Celldex Therapeutics Inc (CLDX) 2004 Q2 法說會逐字稿

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  • Operator

  • Good day ladies and gentlemen and welcome to your quarter 2 2004 Avant conference call.

  • My name is Jean and I will be your conference coordinator.

  • At this time, all are in a listen-only mode and towards the end of the conference call, we will be taking questions. (Operator Instructions).

  • At this time, I will turn the call over to your host, Dr. Una Ryan.

  • Dr. Una Ryan - President, CEO

  • Thank you very much.

  • Good morning ladies and gentlemen.

  • I am Una Ryan, President CEO of Avant Immunotherapeutics Inc.

  • With me on this call it is Chip Catlin, Avant's Chief Financial Officer.

  • I would like to read a short prepared text before opening this call to questions.

  • I want to remind you that statements made by Avant during this call which are not historical facts may be forward-looking statements that are subject to risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission.

  • Actual results could differ materially from those expressed in any forward-looking statements made by Avant.

  • First for the second quarter financial results.

  • We announced in our press release today Avant's financial results for the second quarter of 2004.

  • The press release is filed as an exhibit to form 8-K with the SEC and is available at Avant's website on the investor information page.

  • Avant reported a net loss of 3.9 million, or 5 cents per share for the second quarter compared to a net loss of 3.2 million, or 5 cents per share for the second quarter in 2003.

  • For the six months ended June 30, 2004, the Company reported a net loss of 5.8 million, or 8 cents per share compared to a net loss of 6.5 million, or 11 cents per share for the six months ended June 30, 2003.

  • Outstanding shares at quarter end were approximately 74.3 million shares.

  • At June 30th, 2004, Avant had cash and cash equivalents of 39.4 million, a decrease of 1.8 million from the prior quarter.

  • This cash balance represents sufficient cash on hand to meet expected burn rates for at least two years.

  • In the clinical program last week, we were delighted to announce that our partner, GlaxoSmithKline, had received approval from the Mexican Board of Health Rotarix in Mexico for the prevention of gastroenteritis (ph) caused by rotavirus infection.

  • This initial approval for Rotarix is a significant event for Avant.

  • It's the first commercial approval of a human health care product from our extensive portfolio of advanced vaccines.

  • We anticipate that this is just the first of a series of marketing approvals for Rotarix as GSK continues its worldwide development efforts for this vaccine.

  • With respect to our complement inhibitor, TP10, we anticipate completing enrollment in the Phase IIb study in women undergoing cardiac bypass surgery by the end of this year.

  • We're working closely with our partner Lonza Biologics PLC to complete process development and scale-up efforts this year in preparation for the production of Phase III clinical materials and the start of the Phase III trial by year end 2005.

  • With respect to our CETP vaccine for cholesterol management, we continue to evaluate a number of new adjuments and delivery technologies in animal models and expect to choose the approach eliciting the most robust antibody response by year end.

  • We're strongly committed to this product and expect to have a CETP vaccine back into the clinic towards the end of 2005.

  • During the quarter, we had several noteworthy accomplishments which further prepare us to become a commercial company, including the following.

  • We received an additional subcontract from DVC for 3 million to support the human clinical testing of a plague vaccine candidate for use in our oral combination vaccine against anthrax and plague.

  • Data presented at a recent scientific meeting show that four of Avant's vaccine manufactured and dried using the Vitrilife preservation technology remained stable and immunogenic, even when stored at or above normal room temperature.

  • The Walter Reed Army Institute of Research initiated a placebo-controlled Phase I clinical trial to assess the safety and immunogenicity of an HIV vaccine based on Avant's Therapore technology.

  • We have expanded our senior management team with the appointment of Timothy Cooke, Ph.D. as Senior Vice President, Commercial Development, as well as Taia Kilane, M.D. (ph), as Vice President of Medical and Regulatory Affairs.

  • Finally, we received a building permit for our manufacturing facility in Fall River, Massachusetts and have begun construction.

  • This facility will implement our Vitrilife technology and will be ready for manufacturing in the first quarter of 2005.

  • As you have heard, Avant has accomplished a great deal this quarter.

  • We feel 2004 is a great year.

  • Each and every one of the achievements from the quarter will bring us one step closer to becoming a commercial company and realizing the full value of our technologies and products.

  • I want to emphasize strongly that Avant is a company with late-stage programs.

  • We now have an approved human health care product in Rotarix and six other products in clinical development, greatly diversifying our risk and providing us with many exciting opportunities.

  • The majority of these programs are supported through partnerships with major companies, governmental agencies or international health organizations.

  • These collaborations validate the value of our pipeline and from a financial perspective, enable us to advance so many products towards commercialization.

  • I want to remind you that this press release and conference call contain forward-looking statements which are subject to a variety of risks, uncertainties and other factors that could cause actual results to defer materially from those expressed in any such forward-looking statements.

  • We look forward to updating you on our programs next quarter.

  • So this is the end of my introductory statement, and now as usual, we welcome your questions.

  • Operator

  • (Operator Instructions).

  • Stuart Kline (ph).

  • Stuart Kline - Analyst

  • With all these great things going on within your company, why does the price of the stock reflect such a low price at this time and what do you plan to do about uplifting the price?

  • Do you see any insider buying?

  • Do you see any other partnerships that would help support your price at these levels?

  • Dr. Una Ryan - President, CEO

  • Well, it is very difficult for me to tell you what would support the price.

  • We have done nothing this year, other than put out extremely strong press releases including a product launch, so it's very hard to see what more or different we should be doing.

  • I think that as has been the case for some time, having a stock price under 5 is in itself a problem, and I hope we can get above that.

  • What we have usually found to be the most valuable is actually to speak at investor conferences.

  • So we do plan to do that.

  • We have some excellent analysts on board now.

  • We intend to get more and Mr. Catlin and I expect to be on the road with investors in non-deal road shows and individual one-on-one meetings every month henceforward.

  • And it is very disappointing for us when we put out this good news but I don't believe that there is much that the company can do.

  • I think a lot of this is a reflection of market forces that are not directly related to Avant.

  • Operator

  • Richard (indiscernible), UBS.

  • Unidentified speaker

  • Good morning (indiscernible).

  • Congratulations again on the Rotarix.

  • Could you comment on the size of the market for Rotarix?

  • Dr. Una Ryan - President, CEO

  • It's quite considerable.

  • Our partner, GlaxoSmithKline, sees this as a worldwide market of a billion pounds sterling.

  • So that's $1.8 billion U.S.

  • About half of the market is in the U.S. and about half not in the U.S.

  • They have an aggressive launch schedule.

  • The announcement that we have put out is for the first launch in Mexico.

  • The plan is that that will then continue in Latin America.

  • So we would expected to see rolling launches in Latin American countries from now on.

  • We also expect to see launch in Southeast Asia, places like Hong Kong and Singapore.

  • And it is our understanding that GlaxoSmithKline intends to file in '04 for Europe and beyond the market in Europe in '05.

  • So I think that we can see our way to half of that market quite soon.

  • The plans for U.S. launch have not yet been revealed.

  • Unidentified speaker

  • Could you also, please on Merck, which evidently has a competing vaccine?

  • The estimates that Glaxo has are separate from Merck, or would they include both you and Merck?

  • Dr. Una Ryan - President, CEO

  • Again, I don't know how Glaxo made them.

  • The Merck vaccine is planned -- is in Phase III clinical trials now.

  • They are planning a launch in the United States and I think that the date in '06.

  • As far as I know, their plans for anything other than that have not been disclosed.

  • Let me say at this point that there are some very clear differences between the two vaccines.

  • Avant's is a two-dose human vaccine based on a single strain from a human baby.

  • It has shown very clear efficacy and safety.

  • Merck's vaccine has several components in it, some of which are bovine in origin, others entirely humane and the Merck vaccine requires three doses.

  • So I believe that ours is extremely competitive on the efficacy, safety and pricing scales.

  • But I think until we know quite how the U.S. will respond and how pricing will occur in each of the foreign countries, it is going to be quite difficult I think to estimate the market.

  • We expect to get the lion's share of what global markets with the GSK Avant vaccine.

  • Unidentified speaker

  • Another question, if I may.

  • Is it possible on the TP10 to do the Phase III trial and then only?

  • Your results were so excellent in the first trial you had.

  • Dr. Una Ryan - President, CEO

  • Yes, I do think so.

  • Obviously, we would like to have the full market for both genders.

  • But as I think we have said before, the bulk of the market really is for males.

  • Our new physician, Dr. Kilane, has an aggressive plan.

  • We expect to be talking to the FDA towards the end of the year about our Phase III plans.

  • I think there are several possibilities.

  • But I think the quick answer to your question is, yes, it would be possible to enter Phase III just for males.

  • It's even possible to launch a product just for males.

  • Obviously, we want to include females if we can and when we can.

  • Right now, the trial in women is not the limiting factor.

  • That is enrolling, and I said, we expect to complete the enrollment by the end of the year.

  • We have been aggressive and made commitments to Lonza, our manufacturing partner.

  • So as soon as the Phase III material is ready, we would be ready to start Phase III trials.

  • Preferably in both genders, but in males only, if that is what is indicated at the time.

  • So we are feeling very bullish about TP10.

  • The Phase III manufacturing is underway.

  • Those commitments have been made and so as soon as the material is ready, I think you'll see Avant gearing up for Phase III.

  • Unidentified speaker

  • That is very impressive.

  • If I could just ask a question on the cholesterol management also.

  • When you are testing the adjuments, is it possible to test them on humans before you start Phase II trials with the new adjument?

  • Perhaps go into Mexico and taking several groups of humans?

  • Dr. Una Ryan - President, CEO

  • Theoretically, the answer to your question is yes.

  • We have strategized this many ways.

  • But since we're doing what I would really deem to be screening of adjuments, it makes the most sense economically to do that in the animal models and that's what we're doing.

  • We can run more combinations.

  • Some of these vaccines are further advanced in the clinic than others and we can run everything else concurrently.

  • So while the possibility of doing essentially adjument screening in humans is possible, it is not convenient and it is not as cost-effective as doing it in animals first.

  • So I don't want there to be disappointment here that we are in animals when we had plans to get back into humans this year.

  • I don't think it's the better part of wisdom to run all of the adjument screening tests together, pick the best one and then go back into the clinic with the winner, rather than have to do a little bit of a complex and perhaps not very neat clinical trials.

  • Unidentified speaker

  • Very good.

  • Thank you and again congratulations.

  • Operator

  • Derek Jellinek, Roth Capital Partners.

  • Russ Gilbertson - Analyst

  • It's actually Russ Gilbertson (ph).

  • I had a problem with my phone, so I'm on a different line.

  • In any event, I do have a couple of questions here.

  • First, I hope you haven't answered these already, because I missed part of the call.

  • When do we expect data on the IIb study in TP10?

  • Dr. Una Ryan - President, CEO

  • I was going through this a little bit with the previous, caller Mr. Aslander (ph).

  • We are enrolling, we expect to complete enrollment this year, so I would imagine that we would have a report out in the spring.

  • There's a lot of data to analyze here.

  • But Russ, I want to make it absolutely clear that while that trial is extremely important and we do want a label which would include both genders, it is not limiting.

  • So Dr. Kilane intends to go to the FDA towards the end of this year to discuss our Phase III plans.

  • What is limiting is that we have Phase III materials from Lonza ready to start a clinical trial for TP10 Phase III and we would expect that to be around the end of 2005.

  • But we're moving very aggressively here.

  • And of course until we have talked to the FDA, I cannot tell you exactly what Phase III will look like.

  • But we're going to start a Phase III and we are not waiting for the Phase IIb data from females, we're simply waiting for material.

  • And we're very bullish on this and very aggressive.

  • Russ Gilbertson - Analyst

  • Very good.

  • Now I know that you have said you would like to get back in the clinical study one by the end of '05.

  • My question to you is, when you elect which adjuments you're going to use in the vaccine, do you think that will be packaged with a deal with the provider of that adjument?

  • Dr. Una Ryan - President, CEO

  • Possibly.

  • Again, we don't want to sort of presage it because we don't know what the winners will be.

  • The current experiment, which we have decided to do in animals for all of the reasons I've just said -- it is much more cost-effective and it's more efficient, because you can do kind concurrent comparisons -- will include delivery devices as well.

  • So what the final winning combination will be, I don't know.

  • So I cannot say that it will definitely be a deal or might be more of a license to that product.

  • Russ Gilbertson - Analyst

  • But you are open to exploring either pathway?

  • Dr. Una Ryan - President, CEO

  • We are exploring both pathways.

  • Russ Gilbertson - Analyst

  • Very good, very good.

  • My next question is -- when do you expect the oral plague anthrax vaccine to be in the clinic?

  • Dr. Una Ryan - President, CEO

  • Our goal was to have it in the clinic at the end of this year.

  • I think we will be close to that.

  • We have -- I believe you were at the biodefense meeting where I was talking about the fact that, although we would like to go straight to humans to look for safety and immunogenicity with a vector (ph) system that will be particularly effective in humans, we will in fact be doing as the FDA has requested, challenge studies with the two (indiscernible) the plague before we enter the clinic.

  • Those studies are scheduled.

  • They will not be done in-house.

  • We don't have the facilities for that.

  • So provided that those challenge studies come on time, I think we can still meet the go at the end of the year or shortly thereafter.

  • So I was at the White House yesterday for the signing of the (indiscernible) program and they were not quite ready for procurement funds.

  • I feel very confident that we will get continued funding for the clinical program for our oral anthrax plague starting first with the plague.

  • So it's on time or very close to it, Russ.

  • Russ Gilbertson - Analyst

  • Is there language in the legislation for '05, the funding under Bioshield or other legislation that would be earmarked for the oral plague anthrax vaccine?

  • Dr. Una Ryan - President, CEO

  • Well, that is what I'm trying to convey I'm so confident about.

  • As you know, we've put out announcements when we know something exactly.

  • Avant has been aggressive and successful in getting earmarked funds appropriations just for Avant and just for this program.

  • I believe it's a high priority because as I said before, the mass vaccinations, multiple dose needle-based vaccines will really not be adequate.

  • The concept that Avant is promoting over single-dose oral combination, preferably that room temperature stable, is really what is required.

  • So I'm very, very confident that we will get continued funding.

  • Right now know though, what we need is development funding.

  • We're not looking for a manufacturing or stockpiling appropriation because we're not ready for it.

  • Russ Gilbertson - Analyst

  • Next question -- in terms of your licensing technology to AdProTech, which is I guess is Influzyme (ph) actually, now --.

  • Dr. Una Ryan - President, CEO

  • Yes.

  • Russ Gilbertson - Analyst

  • That's for APT 070 in rheumatoid arthritis?

  • Is that the program?

  • Dr. Una Ryan - President, CEO

  • That is correct.

  • Russ Gilbertson - Analyst

  • And that is in Phase I, Phase II I believe?

  • Dr. Una Ryan - President, CEO

  • Correct.

  • Russ Gilbertson - Analyst

  • My question is -- when would you anticipate getting milestone payments out of that 13.5 million that you have allotted for milestone payments or the development of this product -- when do you think you will be realizing those?

  • Dr. Una Ryan - President, CEO

  • It's a good question,.

  • Russ.

  • We hope the answer is soon.

  • I think Influzyme had a little bit of a setback on a completely unrelated program, which I hope means that they will be moving forward in the clinic more aggressively with APT 070.

  • But I cannot tell you exactly, I don't know.

  • Russ Gilbertson - Analyst

  • Could we expect that those milestones will be connected to latter-stage developments, so like Phase III data and NDA filing and launch, that type of thing?

  • Dr. Una Ryan - President, CEO

  • Yes, yes.

  • Russ Gilbertson - Analyst

  • Very good, very good.

  • Congratulations on the progress that you have made and we look forward to hearing more.

  • Dr. Una Ryan - President, CEO

  • Okay, thank you.

  • Operator

  • Stuart Klein.

  • Stuart Kline - Analyst

  • As far as share price, I hate to keep bringing that up, but you are shareholder, correct?

  • Dr. Una Ryan - President, CEO

  • Yes I am.

  • Stuart Kline - Analyst

  • How many shares do you hold -- well over a million shares, I believe?

  • Dr. Una Ryan - President, CEO

  • I do hold I think approximately 1 percent in options.

  • I have bought myself on the open market shares during the course of time, which are fairly small in number.

  • Stuart Kline - Analyst

  • And when was the last purchase that you did make?

  • Dr. Una Ryan - President, CEO

  • I don't remember, but I think it '02, a couple of years ago.

  • Remember -- I cannot sell my stock.

  • Stuart Kline - Analyst

  • Not sell, but can you buy more, and do you plan on buying?

  • Dr. Una Ryan - President, CEO

  • I can buy, but remember that I cannot sell, so it gives me a sort of difficult situation.

  • Stuart Kline - Analyst

  • I'm out here buying your stock and I'd like to know that the people inside the Company feel as strong as I do because you keep saying the word bullish -- I'm bullish on your stock price.

  • Dr. Una Ryan - President, CEO

  • Yes, but you can sell if you need it and I can't.

  • But I'm very bullish on it and I think it is very good value.

  • Stuart Kline - Analyst

  • I wish you guys good luck and success in finishing all your trials.

  • Dr. Una Ryan - President, CEO

  • Thank you.

  • Operator

  • (Operator Instructions) Dorie Steinberg (ph).

  • Dorie Steinberg - Analyst

  • Hi.

  • I just had couple of numbers questions.

  • The 39.4 million in cash and cash equivalents -- have you said how long that money can last you and --?

  • Dr. Una Ryan - President, CEO

  • It's two years of cash, cash burn.

  • As you know, we like to try to keep two years of cash on hand.

  • That would be at current burn.

  • It does not take into account the possibility of partnership, revenue and it does not take into account any potential Rotarix revenue.

  • Dorie Steinberg - Analyst

  • Has the company said publicly at all the kind of revenue that can be expected from Rotarix in '05, or is it just too early because you're not sure exactly what the rollout of approvals will look like?

  • Dr. Una Ryan - President, CEO

  • It's too early.

  • We haven't said and GlaxoSmithKline hasn't said.

  • I believe that there are pricing negotiations still ongoing in Latin America.

  • So I'm afraid there is very little to go on here.

  • We do know that the vaccine will be available for a private buyers immediately and that the government use -- the government immunizations will occur in the spring in Mexico.

  • But as each time, with each country that is brought onboard, private acquisition can occur.

  • So we are expecting sort of small revenues this year.

  • I think when we have the whole of '05 to look at, we will be able to project much better.

  • Dorie Steinberg - Analyst

  • And lastly, the net loss, which is now forecasted in the range of 17 to 19 million, would you tell me what had been the previous forecast?

  • Dr. Una Ryan - President, CEO

  • Well, we had forecasted it lower, 14 to 17.

  • The reason for the increase is actually all very positive.

  • It's an increase in the cost for TP10, both clinical and particularly manufacturing.

  • As we get into discussions with potential partners for TP10 and as we look at our success with Rotarix, we are looking less and less for license deals with simply royalties, but looking to see if Avant can't show them more of burden of development and receive a much greater return on revenue.

  • I really want to convey that we are becoming much more of a commercial company, and in order to do that, we will have to show the greater expenses.

  • So most of the increase that you see is TP10 related for late stage development activities.

  • Dorie Steinberg - Analyst

  • Lastly, I need a little more clarity on the Phase III TP10 trial that you, either way, would expect to begin enrollment, I believe you said by the end of '05.

  • And you said it's not contingent on receiving the IIb data, but you're just waiting for materials.

  • What I'm just wondering is how do you begin to enroll if you don't know the IIb data?

  • You would just begin with men, and then if the other data --?

  • Dr. Una Ryan - President, CEO

  • You're asking all of the right questions, and basically, these are the questions we will ask of the FDA.

  • There are several ways that it could be done.

  • One is to just sit tight and wait until we have the IIb data and then start.

  • Another way would need to start really two Phase IIIs where we would start one for males and then do another one for females when we have those data.

  • And the other, which is attractive, but perhaps a little more cumbersome, is to start the trial, power it for both genders, bring women in when we're ready to.

  • All of these things -- you cannot just do this, you have to project it and put the plan in front of the FDA.

  • I don't rule out any one of those.

  • They're all very successful routes that have been tried before by other companies to getting to a BLA.

  • But our head of medical affairs and regulatory affairs here will be in discussions with the FDA.

  • And as you have heard me say before, I know better than to predict the FDA.

  • But I think that we can convey to you, our investors, our confidence that Phase III will start at the end of '05.

  • And I cannot yet exactly tell you which genders will be part of the beginning or the end of that story.

  • Dorie Steinberg - Analyst

  • And the waiting for materials, not the IIb data, that quote that you said earlier in the call, does that imply that -- I am not sure exactly what that implies.

  • Dr. Una Ryan - President, CEO

  • Let me explain that.

  • There was always the possibility that we could've gone to Phase III on the data we had before.

  • The reason we couldn't go to Phase III was we did not have any Phase III material.

  • But we did have sufficient Phase II material that we were able to cross (ph) this women-only trial.

  • So since that was such an important part of the equation, that's what we did.

  • Now, Phase III material requires a lot scale-up, because essentially, this is Phase III and commercial material.

  • So it will be getting ready for sale.

  • Our partner Lonza has a slightly different method for manufacturing.

  • Basically it's the same, the materials manufactured in mammalian cells, (indiscernible) cells.

  • So we will have to do a small pharmacokinetic study just to make sure that the new material behaves the same as the old, but that can be done quite easily.

  • But there's a huge amount of process development and manufacturing that has to occur for Phase III commercial materials.

  • We have committed by contract to doing that with Lonza, and it just takes time.

  • We will be increasing the size of the cementers (ph) that will be used and there are a whole lot of things like violent (ph) activation and release data where the assays simply have to be done and certain amounts of time have to elapse.

  • That is the whole business of stability.

  • So I am afraid it's a cumbersome process.

  • We are well on the way, but I don't expect that the material will be ready for Phase III until after we have finished the IIb trial, but we're certainly going to start talking to the FDA as soon as we have sufficient manufacturing data that we can put a CMC (ph) section together.

  • Dorie Steinberg - Analyst

  • But you are fully confident that the materials would be ready by the end of '05?

  • Dr. Una Ryan - President, CEO

  • Well, I'm fully confident they should be ready before then.

  • When you're talking about the contract manufacturer, all you can do is rely on their reputation and experience.

  • In my opinion and I think many other people's Lonza is the best contract protein manufacturer out there.

  • But again, you know, force majeure, something huge that happened.

  • But I'm very confident that we will have the material.

  • Dorie Steinberg - Analyst

  • Thank you for your time.

  • Operator

  • Kate Winkler, Merriman Curhan Ford.

  • Kate Winkler - Analyst

  • Hi, Una.

  • Thanks again for the update.

  • And I just wondered if you could give a little more comment on the TP10 plans.

  • Because in the past, it has been a pretty prominent discussions of partnership opportunities, although admittedly, indicating that you would proceed full force towards Phase III.

  • And now I'm hearing less mention of that.

  • And I just wonder has that become a strategic decision that you're designing to bring it into Phase III yourself, or is there still discussion underway and what might we see from that?

  • Dr. Una Ryan - President, CEO

  • Well, it will depend a little on the marketplace and on results and an absence of the sort of depressions that we have seen in the marketplace at the moment.

  • I'm going to try to avoid saying bullish.

  • We are very excited about TP10.

  • And that now that Rotarix is launched, we believe that there's a real possibility of Avant holding onto a portion of the U.S. market.

  • Now a lot of things have to fall into place.

  • We certainly would not be able to launch or market in Europe or the rest of the world.

  • So we will be looking at partnerships for that kind of thing.

  • But increasingly, since we are now getting manufacturing and the at least Phase III plans to crystallize in our minds, we would like to hold onto more than just a royalty for TP10.

  • So we're beginning to structure our discussions with potential partners more towards Avant sharing some of the development expense in exchange for more of the revenue income.

  • So I think that we're getting more confident and we would like to be able to show that we could get into Phase III ourselves, which we can.

  • Clearly, we don't have the money now to complete Phase IIIs or even to think about a launch, but we have brought a commercial person onboard and we are going to hold onto as much of TP10 as we can.

  • We believe this is a huge opportunity for Avant and we don't want to just sort of license it away lightly.

  • Kate Winkler - Analyst

  • Two other just quick questions on that platform.

  • One is -- if you could give us any indication on what your manufacturing margins are.

  • It sounds like this is a relatively complicated biologic to produce, and so I just was wondering if you could give us any thoughts there?

  • Dr. Una Ryan - President, CEO

  • I'm not sure -- I can give you some costs.

  • It's of the order of 5 million to complete process development and another 5 million for manufacturing.

  • I'm not quite sure what the margins will look like.

  • Ultimately, a partner may want to build their own plant for commercial.

  • But we can certainly get all the way to a launch with Lonza.

  • Kate Winkler - Analyst

  • Then the other question is -- you said that the project burned, the two years worth of cash on hand is based on current burn and doesn't account for the revenues coming in potentially from Rotarix.

  • But also, am I hearing you right that it also doesn't not (ph) incorporate the Phase III program for Rotarix?

  • Is this based on backwards burn, or is this projecting in the burn for that -- not for Rotarix, excuse me -- for (multiple speakers).

  • Dr. Una Ryan - President, CEO

  • That's what I thought you meant.

  • It certainly includes nothing for Rotarix.

  • It does not include the Phase III clinical trial expenses for TP10.

  • Kate Winkler - Analyst

  • So that would be on top of?

  • Dr. Una Ryan - President, CEO

  • Right.

  • Kate Winkler - Analyst

  • Okay, thank you very much.

  • Dr. Una Ryan - President, CEO

  • Thanks Kate.

  • Operator

  • (Operator Instructions) I show no questions at this time.

  • I'd like to turn it over to you, Dr. Ryan, for closing remarks.

  • Dr. Una Ryan - President, CEO

  • I'd just like to close by reminding you of what a good year or half-year we have had.

  • The highlights have been Rotarix's launch in Mexico and every indication that further launches are coming, including potentially Europe next year.

  • The TP10 -- we have been discussing that we will move to a pivotal Phase III trial of TP10 in cardiac surgery towards the end of next year in men only, if necessary, but we hope in both genders, and that we have committed to Lonza, our partners for production of Phase III clinical materials in 2005.

  • In CETi, we're looking at a broad number of adjuments and delivery technologies, so we've decided to do that in animals and then take the new vaccine candidate into a clinical trial towards the end of '05.

  • In the area of biodefense, as I said, I had the privilege of being in the Rose Garden yesterday for the signing of Bioshield.

  • And we do not expect to be stockpiling immediately using Bioshield funds, but we are very confident of continuing appropriations earmarked just for Avant for our clinical programs there.

  • And one area where we did not have much discussion on this call, Fall River, our manufacturing facility.

  • I want to emphasize we're on schedule to complete construction in the September/October timeframe.

  • We are trying now to plan a ribbon-cutting ceremony.

  • Validation will occur in Q4 and we will be operational in the first quarter of '05.

  • So that facility is completely on schedule and we are in discussions with a number of parties who would like to have their vaccines room temperature stable.

  • So all in all, a very good six months and we look forward to talking to you one quarter from now.

  • Thank you, goodbye.

  • Operator

  • Ladies and gentlemen, thank you for joining the conference call today.