therapy. The study was designed with very broad eligibility criteria in order to capture safety data in the real world setting during conditions of the pandemic. The study enrolled 234 very ill predominantly pretreated patients. 69% of these patients required oxygen supplementation at enrollment. 17% were in the ICU and 74% received had received at least one prior dose of an oral or inhaled neuraminidase inhibitor.

The takeaways from this study are summarized on slide four. Both dose regimens of IV Peramivir were generally safe and well tolerated and we observed similar reductions in the viral titers from baseline for each regimen. Overall mortality within the study population was 8.7% and the frequency and severity of adverse events and mortality was also similar in the two groups. These findings are consistent with literature reports of the profile of influenza patients hospitalized during the 2009 to 2010 pandemic.

For the efficacy study 301 we have reached agreement with FDA and HHS BARDA to revise the primary efficacy population to focus on the subset of patients not treated with neuraminidase inhibitors as standard of care. To enroll a sufficient number of patients for the primary efficacy analysis and to do so most efficiently, we are increasing the total sample size of the study and the number of clinical site locations in geographical regions where neuraminidase inhibitors are not widely used. These changes improve the likelihood of demonstrating a statistically significant Peramivir treatment effect. The additional resource requirements are address in the contract modification request that we have submitted to HHS BARDA. The actual timing of filing and approval for Peramivir will depend on the severity and prevalence of influenza as well as our ability to activate additional study sites.

If you go back to January, 2010, everyone associated with BioCryst almost exclusively with Peramivir, influenza and particularly the H1N1 pandemic. During 2010, we worked diligently to demonstrate that BioCryst has multiple assets that can be developed to address unmet medical needs. We believe these multiple assets should be reflected as well in the valuation of the Company as we successfully advance our clinical programs.

One clear example is BCX-4208 which has emerged as a promising potential treatment for gout based on a rapidly advancing clinical program that has generated compelling short term efficacy, safety and tolerability data from two Phase II studies. Gout is a chronic disease requiring long-term treatment, and according to the most recent NHANESdata, 8.3 million people have gout in the United States, which is a big jump in gout prevalence over the last ten years.

There is a high unmet need for new gout treatments and over half of the patients taking the most commonly prescribed drug, Allopurinol, are failing to reach the treatment goal for uric acid concentration below six milligrams per deciliter. Controlling serum uric acid is important to reduce the frequency of acute flares over time and to prevent progression of the disease.

BCX-4208 is a novel, potent and specific purine nucleoside phosphorylase inhibitor that blocks the production of uric acid at a higher level in the metabolic pathway than xanthine oxidase inhibitors such as Allopurinol and febuxostat. It is conveniently administered by once daily oral dosing.

Our Phase II gout program consists of several clinical trials as shown on slide five. We completed two studies during 2010 that evaluated BCX-4208 in gout patients who are not on uric lowering therapies and had serum acid levels of 8 milligrams her deciliter or greater. In the first study, we successfully demonstrated the three week dose response safety and tolerability of BCX-4208 when given alone in gout patients, and we confirmed dose dependent reduction in uric acid.

The percent of patients reaching goal of under 6 milligrams per deciliter was 77% for a daily dose of 240 milligrams which was the highest monotherapy dose evaluated. We presented detailed results from this study at the American College of Rheumatology meeting in November.

In the second study we evaluated various doses of BCX-4208 in combination with 20mg, 40mg, and 80 milligrams doses of Allopurinol, and demonstrated the additive or synergistic effect of these drugs in combination. Five of the nine drug combinations studied achieved at least an 80% remission rate. In other words, getting patients to goal.

We are particularly pleased that a low 20 milligram dose of BCX-4208 combined with the standard 300 milligram dose of Allopurinol doubled the proportion of patients reaching goal to 80%. In both of these studies the pattern of adverse events observed was similar between BCX-4208 patients and control.

Slide six shows that adding 20 milligrams of BCX-4208 to 300 milligrams of Allopurinol led to a similar uric acid reduction and response rate as 240 milligrams of BCX-4208 monotherapy. So this is an equivalent therapeutic benefit at one tenth the BCX-4208 exposure. This is important for two reasons. First, a lower dose of BCX-4208 is likely to have a more favorable safety profile for chronic dosing compared to higher doses. Second, an analysis of several hundred gout patients who were not achieving the goal of 6 milligram per deciliter on Allopurinol alone show that over 60% of these non responders were at 8 milligrams per deciliter or under. So in other words, they were within 2 milligrams per deciliter of the target. We believe that the population of Allopurinol nonrespondents has the potential to benefit from BCX-4208 add on treatment.

The conclusions from these two studies drove the design of our next study, which we initiated in December. We have started a 250 patient, Phase II B study, 203, to evaluate the effect of adding lower daily doses of BCX-4208, five milligram, ten milligram, 20 milligram or 40 milligram, or placebo, to a standard dose of 300 milligrams Allopurinol administered for 12 weeks to gout patients who are not adequately responding to Allopurinol alone. The primary endpoint for this trial will be the percent of patients reaching 6 milligram per deciliter or less after 12 weeks. We will evaluate a number of other safety and efficacy measures as well as the frequency and severity of gout flares which should be lower at reduced serum uric acid levels.

We expect to report top line results for this study later this year. We also plan to begin evaluating long-term safety in gout patients by mid year once the required animal safety studies are completed. We foresee discussing the results from these studies together with the proposed Phase III development plan with regulators during the first half of 2012.

Based on gout market research and the studies we have completed to date, we are confident that BCX-4208 as add on therapy in patients not adequately controlled on their current gout therapy can lead to better therapeutic outcomes than currently approved therapies alone. We expect BCX-4208 to be BioCryst's primary news flow driver again in 2011. We have submitted additional analyses of safety and efficacy from our completed combination study and the monotherapy study for presentation at an upcoming medical meeting.

That concludes today's update on our clinical programs. I would like to hand it over to Stuart who will cover our financials.

Thanks, Bill. Good morning. I will provide some additional color regarding the final results for the fourth quarter and for the full year 2010,give you some details regarding our cash position at year end, cash used for 2010 and our outlook for 2011.

At this stage in the Company's evolution cash use is a critical measure for us. Net cash used during the fourth quarter was $5.7 million and for the full year, $28 million. This compares to $37.2 million cash used for the previous year and to our latest guidance for the current year of $30 million.

This significant improvement versus guidance was the result of tight cash management and tight cash management of receivables due from the US government and the receipt of a $1.1 million US QTDP Grant.

We exited 2010 with a strong cash position of $66.3 million. Q4, 2010, R&D expenses were $23.6 million. That is down $8 million from last year's quarter mainly due to year on year reductions in Peramivir and Forodesine development program costs. Q4, 2009, Peramivir R&D expenses were very high due to the initial rampup of our Phase III Peramivir studies.

Full year 2010 R&D expenses were $82.5 million, that is an increase of $10.2 million over last year. This included increases of $6.7 million for Peramivir, $6.5 million for BCX-4208, and $1.4 million for preclinical programs.

This was partially offset by a decrease of $4.8 million for Forodesine development costs as we completed the CTCL and CLL studies during 2010. The trend in R&D expenses is consistent with our shift in prioritization towards the development of BCX-4208 for gout as well as our preclinical assets such as BCX-4161.

Fourth quarter 2010 revenue of $17.8 million consisted primarily of $14.9 million from the HHS Peramivir development contract. Q4 2009 revenue of $54.9 million was unusually high due to exceptional items. These included $22.9 million in emergency use product sales of Peramivir and the $7 million milestone payment from Shionogi related to the Peramivir NDA filing in Japan.

Both represented important new [undiluted] sources of cash BioCryst but complicate the comparison of year on year financial results for both the fourth quarter and the full year.

Revenues in the fourth quarter reflected a $0.7 million reversal of royalty revenue previously booked in quarter one of the current year. These royalty revenues related to the sales of Rapiacta in Japan during Q1. Rapiacta received an accelerated Japanese approval in January in 2010 to allow it to be made available as a treatment option during the H1N1 pandemic. At the time of approval, Rapiacta stability testing was ongoing so the first products shipped had a short shelf life. Shionogi began shipping and filling orders immediately after approval and indicated returns would not be accepted to provide wholesaler stockpiling. Initial sales occurred late in the 2009 to 2010 flu season. During the fourth quarter Shionogi did decide to accept the return of this product from the wholesalers. All Rapiacta shipped during Q4 and currently shipping during this quarter have a longer shelf life.

Full year 2010 total revenues of $63.5 million consisted primarily of reimbursement of collaboration expenses including Peramivir development reimbursement under the Peramivir HHS contract and the Q1 milestone payment from Shionogi related to the marketing and manufacturing approval of Rapiacta. For the full year, collaboration revenues from HHS increased to $43.7 millionfrom $37.9 million in 2009 and peaked during the fourth quarter of both years at $14.9 million in the recent quarter and $21.5 million in Q4 2009. Consistent with 2010, we anticipate net cash used for 2011 to be approximately $30 million.

Since 2010 started, BioCryst has moved closer towards its goal of becoming an enduring and successful biopharmaceutical company. The success is measured by moving BioCryst discovered molecules to approval in markets where there is a high unmet medical need.

In conclusion I refer you to our upcoming events and milestones on slide 11. For Peramivir, these include royalty payments on sales of PeramivirX USA from Shionogi and possibly Green Cross and conclusion of discussions with HHS regarding additional funding. Regarding gout, we plan to present additional data from Phase II BCX-4208 Allopurinol combination study in gout at an upcoming medical conference and expect top line data from the Phase IIB 4208 Allopurinol add on study in gout before year end.

With that, we will open up the call to questions.

Thank you. (Operator Instructions). Our first question comes from Charles Duncan from JMP Securities.

Hi, guys. Thanks for taking the question and congratulations on a nice year of progress. My first question is for Bill. I wanted to ask you with regard to 4208 and the emerging competitive landscape. You suggested that the trial is enrolling well and I'm kind of wondering what you think differentiates 4208 in the mind of investigators with regard to that drug's either efficacy or safety and why you think that trial is enrolling well?

Hi, Charles. Thanks for the question. Our studies last year, we were very pleased with investigator enthusiasm and we have just started our next study. We have been screening and enrolling already. We look forward to completing that study and reporting the results later this year.

With regard to differentiation, I think there are several aspects of BCX-4208 that make it attractive. First, it does have a novel mechanism of interaction and the gout landscape for chronic urate lowering therapies for many years has had no new entrants in terms of mechanism of action. Second, BCX-4208 is not metabolized. Our evidence to date is that the drug is excreted unchanged in the urine, so it has a very clean metabolic profile, and it's highly likely that BCX-4208 will have no drug drug interactions and will be able to be used with other medicines that gout patients need. Now these patients often have high blood pressure, diabetes, high lipids and need other medicines to support their other conditions and that won't be a worry with BCX-4208.

The third aspect that we are beginning to develop information on is use of BCX-4208 in patients with renal impairment. Many gout patients have abnormal kidney function. We did include people with mild renal impairment in the first two studies, and in the current study, and we hope to be able to show some of that data at an upcoming medical meeting.

Okay. With regard to the safety side of the mechanism, if you will, and the impact on T-cells, what do you think is the predictive value of the upcoming data with regard to the shorter exposure timelines? What particular information will you be looking to, to give you confidence in longer term duration and do you think those shorter timelines will be sufficient to have some predictive value for later longer term use safety?

With regard to the effects of BCX-4208 on the immune system, three months of exposure will greatly increase our knowledge base from where it is today. Right now we understand six weeks exposure in psoriasis subjects and three weeks exposure in gout subjects. Three months of daily dosing is a big step up. We expect to see a plateau effect on the lymphocyte and immune systems during that time and the main focus will be on evaluation of adverse events. We also intend this year to implement a program of immune functional testing and incorporate that into our laboratory and clinical studies as the year progresses. Once people are at a plateau effect of the drug we want to understand how well their lymphocytes are performing and that will be an important part of the data that we bring forward to our end of Phase II discussions in early 2012 with our proposed Phase III development program. It will be very important and it will go a long way to help us understand the safety profile of the drug.

And then although not a driver this year, could I hop into Peramivir quickly. I'm wondering what is the current shelf life of the product that you are providing to Shionogi and how is Shionogi educating patients or physicians in terms of its use? How do you anticipate Peramivir to be used in the Japanese flu season?

Hi Charles, this is Stuart speaking. We supply the active (inaudible) to Shionogi, and that has a three year shelf life. The shelf life that they were shipping, the product that shipped early in 2010, was in [their bags] and stability was ongoing. That product had a 12 month shelf life. We subsequently have additional stability time points and they are currently shipping bags with a 24 month shelf life. So stability is ongoing in Japan on the product and again, currently 24 months.

So that is driven by the use in their bags, not by shelf life of the active changing?

Absolutely. So, you know, the active is very stable. They expect that we will have -- a year from now we will be out with the three years on their bags as well.

Okay.

And with regard to expectations about how the drug will be used in Japan. The first thing to say is that their label includes pediatric as well as adult dosing and that is very important because most of the market is in fact the pediatric for influenza or antivirals in Japan. The second thing is that they have a very strong marketing campaign. This is really the real launch of the drug. As you will probably recall by the time it was approved and shipped last year the influenza season was already over in Japan. A lot of effort into the marketing campaign in Japan, education of physicians. It's a high quality campaign and we expect the drug will be used according to the label in Japan which allows a single administration or several days of administration depending on the person's circumstances.

Thanks for the added color. I'll hop back in the queue.

Thanks, Charles.

Our next question comes from Yigal Nochomovitz from Rodman.

Hi, good morning gentlemen. Thanks for taking the question. Just following up on some of Charles' comments. Could you give us a sense regarding the add on study , Phase IIB, where enrollment stands now? Do you have any figures there yet?I know it's early.

It is early and we don't make a practice of giving blow by blow patient enrollment updates. What we can say so far is that the screening is going very well as it did in our two initial studies. It is too early to predict with any more granularity when we will be able to share the data. We are confident that we will have the data now before the end of the year.

Okay. And Bill, you mentioned the required animal toxicity studies were ongoing and once those would be completed you could move to the longer term monotherapy study. Do you have any sense there as to what the update is with the animal tox studies and when they would be finished?

Yes. We fully expect to have those completed in the first half and so by mid year we expect to be able to move forward and that, of course, depends on the results of the animal safety study but we have no reason to believe that we will have any surprises there.

And just to clarify, Bill, can you confirm that that would apply, the safety duration would apply not only to monotherapy but also in ongoing combination and add on.

Any BCX-4208 exposure will be covered.

Got it. And Bill, more of a 30,000 foot high question. You mentioned the market research that you have done in the gout phase. We understand that a very small fraction, potentially less than 5% of gout patients are actually treated by rheumatologists and that the vast majority in the United States if not the world are treated by the general practitioner. How are you planning to get the message out to physicians that combination therapy with BCX-408 is coming? Clearly presentations at ACR are necessary but the larger market is of course the general practitioner. What is the strategy in terms of getting the word out?

Let me tackle that in two elements. The first thing to say is that of course we will be compliant with all of the regulation in the way that we bring this drug forward and ultimately promote it once it is on the market. The second comment is the primary care landscape is not uniform and there are physicians out there who are very interested in gout and treat a lot of patients in the primary care field. So as the program matures we will be able to understand how best to launch the drug. And maybe one other comment is we won't be at this alone. As you probably know, there is a direct to consumer marketing campaign going on right now for Uloric which is a first in gout and the Savient product is now approved. So all of that helps the physician community get better educated about gout. Finally, the American College of Rheumatology is currently developing guidelines for the treatment of gout and it is surprising to understand actually that the United States doesn't have any official guidelines. I think that will be very important for those guidelines to get developed and promulgated.

Got it. Thanks. And briefly on the Phase III discussions I know it is again very early but do you have any preliminary thoughts about how you might envision a Phase II trial design? Would it be similar to the add on approach or something slightly different?

We certainly have thoughts, and the Phase II program has given us a lot of options for Phase III. We have monotherapy and combination therapy data, and after the current trial we will have add on data and the Phase III program will be designed to give us a label, generally speaking, the setting of second line therapy. We don't intend to go head to head against generic, pennies-a-day Allopurinol in first line therapy. But we have lots of options in terms of designing the Phase III program in the relevant space.

Okay. Thanks. And just one question on the Peramivir. Regarding the contract modification, where does that stand now? Are there discussions back and forth presently with HHS BARDA or is everything in it their hands and you are just waiting for them to come up with a final number and a final contract?

The discussions around the contract happened several weeks ago and there was a limited amount of back and forward. The program was really developed in conjunction between the BioCryst team and the HHS team. So they have the final proposal, they've had that for a couple of weeks. We got one round of questions and we have answered those and it's with them for the final inking at this point in time.

Thanks very much, gentlemen. And good luck with the progress.

Thank you.

Our next question comes from Jobe Taylor from Oppenheimer.

This is actually Eric Cheung for Bret Holley at Oppenheimer. Can you talk about the real world dosing for Allopurinol relative to the 300 mgs and how you think that might impact 4208 usage as a combination therapy.

Sure. The prescription data is crystal clear that the vast majority of prescriptions for Allopurinol are 300 milligrams a day. The label does allow for -- does titration to 300 milligrams which is important for Allopurinol, and it does allow for higher doses, up to very high doses, but hardly anybody uses those. So the current study takes the common prescription dosing into account and we have a running phase patient screening that confirms that patients are on 300 milligrams per day, taking their drugs, and that their serum uric acid is still above six in order to qualify for randomization.

Okay great. And for the Peramivir, when BARDA responds can you kind of give us general -- what would be next steps needed before implementing the [political] changes or how rapidly that process could occur?

We still have money under the current contract. The Phase III program is well underway. So I think there is no stop in terms of our progress on the Phase III work right now. All the contract modification will do, will allow us to continue that progress and complete the program. So there is no interruption. Bill, as I see it, things will go ahead and when the contract modification comes through we will just keep going. So we have no stop. We are not waiting, we are moving ahead under the current contract.

We have opened sites, we have patients enrolling into 301.

Great. Thanks a lot, guys.

Our next question comes from Steve Byrne from Bank of America.

Bill, were there any meaningful differences between the monotherapy, the first combo trial, and then the ongoing 203 trial with respect to enrolling criteria?

The major difference in the current study compared to the two earlier studies is based on the design. So we are now taking people who have failed 300 milligrams of Allopurinol to date and have not achieved the serum uric acid goal. So that is a big difference compared to 201 and 202 where the patients were off urate lowering therapy all together and had serum uric acids of eight or greater. With regard to other inclusion and exclusion eligibility criteria, we have maintained them, we made minor changes.

So by enrolling only those patients that have failed Allopurinol you are -- you would be targeting the refractory gout market with this approach, is that correct?

I wouldn't use the term refractory. I think in the minds of rheumatologists that is the patient with massive urate deposits, tophi, polyarticular arthritis, gets wheeled in in a wheel chair. That's a small patient population and that is not the type of patient enrolling now. If you look at what happened for instance in the Uloric Phase III trials that had an Allopurinol control arm, about 60% of those Allopurinol patients failed to make it to goal. They are not the refractory gout population. They are just your average gout patient.

How would you anticipate the label being written based on the 203 study?

In general, it will be written according to the Phase II program and what we study in drug development is typically what we get in terms of the ultimate label. So it hasn't been finalized, obviously yet, and as I said before there is a lot of flexibility in designing the Phase IIIs. So I think you can generally think of it as a label that would allow the use of BCX-4208 in people who have failed Allopurinol.

And is that differentiated versus Uloric?

So I think that -- Uloric is another xanthine oxidase inhibitor. So we're quite differentiated versus Uloric. There is a different mechanism of action. We are developing a different program.

And you mentioned immune functional testing. Are you intending to do any of that as part of the 203 study?

We haven't reached a conclusion with regard to 203 but we have opportunities this year to either incorporate those types of tests in some group of patients in 203 or in two studies of longer term administration of the drug. So we fully intend to do that this year and develop that package.

Then lastly can you give us any idea of the potential royalties from Shionogi based on the flu season that is upon them now and their use to date of Peramivir?

Steve, it's Stuart speaking. We haven't given any of that guidance for Q1. The flu season in Japan looks to be fairly strong right now. Kind of a good flu season over there but we haven't given any details for Q1 right now.

Okay. Thank you.

Our next question comes from Michael Schmidt from Leerink Swann.

Hi, good morning. I had a couple of questions regarding the Peramivir program. So first I was wondering if you could provide an update on the enrollment progress and the efficacy Phase III trial, what proportion of patients is still outstanding, and in dollar terms sort of what cost factor is that for the trial and what proportion of that is being requested from HHS and is that included in cash burn guidance? And then I have a follow-up question.

From a cash burn perspective, the Peramivir program is 100% funded by the government so BioCryst did not have any cash burn associated with Peramivir. So the guidance that I have given of $30 million does not include anything for Peramivir. That is fully funded by the government.

Okay. And so for the remaining trial and remaining funding that's required to complete the trial, how much is that, that will have to be approved by HHS?

So again the government doesn't allow us to articulate how much the ask is of them but the current contract is for $180 million. We have some money in there to initiate the Phase III work that is already underway so there is a full Phase III program, a normal Phase III program is kind of in the $50 million to $70 million range for a trial like this. So you can kind of do the math from that. We have some headroom left in the current contract and then we have requested enough to finish the full Phase III program.

Okay, perfect. And regarding the overall market opportunity, can you just give a quick overview on the number of hospitalized flu patients by the time the drug is approved and what market you could address potentially with this Peramivir? I think the CDC has recently or like last fall I think restated some of the estimates for H1N1. Could you just comment on the overall market?

We think there is a very good market opportunity for Peramivir, number one, and the reason that the HHS BARDA is funding this program is because of the very limited choice for the government to stockpile flu drugs. And the lack of an IV drug for hospitalized patients. So number one is government stockpiling. Number two is used in seasonal influenza in hospital patients that get admitted with influenza, and we are in the lead here in terms of understanding that and doing clinical trials in that space. So we think that is a good market opportunity. Don't forget Japan as well. Our partner Shionogi is launching, as we discussed before, and the opportunity there is rather different because Japan has the world's highest per capita use of influenza antivirals and it clearly -- that is a segment where there can be single administration of Peramivir in the doctor's office, for example, which is not the situation in the US. So there would be the three top market opportunities.

Okay. And how many patients are there that Peramivir could address per flu season approximately?

Flu seasons vary a lot from year to year. That is a striking characteristic as we all know. For hospital subjects in the United States, patients who -- there are tens of thousands at least up to hundreds of thousands depending on the season. And there were tens of thousands of deaths from H1N1 influenza so I think that this is a real disease that has real consequences and needs an IV therapy.

Right, right. Okay. Thanks a lot.

(Operator Instructions). Our next question comes from Charles Duncan from JMP Securities.

Hi, guys. Thanks for taking the follow-up call. I wanted to follow up to the last questioner with regard to the Peramivir program. If you take a look at the percentage of patients that have been enrolled thus far in the trial, that may or may not have been exposed to previous neuraminidase inhibitors could you help us understand how the trial would be different going forward, and if you would be able to segregate those patients and if that would impact the statistical analysis of efficacy for that trial?

Thanks for the question. So to clarify, the safety study 303 that we reported recently has very, very different inclusion criteria compared to the efficacy study and that is quite deliberate. In the safety study we allowed patients to be enrolled even if they had been in hospitals for any length of time, in intensive care for any length of time. Any duration of illness, any administration of any other antiviral. Didn't matter. However, for the efficacy study, patients are not allowed in if they have had another antiviral. Big difference. So in terms of prior exposure to an antiviral, the efficacy study is testing the addition of Peramivir, the standard of care versus standard of care plus placebo, and the main goal of changing the study to include -- to specify the efficacy analysis population as patients who don't get another neuraminidase inhibitor on study is to increase the signal to noise ratio if you like and approve our ability to detect a statistically significant difference. And we are quite pleased with that.

And can you help us understand, was there -- call it roughly a third, a quarter, whatever and how would you manage that in the statistical analysis at the end of the trial?

So the first comment to make is we based our planning around our Phase II study, not around the rate of enrollment in 303 because the Phase II study had similar eligibility criteria to the efficacy study. That is the first thing. The second is that depending on the region, it could be a very low percentage up to a very high percentage who will qualify to be included in the efficacy analysis population. We have been quite conservative in our proposal to the government, as Stuart said before, we can't get into the details but the proposal takes into account a relevant proportion and expanding the number of patients in the study and expanding the geography allows us to get to the number we need for the efficacy analysis. And obviously we track all of these things during enrollment and the goal is to keep the study open until we have got the efficacy analysis population done and we have also completed the safety requirement population.

And Bill, can you give us a sense as to how much it is expanding? Is it expanding by 25% or 50%? I mean just rough order of magnitude.

I can't really go into that today.

Okay.

I think that we are so close to the end of the process here we will put out a detailed explanation when we are done.

Okay. Thanks for the added color.

I am not showing any further questions at this time. I would now like to hand it back for any other remarks.

Thank you. We appreciate everybody's interest in the Company. 2010 was a great year for the Company, good progress and we are excited about 2011 and look forward to your continued interest in the Company. Thank you.

Ladies and gentlemen, this does conclude today's program. You may now disconnect. And have a wonderful day.