CASI Pharmaceuticals Inc (CASI) 2007 Q4 法說會逐字稿

Good morning and welcome to EntreMed's Company update call. At this time all participants have been placed on 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, ladies and gentlemen. Welcome to EntreMed's Company update conference call. Joining me on the call this morning is Dane Saglio, our Chief Financial Officer; Dr. Kenneth Bair, our Senior VP research and development; and Carolyn Sidor, our Vice President and Chief Medical Officer. Before we begin I'd 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 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. I've been reminded also to mention that the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, March 13, 2008. EntreMed undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

Now that I've had the required statement out of the way, let me begin by saying that our entire management team is aware of the recent downward pressure on our stock price. Market conditions over the past several months have been volatile and EntreMed's stock has been no exception. However, I remain confident in the Company's prospects and in our capabilities. We are in a strong position financially, we have a focused pipeline of promising drug candidates, and we have the team to move these programs forward. Consistent with our strategy we have reviewed the potential for the programs in our pipeline with a view towards selecting the most promising candidates to pursue while keeping in mind the ride out to current Market volatility. The plan tor 2008 that I will discuss with you today is both consistent with these objectives and, as I believe, will keep us on a positive track toward creating shareholder value. During this call, I will elaborate on our program plans and milestones for 2008.

As a clinical stage pharmaceutical company developing novel multimechanism drugs for the treatment of cancer and inflammatory diseases our goal has been to develop and commercialize orally-administered small molecule drugs that have both antiproliferative and antiangiogenic activities. We currently have four product candidates in clinical development that are based on these mechanisms. EntreMed's goal with these four product candidates has been to rigorously test and evaluate them, both as single agents and combined with other approved chemotherapeutic drugs in order to build sufficient early clinical data with which to make a larger and more selective investment in specific programs. In rebuilding our pipeline over the past three years, three oncology programs moved into Phase 1 and Phase 2 trials, and we have recently had two INDs accepted by the FDA for clinical development, one of which is the result of our clinical oncology efforts.

We have built our pipeline through a combination of internal development and acquisition to provide the opportunity for us to refine our internal focus or seek pharmaceutical partners to develop programs that would take greater resources to develop than we have currently. We will also continue to look selectively at product or company acquisitions that could build shareholder value. We have now reached the point in our strategy where we need to concentrate and focus our efforts on a smaller number of programs, essentially a greater concentration of resources behind a fewer number of promising opportunities. This is not only prudent from a strategic perspective, but current Market uncertainties limit the near-term financing opportunities available to micro cap companies.

As such, we are proceeding forward in 2008 with three very focused objectives in mind: Namely, to concentrate our resources on fewer programs to provide a more direct path forward to product registration and ultimately to the Market; to conserve cash by funding essentially -- essential priority program activities and deferring new program initiatives;and three to expand our partnering activities across our clinical programs. In keeping with our prioritization objective we will target our investment in three of the oncology programs, specifically MKC-1, ENMD-1198, and ENMD-2076. Our selection criteria are based on product candidates that show potent antitumor activity across multiple indications, have single-agent activity that can induce significant tumor inhibition regression, that work through antiproliferative and antiangiogenic mechanisms that are relatively easy to formulate and that have acceptable cost characteristics.

We are in a good position financially such that we can devote the effort necessary to advancing our priority programs further into clinical development. In our recent 10-K filing with the SEC we reported $47.7 million in cash at the end of 2007, plus a receivable of $3.9 million from 4Q '07 royalty revenues. Our net cash expenditures for 2007 were less than $24 million. In keeping with our cash conservation objective we intend to manage our net cash expenditures at approximately the same level in 2008 as in 2007. As a result, we should have sufficient cash resources to take us well into 2009.

With respect to our business development objective we intend to expand our efforts in seeking a corporate partner for one or several of our oncology programs. We currently have full worldwide commercial rights to all of our product candidates. We have strong intellectual property protection, including composition of matter for all of our compounds, and they are backed by solid preclinical data packages that provide an informed direction for our clinical development efforts. In 2008, we will pursue development and our out-licensing partners to accelerate their development, offset the cost of larger clinical trials, and strengthen our own development capabilities. We are seeking one or more partnership opportunities with pharmaceutical and biotech companies for a number of our programs, including ENMD-2076 and MKC-1 for oncology and Panzem® for rheumatoid arthritis.

The reprioritization of our clinical portfolio strengthens our product focus and enables to us direct resources toward our highest potential clinical oncology programs. We believe that MKC-1 , ENMD-1198 and ENMD-2076 fit the development criteria that I described earlier. All three compounds have shown good single-agent activity, are druggable, demonstrate significant antitumor activity in multiple models, and have strong intellectual property positions. ENMD-2076 and 1198 product candidates were discovered internally while MKC-1 is licensed from Roche. EntreMed retains exclusive worldwide rights to all of these compounds. In addition, this prioritization of our pipeline is based on what we believe are more favorable economics for our oncology programs in terms of clinical trial costs, projected cost of goods, ease of formulation and competitive positioning. We intend to limit our expenditures on Panzem® NCD and oncology.

We have reached a point in this program where we would need to commit a larger -- commit to larger randomized Phase 2 and 3 studies. While we have seen modest antitumor activity across most of our clinical studies there is not yet a clear development path that would allow us to narrow the indications that we would pursue in the next series of studies. For example, we have multiple carcinoid patients who remain on drug for periods ranging from 12 to 18 months, on the ovarian trial 14 months, on GBM single-agent and combination trials for periods ranging from eight to 13 months, and on the metastatic breast cancer trial for up to ten months. Panzem® for oncology is a drug candidate that needs to be developed in combination with other chemotherapeutic agents, but we would need to conduct further nonrandomized trials to clarify which combinations and for what indications. Furthermore the high doses required for use in oncology would necessitate a substantial parallel investment by EntreMed to address process development, scale-up and other CMC issues earlier in the clinical development process than we believe is prudent for us to tackle at this stage.

In order to deal with these issues, we would need to commit a disproportionate amount of our resources to conduct a more clinical and CMC development using 2ME2, significantly limiting our clinical development efforts on the remainder of our pipeline. Therefore, we have decided to discontinue the 2ME2 oncology program with the exception of continuing to supply to 2ME2 to patients still on our clinical trials. We do believe, however, that our investment and experience in 2ME2 for oncology can be directed to nononcology applications. As a result, we plan to move 2ME2 forward in rheumatoid arthritis, based on our preclinical research effort and the knowledge gained on 2ME2 during its oncology development program. We pursued the evaluation of 2ME2 for rheumatoid arthritis due to its favorable safety profile, as well as its antiangiogenic and antiinflammatory properties.

Results from five separate preclinical studies demonstrated that 2ME2 has disease modifying or [demared] activity. These preclinical studies have shown consistent [enhematory] effects on the hallmarks of the disease, including the inhibition of highly angiogenic panis tissue infiltrating cells, cartilage lesions and bone resorption. We have also seen an additive effect when 2ME2 is combined with Methotrexate, a current standard-of-care treatment for rheumatoid arthritis. Recently we announced the IND for 2ME2 in RA has been accepted. Submission of the IND was a major undertaking for EntreMed. The IND package included an extensive human safety dossier in 300 patients from our oncology studies that was a significant component of our submission.

We believe that Panzem® for RA represents a safe, orally-administered, small-molecule alternative to current biologicals that could contribute to the treatment paradigm for patients with RA. Based on 2ME2's demonstrated safety profile and activity in oncology patients, its mechanism of action and its activity in preclinical RA models we believe that Panzem® represents a first-in-class opportunity in a large multi-billion-dollar global market. Acceptance of the IND for Panzem® in RA represents a key development milestone and adds a potential crossover asset to our pipeline. Rheumatoid arthritis affects over two million adults -- American adults alone, of which about two-thirds of them are women. Unmet need still exists in this market, particularly for safe, orally-administered products. While we have the capabilities and resources to conduct early clinical development activities, our goal for this program is to seek a development or license partner to manage the longer-term development in RA, particularly for large multiarmed Phase 2 and Phase 3 studies.

Now I'd like to turn to a review of the pipeline of oncology product candidates that we intend to focus on in 2008 and bring you up to date on our progress with these programs. I'll start off with MKC-1, which is a novel orally-active cell cycle inhibitor with in vitro and in vivo efficacy against a broad range human sala tumor cell lines, including multidrug resistant cell lines. Data from previous studies with MKC-1 demonstrate broad acting antitumor effects showing tumor growth inhibition or regression in multiple preclinical models, including paclataxil resistant models. MKC-1 has been shown to inhibit mitotic spindle formation, prevent chromosome segregation of the M phase of the mitotic cycle and induce apoptosis. Furthermore, MKC-1 inhibits the AKT MTOR path -- signaling pathway, which we believe occurs through inhibition of the MTOR rictor pathway. The PI3K ACT MTOR pathway is the most frequently mutated pathway in human tumors and mutations have been shown to promote tumor regression and decrease survival in cancer patients.

MKC-1 was originally discovered and developed by Roche and eventually licensed by Miikana Therapeutics. Following our acquisition of Miikana we extended MKC-1 preclinical database to identify combination approaches and new oncology indications and refined our understanding of the role of important beta and MTOR pathways in MKC-1's mechanisms. We have extended our clinical experience with MKC-1 beyond the early breast and lung cancer trials initiated by Roche and now into hematological cancers and we are exploring alternate dosing schedules based on our preclinical findings. We have added new indications supported by information on the compound's mechanism of action. In connection with our license with Roche we have also secured sufficient drug substance to conduct our clinical trials for foreseeable future, a situation that precludes our need for substantial near-term manufacturing and process development cost. In addition, EntreMed has exclusive worldwide rights to MKC-1 .

We currently have five clinical trials underway with MKC-1 including single-agent and combination studies with approved chemotherapeutics in various cancer indications. In addition, we are evaluating schedules that had not previously been evaluated in the Roche Phase 1 program in order to take advantage of additional data on MKC-1's mechanism of action discovered at EntreMed. We have commenced multiple Phase 2 studies in indications where activity was seen in earlier studies and a Phase 1 study in leucemia. Based on preclinical data and mechanism of action studies, we have initiated a Phase 2 clinical trial on pancreatic cancer and a multicentered study on ovarian and endometrial cancers. We are planning to initiate additional MKC-1 trials in 2008, including a continuous dosing trial. We may addition -- we may initiate additional trials based on the results of these ongoing Phase 1 and 2 studies. We believe that the current mix of single-agent and combination trials will be sufficient to determine the potential benefit of MKC-1 and define a path for Phase 3 clinical trials.

Our 2008 milestones for MKC-1 involve a combination of reporting results on existing trails and initiating new trials. These include presentation of finals results for single-agent MKC-1 in the metastatic breast cancer study around second quarter this year, presentation of interim data for the MKC-1 olympta combination study in non-small cell lung cancer, also second quarter this year. The presentation of data for the Phase 1 study of MKC-1 in hematological cancers, which we expect to report out in second half of this year. Initiation of a Phase 1 MKC-1 continuous dosing study, which we anticipate beginning in second quarter. And the presentation of interim data for the Phase 2 study in pancreatic cancer, which we are now expecting to report in fourth quarter of this year.

Now turning to ENMD-1198, this is a potent orally-active antimitotic agent that causes cell cycle arrest in apoptosis and tumor cells. This is a new chemical entity discovered at EntreMed and has a strong IP position. ENMD-1198 has shown positive antitumor activity in multiple preclinical animal models. Preclinical data demonstrated the oral administration of ENMD-1198 leads to pronounced in vivo antitumor activity in cancer models, specifically reductions of tumor burden and are increases in survival when compared to controls. Oral daily treatment with 1198 in a preclinical model of human breast cancer led to a substantial decrease in tumor cell proliferation and angiogenesis. Combination studies with 1198 in vincristen demonstrated synergistic effects that prolonger survival in preclinical leukemia models.

In addition, we evaluated in preclinical models of non-small cell lung cancer with treatment with 1198 and demonstrated a three-fold increase in survival compared to Cisplatin, an approved agent for the treatment of this disease. A Phase 1 dose-escalation clinical trial is currently underway to evaluate 1198 in patients with refractory solid tumors. The Phase 1 study has proceeded through multiple cohorts without any drug-related toxicity at doses that are approaching the maximum tolerated dose from our preclinical models. We expect to complete this study around mid-2008 and initiate further trials in the second half of this year. The milestones are for ENMD-1198 in 2008 include completing the enrollment of the Phase 1b trial, which we expect to happen in the second or third quarter of this year, to initiate an expanded Phase 1 or Phase 2 trial which would follow on in the third or fourth quarter, and then to report data for the Phase 1b trial, which we hope -- expect to do in fourth quarter this year.

Turning to the third oncology program that we are emphasizing, ENMD-2076, this is a selective kinase Turning to the third oncology program that we are emphasizing, ENMD-2076, this is a selective kinase inhibitor with a unique kinase profile and multiple mechanisms of action, including antiproliferative activity and the inhibition of angiogenesis. ENMD-2076 has potent activity against Aurora A and tiracene kinases linked to promoting cancer and inflammatory diseases. ENMD-2076 has demonstrated a substantial dose-dependent efficacy as a single agent in multiple xenograph models, including tumor regression in breast, colon, and leukemia models. Importantly, 2076 is an oral agent that has shown an acceptable toxicity profile in preclinical studies without cardiovascular effects.

ENMD-2076 is a unique-in-class compound because it no only inhibits Aurora A selectively over Aurora B, it also inhibits a number of other kinases important in the growth of tumors, and in particular, growth factor receptors critical to angiogenesis. ENMD-2076 has potent antitumor activity in multiple clinical models, including both solid tumors and hematological cancers. Our IND submission has been accepted by the FDA and a Phase 1 study in solid tumors is expected to enroll patients in early second quarter of this year. On a point of special note, with this program EntreMed has been selected for an oral presentation on ENMD-2076 during the American Association for Cancer Researchers Drugs on the Horizon symposium to be held during the AACR annual meeting in April. This symposium has historically been an opportunity for large pharmaceutical companies to share information on promising pipeline compounds. We are delighted to have the opportunity to share the podium with prestigious leaders in the pharmaceutical industry.

Our goal for ENMD-2076 is to accelerate development of this promising program with a larger development partner. We presented this compound to a number of prospective partners during early IND-directed studies, and based on initial interest, we will conduct a more detailed partnering effort for ENMD-2076 once it has entered clinical human trials. So the milestones for 2008 for ENMD-2076 include: Initiating Phase 1 trial insolid tumors, which we expect to do shortly; to initiate a Phase 1 trial in hematological tumors, which we expect to do toward the third or fourth quarter of this year; and to continue our efforts to seek a development partner for the compound, which we have on our milestone list as some time in the second half of this year or the first half of '09.

I would like to now provide a brief overview of our current financial position. On March 6, 2008 we filed our report containing financial results for the 12 months ending December 31, 2007, on Form 10-K. We reported royalty revenues for 2007 of $7.4 million versus $6.9 million for 2006. Our net loss for 2007 was $23.4 million, or $0.28 per share, as compared to $50 million or $0.71 per share for 2006. The higher 2006 net loss includes the noncash charge of $29.5 million resulting from the acquisition of Miikana Therapeutics. Excluding the noncash charge the Company's net loss for 2006 would have been $21.4 million compared with $17.3 million in 2005. In 2008 we expect our cash expenditures will remain at similar levels compared to 2007, or a slight increase as a result of supporting our current or planned clinical trials. At the present time we expect net cash expenditures for 2008 to be less than $24 million, reflecting costs associated with a multiproduct clinical development program. As of December 31, 2007 the Company reported cash and short-term investments of approximately $47.7 million. We believe that our cash, short-term investments and royalty revenue will be sufficient to fund planned operations well into the second half of 2009.

As I mentioned at the beginning of my comments, we are pursuing a course of action in 2008 that is consistent with the strategy we embarked upon three years ago. By building a portfolio of multiple clinical candidates in oncology we expect to enhance our opportunity to succeed with one or more product candidates while mitigating the inherent risks associated with oncology drug development. Our goals for 2008 are straightforward; invest selectively and conserve cash. The specific elements of our plan involve, as I mentioned earlier, concentrating our resources on fewer programs to provide a more direct path forward to product registration and ultimately to the Market, conserving cash by funding essential priority program activities and deferring new program initiatives, and expanding our partnering activities across our clinical programs. Drug development is risky business, and while not everyone agrees with a multiproduct pipeline, I continue to belief that multiple shots on goal is the appropriate business model to follow in building a viable drug development business and ultimately creating sustainable shareholder value.

In 2008 we have three viable oncology programs to pursue' MKC-1 in multiple Phase 1 and 2 trials, ENMD-1198 that we expect to enter into Phase 2 trial before year end, and ENMD-2076 that will begin a Phase 1b clinical trial shortly. The knowledge gained from our investment in Panzem® for oncology also provided with us with the ability to cross over into a potentially larger market opportunity in rheumatoid arthritis. I recognize that there are other realities in this business. Drug development is expensive and we cannot afford to pursue all of the opportunities ourselves. We need to offset or share costs with pharmaceutical partners in order to advance some of our programs into later stages of development. By partnering a portion of our pipeline we will free up cash to further concentrate on internal programs. We have full worldwide commercial rights to all of our product candidates. We have strong intellectual property protection for all of our compounds, and they are backed by solid data packages. We have the flexibility to pursue partners for multiple programs. Now is the time for us to focus increased attention on partnering.

The realities of current Market conditions also mean that we must conserve our cash resources and invest them judiciously behind those programs that we believe, based on the best available data at hand, there is the most promise. We have developed a solid culture of prudent cash management throughout our Company that I believe will help see us through these his turbulent times. Our goal in 2008 is to continue moving ahead on our priority programs while maintaining our cash expenditures at approximately the same level as 2007. Our investments in 2008 are concentrated on priority programs, which means new initiatives will be deferred for the time being.

We have built EntreMed's recent pipeline through a combination of internal development and company acquisition. Internally we have the ability to move compounds efficiently through pipeline from the bench through mid-stage clinical development. Externally we will continue to selectively seek opportunities, such as individual products or companies that could favorably impact the quality of our pipeline, allow to us de-risk the Company, and enhance shareholder value. We intend to stay on course, invest behind our promising programs, execute to plan, and manage our cash conservatively and continue working to create shareholder value.

With respect to the shareholder value issue, I would like to take a moment before opening the call to your questions to again acknowledge investors' concerns regarding EntreMed's recent weakness in the stock price. We have heard your comments and we listen to them completely. As you all know, this has been a very difficult time for small cap Market, particularly for micro cap biotechnology companies. We believe that the recent downward pressure on our stock price is a function of Market-based weakness rather than any issue with fundamentals in EntreMed specifically.

In addition, our market cap has declined in line with other comparable micro cap oncology development companies. I believe that the price issue is not Company-based but rather Market-based. We have the resources to move our programs forward into 2009. Our development pipeline now has a sharper focus and we are devoting more time and attention to partnering. Our board and management team remain committed to our business strategy and are confident that our pipeline will show results in 2008 and beyond. I would like to thank all of our shareholders for your continued support and encouragement as we work to build EntreMed into a leading oncology company.

Operator, at this point we will open the line for any questions.

Thank you. (OPERATOR INSTRUCTIONS) Our first question comes from Ren Benjamin of Rodman & Renshaw. Please go ahead.

Hi. Good morning, Jim, and thanks for taking the questions.

Good morning, Ren.

First things first, congrats on streamlining the program. I think that's something that a lot of us were looking forward to. So I guess regarding that, with the Panzem® programs being discontinued, why don't we see a drastic decrease in the R&D spend for the Company?

For two reasons. One is we are increasing our spend for clinicals on MKC-1 , and we have two other -- we have 2076 coming on-line, and we will be moving 1198 forward into either a Phase 1 or 2 toward the end of the year. In addition, the cost of of unwinding a clinical program, it lags a little bit and some of those costs we will incur over the next couple quarters until we are out. We also continue to have some patients remaining on the trials and we have committed to maintaining drug for those patients as long as they are benefiting by treatment.

So we won't necessarily see a decrease in R&D in the first and second quarter and then a ramp-up, it should stay relatively consistent?

Yes, I think we'll probably see a consistent flow across quarters.

Okay. The potential for Panzem® in RA, did I hear right in that you said that you would seek a partner for this program before going into the clinic, or will you go ahead into the clinic on your own?

We're going to go into the initial stages of clinical development. We are required by the FDA under our IND to conduct a normal volunteer study. We're proceeding forward with that in 2008, and then as we start to move through those early stages of clinical development, we will start seeking partners, and the goal is to be able to have a partner in time for the much-larger Phase 2 and Phase 3 trials.

And when in 2008 do you plan on starting this trial, and how big do you think this trial will be?

I would -- the planning for beginning of the trial would be sometime around mid-year.

Okay. And the size of the trial?

This is Carolyn. The trial will be appropriate for evaluating safety and PK in the healthy volunteers, and those trials tend to be fairly modest in size with various dose levels are evaluated. So the entire trial will be probably under 35 individuals.

So, Carolyn, even with the relatively benign side effect profile we've seen with Panzem® in oncology do you think that you'd be able to keep that trial fairly small?

Yes.

Okay. And I guess one or two final questions. The MKC program seems to be broadening out quite a bit with a couple of new trials starting, especially this continuous-dosing trial and I guess one question is why evaluate MKC-1 in a continuous-dosing trial? What's the rationale behind it? And I guess from a broader picture, are you worried at all that the MKC program is going to fall in the same path as Panzem® did in that you had -- a lot of trials were ongoing, trying to figure out exactly where the best activity was, and they kept on going without the definitive indication or proof to focus on one area?

Well, let me first address the issue about continuous dosing. One of the things that was part of the package that we received as Miikana was acquired that had been developed by Roche was further explored internally in terms of preclinical models, which were designed to evaluate schedules, and it was pretty clear to us, both from the previous data and from the data that we generated internally that dosing MKC-1 continuously gave better anti-tumor activity that on an intermittent schedule. And the continuous dosing paradigm in the clinic was never really done previously, probably because at the time that Roche entered the clinic with this compound it was being used in combination with cytotoxins that given on an intermediate schedule and it seemed more rational for them to try to mimic the schedule of cytotoxins.

So we believe that we might see better activity if this agent is given continuously, and that's supported, as well, by some of the new work that's been done on mechanism of action; again, unknown to previous folks who dealt with this product. This compound does have mechanisms that would lead you toward a continuous dosing schedule rather than an intermittent high-dose schedule. So this is an exciting trial for us. We're really looking forward to getting data from it, and hope that we can indeed find from that trial a clear path forward.

As far as doing a number of studies, again, our paradigm has always been, let's look at the mechanism, let's look at the preclinical models, and let's look at the Phase 1 data and pursue those indications where there's hints of activity that seem unique to MKC-1 relative to other compounds or compounds in our own pipeline, for that matter. And we've done that and I think the trials that you've seen, as opposed to a big company who may only look at those very large indications, like lung cancer and breast cancer, our actually have a foundation in our preclinical work and that's the way we tend to move forward, as well.

Okay. Let's see. I guess one final question -- because my note taking abilities have decreased as I've aged -- obviously there are a lot of milestones set up for 2008, but I think investors are probably most interested in the data presentations as opposed to, let's say, clinical trial initiations. So can we just go through maybe systematically as to -- with each of the programs when the data presentations for the ongoing trials will be available in 2008?

Sure. Let's start with 1198, that's the compound that's in Phase 1b. At the end of the year we hope to present our data from our 1b study for 1198. As far as MKC-1 is concerned, again, we haven't announced any data presentations for the bigger meetings later this year, but we have submitted information for potential presentation at ASCO, and when it's appropriate for us to make those announcements we will do so, And, of course, that would be particularly important for the trials that have been up and running the longest; he breast cancer study and the combination study with olympta in lung cancer.

The other studies are fairly early in terms of just having started toward the end of last year or the beginning of this year and that would include the pancreatic trial that mentioned previously, as well as the trial in ovarian and endometrial cancer. It's probably a little early for me to give you a timeline on that. It's possible that we will be looking at that some time late this year, but it's a little too soon to project there. The hematological study for Phase 1 with MKC-1 would be set up, I think, purposefully and time-wise for presentation or a poster at ASH later this year.

Terrific. Thank you guys very much.

Thank you, Ren.

Thank you. Our next question comes from Jeff Harvey of Janney Montgomery Scott. Please go ahead.

Yes, good morning. I just wonder, since you have -- winding down Panzem®, is there any potential to monetize Panzem® with some other interested party that may want to take the drug over?

There is a potential, but I don't know the extent to which. We are now really reviewing all the data and as we -- as some of the studies that are still up are winding down and we get a chance to look at all that patient data we'll know a lot better what we have in the way of residual opportunity. If there is an opportunity for us to monetize that asset, we will absolutely go after it.

Okay. And commenting on the price of the stock, I guess a couple of things. One, what is the path for potential delisting? I don't know how many more days it has to trade under a dollar and I must say I'm very disappointed that we've seen no insider buying up to this point.

As to -- as to delisting issues, I'll turn that over to our CFO, Dane Saglio.

Good morning. The delisting action is having a closing bid price of under $1 for 30 successive trading days. We're about half way through that cycle at this point and assuming that it continues on that trend, we would receive a delisting notice which has a built-in 180-day stay period in which you can propose a plan of compliance to bring the Company into compliance with the continued listing standards. We haven't received the notice yet, and, like I say, it's about half way through the cycle and certainly we'd hope to see some action in the stock to stave that off. But that's a real risk at this point and one that we think we have the ability to deal with.

Okay. Thanks very much.

Okay.

Thank you. Our next question comes from [Dennis Luwan] who's a private investor. Please go ahead.

Dr. Burns, thank you very much. Following up on the delisting issue, would EntreMed consider purchasing the shares then if it got to that point, or can you not comment on that?

It wouldn't be our objective. We're trying to conserve cash to have fuel in the engine to fuel the pipeline to bring it forward. You don't see a lot of biotech companies that do stock repurchase, irrespective of price, and certainly with respect to our cash balance, that wouldn't be the way that we would look to put that to work.

What about a reverse split? That's been talked about, I know.

Yes, it's one of the ways that you can become compliant for the continued listing standard, so it's certainly something we can't rule out. It wouldn't be the desirable route, but it's something we have to consider as part of the compliance plan.

Okay. And the other issue is just that the Mayo Clinic results, I just never heard EntreMed say too much about that I know terms of the Panzem®, and if I understand it -- I'm not medically trained -- but it was very successful but they were actually giving it intravenously, if I'm not mistaken, or actually with shots. Do you care to comment on that with the Panzem® NCD?

Yes, I'm happy to comment on that. You're absolutely right, we didn't comment on that study because it wasn't a study done with our material, nor did we collaborate in any way on that study and it was a direct intratumoral injection (inaudible) which was formulated with an alcohol base. The relationship of [ABS] for treating human tumors is very remote and we give our agent systemically, which of course is more appropriate for treating women with breast cancer. It's an interesting result, but we're well beyond the preclinical models in breast cancer. We've done several studies, both Phase 1 studies with single agent and in combination taxain in breast cancer and we feel that's the data on which we should base our decision.

Okay, thank you, doctor. Thanks, everyone.

Thank you. Our next question comes from [Marshall Bratz], who's a private investor. Please go ahead.

Good morning, everyone.

Morning.

I've noticed a recurrent theme in the past two or three calls -- which was referenced a moment ago also -- that management has been reluctant to make open market purchases of the Company's stock. I did notice a 25,000 share purchase, I think in the past three months, by one management individual. I don't think I noticed any others, and that is a little bit surprising to me, as well as to some of the other listeners as well. I just wondered if that could at least be minimally addressed, without getting too personal? And secondly, when you did the Miikana Therapeutics acquisition, I believe [Tackmac] -- if I'm pronouncing his name right -- was the principal in that company, aside of a very renowned researcher and scientist. Did Tackmac himself retain any equity at all in EntreMed? I haven't noticed that there is any equity held by him, but if you could clarify that or let me know whether I missed it or not I would be pleased to know. And I thank you.

Okay, let me start with the Tackmac question first. Yes, he has retained an ownership -- he does retain an ownership position in EntreMed from his Miikana trade and, in fact, he has increased that somewhat since the acquisition by EntreMed. With respect to management purchases of stock, each person obviously has their own view of that personally, but the fact that there has not been any purchases of stock by management recently in no way is a reflection of our lack of confidence in what we're doing. We are precluded on occasion from -- we have blackout periods, according to SEC rules, where we cannot come into the market, but where we can come into the market we do that. This is, it seems to me, a good buying time and we will look at that further. I have been -- I have personally purchased stock along the way and I intend to do so in the future.

Okay. Quickly on Tackmac, would that equity position be revealed in your filings, if I was to go to look at your 10-Q, 10-K, or whatever?

He's not listed individually in any of our filings other than the resale registration statement that was filed pursuant to the merger agreement. I don't recall offhand what his ownership interest was, but it was not significant in Miikana because it was a BC-backed company, but that information is available in the registration resale statement that was filed in mid-'06.

And one gets that through the SEC, I imagine?

Yes, you can access that through EDGAR.

Okay, I thank you very much.

Thank you. Our next question comes from [Stephan Quitman], who is a private investor. Please go ahead.

hi, Jim.

Good morning.

When you start the rheumatoid arthritis trial in mid-year, are they going to be using the Panzem® NCD or the original Panzem® capsule, or some other version?

They will be using Panzem® NCD.

Okay. And I also noticed an application for a trade name Aegea. Can you tell us what that drug would be used for?

We have, like most companies, in the normal course reserve different names for flexibility and possible use, and this was one that we thought as we would need either a name for future endeavors, we decided to go ahead and trademark it, but we don't have any immediate use for the name.

Okay. The other question I have is about Celgene's buyout of Pharmeon, will that have any effect at all on the relationship between EntreMed and Celgene, in particular regarding the royalties from THALOMID® sales?

I'll let Dane address the royalty portion. I will address the relationship portion.

All right.

It should not have any material effect on our relationship with Celgene. We continue to operate as normal. We have benefited in the past from their investment in the various equity financings that we have done and their chief scientific officer continues to participate as an observer during our board meetings. So we have a good relationship with the company, and I don't expect that's going to change in the future.

Now with respect to the royalties, we do receive a royalty on royalty from the Pharmeon sales at this point. It's not a particularly significant royalty pass-through. With the acquisition, and assuming there is a consolidation of the entities and reporting of the sales as a top-line item for the combined entity, we would expect that it would fall into the direct sales category rather than a sub-license sale, and with it lead to an increase in the royalty flow to us. How much, not certain at this point, and with the acquisition just closing, I'm not exactly sure how it's going to be booked, either.

There was another agreement with AlbumGen, this will be terminated in the end of April does. That have any effect on EntreMed?

It really doesn't. It was a -- part of the work-out process on Endostatin some time ago, and AlbumGen licensed the right for Asian development for endo and angiostatin and they were not successful in exploiting it. We still retain a residual interest if Children's do license either of those products for future development, but there's no short-term impact on us. If they had been successful in developing it, we would have been entitled to a percentage of the royalty flow off that, but they were not successful, and consequently decided to shut down operations and gave notice to terminate the license.

I have one more question, it has to do with partnerships. You mention now that you're investigating and discussing a number of different possibilities. Is there any way of estimating when the first partnership might be announced?

That's really difficult to do. We're putting the time and attention to getting together with particular companies. We've had some inbound inquiries into various programs. We are also working on contacting various big pharma and large biotech companies for partnerships, and that process takes time to both develop the interest, to develop the discussions, and for them to gain an understanding of the program specifics. So it's not an immediate event, but specifically when, I can't actually predict.

Okay. Thank you very much.

Thank you. Our next question comes from [Cort Anderson] of Willow Investment. Please go ahead.

Yes, good morning all. I have a follow-up question regarding the Celgene relationship. First of all, what percentage of the outstanding shares of EntreMed do they currently own? And secondly, is my memory correct with regard to an option that Celgene may have to buy the whole Company at approximately $1.40 or $1.50 per share? Thank you.

The first question with respect to the ownership position, approximately 10% of the outstanding common stock. In addition, they hold the equivalent of approximately 16.7 million shares of common stock that's held as preferred. It votes as a -- on a converted basis, so on a converted basis they vote about 27% of the outstanding share votes. There is no option to purchase the Company. There was an option for them to look at a couple of programs, but that was part of the '02 deal. That option's lapsed at this point and there's no prearranged acquisition rights or anything like that.

Okay. And finally, the percentage of insider ownership of the common stock? I'm not sure. Less than 5% I would think. I'm sorry, I don't have the data available for you. It's not significant percentage, though. Thank you.

Thank you. Our next question comes from Jim Blair who is a private investor. Please go ahead.

Morning, gentlemen.

Good morning.

We've talked in this conference call about -- in a way, resources are limited through, I'd say, the first half -- or second half of '09, yet you've also mentioned, Dr. Burns, we're look at acquisitions and I'm just curious from a financial standpoint how we can do this. How can we continue to acquire companies under the guise of creating shareholder value, yet the share price continues to go down?

Yes, we don't have any immediate situations that we need to report on, but these kind of com -- our kind of companies are still limited by scale, they're limited by -- and they have to continue to derisk, so that even though the stock prices are down and the market cap is low, I think it's still prudent to continue to look.

Thank, sir. Thank you very much.

Thank you. (OPERATOR INSTRUCTIONS) Our next question comes from [Matthew Alamena] of Jesup & Lamont . Please go ahead.

Good morning, gentlemen.

Good morning, Matt.

A question about the recent activity by Pfizer in their acquisition of Incisive and Seronex, Seronex being private, Incisive being public. The Incisive was about a $195 million acquisition. I believe they -- believe they have one drug in Phase 3 and a couple of other compounds, I think, in 1 and 2. When you look at that acquisition and compare it to not only the dollars that's already been expended into EntreMed on a cumulative basis, but also your current compounds and valuation currently, I'm sure you guys have looked at that, and just out of curiosity, maybe Dane, from an accounting standpoint, if you could make some sort of articulation with regard to that?

Not sure that I understand your question, Matt, are you -- is it a --

Well, essentially your market cap right now is about $60 million, Incisive was bought out $195 million. They do have one drug in Phase 3 trials. Obviously the valuation seems to be low from a reasonable perspective, although the Panzem® oncology decision obviously is something that some investors may have smelt that a while ago and of therefore it's reflected in the stock price. What I'm really trying to say is that I think what you're hearing from investors is a disappointment, to say the least, and then a question of whether or not your Company should be a stand-alone company, and whether or not it should be part of another company. And given the level of activity by big pharma in oncology, it seems to be an open question. I just want you guys to address that, if you can.

Well, is the suggestion, Matt, that we put ourselves up for sale?

Well, I think that is the suggestion.

Okay. I wanted to be clear I understood the question. Right now we have no plans to put ourselves up for sale. We think -- we're following a plan that we put in place three years ago to build a pipeline. We think we have a pipeline that is not a refle -- the current market value is in the a reflection of the pipeline that exists or the potential for that pipeline, and the program that we are on and that's supported by our board is to continue moving forward as an individual company and to continue to exploit those assets and to move in a way that we can start to monetize some portion of individual programs. That's the program we're on. And it doesn't mean that we wouldn't have a conversation at a board meeting in the future about the other, but so far that hasn't been the case.

Okay. Thanks a lot, guys.

Thank you. There are no further questions. I will turn the floor back to Mr. Burns for closing remarks.

Again, I want to thank everybody for their participation today, for your continued support. We know these are tough times. We hear your views and comments and questions. Believe me, when we -- I'm aware of every phone call and every e-mail that comes from investors, and we can't always respond to them for obvious reasons as a public company, but we are sensitive to the understanding, we appreciate the comments and the suggestions. and I just want to thank everybody for that.. We will also go back and review among the management team the questions and the comments associated with management participation in stock purchases. So with that I'd like to thank you all for your participation and continued interest in the Company, and that concludes today's teleconference.

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