BioCryst Pharmaceuticals Inc (BCRX) 2012 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the BioCryst first-quarter 2012 earnings conference call. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to introduce our host for today, Mr. Rob Bennett, Executive Director of Investor Relations and Communications. Sir, please go ahead.

Thank you. Good morning and welcome, everyone, to BioCryst's first-quarter 2012 corporate update and financial results conference call.

Today's press release and accompanying slides for this call are available on our website at 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 on the call today are Jon Stonehouse, Chief Executive Officer of BioCryst; Dr. Bill Sheridan, our Chief Medical Officer; and Tom Staab, Chief Financial Officer.

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 are subject to known and unknown risks and uncertainties which may cause our actual results, performance, or achievements to be materially different from any results or 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, please refer to BioCryst documents filed with the SEC, which can be found on our Company website.

With that, I will turn the call over to Jon.

Thank you, Rob. Good morning and thanks to everyone for joining us today.

BioCryst entered 2012 with the most promising risk-balanced development pipeline in the Company's history. Our team established strong momentum in the first quarter by generating positive clinical results from our Phase IIb BCX4208 gout trial and completing our FDA end of Phase II meeting, as well as reporting promising preclinical results for our hepatitis C and hereditary angioedema programs.

We continue to aggressively execute our plan to advance all four of our development programs during 2012. Each of these programs has clear milestones and goals, representing attractive value-creation opportunities for BioCryst and its stakeholders.

Let me begin with gout, where we have recently completed our end of Phase II meeting with the FDA. The interaction provided clear and informative guidance regarding the path to approval for BCX4208, and we are now incorporating this advice into the Phase III plan. Our primary focus is on securing the right partner to complete the Phase III program and to commercialize the product.

We are convinced that the gout market in general and BCX4208 specifically have great future potential. There's a very large growing and underserved gout population following decades without innovative new treatments and patient education. Over the last year, investors have questioned the market potential of new gout treatment options.

In April, we witnessed two large transactions in the gout market that validated the commercial opportunity, the acquisition of URL Pharma by Takeda to build upon its existing franchise and the acquisition of Ardea and its Phase III compound by AstraZeneca. Both proposed deals exceed $1 billion in value and confirm that large competitive pharmaceutical companies are willing to commit not only cash, but development resources and marketing muscle to the gout market.

These developments not only validate the market, but also decrease the number of attractive late-stage options remaining for partnering or acquisition. BCX4208 is now the most novel, advanced, and unencumbered gout asset available.

So why is BCX4208 attractive for a future partner? First, it offers a novel mechanism of action, synergy with allopurinol, and other differentiating characteristics that can make it a promising treatment option for physicians in a large portion of their patients.

Second, we believe the partner's investment is reasonable, with relatively low Phase III clinical costs compared to other chronic indications.

Lastly, the clinical risk should be relatively low since the Phase III program will be very similar in design to our Phase IIb trial.

The value-creation opportunity for BioCryst with BCX4208 is substantial in the hands of a competent partner, primarily through royalties and milestones on future sales that can fund our operations at the time when we may be launching our own drugs, such as BCX4161.

Our goal is to conclude our partnering process during 2012, enabling Phase III trials to start as soon as possible.

Next up is Peramivir, our Phase III influenza program, which is fully funded by the U.S. government and is in its final clinical trial to support U.S. filing. The government funding enables us to advance Peramivir while limiting the downside risk to BioCryst and its shareholders, as this is non-dilutive financing.

The primary value-creating opportunity is U.S. government stockpiling for pandemic purposes. If Peramivir is approved, we believe stockpiling orders could fund the Company's future in a meaningful way.

Furthermore, there is additional potential from ex-U.S. stockpiling and from seasonal hospitalized flu demand, particularly in severe flu seasons.

The next milestone in the Peramivir development program is an interim analysis to determine if the study's enrollment target for the primary efficacy population should be revised. We expect to complete this interim analysis during the fourth quarter, following conclusion of the Southern Hemisphere flu season.

Moving on to our preclinical development programs BCX5191 for hepatitis C and BCX4161 for hereditary angioedema. The next important milestone for each compound is completion of our ongoing GLP nonclinical safety studies to guide our selection of doses for Phase I safety and PK trials as we prepare for first-in-human studies later this year. To maximize value opportunity for each program, we need to quickly -- move quickly and have started Phase I planning for each drug candidate.

BCX5191 has the potential to be an important part of an oral pan-genotypic treatment regime for patients infected with hepatitis C. Scientific results presented at EASL reaffirm the potential role of nukes as the backbone of combination therapy.

For BCX5191, our strategy is to move it through preclinical and clinical safety trials as soon as possible so we can then evaluate the potency in combination with other oral treatments in patients with hepatitis C. It is likely that the best way to maximize BCX5191's value is ultimately through partnering, but it is too early to say at what development stage. For now, our focus is on completing nonclinical safety studies.

I want to share some more information regarding the ongoing BCX5191 patent interference process. Since we originally disclosed this on March 12, we have submitted an interference request to the U.S. PTO and taken appropriate steps to address this in other countries. We have also discussed this with our U.S. PTO examiner who is currently evaluating our interference request.

If the reviewer determines our claims are allowable and overlap with Biota's patent, he would then forward the matter to the interference review board, and they in turn will designate the senior and junior party in the interference process. The burden of proof will lie with the junior party.

We expect the interference to be granted and for BioCryst to be designated the senior party, based on the fact that we filed approximately 18 months prior to Biota's patent application. We look forward to resolving this matter.

Now looking at BCX4161 for hereditary angioedema. Why are we so excited about this program? First, there is a significant unmet medical need for HAE patients in terms of their treatment options for preventing attacks. Second, the target for BCX4161 is validated and this reduces technical risk.

Third, orphan drug indications typically have relatively short and clearly defined clinical pathways. This reduces time to market. And finally, it requires a commercial effort that BioCryst can manage independently. This limits cost while maximizing value retention for the Company and its shareholders.

Most importantly, an oral treatment option like BCX4161 would be a game changer for patients and for BioCryst. This is why we're so excited about this program and why getting into human clinical trials later this year is an important milestone.

In summary, we are making good progress with the potential for two Phase III programs and two innovative molecules in Phase I by the end of this year. Our goal is to enter 2013 with an even more attractive pipeline.

With that, I will turn it over to our CFO Tom Staab, who will discuss the first-quarter financial results.

Thank you, Jon, and good morning, everyone.

I am pleased to discuss our strong first-quarter financial results and to provide some additional detail regarding the financial and operational achievements discussed in today's press release.

I also would like to specifically point out some achievements in the first quarter, as they relate to goals we have established and discussed in previous quarters. First, we have successfully transferred the Forodesine IND and relevant data to Mundipharma one quarter after amending and restructuring our licensing agreement. Our completion of this transfer allows Mundipharma to advance the Forodesine program and allows BioCryst to focus its resources and attention on our four primary development programs.

In addition, this transfer resulted in our first-quarter operating loss decreasing approximately 50%, as compared to 2011, by recognizing all previously-deferred revenues and expenses associated with the Forodesine program.

Second, we have continued to focus our cash resources on advancing our development programs and minimizing noncritical and non-project spending. You will notice that our first-quarter G&A expenses are half of what they were in 2011. We successfully completed the transition of our corporate headquarters in early 2011 and have realized in 2012 a significant reduction in administrative costs.

Third, we remain committed to maintaining a strong balance sheet. We have ended the first quarter with $57 million, or less than a $0.5 million decrease in our cash balance from year-end 2011. Over the last year, we have significantly improved our working capital parameters by closely managing our accounts payable and accounts receivable.

Additionally, we have opportunistically and judiciously utilized our ATM facility to raise cash through the sale of equity when favorable market and stock conditions were considered to exist. The result is a strong balance sheet, affording us the ability to maintain a healthy operating cash runway and liquidity to achieve our goals.

Our first-quarter financial results for 2012 are summarized on slide four. Revenues for the first quarter of 2012 were $2.2 million, compared to $5.4 million in the first quarter of 2011. This increase was primarily due to Forodesine-related revenue.

As discussed earlier, both our revenues and our research and development expenses for the first quarter in 2012 include the recognition of previously-deferred revenue and expense associated with the Forodesine program and the Mundipharma relationship. In 2012, we completed the transfer of the IND and development data to Mundipharma in accordance with the restructuring of our license agreement in November 2011.

The transfer resulted in approximately $7.8 million in deferred revenue and approximately $1.9 million of deferred R&D expenses being recognized in the first quarter of 2012. The transfer did not have any impact on our cash balances.

Furthermore, as you look at the remaining components of revenue, approximately $4.1 million of the remaining $4.4 million represents revenue associated with BARDA HHS. When comparing BARDA HHS revenue in the first quarter of 2012 to the first quarter of 2011, there was a decline in reimbursable Peramivir expenses as adjusted by the continued development and ongoing 301 clinical trial activity.

The remaining 2012 revenue of approximately $300,000 represents amortization of collaborative revenue associated with the cash received in previous periods from our Shionogi collaboration and will continue to be amortized over future quarters through the end of 2018.

First-quarter 2012 R&D expenses were $15.4 million, up from $13.4 million in the last quarter's -- last year's quarter. Excluding the Forodesine expense recognition impact, R&D expenses were roughly equivalent between the two quarters. The mix, however, has changed as higher preclinical development expenses associated with our preclinical -- with our hepatitis C and HAE programs incurred in the first quarter of 2012 were offset by lower BCX4208 gout development spending as compared to the first quarter of 2011.

As we continue to advance our preclinical molecules into testing in humans, these programs should represent a larger portion of our total R&D expenses.

First-quarter 2012 G&A costs were $1.8 million and were approximately half of the $3.5 million incurred in the first quarter of 2011. The large decrease was primarily due to costs related to the relocation of our headquarters to North Carolina in 2011 that didn't occur this year and an overall reduction in administrative expenses as our focus on minimizing noncritical and non-project related spending continues to be realized.

Moving below the operating line, we incurred $1.2 million of non-cash interest expense in 2012, as compared to $300,000 in 2011, due to recognizing a full quarter of interest expense on our nonrecourse debt in 2012 versus a partial month in 2011.

Last year also included a mark-to-market loss of $1.3 million on our foreign currency hedge, whereby we had a slight $38,000 gain in 2012. Both amounts are derived from changes in the U.S. dollar/Japanese yen exchange rate as our hedge, enacted in conjunction with the parameter royalty monetization, is marked to market.

Now moving to slide five, I'd like to discuss our first-quarter cash usage and our 2012 financial outlook. At March 31, 2012, we had $57.3 million of cash and investments, in line with the $57.7 million we had on the balance sheet at the end of 2011.

Our operating cash usage for the quarter was $11.7 million and reflects a run rate above our expected quarterly average, due to the timing of certain one-time payments that occurred in Q1. As a reminder, operating cash excludes the following -- any impact of our royalty monetization and hedge collateral posted or received; sale of stock in the marketplace; and other nonroutine cash inflows, including any proceeds from outlicensing.

We will continue to adhere to our guiding principle of directing maximum resources to our development programs and controlling non-project spend in 2012.

As previously mentioned, we succeeded in offsetting our first-quarter operating cash use by taking advantage of market conditions and raising $11.7 million in proceeds by selling equity through our at-the-market offering, or ATM.

During the quarter, we sold approximately 2.9 million shares at an average weighted price of $4.16.

In regards to our outlook for 2012, we are reiterating our operating cash and operating expense guidance originally provided with our year-end 2011 results call that occurred in February. Accordingly, based on current trends, assumptions, and our operating plan, we continue to expect 2012 net operating cash use to be in the range of $32 million to $38 million. Based upon the midpoint of this range and our cash position -- our March cash position, we continue to maintain approximately 20 months of cash runway to achieve our 2012 objectives.

Our range excludes any consideration of cash inflows, including those inflows which could be derived from outlicensing BCX4208.

Additionally as discussed in February, we continue to expect total operating expenses to be in the range of $57 million to $69 million in 2012.

I want to remind you that our annual results are heavily dependent on Peramivir-related operating expenses and reflect a mild 2011-2012 Northern Hemisphere flu season.

That concludes my financial review, and I'd like to turn the call over to Dr. Bill Sheridan. Bill?

Thanks, Tom.

My comments today will begin with our BCX4208 end of Phase II meeting with the FDA and next steps in our BCX4208 clinical program and regulatory interactions. I will also discuss enrollment in our Peramivir Phase III influenza trial, as well as progress for our BCX5191 hepatitis C and BCX4161 hereditary angioedema programs.

In April, we held an end of Phase II meeting for the BCX4208 gout program with FDA. We are pleased to report that the Phase III program can move forward. We confirmed the proposed NDA safety sample size and Phase III patient population, trial designs, duration, and primary efficacy endpoint.

The Phase III program builds on the strategy and details of our Phase IIb trial. This proposed program studies approximately 1,800 patients for 12 months of steady drug exposure with the primary efficacy analysis at six months. BCX4208 will be evaluated as add-on treatment to either allopurinol or febuxostat in gout patients who are not adequately responding to a xanthine oxidase inhibitor alone.

The primary efficacy endpoint is the proportion of patients with a serum uric acid level that is less than 6 milligrams per deciliter.

In addition, we have also initiated the scientific advice process with the EMA and expect feedback in the third quarter of this year. We expect to submit finalized trial protocols to regulatory bodies shortly thereafter.

Our Phase IIb 203 trial extension through 52 weeks will conclude in the third quarter.

We will also complete the BCX4208 moderate renal impairment trial during the third quarter. This latter trial objective was to obtain additional experience in gout patients with moderately severe renal impairment.

Our original enrollment target for the trial was 40 patients; however, we found that recruitment was slow, with qualified patients more difficult to find than expected. With this in mind, we decided to close enrollment after reaching 20 patients. This trial and other previous clinical pharmacology and Phase IIb data provide sufficient information to include patients with moderate renal impairment in the Phase III program.

With regards to the Peramivir Phase III trial, we have continued to enroll patients steadily, despite the relatively mild recent influenza season in the Northern Hemisphere, and now expect to meet our enrollment target for the planned interim analysis by the end of the 2012 Southern Hemisphere season.

The main remaining task is to enroll sufficient patients to reach our full target of 160 patients in the completed study for the primary efficacy analysis population, defined as patients who did not receive a neuraminidase inhibitor as part of their standard of care. In the coming months, we will focus recruitment in those regions that are best positioned to meet this goal.

Turning to our preclinical programs, both remain on track for the initiation of first-in-human trials before the end of 2012, and the Company has started Phase I planning for each of these promising drug candidates.

In February, we reported results demonstrating the potency and oral bioavailability of our plasma kallikrein inhibitor BCX4161 in preclinical models and established its predicted therapeutic window in prevention of HAE attacks. Since then, we have initiated our GLP nonclinical safety studies and advanced GMP drug substance and drug product manufacturing for Phase I supply.

We also shared results showing that our hepatitis C nucleoside NS5B RNA polymerase inhibitor, BCX5191, met criteria for advancing to IND-enabling studies. Similar to the timings of BCX4161, the 5191 project has advanced into nonclinical safety evaluations together with Phase I drug supply GMP manufacturing.

Consistent with prudent R&D practices, we are continuing to make progress on several later-generation HCV and HAE compounds discovered by BioCryst scientists to ensure we have options for backups and lifecycle management. In addition, we are evaluating other novel small molecules for new indications.

In closing, we are very pleased with the clarity that we have gained regarding Phase III development of BCX4208 in gout from the end of Phase II meeting, as well as the steady progress that we are making with Peramivir Phase III enrollment and in both of our preclinical-stage programs. We look forward to updating you as we advance our development agenda.

Now I will hand the call back to Jon.

Thank you, Bill. So looking ahead, we expect to continue to make progress with our development programs.

Over the course of the remainder of the year, we will update you on clinical and regulatory progress for BCX4208, the completion of nonclinical safety studies for BCX4161 and 5191, and the Peramivir interim analysis.

We are focused on reaching a successful conclusion with our BCX4208 gout partnering process, and as always, we'll carefully manage our financial resources.

This concludes our remarks, and we will now open it up for your questions.

(Operator Instructions). Charles Duncan, JMP Securities.

Good morning, guys. Thanks for taking my questions and congrats on the end of Phase II meeting, as well as Phase III plans with 4208.

My first question is regarding some additional color on the protocol. Jon or Bill, I'm wondering if you could help us in terms of understanding timelines to the start, as well as enrollment, and then, finally, what dose do you expect to study, and then I have a follow-up on partnering.

So let me start with timelines. So we've got the guidance that we need to be able to begin the Phase III, and so the important step next is a partner in place to move the program forward.

So we're working aggressively to secure a partner. We expect to do that this year and get the Phase III trial running as quickly as possible, so that's it with regard to timing. I'll let Bill talk to dosing.

Hi, Charles, so we discontinued the 40-milligram cohort in the Phase II program, so all of the other doses are addressable in Phase III, so that's 5 milligram, 10 milligram, and 20 milligram.

We still have another regulatory step to go through, that's EMA scientific advice, and so we have quite advanced thinking on our protocols, of course, but we won't finalize them just yet. Once they are activated by a partner, then they'll be available on clinicaltrials.gov.

And regarding drug exposure, it seems to me that in Phase II you've got sufficient drug exposure to facilitate this Phase III, but is that truly the case? What was the agency's feedback on that? And do you think that they're concerned about shorter exposures versus longer ones for chronic dosing?

I think the -- one of the questions we asked was around duration of exposure in the NDA package, and that will be the same as in the Phase II, so 12 months, so I think that, indeed, our Phase II program is quite unusual in having longer-than-normal duration of exposure at Phase II level, so we're very pleased that we were able to do that.

We have a Phase IIb study with exposure through 52 weeks, and even in the first six months of that study we had more than 900 patient months of exposure to BCX4208. So, that gives us a lot of comfort with the duration of exposure that we'll be studying in Phase III.

Yes, Charles, I would add that one of the areas that you can run into problems in moving from Phase II to Phase III is making significant changes in the design.

As Bill says, when you've got the same amount of exposure in terms of length of therapy and you've get the same endpoint and a lot of other similar aspects of the design, I would argue that we have a lower-than-normal risk profile moving from Phase II to Phase III.

That's helpful, and then, in terms of your strategy on partnering, you mentioned this potentially increasing scarcity value, given some of the other news in the gout space recently, but has your strategy changed in terms of -- or what are you really focused on? Is it upfronts or is it royalty share over time?

So, our strategy hasn't changed. The market landscape certainly has, and my experience in business development over the years is good Phase III assets are not always available, and that we think we have the best and only remaining Phase III-ready high-quality asset left in the gout space.

So the goal is to get it in the hands of a competent partner that can really take full advantage of the profile of the drug and make it successful in the marketplace. So what's most important to us, and the real core value of the molecule, is at about the time we hope to be launching BCX4161, that we're getting very nice royalties and sales milestones from a successful partner to offset some of that expense.

Of course, we'll want a fairer upfront payment, and the more competitive that process is, the better that will be. But really, the core value of this asset is the stream of cash once it's in the market because we think the gout market could explode, and we want to be able to benefit from that.

I'm sorry if I missed this. Your confidence in having something done this year is the result of just general observations on the gout market or based on discussions that you have ongoing?

Both. So, clearly AstraZeneca probably did us a favor by the acquisition of Ardea and the interest level is high, and we want to get the molecule into the Phase III program as quickly as possible.

So we completed the end of Phase II meeting with the FDA, and there's not a whole lot more that's necessary to get into Phase III. So it's both the space is heating up and it's important for us -- we're basically done with the major events that lead up to a Phase III and we're ready to go.

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

Steve Byrne, Bank of America.

Hi, this is Sarah on for Steve. I have a question about the incidence of flu right now in some of the sites in India, and I guess the confidence that you'll be able to achieve the 160 by next year?

Thanks for the question. So India has more or less a year-round flu season, if you like. But right now, it's quiet. The monsoon has yet to start. That should happen pretty quickly.

There have been early signs of an uptick in influenza there. And given the amount of progress we made during the Northern Hemisphere season with a light flu season, I think we're quite confident that we'll be able to hit the target.

And then, I think one other piece on India is we have a meaningful number of additional sites than we did in the last monsoon season. So we're really prepared to cast a very wide net in India and catch a lot of patients when flu arrives.

Okay, thank you. And then, in terms of the 5191, what other preclinical studies are you planning at this point?

We mentioned during our last call that we intended to examine the combination of 5191 in vitro in the replicon assay with other drugs, so that work is ongoing.

And I think the real task, the most important task, in the preclinical evaluation is to complete the nonclinical safety program. So from that program, we'll be designing our early clinical starting doses and dose escalation and the like. So, most of the heavy lifting is the nonclinical safety and drug supply.

Rahul Jasuja, Noble Financial.

Hey, good morning, all. Congratulations on getting past the end of Phase II hiccup and also bolstering your balance sheet.

A few questions here. So, one of the questions I had was regarding dosing, and I know the 5-milligram, 10-milligram, and 20-milligram dose is the one that's going forward, but when you went into the FDA meeting here, was the consideration that maybe your lymphocyte suppression count was too stringent and maybe the 20-milligram dose could be viable? So that's one question.

And then, I forget if the 52-week study has a 20-milligram arm. I think it does not.

And then, the other question regarding the end of Phase II meeting is not that it's important to the FDA, but when you approached this meeting, was there any plan to design a study that would provide a marketing edge given what's on the market, what's going to be on the market, Ardea's drug and so on? So was something discussed at that meeting that provides 4208 a potential marketing edge in designing your Phase III studies?

Let me address your dosing questions and design questions. So there -- if you look at the labels for gout drugs, despite the way they were studied in Phase III, they're labeled to start the lowest dose, and then, if necessary, increase the dose.

So there are two ways to get that type of information. One is to do a randomized cohort study; another one is to do a dose-escalation study. Both of those are possible to do in Phase III.

With regard to dose selection, the 40-milligram cohort has been discontinued. The 5, 10, and 20 were all continued through 52 weeks, and I think that those doses were in the plans discussed, so we feel quite comfortable with that.

With regard to lymphocyte monitoring and the like, this is a clinical trial and we've shown that we can conduct clinical trials extremely safety in gout subjects with this agent.

And the 20-milligram arm was continued in the 52-week extension.

It was, okay.

So let me address the market edge, and Rahul, you used the word hiccup. The end of Phase II meeting was a standard part of getting the advice. That's important, critically important, before you go into Phase III, so we didn't see any hiccup. In fact, we found it to be incredibly valuable.

We have a very clear picture of what is necessary for successful review. So we are very appreciative that it went that way.

On the market edge in Phase III, I don't think FDA is in the business of advising around competitive advantage for companies. But having said that, what I will say is we've been thinking about that for years, and there's two areas that we see -- well, actually three.

The first one is mechanistically we see synergy with allopurinol, and we think that -- we've mentioned this before in our primary market research -- that tests very well, that doctors are looking for innovative new mechanisms, and the synergy, the idea of using lower doses of both drugs to get more meaningful efficacy, very important for physicians.

The second is drug-drug interactions. So mechanistically, other drugs being studied for gout affect -- or have a mechanism of a renal transport inhibitor, so by their very nature of their mechanism could have problems with drug-drug interactions. And we know that these patients are on a number of concomitant chronic medications, like antihypertensives, hyperlipidemia drugs, and diabetes drugs.

So we think that's going to be an important differentiator, and we did have discussions with FDA around drug-drug interaction, and the remaining step that we have is the ADME or metabolism -- human metabolism study that we've mentioned before. We hope to have results by the end of this year.

And then, lastly, we know that there is a high propensity for kidney stones in this patient population, and again mechanistically, a drug that by its mechanism pumps out more uric acid through the kidneys to lower uric acid versus one that decreases production of uric acid could be problematic in patients with a propensity for stones. And it's even more problematic when you consider that as much as 50% of patients with stones are in the silent stone category where they actually haven't had an attack, so the doctor doesn't know that they have a problem.

So we think those are three differentiators that will put BCX4208 in a competitive position in the marketplace.

Great, thanks, and obviously the hiccup was a bad choice of words, so sorry for that. Last couple of questions, then I'll get off the phone.

Jon, this is probably for you. In terms of thinking about partnerships, should we be thinking just big pharma or should we be thinking mid-tier pharma as well? Because sometimes the economic value for a company like BioCryst may be well served by a mid pharma kind of player. And then, finally, is there any data at EULAR that BioCryst is presenting on the gout program? Thanks.

So on the -- what's the tier, if you will, of big pharma versus medium pharma, and our interest in that kind of a partnership. You know, for me it's all about somebody who demonstrates that they can be successful with this molecule.

Because as I said before, the strategy and the value-creating opportunity for the drug is in the sales milestones and the royalties because we think the gout market is going to explode and we want to be able to get the benefit of that. So a capable, hungry mid-size pharma that shows a real desire that they're really going to push hard with this drug is important to me.

I mean, the last thing I want to do is have this in a big company were it gets lost amongst a bunch of other priorities. That being said, if a big company shows that same interest, I'd love to have that kind of competition.

So it really doesn't matter to me what size, as long as they can afford to do a high-quality Phase III, as long as they're committed to the molecule and pay a fair upfront payment and other terms. We just want somebody who sees gout the way we do.

And then, with EULAR, Bill, I'm not sure. Do we have (multiple speakers)

Yes. So at EULAR, we submitted some abstracts. I believe the abstract book comes out next week, so you can look forward to seeing that.

Charles Duncan, JMP Securities.

Hey, guys. Thanks for taking the follow-up. I wanted to ask you a quick question about 5191, and in particular, what is the key information that you'd like to hear from the ongoing IND enabling or, if you will, the safety -- nonclinical safety studies? And what is the predictive value that you see for clinical programmatic success out of that question?

Thanks, Charles. The most important thing that I need to see coming out of the nonclinical safety studies is the no observed adverse event level and the calculation to starting doses in humans.

At the end of the day, the efficacy is a class effect for nucleoside NS5B inhibitors, and what drives that is how much of the triphosphate is formed in liver cells. So we can't measure that in humans because that would require a liver biopsy, so we'll take the exposures and the doses in the nonclinical program and try to extrapolate the therapeutic range, but you really have to do a virology study to work on -- to find out about efficacy in humans.

So I think it's -- the most important thing is just being able to calculate doses and moving into the clinic and knowing what to look for and what to measure.

So the inflection points, Charles, are five on the IND, so we've successfully found those doses that we can take into Phase I, and then I think the [MAD] study where we intend to have hep C infected subjects that we can measure by viral load. So those to me are two important events in the coming months for BioCryst.

But you had both -- I mean, it is a class effect in terms of efficacy, but also safety, and so I guess the question is, do you think that the ongoing studies are going to answer at least the latter half of that question?

At the nonclinical level, yes, absolutely.

Thanks. Thanks for the added color.

Thank you, and I see no further questions in the queue at this time. I would like to turn the conference back to BioCryst for any concluding remarks.

Yes, so thank you. We really appreciate your interest today. Like I said, the coming months are really going to be important for the Company. You can trust that we will be very, very busy pursuing the partnership with 4208, moving our preclinical assets through the tox studies, and getting ready for Phase I, so an exciting couple of quarters to come. Again, thank you for your interest in BioCryst, and have a great day.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone, have a good day.