CASI Pharmaceuticals Inc (CASI) 2006 Q4 法說會逐字稿

Good morning and welcome to EntreMed's fourth-quarter and year-end 2006 update call. At this time, all participants have been placed in listen-only mode. There will be a question-and-answer session prior to the conclusion of the call. It is now my pleasure to turn the call over to your host, Mr. James S. Burns, EntreMed's President and CEO. Mr. Burns, you may begin.

Thank you and good morning. Welcome to our fourth quarter and year-end 2006 update conference call. Joining me on our call this morning is Mr. Dane Saglio, our Chief Financial Officer, and Dr. Carolyn Sidor, our Vice President and Chief Medical Officer.

Before we begin, I would like to caution that comments made during this conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of EntreMed. I encourage you to review the Company's past and future filings with the SEC including without limitation the Company's Forms 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, March 22, 2007. EntreMed undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

Now the purpose of today's call is to review our progress in 2006, including our clinical and two late-stage preclinical programs; update you on the Company's financial status and operations; and provide an overview of our 2007 clinical milestones and business objectives. At the conclusion of this update, we will open the lines for your questions.

Now as to progress in 2006 and to bring you a little bit further back on the progress, EntreMed is focused on developing drugs for the treatment of cancer and inflammatory diseases. Our therapeutic pipeline is built using our extensive expertise in angiogenesis, cell cycle regulation, and apoptosis and the inhibition of kinase signaling, together with the understanding of how these mechanisms interrelate.

As I have emphasized during previous updates, EntreMed is focusing its resources and scientific expertise on the development of orally-active, small-molecule, multi-mechanism drugs that target the inhibition of multiple cellular pathways important in cancer and inflammatory diseases. We continue this focus because these multiple pathways are particularly important in cancer cells that have developed very elegant survival mechanisms.

There are at least five to 10 major mechanisms that cancer cells used to survive and prosper. Our approach has been to interdict in the disease process at the level of both the tumor cell and the supporting tumor blood vessels that nourish them.

2006 was a year of tremendous growth for EntreMed. During 2006, we transformed the Company from an oncology research company with one product candidate in Phase 1 studies to a company with multiple product candidates in multiple Phase 2 studies. We achieved this through a combination of advancing our own internal pipeline and through the acquisition of Miikana Therapeutics.

During 2006, we initiated nine clinical trials, six of which are Phase 2 trials. This has been quite an accomplishment for us, and we anticipate reporting interim data from these studies beginning in the second quarter of 2007.

We continue to make solid progress in both our clinical and preclinical programs. I'm encouraged by our progress for advancing clinical programs of our three lead product candidates, where we continue to execute on our guidance, support our claims with scientific progress, and broaden our pipeline to mitigate risk.

Turning to our 2006 clinical progress, I would like to briefly review each of these programs, update you on their status, and share with you our plans moving forward. Then I would like to discuss our progress and plans for our late-stage preclinical programs in cancer and inflammatory disease.

Panzem NCD, one of our lead small-molecule anti-cancer drug candidates, is an orally-active, well-tolerated, anti-cancer agent that has both anti-proliferative and anti-angiogenic activities. Panzem NCD is currently in multiple Phase 2 clinical trials using a formulation developed with Elan drug delivery to enhance its bioavailability in cancer patients.

Panzem works through multiple cellular pathways by attacking tumor cells directly to induce programmed cell death, or apoptosis, by blocking blood vessels that feed tumors, or the inhibition of angiogenesis, and by disrupting microtubules, an intracellular matrix necessary for the rampant division of cancer cells. Panzem has been shown to induce cell death through a number of pathways including the inhibition of HIF-1 alpha, a pro-survival and pro-angiogenic transcription factor. We believe that Panzem NCD may be one of the most potent inhibitors of HIF-1 alpha, which is overexpressed in more than 70% of human tumors and helps maintain cancer cell growth.

At the present time, EntreMed has eight clinical trials underway with Panzem NCD, including five Phase 2 clinical studies. In 2006, we commenced a Phase 2 single-agent clinical trial in glioblastoma multiform, or GBM, in patients at the Duke University Medical Center Brain Tumor Center. The purpose of this trial is to determine the safety and extent of activity with Panzem NCD as a single agent.

As a single agent in GBM, we would expect Panzem NCD to cross the blood-brain barrier, to continue to show the safety profile we have seen with this agent in prior studies, and to demonstrate modest antitumor activity. We anticipate having interim data available in the second quarter of this year and expect that those findings, together with our prior preclinical findings, will support combination studies in GBM.

As such, a Phase 2 study with Panzem NCD in combination with temozolomide, trademark Temodar, for the treatment of GBM patients is planned to begin in the second quarter of this year. We believe that this study is important because our preclinical studies have demonstrated that Panzem NCD and Temodar act synergistically to cause tumor regression in a glioblastoma model. Furthermore, tumor regression took place when the tumors had reached a substantial size, often analogous to the clinical situation in this disease.

In 2006, we initiated a Phase 1b study of Panzem NCD in combination with paclitaxel, or Taxol, also at the Duke University Medical Center. This is in patients with metastatic breast cancer. The purpose is to evaluate the biologic effects on tissue and plasma in patients treated with paclitaxel alone and in combination with Panzem NCD.

A primary resistance mechanism to treatments for breast cancer is thought to be the upregulation of HIF-1 alpha. Prior studies conducted by the Duke team demonstrated that the inhibition of HIF-1 alpha causes nearly complete destruction of tumor cells and enhances sensitivity to radiation in resistant breast tumors. Panzem is one of the most potent inhibitors of HIF-1 alpha and may have the same or similar impact on chemotherapy-resistant tumors.

Through serial biopsies of Duke breast cancer patients, we will be able to directly evaluate HIF-1 alpha levels following treatment with Panzem NCD and Taxol. We expect to report results of the study in the third quarter of this year.

In 2006, we began a Phase 2 multi-site study to evaluate the safety and efficacy of Panzem NCD in combination with Genentech's Avastin in metastatic carcinoid tumor patients. This trial is being conducted at Dana Farber Cancer Center and other Harvard cancer centers. Carcinoids are tumors of neuroendocrine origin, with 85% of carcinoid tumors developing in the gastrointestinal tract. We believe that combining two agents with anti-angiogenic activity represents a unique approach to treatment and may result in better anti-tumor activity than either anti-angiogenic agent alone. Commencement of this clinical trial represents our first Phase 2 clinical trial in combination with an approved anti-angiogenic agent.

In 2006, we commenced a multi-center Phase 2 study to assess the antitumor activity, safety, and pharmacokinetics of single agent Panzem NCD in patients with hormone-refractory prostate cancer. This study is ongoing and continuing to enroll patients.

Later in 2006, we also initiated a multi-center Phase 2 study in patients with recurrent or resistant epithelial ovarian cancer. The primary objectives for this single agent Phase 2 study are to assess the safety, pharmacokinetics, tumor response rate, and progression-free survival in ovarian cancer patients receiving orally-administered Panzem NCD. This trial is close to being fully enrolled. We will provide updates on our progress as they become available.

Earlier this month, we commenced a Phase 2 clinical trial to evaluate the safety and efficacy of Panzem NCD alone and in combination with sunitinib, or Sutent, in patients with metastatic renal cell carcinoma. The combination portion of the study will determine if the addition of Panzem NCD will restore tumor response by blocking tumor growth at both the level of the VEGF receptor and by inhibiting HIF-1 alpha. It has been hypothesized that a mechanism for tyrosine kinase inhibitor failure is a compensatory increase in HIF-1 alpha, a key regulatory protein responsible for the expression of multiple growth factors in survival proteins.

We have also extended the two Phase 1b trials in Wisconsin and Indiana with Panzem NCD in order to determine food effects on Panzem metabolism and to determine if we can simplify the dosing schedule of Panzem NCD. Through these extended trials and other studies, we have now been able to reduce the dosing frequency of Panzem NCD from 4 times a day to 3 times a day, which is a further improvement in patient convenience with this oral agent. We anticipate presenting data for these studies during the second half of 2007.

With respect to multiple myeloma, five patients from our earlier Phase 2 trials still remain on Panzem capsules with stable disease for periods ranging from 18 months to five years. We expect to report on the results of this trial next quarter; and a publication of this trial is being prepared.

The Panzem NCD clinical strategy that we are following is based on selecting indications where, one, -- where we, one, have seen prior activity in patients; where we have solid results in preclinical studies; and where we can match Panzem mechanisms with specific indications where we expect to see elevated levels of tumor-specific proteins, particularly HIF-1 alpha.

For example, PTEN mutations in glioblastoma and hormone-refractory prostate cancer, or VHL mutations in renal cell carcinoma, result in substantial upregulation of HIF-1 alpha in these tumors. As a result, we are pursuing tumors where our unique mechanisms may provide a competitive advantage and data to support the design of pivotal trials.

We have also pursued Orphan Designation for GBM, ovarian cancer, and multiple myeloma as part of this strategy. Furthermore, we are focusing our Panzem NCD clinical studies primarily on combinations with approved anti-angiogenic and cytotoxic agents. Our preclinical studies have shown that Panzem, as a cytostatic agent with a very favorable safety profile to date, has an additive or synergistic effect on tumor inhibition when used in combination with approved drugs at their maximum tolerated dose without an additive increase in toxicity. This is a unique feature that we intend to continue pursuing throughout Panzem's clinical development.

Our commercial goal is to develop a potent HIF-1 alpha inhibitor that can be used in combination with approved agents or in combination with radiation therapy.

Now turning to MKC-1, in January of 2006 we expanded our clinical oncology pipeline with the addition of MKC-1, a Phase 2 drug candidate, which we added to our pipeline through our acquisition of Miikana Therapeutics. MKC-1 is an orally-active small-molecule cell cycle inhibitor with a unique mechanism of action. MKC-1 binds to a novel intracellular target that has been shown to be important for cell division.

In addition, the addition of MKC-1 to EntreMed's clinical pipeline is consistent with our expertise in cell cycle regulation and our continuing emphasis on anti-cancer agents with novel mechanisms of action.

Shortly after the acquisition of Miikana, we commenced a multicenter Phase 2 study with MKC-1 for the treatment of metastatic breast cancer in patients who fail conventional therapies. In February of this year, we announced a favorable review of MKC-1's safety data by an independent data safety monitoring board, which concluded that this trial did not require any modification and should continue as currently designed.

This was an important milestone for this program, because earlier clinical studies by Roche, the original developer of MKC-1, revealed a substantial toxicity at a higher dose and shorter administration schedule that we believe has been ameliorated with our current 14-day dosing schedule. Patient accrual is continuing on this study and we anticipate the presentation of interim results during the second or third quarter of this year.

Additional progress in the MKC-1 clinical program was made in 2006 with the initiation of two other studies. First, a multi-center Phase 2 study in combination with [Olimpta] in non small-cell lung cancer patients, which is being led by the Indiana University Cancer Center; and a multi-center Phase 1 study in patients with hematological cancer, which is being led by the M.D. Anderson Cancer Center in Houston.

In 2007, we anticipate the initiation of an additional Phase 2 clinical study with MKC-1 in either pancreatic or ovarian cancer patients. We have an exclusive worldwide license from Roche to develop and commercialize MKC-1 and have purposed purchased from Roche, under favorable financial conditions, a large quantity of drug substance, or API, which should be sufficient to conduct a good portion of our clinical trials.

Our third clinical candidate, ENMD-1198, is a new chemical entity based on a modified chemical structure of 2ME2. ENMD-1198 was designed to improve the metabolism of 2ME2 while retaining its multiple mechanisms of action, including inducing apoptosis, inducing G2/M arrest, and inhibiting HIF-1 alpha. In preclinical studies, 1198 has been shown to be a potent, orally-active, microtubule-disrupting agent that leads to arrest of cell division and apoptosis in tumor cells. It also exerts anti-angiogenic activity that further contributes to its overall antitumor properties.

In preclinical studies, ENMD-1198 appears to be a novel anti-cancer compound in terms of both its activity and safety profile. In 2006, we commenced a Phase 1 clinical trial to evaluate the safety, tolerability, pharmacokinetics, and clinical benefit of ENMD-1198 in patients with advanced cancer. Patient accrual is continuing for this study. This dose-escalation study is being conducted at the University of Colorado. We anticipate the presentation of interim data from this study in the second half of this year and expect those results to guide our development strategy moving forward.

In addition to our Phase 2 trials with Panzem NCD and MKC-1 and our Phase 1 trial in ENMD-1198, EntreMed's preclinical pipeline comprises both new indications for existing compounds and novel compounds with anti-cancer and/or anti-inflammatory properties. For today's update, I will focus on our two late-preclinical programs for which we expect to submit IND applications before the end of this year.

Based on the anti-angiogenic and anti-inflammatory properties of 2ME2, we are focusing particular attention on the development of Panzem for the treatment of rheumatoid arthritis. Angiogenesis is a major component of the pathology of inflammatory diseases such as rheumatoid arthritis. With this understanding of RA disease pathology and the anti-angiogenic inhibitory mechanism of Panzem, we have completed multiple clinical studies with Panzem in rheumatoid arthritis model. Based on the results from these studies, we have determined that Panzem not only has anti-inflammatory effects but, more importantly, has potential as a disease-modifying anti-rheumatic drug, or DMARD. DMARDs are drugs that have the ability to slow down disease progression in rheumatoid arthritis and other autoimmune diseases.

We have generated substantial preclinical data demonstrating the positive effects of 2ME treatment on inflammation and disease progression in well-accepted RA models. Radiographic and immunohistochemical staining results from these preclinical trials have shown consistent inhibitory effects on the hallmarks of the disease, including the inhibition of highly angiogenic pannus formation, infiltrating cells, cartilage lesions, and bone resorption.

We believe that an opportunity exists for 2ME2, based on this anti-angiogenic activity and safety profile, to become a novel, non-immunosuppressive DMARD for the treatment of RA. We are continuing to invest behind the development of Panzem for rheumatoid arthritis, potentially adding a multibillion dollar market opportunity to our pipeline.

Since we last reported on our progress in RA, we have been conducting a series of preclinical studies internally and with collaborators to confirm that Panzem activity is based in part on its anti-angiogenic properties, as well as evaluate how its activity differs from standard RA treatments. Since Panzem represents the first in a potentially new class of disease-modifying rheumatoid arthritis drug candidates, an understanding of Panzem's safety history and mechanisms will provide important components of our IND submission. We remain on track to complete IND-directed safety studies for Panzem in rheumatoid arthritis and to file an IND in the third quarter of 2007.

Moving back to oncology, the lead compound in our kinase program, ENMD-981693, an Aurora kinase inhibitor with a unique multi-kinase profile and mechanism of action, is currently in preclinical oncology studies. Aurora kinases are known to be involved in the process of mitosis, or cell division, critical to the development of human cancers. Our multi-kinase inhibitor induces G2/M cell cycle arrest, apoptosis, and angiogenesis inhibition. It is a potent inhibitor of Aurora A, which induces apoptosis, as compared to Aurora B, which induces polyploidy that leads to mitotic catastrophe.

Our multi-kinase inhibitor also targets a broad constellation of angiogenic kinases including VEGF, PDGF, FGR, and KDR. We now have data demonstrating that ENMD-981693 has potent activity in multiple preclinical tumor models. Specifically, we have demonstrated that our multi-kinase inhibitor can induce tumor regression in multiple colon, breast, and leukemia models.

Our 2007 activities on this program involve further work on the antitumor mechanisms of 981693, and to conduct IND-directed studies leading to the expected filing of an IND in the fourth quarter of 2007.

We are also meeting with large pharmaceutical and biotech companies to discuss potential codevelopment of this compound. We believe that we have a unique kinase inhibitor for oncology that could be financially attractive and could help us accelerate its development.

With completion of my comments on the clinical and preclinical programs, I would like to turn now to provide a brief overview of our current financial position. On March 15, 2007, we filed our report containing financial results for the 12 months ended December 31, 2006, on Form 10-K.

Royalty revenues for 2006 were $6.9 million versus $5.3 million for 2005, representing an increase of approximately 30%. Net loss for 2006 was $50.9 million or $0.71 per share, as it compared to $17.3 million or $0.36 per share in 2005. The 2006 net loss includes a non-cash charge of $29.5 million resulting from the acquisition of Miikana Therapeutics in January 2006. Excluding the non-cash charge, the Company's net loss for 2006 would have been $21.4 million compared with $17.3 million in 2005.

Increased expenses during the fourth-quarter 2006 reflect the Company's shift to a clinical focus for Panzem NCD, MKC-1, and 1198, as well as progress in key preclinical programs. In 2007, we expect our expenses to continue to increase as a result of both ongoing and new clinical programs. At the present time, we expect net cash expenses for 2007 to be between 30 and $32 million, reflecting costs associated with a multi-product clinical development program.

As of December 31, 2006, the Company reported cash and short-term investments of approximately $50.6 million. We believe that our cash, short-term investments, and royalty revenue will be sufficient to fund planned operations into the second half of 2008.

Now as to our 2006 accomplishments, 2006 was a year of growth and transformation for EntreMed. I'm pleased to report that for the third consecutive year we successfully executed to our guidance and achieved every milestone that we set at the beginning of 2006. In addition to clinical progress we made during 2006, we accomplished several other important initiatives, including receiving Orphan Drug designation from the FDA for Panzem and GBM. We successfully completed the Miikana acquisition and integration. We significantly strengthened our patent portfolio with the issuance of patents covering composition of matter, methods of use, and formulation for 2ME2 and 2ME2 analogues.

We established a Scientific Advisory Board comprised of distinguished, world-renowned clinicians and researchers in oncology to guide our development of our novel small-molecule drug candidates for the treatment of cancer and inflammatory diseases. We strengthened our senior management team with the appointment of Cynthia Hu as Vice President, General Counsel, and Secretary.

We entered into a license agreement with Elan for the utilization of its NCD technology with Panzem. Furthermore, we raised $47.2 million to provide the financial foundation to support our developed programs. As a result, our progress has positioned us as a solid Phase 2 oncology drug development company.

We expect to continue emphasizing our later-stage programs, comprised of two oncology product candidates in multiple Phase 2 clinical trials; a third oncology product candidate in Phase 1 trials; as well as our late-stage preclinical rheumatoid arthritis and Aurora kinase inhibitors programs that are headed toward IND submissions this year.

In terms of our milestone and corporate goals for this year, we have established aggressive goals for this year in order to advance our clinical and preclinical programs. During 2007, we expect to publish results for Panzem capsule study in our multiple myeloma patients; present interim data from the following studies including Panzem NCD in glioblastoma, MKC-1 Phase 2 study in metastatic breast cancer, Panzem NCD Phase 1b combination study with Taxol in metastatic breast cancer, our Panzem NCD Phase 1b food effect study, our MKC-1 Phase 1 study in hematological cancer, and our ENMD-1198 dose escalation study in advanced cancers.

We also expect to initiate a Panzem NCD combination study with Temodar in glioblastoma and to initiate an MKC-1 Phase 2 study in either pancreatic or ovarian cancer. Furthermore, we expect to submit IND applications for ENMD-981693 for use in oncology, and for Panzem for the treatment of rheumatoid arthritis. We expect to present additional clinical data on Panzem NCD and MKC-1 studies as they become available.

Finally, we are continuing our effort to seek a partnership for our multi-kinase inhibitor program. We will report to you on the progress of that program as it occurs.

Now I believe that we have the right strategy in place to build a leading oncology franchise, one that is focused on developing small-molecule oncology drugs like Panzem NCD, MKC-1, ENMD-1198, and our other mechanism drugs. We will continue to build our Company around a multi-product portfolio rather than rely on one drug candidate to map out the future of the Company, believing that multi-product candidates in multiple clinical trials provide us with multiple opportunities to succeed and at the same time mitigate the risk associated with a narrow pipeline.

We will also continue to add breadth and depth to our development portfolio, which means that we will look selectively at acquiring technologies or product candidates that fit our strategy. In addition, we will seek codevelopment partners for one or more of our core programs and licensing partners for noncore programs.

We currently retain our commercial rights to all the compounds in our pipeline, so we have maximum flexibility to determine with whom and when to seek strategic development or commercial alliances. Ultimately, our goal is to commercialize our core pipeline both for our own account and in partnership with pharmaceutical or biotech companies.

2000 (sic) has gotten off to a strong start for what we expect will be another exciting year for EntreMed. In 2006, we laid the foundation with initiation of multiple Phase 2 trials. We believe that staying on plan, meeting guidance, and generating the data to support the continuing development of our multi-mechanism drug candidates will ultimately create shareholder value. We have plenty of activities under way that are expected to create a steady flow of news that will allow investors to monitor our progress and, hopefully, attract new investors to the new EntreMed.

We're making solid progress on multiple fronts and look forward to keeping you informed of our progress. Thank you for your continuing interest and support of EntreMed. Operator, we will now open the line for any questions.

(OPERATOR INSTRUCTIONS)

Okay, should we start with the first question from Ren Benjamin?

Thanks for a thorough update. Can you please maybe try to pinpoint when some of the results from the ongoing trials will be coming out? I know you mentioned first half, second half, things along those lines. But we have some interesting oncology conferences coming up, AACR, ASCO. Can we expect any data from any of those conferences?

We have submitted abstracts to both of those conferences. So far, we have received some acceptances. We don't know how many; but yes, I think you can start to expect to see some data coming out of both of those meetings.

Of the ones that have been accepted, can you tell us (indiscernible) which results we can expect from those meetings?

I will let Carolyn answer that.

Yes, we have several posters and presentations around the 2-methoxyestradiol clinical program that will be part of the ASCO meeting. You will hear more details about that when they become available on the ASCO website.

Okay, Carolyn. How about AACR?

There are also several posters at AACR that cover several of our programs, both clinical and preclinical. But of course, AACR is a preclinical meeting, so I would not look for clinical data there.

Okay, great. Then finally, you had mentioned on the call that you are retaining all the rights to all the drugs that are in your pipeline. What are the thoughts right now?

I know that at one point you were trying to partner or looking at partnerships for the Aurora kinase program. Can you give us an update on how that is going, or if there is interest in any of the other programs from other suitors?

I can tell you what the game plan has been. The game plan has been to start our partnering efforts off with the Aurora kinase program. So we have been meeting with pharmaceutical and large biotech companies over the past number of months. The plan has been to keep them up-to-date on our progress, our preclinical progress, that would match both the mechanism studies, the constellation of the kinases that we hit, and ultimately the tox data that we will get through the studies that are currently underway. So that prospects for codevelopment of this compound would be up-to-date through about the time we file the IND.

So the expectation is that we would be looking for more definitive discussions with these partners toward the end of the year-on-year when we actually file the IND.

To the extent that we don't have term sheets then, or we feel it is not appropriate at that point in time yet to file an IND, we will go forward into Phase 1 on our own.

So going beyond the Aurora kinase, what we have said in the past is that our partnering strategy is directed toward going to codevelopment or cocommercialization partners when we start to get proof-of-concept Phase 2 data. So as you can see, we are approaching that time period right now. As we talk with various pharmaceutical companies about our Aurora kinase program, in the process we are also bringing them up-to-date on where we are on some of the other programs.

Perfect. Thanks very much.

[Stephen Quitman] with (technical difficulty).

Congratulations on wonderful work in 2006. When the clinical trials for RA begin, do you plan to use Panzem alone? Or will it be administered in combination with methotrexate?

The second part to that question is are you going to be using Panzem capsules or the Panzem NCD?

I will turn the question over to Carolyn.

Obviously, the landscape for rheumatoid arthritis pretty much requires combination studies on a background of methotrexate. So we would expect our developing program to follow on those same lines.

It is unusual, now, for patients to be taken off methotrexate even in the absence of progressive symptoms.

As far as the formulation to go into the RA program, at this point we plan to use the same product that we currently are using in our oncology trials.

By the way, is that the capsule version or the NCD?

That is the NCD.

I see. Okay. Jim, I have one more question (multiple speakers). You have always talk about Celgene Corporation and EntreMed's wonderful big brother. Celgene and EntreMed are so compatible, I often look at Celgene as EntreMed's fiancee. So my question to you would be, when are you guys going to set a date for the wedding?

I don't think we are that far along in the dating process. But what I can tell you is that they continue to be a very supportive partner; and the analogy of a big brother continues to be in effect. We get all of the benefits of having a successful, well-experienced, large shareholder and we are going to continue to do that.

We have had no discussions, and I don't anticipate having any discussions anytime soon toward engagement, if you will.

All right, thanks, and all the best for this year.

Thank you.

[Krishna Gortay] with Rodman & Renshaw.

I have one question, really. I was wanting to ask you the Phase 2 trial where Panzem is being used with Avastin in carcinoid cancer. I would like to ask like the state. I mean, how many patients have been accrued until now? What are the timelines for this, the trial?

Would you like to take that, Carolyn?

Sure. Well, it is usually our policy not to give constant updates about the status of accruals. So I can tell you that this study is well over half accrued relative to the total enrollment we plan.

In terms of providing an update on the data, it could be fourth quarter this year or so. The endpoints in this tumor tend to take a while to develop because it is a tumor that has a fairly variable clinical course. As such, it takes a while to collect the data on means or medians, as you would want to report out. So I don't anticipate data on this study before the end of the year.

Okay, so how many -- before the trial was planned, how many patients did you plan for this trial?

We planned approximately 32 patients.

Okay. All right, thank you.

(OPERATOR INSTRUCTIONS) [Matthew Alamino] with Jesup & Lamont.

Jim, question regarding -- you made a comment that are still five patients in the multiple myeloma trial, which -- looking at the data -- there were 51 patients initially, 31 had relapsed.

What is the significance to the fact that there are still five patients out of 51 that are still in the trial? Obviously, they are receiving results from the medication. What is that significance?

Carolyn, do you want to take that?

Yes, first, there were a total of 60 patients enrolled, six-zero, not 51. So I don't know whether your data are old or --.

I'm reading your website, actually.

Okay. Well, we will update our website. As you rightly point out, there is a combination of patient types in this study, the relapsed patient, and that patient who is a so-called plateau-phase patient.

The relapsed patients tend to progress more quickly. The plateau-phase patients have a somewhat indeterminate course because they have reached some benefit from therapy but not total removal of their end component.

The five patients who remain on study are in the plateau-phase group. The significance of it for us is, I think, several-fold. One, I think the length of follow up we have these patients is quite remarkable for an initial Phase 2 study in a disease type, no matter what your looking at. Because we are up to over 60 months of treatment.

But more importantly for us, it gives us the very long-term safety database in a group of patients who are otherwise more typical of a stable patient population than the advanced cancer patient population that we normally get to work with. So we are pleased to be able to continue to collect the data.

Obviously for each one of those five patients, staying on Panzem has been a very good thing.

So it is hard, in a trial of that size and in the group of patients we are studying to give you (inaudible) definitive results (technical difficulty). Some of that will be discussed at ASCO, some of it will be discussed in the publications (technical difficulty) the investigators address that (technical difficulty).

Okay, great. All right, thank you so much. I have one more question regarding the valuation of the Panzem for rheumatoid arthritis. You had mentioned, Jim had mentioned that there were various collaborators with regard to that evaluation. Is that --? Are you bringing outside parties to help you evaluate that? Is there any type of elaboration on that process?

Matt, these are research collaborators, so that we can fully understand the mechanism for 2ME2 in RA versus perhaps the mechanism in oncology.

Okay.

Since the review group in the FDA is different for RA than it is for oncology, they will have plenty of questions that go to that disease specifically. So more information we have on mechanism, the better we will be.

Okay. Lastly, of course companies like yours, as we all know that have been in the business for so many years, at least on the securities side, is that the consumption of cash is always dramatic over a long period of time; and so therefore to the investors, the dilutionary impact of new rounds of financing. The concern, I guess, to me as an investor is continued rounds at lower levels. Can you address that? Can you just address that issue?

Well, I can tell you where we -- when we did the small round of financing at the end of last year, what we wanted to do was do just a sufficient amount that we would be in a relatively good financial position going into when this data stream would start rolling out. So that was the goal there.

We recognized that to get to where we were we had to do a number of financings. But right now, we are kind of moving on a course to try and execute on one or more partnerships, as the next step. In those kind of situations, we would be looking for upfront payments for more technology and/or equity payments and milestone payments, in the typical course that biotech companies have.

So what we're trying to do is have enough cash to carry us through the bulk of where these data are going to be coming out; to report on the results of the trials; and in the interim start to look for partners that will provide fresher, new sources of capital for the Company and go forward on that basis.

Okay, great. Thank you so much.

You're quite welcome.

If there are no further questions, I would like to turn the call back to Mr. Burns for closing remarks.

Well, really the closing remarks I want to make is, first of all, to thank you all for your continuing support of the Company, for following the Company. We have what I believe is an exciting year ahead of us, and the excitement is already building. I am looking forward to the results as you all are of these trials.

We are going to continue to work hard to stay on the guidance that we provide our shareholders and provide through the programs that we have benefits to patients, and then hopefully the financial benefits to all of our shareholders. So I just want to thank you all and that concludes my comments and the call for today.

Thank you. This concludes today's teleconference. Please disconnect your lines at this time and have a wonderful day.