CASI Pharmaceuticals Inc (CASI) 2007 Q2 法說會逐字稿

Good morning and welcome to Entremed's second quarter 2007 update call. At this time all participants have been placed on a listen-only mode. There will be a question-and-answer session prior to the conclusion of the call. It is now my pleasure to call over to your host, Mr. James S. Burns, Entremed's President and CEO. Mr. Burns, you may begin.

Thank you, and good morning, everyone. Welcome to our second quarter 2007 update conference call. Joining me on our call this morning is Dane Saglio, our Chief Financial Officer, and Dr. Carolyn Sidor, our Vice President Chief Medical Officer.

Before I 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 all to review the company's filings with the Securities and Exchange Commission including 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.

In addition, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, August 15, 2007. EntreMed undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

The purpose of today's call is to review our accomplishments for the first six months of 2007 including progress for our three clinical and two late-stage preclinical programs, update you on the company's financial status and operations, and provide an overview of our remaining 2007 milestones and business objectives.

At the conclusion of this update, we will open the lines for your questions.

Entremed is focused on developing drugs for the treatment of cancer and inflammatory diseases. We continue to channel our 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 to maintain this focus because these multiple pathways are particularly important in cancer cells that have developed very survival mechanisms. 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.

Today we are a mid-stage clinical development company with multiple product candidates in multiple Phase II studies. Throughout the first half of 2007 we have made consistent progress in achieving milestones and in building momentum with our clinical and late-stage preclinical programs. We continue to execute in our guidance, support our claims with clinical and scientific progress and strengthen our pipeline to mitigate risk.

Turning to our 2007 clinical progress, I would like to update you on the status of our programs and share with you our plans, going forward, and then I would like to discuss the progress and plans for our late-stage preclinical programs.

Starting off with Panzem NCD, one of our lead small-molecule anti-cancer drug agents -- this is an orally active, well-tolerated anti-cancer agent that has both anti-proliferative and antiangiogenic activities. Panzem NCD attacks tumor cells through multiple mechanisms of action and blocks the development of new blood vessels that feed tumor cells.

Panzem's mechanisms of action include apoptosis, or program cell death, tumor cell cycle inhibition at the G2M phase of mitosis, and disruption of angiogenesis through the inhibition of hypoxia induceable factor 1-alpha or HIF 1-alpha, a protein required for angiogenesis and cell survival under stress. HIF 1-alpha is overexpressed in more than 70% of human tumors and helps maintain cancer cell growth.

Through these mechanisms, Panzem has the potential to attack cancer cells through multiple pathways that affect the formation and replication of tumor cells and can interrupt the formation of blood vessels and nourish cells and sustain tumor growth.

Panzem NCD is currently in five multiple-Phase II clinical trials using a formulation developed with Elan drug delivery to enhance its bioavailability in cancer patients. We are currently completing a Phase II single-agent clinical trial in glioblastoma multiform patients at Duke University Medical Center Brain Tumor Center. Since glioblastoma has never been treated previously with Panzem NCD, the single-agent trial was designed to determine safety and potential activity of Panzem NCD in a recurrent GBM patient population.

As a single agent at GBM, we expected Panzem NCD to continue showing the favorable safety profile we have seen with this agent in prior studies to demonstrate modest anti-tumor activity and to demonstrate that the drug crosses the blood/brain barrier. Interim results from this single-agent study were presented in June 2007 at the American Society of Clinical Oncology ASCO annual meeting, and these data corroborated our expectations.

The Phase II open-label study of Panzem NCD was conducted in patients with recurring GBM who have failed prior therapies. Of the 27 patients enrolled in the study, 78% had received two or more prior cancer agents.

Reported results from this Phase II study included one partial response and one minor response. In addition, Panzem NCD was well tolerated with reversible transaminase elevations as the only grade 3 toxicity in more than one patient and no grade 4 toxicities. Although enrollment on this trial is closed, a patient still remains on study with good performance status.

Results from in vivo preclinical glioblastoma studies combining Panzem NCD with temozolomide demonstrated tumor regression compared with either agent alone. Furthermore, tumor regression took place when the tumors had reached a substantial size, often analogous to the clinical situation in this disease. These data encouraged Entremed and the clinical team at Duke to pursue a clinical trial for Panzem NCD in combination with temozolomide trademarked Temodar for patients with recurrent GBM.

A Phase II clinical trial combining Panzem NCD with Temodar was initiated in May 2007 at Duke University Medical Center in patients with recurrent GBM who have failed prior therapies. The purpose of this Phase II trial is to determine the safety and efficacy of the combination as second-line therapy.

Efficacy endpoints in the study include six-month progression-free survival and median overall survival. Positive results from this combination Phase II Panzem NCD/Temodar clinical study would provide the basis for evaluating the combination in a larger randomized trial. A larger randomized clinical trial could represent a possible registration strategy for Panzem NCD.

In June 2007, we also reported preliminary results from a Phase Ib study of Panzem NCD in combination with Paclitaxel, or Taxol also at the Duke University Medical Center in patients with metastatic breast cancer. The primary objective of the study was to evaluate the effects of standard Paclitaxel chemotherapy alone and in combination with Panzem NCD or biomarkers of hypoxia and angiogenesis in metastatic breast cancer.

Previous clinical studies conducted by the Duke team demonstrated that inhibition of HIF-1 alpha caused near complete destruction of tumor vessels and significantly improved radio sensitivity in radiation-resistant breast tumors.

The addition of HIF-1 alpha was thought to have the same or similar impact on chemotherapy-resistant tumors. HIF-1 alpha over-expression correlates with tumor aggressiveness, metastases and poor prognosis.

Despite the introduction of new therapies, breast cancer remains a significant health problem killing over 40,000 American women annually. A primary resistance mechanism to chemotherapeutic agents is thought to be the up regulation of HIF-1 alpha and Panzem is a potent inhibitor of HIF-1 alpha.

Interim results for 10 patients with clinical stage 4 or inoperable stage 3 breast cancer who received orally administered Panzem NCD in combination with Taxol were presented at the ASCO annual meeting in June. All 10 patients had received prior anthracycline therapy and nine also received taxane therapy. Patients also underwent sequential biopsies of their tumors to evaluate biomarkers of hypoxia and angiogenesis.

Of the 10 patients evaluated at the time the results were presented, all 10 patients completed four weeks of therapy and seven of the 10 patients had completed eight weeks of therapy. Among the 10 evaluable patients there was one complete response, one partial response, and one patient with a 30% reduction in tumor volume. Changes were observed in HIF-1 alpha regulated proteins including tissue VEGF, VEGF receptor 2, plasma PAI-1, and osteopontin.

Based on these findings, enrollment is continuing to further define the relationship between 2-ME2 therapy and the effects on these biomarkers with the goal of identifying patients who would benefit most from 2-ME2's unique mechanism of action.

We also have a Phase II multicenter study underway to evaluate the safety and efficacy of Panzem NCD in combination with Genetech's Avastin in metastatic carcinoid tumor patients. Carcinoids are tumors of neuroendocrine origin with 85% of carcinoid tumors developing in the gastrointestinal tract. Combining two agents with antiangiogenic activity represents a novel approach to treatment, which may result in improved antitumor activity versus either antiangiogenic agent alone.

Enrollment on the study, which is being conducted at Dana Farber and other Harvard cancer centers is complete. We anticipate the presentation of results in early 2008.

A multi-center Phase II clinical trial in patients with recurrent or resistant epithelial ovarian cancer is also currently underway. The primary objectives for this single-agent Phase II 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 now closed to enrollment, and we anticipate presenting results later in the year. A multicenter Phase II study to assess the antitumor activity, safety, and pharmacokinetics of single-agent Panzem NCD in patients with hormone refractory prostate cancer is also underway.

Earlier this year we commenced a multicenter Phase II 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. The study is enrolling patients at several U.S. sites.

Beta for the Phase II study in a multiple myeloma patients receiving our original Panzem in capsule formulation were also presented in June at the ASCO meeting. Sixty patients with relapsed or plateau phase multiple myeloma were enrolled in the study and results demonstrated prolonged stable disease and minor responses. Four patients continue to receive Panzem capsules including two patients with plateau phase disease who have been on the study for over four years without disease progression.

Our Panzem NCD clinical trial strategy has been based on selecting indications where we, one, have seen prior activity in patients; two, have solid results in preclinical studies; and, three, can match Panzem's mechanisms with specific indications that are known to express elevated levels of tumor-specific proteins such as HIF-1 alpha.

As a result, we have pursued tumor indications where our multiple mechanisms of action provide a competitive advantage and could provide proof-of-concept data to support the design of pivotal trials. We have also pursued orphan drug designation for GBM, ovarian cancer, and multiple myeloma as part of the strategy.

Furthermore, we have been positioning Panzem NCD as a combination therapy with approved antiangiogenic and cytotoxications. Our preclinical studies have shown that Panzem as a cytostatic agent with a favorable safety profile has an additive or synergistic effect on tumor inhibition when used in combination with radiation or approved chemotherapeutics at their maximum tolerated dose without an increase in toxicity.

This is a unique feature that we intend to continue pursuing throughout Penzem's clinical development. Our ultimate commercial goal is to develop a safe but potent HIF-1 alpha inhibitor that can be used in combination with approved agents and/or in combination with radiation therapy.

Now moving on to MKC-1, our second lead product candidate, MKC-1 is a novel orally active cell cycle inhibitor with in vitro and in vivo efficacy against a broad range of human solid tumor cell lines including multi-drug resistant cell lines. In previous studies, MKC-1 demonstrated broad-acting anti-tumor effects including tumor growth inhibition or regression in multiple preclinical models even impact the Taxol-resistant models.

MKC-1 has been shown to inhibit mitotic spindle formulation, prevent chromosome segregation in the M-phase of mitosis, and induced apoptosis. MKC-1 showed potent dose-dependent activity against a variety of cell line derived from cancers of human blood cells and inhibited growth of primary cells derived from acute and chronic myelogenous leukemia, AML and CML patients, in vitro.

MKC-1 has also been shown to inhibit PI-3 kinase and emptor pathways by inducing a dose-dependent reduction in the level of the activate forms of the oncogenic kinases AKT and phospho-70s6k. These signaling pathways are strongly linked to cancer proliferation and survival.

Additionally, MKC-1 showed enhanced activity with cytosine arabinoside, or ARA-C in combination studies in vitro when added either simultaneously or sequentially in an AML cell line.

MKC-1 induces apoptosis and hematopoietic cell lines in patient samples through a complex mechanism involving the rest of the cell cycle and disruption of multiple oncogenic survival pathways. A multicenter Phase II study with MKC-1 for the treatment of metastatic breast cancer is currently underway in patients who have failed prior conventional therapies.

MKC-1 has received a favorable review of 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 previous clinical studies by the early developer of MKC-1 revealed substantial toxicity at a higher dose and shorter administration schedule. We believe that the toxicity seen in earlier clinical trials has been ameliorated with the current 14-day dosing schedule.

Patient accrual is continuing on this study, and we anticipate presentation of interim results during the third quarter of this year.

A multicenter Phase I/II study of MKC-1 is also underway in combination with Alimta in patients with non-small-cell lung cancer, which is being led by the Indiana University Cancer Center. We have moved to the Phase II portion after selecting an MKC-1 dose that can be combined with standard dose Alimta.

Our clinical development program for MKC-1 is progressing well. We recently received a no-objection letter from a therapeutic products director at Health Canada for our clinical trial application to conduct a clinical trial in leukemia patients. A Canadian clinical trial application, or CTA, is similar to a United States investigational new drug IND application. This is an important milestone for us as it represents our first regulatory submission to Health Canada and provides us with the opportunity to expand clinical studies with MKC-1 to institutions outside the United States.

Following approval of the CTA we announced commencement of a Phase I study for MKC-1 in leukemia patients at the Princess Margaret Hospital University Health Network Toronto, Canada. By year-end we anticipate the initiation of additional Phase II clinical studies with MKC-1 in pancreatic and ovarian cancer patients.

Turning now to ENMD-1198, our third clinical candidate, this is a new chemical entity based on a modified chemical structure of 2ME2, which was designed to improve the metabolism of 2ME2 while retaining its multiple mechanisms of action including induction of apoptosis, G2 Emerest and inhibition of HIF-1 alpha. In preclinical studies, ENMD has been shown to be a potent orally active anti-mitotic agent that leads to arrestive cell division apoptosis in tumor cells.

ENMD-1198 also exerts the anti-angiogenic activity that further contributes to its overall anti-tumor properties. Based on extensive preclinical studies, ENMD-1198 appears to be a novel anti-cancer compound in terms of both its activity and safety profile. A Phase I dose-escalation clinical trial is currently underway to evaluate the safety tolerability, pharmacokinetics and clinical benefit of ENMD-1198 in patients with advanced cancer.

Patient accrual continues for this dose-escalation study, which is being conducted at the University of Colorado. We anticipate presentation of data from this Phase Ib study in 2008 and expect those results to guide our Phase II development program for 1198, which we anticipate commencing in 2008 as well.

Turning to our preclinical pipeline, in addition to the oncology clinical trials, which I've just reviewed, our preclinical pipeline consists of two very promising late preclinical programs for which we expect to submit IND applications before the end of this year; namely, Panzem for rheumatoid arthritis and ENMD-98-1693, our Aurora Kinase inhibitor for oncology.

As we have discussed previously antiangiogensis is a major component of the pathology of inflammatory diseases such as rheumatoid arthritis. With this understanding of RA disease pathology together with the angiogenic inhibitory mechanism of Panzem and its favorable safety profile, we have completed multiple clinical studies with Panzem in rheumatoid arthritis models.

Based on results from these studies, we have established that Panzem not only has anti-inflammatory effects but, more importantly, has potential as a disease-modifying anti-rheumatic drug, or D-MARD. D-MARDs 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 2ME2 treatment on inflammation and disease progression in well-accepted RA models.

Blinded radiographic and immunohistochemical results from these preclinical studies have shown a consistent inhibitory effects in the hallmarks of the disease including the inhibition of highly angiogenic pannus tissue, infiltrating cells, cartilage lesions, and bone resorption.

In addition, we have seen a synergistic effect with Panzem in combination with methotrexate, a current standard-of-care RA treatment.

Since we last reported on our progress in RA we have conducted a series of preclinical studies internally and with collaboration to confirm that Panzem's activity in RA is based, in fact, on its antiangiogenic properties. We have also continued to evaluate how Panzem activity differs from standard RA treatments. Since Panzem represents a potentially new class of disease-modifying rheumatoid arthritis drug candidates, an understanding of Panzem's safety history and mechanisms will be important components of our IND submission.

We are optimistic about the potential for Panzem in RA. Based on its antiangiogenic activity and safety profile, we believe there is a compelling opportunity for 2ME2 to become a first-in-class, oral, nonimmunosuppressant D-MARD for the treatment of RA. We are continuing to invest in the development of Panzem for rheumatoid arthritis potentially adding a multi-billion-dollar market opportunity to our pipeline. We remain on track to file an IND by the end of this year.

Now moving back to oncology, the lead compound of our kinase program, ENMD-98-1693, a dual-acting Aurora kinase inhibitor with a unique, multi-kinase profile and mechanism of action is currently in preclinical IND directed studies for oncology.

Aurora kinases are known to be involved in the process of mitosis, critical to maintaining tumor growth. Our Aurora kinase angiogenesis inhibitor, ENMD-98-1693, induces G2M cell cycle arrest and apoptosis and inhibits angiogenesis. It is a potent inhibitor of Aurora -- excuse me -- it is a potent inhibitor Aurora-A, which induces apoptosis versus Aurora-B, which induces polyploidy that leads to mitotic catastrophe, a cell-altering mechanism that does not lead directly to cell death.

ENMD-98-1693 also targets an important constellation of angiogenic kinases including a VEGF, PDGF, FGF, and KDR, which contributes to a substantial antiangiogenic activity. Preclinical data demonstrates that ENMD-98-1693 has potent activity in multiple preclinical tumor models. Specifically, we have demonstrated that our Aurora kinase angiogenesis inhibitor can induce tumor regression in preclinical models of colon, breast, and leukemia cancers.

During 2007, our development program for ENMD-98-1693 has been focused on furthering the scientific understanding of its antitumor and antiangiogenic mechanisms. In addition, we have been conducting IND directive studies leading to an expected IND filing in the fourth quarter of 2007.

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

With those remarks on the clinical programs, I'd like to turn the comments over now to Dane Saglio, our CFO, who will provide you with a brief update on our financial situation. Dane?

Thank you, Jim. I would like to provide just a brief overview of the current financial position and also the results for the first six months.

On August 8, 2007, we filed our report containing financial results for the first six months ending June 30, 2007, on Form 10-Q. The company reported net loss of the first six months 2007 was $15.6 million, or $0.19 per share as compared to $40.7 million, or $0.59 per share 2006. The 2006 loss included noncash charge of $29.5 million resulting from the acquisition of Miikana Therapeutics in January of 2006.

Our 2007 R&D expenses reflect investment in the company's clinical programs for Panzem NCD, MKC-1, and ENMD 1198 as well as pre-IND investment in our key preclinical programs. We expect net cash expenses for 2007 to be approximately $30 million or less, which is reflective of our multi-product clinical development program.

As of June 30, 2007, the company reported cash and short-term investments of approximately $38 million. We believe that our cash and short-term investments and royalty revenue from Celgene's sale of Thalomid, which is largely booked in the third and fourth quarters will be sufficient to fund planned operations into the second half of 2008.

Okay, thank you, Dane. So I'd like to spend the last part of my prepared remarks discussing our accomplishments, to date, and where we look like we're going to be going for the rest of the year.

In the beginning of 2007, we established and reported aggressive milestones for the achievement of our clinical and preclinical programs. We are now halfway through 2007, and I am, once again, pleased to report that we on track with our guidance and for the third consecutive year anticipate achieving all the objectives we set forth earlier in the year.

Today we have met the following milestones -- one, presented interim data from the following studies -- Panzem NCD, Phase II study in glioblastoma single agent, Panzem NCD Phase Ib combination study with Taxol in metastatic breast cancer, and Panzem capsule Phase II data in multiple myeloma. We also initiated a Phase II Panzem NCD combination study with Temodar and glioblastoma, and we initiated a Phase II Panzem NCD combination study with Sutent in renal cell carcinoma.

We expect to continue emphasizing our later-stage programs comprised of two oncology product candidates in multiple Phase II clinical trials, a third oncology product candidate in Phase I trials, as well as our later preclinical rheumatoid arthritis and Aurora kinase programs that are headed toward IND submissions in 2007.

We've established aggressive goals for this year in order to advance these programs. For the remainder of 2007 we expect to present interim data from the following studies -- MKC-1 Phase II study in metastatic breast cancer, MKC-1 Phase I/II combination study in non-small cell lung cancer, and Panzem NCD Phase IIb food effect study.

We also plan to initiate MKC-1 Phase II studies in pancreatic and ovarian cancers. We plan to submit IND applications for Panzem to treat rheumatoid arthritis and for ENMD-98-1693 for us in oncology. We will present additional clinical data on Panzem NCD and MKC-1 at several scientific meetings in the fourth quarter of '07, and as we get closer to that, we'll provide a bit more detail on those meetings.

And then we'll continue to seek a partnership for our dual-acting Aurora kinase inhibitor, and shortly we'll commence partnership discussions on one or so other programs to start to move those along.

We continue to pursue a strategy focused on developing small molecule oncology drugs such as Panzem NCD, MKC-1, ENMD 1198, and our principal preclinical 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 multiple-product candidates and multiple clinical trials provide us with opportunities to succeed and, at the same time, mitigate the development risk associated with a narrow pipeline.

As we obtain the results from the clinical trials that are currently underway, we will evaluate the data and further refine the focus of our clinical efforts on programs and indications with the greatest opportunity to develop a clear-cut registration directive strategy and for which there is a significant commercial value proposition.

For example, in the case of Panzem NCD for oncology, we would move forward in randomized, registration-directed clinical trials in one or, at the most, two indications. We will also seek co-development partners for one or more of our core programs and licensing partners for noncore programs. In addition, we will continue to look selectively at acquiring technologies or product candidates that fit our strategy.

We currently retain commercial rights to all of the compounds in our pipeline so we have the flexibility to determine which programs to seek strategic development or commercial alliances. Ultimately, our goal is to commercialize a portion of our pipeline on our own and in combination with pharmaceutical or biotech partners.

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 are making progress on multiple fronts, and I look forward to keeping you informed of our progress. And thank you all so much for your continuing interest in and support of Entremed.

Operator, we'll now open the line for any questions.

Thank you. (Operator Instructions) Ren Benjamin, Rodman.

I may have one or two questions -- starting with Panzem. You completed the Phase II GBM trial, and you announced some results. I believe you reiterated in this conference call one PR and one MR. Can you comment on how long the duration was of those responses and whether you plan on moving forward with a single agent -- moving Panzem forward in GBM as a single agent?

As usual, Ren, I will turn the clinical question over to Carolyn.

Good morning. The two patients that you're referring to in our GBM study, initial PR patients that was the subject of a poster that was presented at ASCO was on study for eight-plus months -- somewhere between eight and nine months -- before he went off the progressive disease. The second patient I cannot comment on because he's still on.

Okay, and then about moving -- you know, based on these results in your talks with, say, the physicians who are involved in the trial, is this still a viable option as far as moving Panzem forward?

Yes, I think all options in terms of 2ME2's activity and GBM have to be considered and weighed. Obviously, if this turns out to be the indication that we pursue most aggressively, we would do more than one study because that's the way you would cover the entire market. So I think in light of the fact that we have responses with a single agent, we have to have that as part of the consideration and dialog.

Okay. Regarding the NCD temozolomide studies for the combination study, how is enrollment going in that and when would we expect to see data there?

You've asked that question a lot, and I always give you the same answer -- that we don't really comment on the rate of enrollment within a specific trial. However, we've had very good experience with the Duke physicians, and this study continues to do well. It's only been open for three months, so it's obviously premature to talk about the kind of endpoints that Jim alluded to that are part of this study.

If you look back and track the single-agent study, you'll see it took about a year for us to [inaudible] it and get the data to the point where we felt comfortable presenting it. I don't see why this study should be any different.

Gee, I think I got a little bit more information this time even though it was the same question.

[laughter]

Keep trying.

You're wearing her down, Ren.

Right, right. In the NCD metastatic breast cancer study, you mentioned that several biomarkers were -- you'd seen, I guess, a decrease in several of the biomarkers. How did that decrease correlate with response?

Yes, the numbers are too small. Either patients for which we have tissue versus the patients -- for example, I'll just give you one example -- one of the patients had a complete response, so there was nothing to biopsy. So that patient's ability to correlate what we were looking for back to response obviously was missing.

And the numbers in the others is essentially two other patients we'd be talking about, and they're just too small to make any statement at this point. That's why the study is continuing, and we're going to enroll additional patients. I think we just need more data.

And then I think you had mentioned the carcinoid study results in early 2008. The ovarian cancer study is close to enrollment and data by 4Q06, and then the HRPC study, I believe, there wasn't really much of an update. Can you give us -- I'll ask you the enrollment question again, but can you give us any sort of additional details on how that's going?

Yes, it's a larger study, so I would think it would be well into 2008 before we would have data. Again, it's one of the studies in hormone refractory -- taxotere refractory prostate cancer population where the only real meaningful endpoint is survival. So it just takes a little bit longer to get there than other endpoints.

So I think it certainly is going and enrolling nicely, but it will probably be until next year before we'll be talking about giving guidance on when data will be available on that study.

And just to clarify, I think you said something about fourth quarter 2006. It's actually fourth quarter 2007 when we'll be talking about the ovarian study. Enrollment in that trial, I think, as Jim mentioned, is complete. So we should have fairly mature data for presentation later this year.

Okay, great, and thanks for the correction. The renal cell combination study -- how many patients do you plan to enroll for that study and then when would you expect that to complete?

That is a two-armed study. They're parallel groups, so they don't compete with each other for enrollment. There's one group of patients who have failed, who tend to -- who will get 2ME2 as a single agent. And the basis for why we chose to do that is one arm of the study is because of a prolonged stable disease patient that we have on our Phase I study.

The second arm of that, which runs in parallel is some of the patients who begin to fail on Sutent where 2ME2 is added to their regimen, and the rationale, I think, Jim went over in your presentation, is if part of the mechanism of failure is due to over-expression or up regulation of HIF-1 alphas, and the addition of 2ME2 might restore some of the responsiveness.

Each of those stands on its own as a two-stage design with a go, no-go decision after approximately the first 20 evaluable patients. Again, that study is enrolling. It's going fine. There are several sites that are going to participate, but I still think it will be into the next year, and part of our guidance next year is to when you can expect to see data.

Okay, so just so I'm clear - the go, no-go decision will be made sometime next year?

Yes.

Okay. Switching gears slightly to MKC-1 -- you mentioned that the interim results for the breast cancer study will be available in the third quarter of this year, and regarding the [inaudible] combination trial, you mentioned that you had moved on to the Phase II portion. So I assume, obviously, a dose has been selected, and could you tell us that dose? Is it different from breast, and did you have to see -- you know, was that a two-stage design as well in that you had to see a certain number of responses before moving on to the second portion?

Let me address the lung cancer study design first. There is a Phase I and a Phase II portion. The Phase II portion has two stages. The design that was determined to be able to be used in combination with Alimta is lower than the breast cancer single-agent, as you might expect. Instead of 125 mg per liter squared twice a day, we're doing a dose of 75 mg per liter squared twice a day, but it's schedule-dependent as well. This is a two-week on, one-week off schedule instead of a breast study, which is two and two -- two weeks on and two weeks off. So the schedule is shorter, and the dose is lower.

And when might we, based on current rates, when might we be able to see data from that as well?

The Phase II portion is in two stages. The first stage is looking at response, but the second state, which I think is of much more interest, is looking to progression-free survival. Obviously, 2008, I think, for both stages, probably early 2008 for the go, no-go decision later in the year for information on progression-free survival.

And what kind of response rate would you want -- well -- I mean, in this two-stage portion of the trial, do you need a particular response rate in order to continue to enroll and follow patients, or you're just looking at both response rates and PFS?

The third stage to go on with the second stage, there does need to be a responder in the first 17 patients, and we did that because even though the response rate with single-agent was extremely low, we still wanted to have some evidence of activity in the combination to warrant it. So there is a go, no-go decision.

So is it a CR or can you be a PR?

It can be a PR.

[Steven Quitman], Private Practice.

Congratulations, first of all. The longer your presentations are the better everything sounds. That's wonderful news. I read recently about an Entremed patent application for a combination of 2ME2 with various types of cancer treatments, and they included chemotherapeutics, angiogenesis inhibitors, kinase inhibitors, as well as HDAC inhibitors. So my first question on that is -- would Entremed ever consider combining Panzem NCD with its own multi-kinase inhibitor or its own HDAC inhibitor?

We could if any of those were approved. The goal in the beginning would be to combine Panzem with already-approved agents in combination and proceed that way, and then at some later date, if any of the other compounds do get approved by the FDA then that's certainly a possibility.

All right, and I have another question about Elan -- back in January '06 is when I think Entremed announced their agreement with Elan for the production of Panzem NCD for clinical trials. At that time, they said something about within a year there would be some kind of an announcement regarding an agreement with Elan about production of Panzem NCD for commercial purposes. I haven't heard anything further after that initial announcement. Where will Panzem NCD be coming from as we, hopefully, move toward commercialization?

The agreement that we announced last year was for clinical supply of the drug product -- so Panzem NCD. The agreement we referred to coming in the future was a commercial supply agreement, so at such time as we start to move into larger randomized trials and get closer to the market, then we will move into that agreement and operate in late Phase III and into commercial -- [inaudible] commercial agreement.

So currently the clinical supply agreement covers us for our needs at the present time.

Okay, and my last question has to do with our old friend, Oxford Biomedica. When Entremed made the agreement with them -- well, actually, with Children's Hospital regarding Endostatin, it was said that Entremed could receive royalties or -- actually, 20% of future agreements between Children's Hospital and anybody who wanted Endostatin outside of Asia. And now Oxford Biomedica apparently has a new agreement with Children's Hospital for the Endostatin gene for cancer trials, which is going beyond their initial high usage for Endostatin gene. So I was wondering if there is any essential future benefit financially for Entremed with this new agreement that Oxford Biomedica has made with Children's Hospital?

It's a good question, but since that agreement precedes my time with the company, I'm going to turn it over to Dane.

Okay.

There is, indeed, an agreement that we had a sort of a vested interest in any future proceeds that would come from re-licensing. We were developing the proteins. There is a question to whether or not the gene application for oncology would be within our bundle of rights, and we're actually looking at that now, and we have been talking briefly with Children's on the topic. There has been no conclusion reached at this point.

(Operator Instructions) [Woodrow Jabor], A.G. Edwards.

Yes, my concern is that I've been a shareholder for many years, and during that time, of course, lots of money has been lost in this company's stock by investors. The stock is within a few pennies of its all-time low, and I realize that everybody is working there for the success of the company, but an indicator to the market of the confidence of the management of the company and the directors of the company would be open-market purchases of the common stock of the company.

The shares owned by the directors and the senior management of the company outside of options granted ultimately by the shareholders is virtually minuscule, virtually non-existent. My question is why has that step not been taken to show confidence to the market and to long-term investors of the company?

Well, I can't speak for others, but I can tell you that I have purchased stock in the company in an open-market basis and will likely continue to do so.

That may be true, but I think that in the last couple of years there has been none, or purchases that you made have been very, very small. I think that, again, confidence could be shown in the company's future by directors and management by somewhat larger purchases, especially based on the compensation of the senior executives of the company.

Yeah, I appreciate the comment and the suggestion, and I'll tell you what I would do -- I'll go back and look at my own holdings, I will discuss this with my team, and then at our next board meeting, I will bring up this issue with the other directors.

Thank you.

Ren Benjamin.

For the ENMD 1198 update, you mentioned that the Phase Ib data would probably be available, I think, in early 2008. Does that represent a delay from what -- how we were thinking about the trial previously, because I thought I had in my notes that it would be data that could come out by the second half of '07, and if that's true, do we view that delay as good news in that that since it's a dose-ranging study the increased doses don't seem to be triggering a maximum tolerated dose.

Yes, if you recall, 1198, when we went into the clinic, there was a discrepancy in our animal tox studies that suggested that the toxic range in humans could be low or high without getting into specific numbers meaning more like what we saw in our rat toxicology studies and less like what we saw in our dog toxicology studies.

So the range of doses that had to be evaluated in the Phase IV study were larger than what you would most often get in a Phase I oncology program where exposure in both dogs and rats are somewhat consistent with where you see toxicity.

We have covered, through the rat range and that's probably what your original notes referred back to, that if we ran into toxicity in humans at the same exposure where we saw toxicity in rats, we would have been there by now. So I think your conclusion that we're moving to higher doses is an accurate one, and we're doing that because we have yet to encounter anything close to an MTD.

Got it. Regarding the HDAC inhibitor program, how is that going and how is that moving forward?

We're still spending money on it, but on a comparative basis, Ren, we're not spending as much as we have been on the Aurora kinase program.

Okay.

As in terms of prioritization we made the decision about a year ago to really push forward heavily on the Aurora kinase, and we're seeing the results now. So come next year, we'll have to turn our attention back to HDAC.

Okay. And then one final question, and it's probably more of a management sort of a question -- or bigger-picture sort of a question -- a lot of people can view the company as a small cap company with several different shots on goals and multiple ways to get to the end goal. And then, of course, you can view it as a company that's spreading themselves too thin, and you have three or two main products but then in a whole slew of different indications essentially trying to find a home.

So I guess the bottom line is how do you manage it all, and do you envision it all sort of tapering in once you start getting these go, no-go decisions -- the go, no-go decisions start coming in, do you feel that the programs will start to come sort of more in line and more manageable or do you think it's manageable now?

A great question -- and right now I think it's manageable, and we have been embarking upon a strategy, which is specifically designed to have a sufficient number of compounds in the clinic and in the late-stage preclinical so that we had multiple opportunities for success and to mitigate the downside risk of oncology development, which everybody knows is pretty risky.

At the current time we have sufficient staff and capabilities and financial resources to be able to take the programs we have in place and move them forward. But we are going to get to the point probably later in the year or early part of next year as the trials mature and the data start coming out, we will start to narrow down.

So at that point in time, we will start to narrow down the indications. We may even narrow down the programs and start to really concentrate our resources on places where we think we have a compelling commercial opportunity. And we wanted to do that on the basis of data and once we have that data we can make some well-informed decisions and as I mentioned in my comments, as well, we are starting to also bring one or several of these programs forward for discussion with corporate partners.

So I think 2008 is going to be the time where we start to do indication narrowing, perhaps program narrowing, and depending on the outcome of the discussions with potential corporate partners, we'll see which ones we move forward with or not, because as we get into larger studies, obviously, they will require more financial and other resources.

So I think your question was appropriately times.

Thank you. I would like to turn the call back to Mr. Burns for closing remarks.

If there are no further -- again, I'd like to thank you all for your participation today and thank you for your continuing interest in Entremed. We are continuing to work hard to make these programs and these product candidates commercially viable, and you have our assurance that we are not letting up from that sense of urgency and activity. And on that, I just thank you all for that support, and this concludes today's teleconference.

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