DURECT Corp (DRRX) 2016 Q2 法說會逐字稿

Greetings and welcome to the DURECT Corporation second-quarter earnings call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Matt Hogan. Thank you, Mr. Hogan; you may begin.

Okay. Good afternoon and welcome to our second-quarter earnings call. This call will begin with a brief review of our financial results, and then Jim Brown, our President and CEO, will provide an update on our business. We'll then open up the call for a Q&A session.

Before beginning, I'd like to remind you of our Safe Harbor statement. During the course of this call we may make forward-looking statements regarding DURECT's products in development, expected product benefits, our development plans, future clinical trials, or projected financial results. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Further information regarding these and other risks are included in our SEC filings, including our 10-Q under the heading risk factors.

Let me now turn to our financials. Total revenue was $3.2 million in the second quarter of 2016 compared to $4.4 million in the second quarter of 2015. Excluding all deferred revenue recognized for upfront fees from our agreements, revenue from our R&D collaborations was around $262,000 in the second-quarter 2016 as compared to $1.6 million in the second quarter last year. And revenue from this source always fluctuates from quarter to quarter, depending on the state of development under the various programs and what our role is in those programs.

Product revenue, largely from the sale of ALZET pumps and LACTEL polymers, was $2.8 million in the second-quarter 2016 as compared to $2.7 million in the second quarter last year. Our gross margin on these products was 67% in Q2 2016, and these product lines continue to be strongly cash flow positive for us.

R&D expense was $7.9 million in the second-quarter 2016 as compared to $5.6 million in the second quarter last year. And SG&A expenses were $2.9 million in the second-quarter 2016 as compared to $2.7 million in the second quarter last year. So our net loss for Q2 2016 was $9 million as compared to $5.5 million in Q2 2015.

At June 30, 2016 we had cash and investments of $33.9 million compared to $29.3 million at December 31, 2015. We also have $19.8 million in long-term debt, and I should note for you that after the end of the quarter, we refinanced this debt to extend the final maturity to four years, so through August 1, 2020, and have an 18 month interest-only period -- so through March 1, 2018.

With that, thanks again for joining the call, and I'll turn it over to Jim.

Thank you, Matt. I'd like to take a few minutes to comment on the progress since our last earnings call and update you on our upcoming news flow and potential milestones. Over the remaining five months of this year, we could see Phase 1b human data from DUR-928 dosed in NASH patients; Phase 1b human data from DUR-928 dosed in kidney-impaired patients; the approval of REMOXY ER, which would be DURECT's first pharmaceutical product, and it has a September 25 PDUFA date; the submission of a DUR-928 IND for a Phase 2 kidney trial in the United States; as well as a submission of a DUR-928 IND for a Phase 2 liver trial in the United States.

Over the next 17 months, we could potentially see the launch of REMOXY ER into the US market, bringing a next-generation abuse-deterrent opioid to a society in desperate need of a better alternative; multiple DUR-928 Phase 2 trials underway; data from one or more proof-of-concept studies with DUR-928; data from PERSIST, the POSIMIR gallbladder Phase 3 trial; and the potential for business development deals, either regionally or globally, as well as resubmission of a POSIMIR NDA.

DURECT has a rich pipeline, consisting of a novel endogenous new chemical entity, which is DUR-928, that may have broad applicability for orphan diseases; acute organ injuries, such as acute liver failure and acute kidney injury; and chronic metabolic diseases, such as NAFLD and NASH. We also have two late-stage products that are being developed for large market opportunities in postsurgical pain and chronic pain.

We could have our first product, REMOXY ER, approved this year; and in 2017, proof-of-concept data in humans from DUR-928 and our second NDA stage product, POSIMIR, resubmitted. With approximately a $250 million market valuation, DURECT has multiple ways to generate a substantial return based on these programs.

I'll now briefly review our major programs in greater detail, beginning with DUR-928. DUR-928 is an endogenous small molecule which we inlicensed four years ago. It is a sulfated oxysterol, and the first of a new class of intracellular hormone therapeutics. DUR-928 acts as an epigenomic regulator that's involved in the regulation of lipids, inflammation, and cell survival.

We are taking DUR-928 forward into development programs. The first is for chronic metabolic disorders with oral delivery, and the second is for acute organ injuries with an injectable formulation. We've made substantial progress recently in dosage form development, and we have developed both oral capsule and injectable formulations for the programs.

In the past, we've disclosed compelling animal data from eight different animal models that suggest substantial efficacy that DUR-928 has. We have been very active recently, conducting multiple additional animal pharmacology studies this year. These studies have affirmed the potential of DUR-928 as a significant medical breakthrough. Data from these studies has allowed us to derisk and guide our human clinical trials to add new indications and patent protection for the program. And data from some of these studies may be presented or published later this year.

DUR-928 continues to demonstrate a strong safety profile. We have shown it to be safe when given in very high doses in animals and in our Phase 1 study. We are getting close to having our first data from human patients.

Our first human Phase 1b safety PK trial is underway, giving a single oral dose to liver-functionally impaired or NASH patients. And our second Phase 1b safety PK trial was initiated this week, giving a single dose by injection to kidney function-impaired patients.

Data from these trials are expected to be available in the near future. And while these studies are primarily for safety PK, we will be looking at biomarkers associated with these diseases. These studies will enable and inform subsequent proof-of-concept studies and our planned Phase 2 studies.

We have recently been granted a face-to-face pre-IND meeting with the FDA. This meeting will be held in late September. The meeting will be to inform our IND submission and enable us to conduct clinical trials with DUR-928 in the United States in patients with acute kidney disease.

The team is in the process of preparing a second pre-IND meeting request. This meeting will inform the IND submission for a trial with DUR-928 patients in the United States in patients with liver disease. If DUR-928 demonstrates biomarker changes in patients, together with the existing animal efficacy as well as our safety data from animals and man, we should see the program reevaluated.

Early-stage programs at other companies have achieved some impressive valuations, as big pharma and biotech are highly interested in molecules that may address liver disease and may affect inflammation. We have a few examples. The first was -- most recently was in March of 2016, this year. Gilead did a deal with Nimbus on a Phase 1 program where they paid $400 million upfront and another $800 million in milestones.

Back in January of 2015, Gilead did a deal with Phenex on a Phase 1/Phase 2 -- early Phase 2 -- program, where they received $90 million upfront and another $390 million in milestones. And in February of 2015, Merck did a deal with NGM on a preclinical program where the payment was $94 million upfront plus $106 million, which represented about a 15% equity stake on over about a $700 million implied market cap and $250 million from Merck over the initial five-year term of the deal. It should be remembered that in addition to DUR-928's potential in liver disease, it has the added potential to be a new therapeutic for kidney disease and other organ injuries that could be game-changing for DURECT shareholders.

Now I'm going to briefly discuss POSIMIR. As a non-opioid for postsurgical pain, POSIMIR offers a big market opportunity. It would compete with EXPAREL which has given Pacira a roughly $1.3 billion market valuation.

We are running a Phase 3 study on laparoscopic gallbladder removal. We are in the process of implementing a request by the FDA to amend the protocol to move to an active control arm that will be bupivacaine. We feel this will produce a stronger NDA resubmission and will offer potential commercial advantages, as no competitive non-opioid product on the market has beaten bupivacaine and well-controlled study. We have confidence in this trial based on a prior 50-patient trial we conducted in the same surgical model, where we saw a 25% reduction in pain that was statistically significant using the same statistical methodology we'll be using in our current trial.

In addition to changing the comparator in this trial from placebo to bupivacaine, we're switching the primary efficacy endpoint, which is going to remain pain on movement from 0 to 72 hours after surgery to 0 to 48 hours after surgery. Pain reduction for 0 to 72 hours will be a key secondary endpoint. Other secondary endpoints, including the 72-hour opioid use, remain the same; each simply moved down one notch to accommodate the new secondary endpoint.

We expect to enroll about 264 patients in this amended part two of this trial, and we expect this new part of the trial to take about one year to enroll. Existing clinical trial sites are being switched over as we speak to the updated protocol on a rolling basis, and newly added sites will begin with the amended protocol already in place.

So why are we moving to a 48-hour time point? Postsurgical pain gradually subsides over time; thus, it is easier to measure a difference in pain relief between POSIMIR and the comparator analgesic earlier after surgery, when the underlying pain signal is larger in both groups. For this reason, looking at a shorter 48-hour window means that fewer patients overall are needed to show a difference between POSIMIR and Bupivacaine. In other words, the trial can be adequately conducted with fewer patients, in a shorter period of time, and at a lower cost.

We believe our trials in shoulder arthroscopy and hernia repair demonstrate clear evidence of POSIMIR's effect for 72 hours. And this will be adequately -- should be adequately reflected in the POSIMIR label.

A 48-hour trial requiring fewer patients can be completed more rapidly and enable us to resubmit the NDA more quickly, and thereby helps maximize our market opportunity. Of note, we think a win over bupivacaine at 48 hours will be quite attractive to payors and P&T committees alike, who are interested in true advances over current practice when setting formularies and reimbursement rates. It is important to remember that our competitors have used 24- to 48-hour endpoints in some or all of their pivotal trials.

It's also worth noting that even though part two of this trial will not be powered to show superiority at 72 hours, it is possible that our key secondary endpoint, which is pain for 0 to 72 hours, will nonetheless turn out to be statistically significantly positive -- which would, of course, be icing on the cake. As a further reminder, in our previous laparoscopic cholecystectomy/gallbladder removal trial, with a cohort of only 50 patients, we saw statistically significant improvement in pain intensity over 72 hours using the same statistical analysis that we are using in PERSIST.

This month, we are implementing the logistics of the switchover to part two of the trial. And we are currently estimating that we will complete enrollment at about one year, have top-line data a few months later, and resubmit hopefully in late 2017 with a possible approval about six months later.

POSIMIR offers multiple differentiating opportunities for DURECT and for the patients. The NDA could include efficacy data from three common surgeries -- that is, hernia, shoulder, and gallbladder removal. POSIMIR could potentially be the first product with efficacy in laparoscopic procedures, and this is important given the trend to less invasive procedures whenever they are possible.

If PERSIST is successful, POSIMIR would be the first product to show efficacy against standard bupivacaine in a well-controlled study. It would have the extended duration of up to three days based on our 660 milligrams of dosing; and, finally, a simple, rapid administration with no cold chain storage requirements. We own all the worldwide rights to DURECT. It's a valuable asset, and we are in discussions with numerous companies at this point with regard to commercialization rights.

Last but not least, I'll update on REMOXY ER. According to pain therapeutics, the ER has been added at the request of the FDA to distinguish the extended release feature of REMOXY. The NDA was resubmitted in March of this year, and the PDUFA date has been set for September 25, 2016.

In May of 2016, the FDA informed Pain Therapeutics that there was a tentative date of August 5 for an advisory committee meeting to review the REMOXY ER NDA. And then in July of 2016, the FDA informed Pain Therapeutics they had determined that an advisory committee meeting would not be necessary and would not be held on August 5. Pain Therapeutics also stated the FDA advised them that the regulatory review remains active and is ongoing, and the PDUFA date of September 25 remained unchanged. So we are now less than two months away from the PDUFA date for REMOXY ER.

REMOXY ER has excellent abuse deterrent properties. It can eliminate or reduce abuse by snorting, injecting, smoking, chewing, crushing, and mixing with drinks. Some of this abuse data was shared at the American Pain Society meeting in Austin, Texas, on the date of May 14 -- the 11th through the 14th of this year. When compared to the approved extended release oxycodone products, we believe that REMOXY ER has the potential to be a best-in-class, tamper-resistant formulation.

REMOXY ER will be entering a large market, with over $2 billion in US annual sales. DURECT receives a royalty on sales that start at 6% and go up to 11.5%. So if the sales end up being in the range of between $250 million and $500 million, the royalty to DURECT would be somewhere between $16 million and $35 million per year.

We have patents that extend through at least 2031, so this product should benefit DURECT shareholders for a long time. And our NOL position -- about $300 million with federal and more than $200 million for state, which means we won't owe taxes on these royalties for some time to come.

REMOXY ER has five dosage strengths, including a 5 milligram, which would be the lowest extended release dose of oxycodone available and is consistent with recent government agency guidelines to start patients on the lowest dose possible and may allow for some immediate-release oxycodone patients to be converted to extended release.

REMOXY extended release is a true twice-a-day dosage form. It was designed to have a PK that is not bioequivalent to OxyContin. There have been a lot of kind of renewed focus lately, driven primarily by a major investigative reporting piece by the LA Times, which was published in May, about whether oxycodone actually works in many patients for a full 12 hours, which would also be an issue for any other products that are bioequivalent to OxyContin. We look forward to the PDUFA date of September 25 and believe that REMOXY ER can be an attractive product to serve the large population of chronic pain patients while deterring illegitimate users who may wish to tamper with the product for improper use.

To summarize, between the potential approval of REMOXY ER, DUR-928 clinical data, and POSIMIR Phase 3 data and the potential of resubmission and business development opportunities, we have an awful lot to look forward to here. With that, I want to thank you for your attention, and we'll take any questions you might have.

(Operator Instructions) Annabel Samimy.

So, with regard to POSIMIR first, I guess: these continual changes to what should have been a confirmatory Phase 3 trial for safety purposes seems kind of weird, given the expense that it's going to be taking when you have what is seemingly a much more valuable program that's in development.

So can you please explain the rationale for all of these changes when it should have just been a confirmatory type of trial? And are these changes FDA directed or are they directed by you? And how this is going to impact any kind of partnership discussion, given that this trial continues to be delayed? Thanks.

Okay. Well, first of all, this is a change that we announced earlier this year at the request of the FDA. And that was to --.

Right, but the 48-hour is not. That's a new change.

Right, right. The new piece is the 48 hours, which actually makes it, quite frankly, just a lot faster and easier for us. So the FDA wanted to see a positive control, and we are happy to comply -- based on, in particular, the fact that we've beaten positive control in the same model with 50 patients.

So we did our sensitivity analysis, and modeled it all up, and found that we could conduct a trial a lot faster and a lot less expensively by doing it in 48 hours. And we already have two studies, hernia and shoulder, that are 72 hours. So, I mean, certainly we have the 72 hours; if we have 48 for gallbladder -- or quite frankly, we've got, I think, a very strong chance of winning the 72 hours anyway as our primary endpoint; we'll have all that information in place.

As far as cost goes, by doing it this way we're going to be probably in maybe a $2 million or so additional cost with regard to it. And timing wise, we're looking at six months difference from when our original timeline. So it's six months more, $2 million more.

We think at the end it'll be a stronger package. You asked about competition -- or not about competition, but about potential business development: I can tell you we've not had, never had more people looking at the product than we do now. We have quite a group of people looking at it. And I think they're quite interested in the potential of being able to beat bupivacaine. And with our 72 hours from shoulder and hernia, with -- you know, beating bupivacaine with -- you know, it's custom-made for laparoscopic surgeries, I think that puts us in a position to be -- you know, I think the product could be quite strong when it's out there.

Has the FDA asked anybody else to do a comparative trial against bupivacaine?

I have no idea what the FDA has asked anyone else. I did note that Heron reported today some Phase 2 data where they used bupivacaine as an active comparator. So it's possible they could have that communication with them, but I have no idea.

Okay. And then onto 928, at what point are you going to be able to discuss partnership with anybody? Because this is going to be a pretty expensive, costly trial for you. And right now, I mean, it seems like you're going all sorts of different angles with this drug, right? And I guess the question is: do you at least get a proof-of-concept for one of the indications and then move forward? Because it seems like, you know --.

We're definitely positioning to be able to get proof-of-concept, and that's what we're working for on a number of fronts. You're right; we're doing a number of fronts.

I would agree with you the oral chronic utility in NASH and some of the lipid storage diseases and those kind of things can be longer trials, for sure. And we are and have been in discussions with potential partners regard to that. I can't say for sure when that might occur, both regionally and globally.

The acute use are then -- are much different, because each patient would only get a single injection or maybe two injections or so. And those are different clinical trials, different indications and can be discerned more rapidly. And in fact that's the first IND that we are looking at in the United States is for acute kidney injuries. And so to that end, we should see something more rapidly.

And remind us again why you are enrolling it in Australia?

The Australian work that we are doing is actually -- it serves both the chronic and the acute use in that we are doing the oral and injectable work down there. And we started the work down there because it was much more rapid to get started and is less expensive, probably about a third less expensive for doing clinical trials in Australia versus the US. So we --.

Is there any chance that you're going to have to repeat it here, the same types of Phase 1b?

I don't think so, not at all. No, not at all. They are all being done under GMPs, which is actually quite -- we've had some advisors here, a number of really good advisors in the US advertising our work down in Australia. Some of the world's leaders actually have worked with us on this product for a number of indications.

And we'll be able to tell you a lot more in future quarters as we update. I think that you're going to be, I think, quite pleased. But can't say. We'll see.

Okay, and any further discussion on partnership for REMOXY from Pain Therapeutics?

I don't know, you'll have to talk to --.

Or are they doing this on their own?

Yes, they are doing that on their own. I wouldn't be able to update you. I can only tell you that there aren't that many good assets out there. And the advantages of this versus everything else out there I started to touch on a little bit, right; I think it's worth just repeating. And that is we'll have the only oxycodone formulation that is 5 milligrams, which is important from the government -- not just CDC; DEA and the FDA all want that. Kind of go low and slow, start with the lowest dose. That's quite important.

From an abuse-deterrent standpoint, we can tie it -- stand toe to toe with anybody. I think we'll have data that will show that, and you have seen some of that from last May. So I think those are kind of some of the real reasons why it's going to be a nice opportunity for someone.

Great, thank you.

Sure.

Jim Molloy.

The no ad comm but still a PDUFA -- I mean, it certainly seemed like a positive. Your stock reacted positively back when that happened. Can I get your take on it when you think what -- you know, does it increase the chances for an approval or decreases?

You know, Jim, it's impossible to -- I think it's a positive thing, personally. But then if you look at the history of this NDA, Pfizer way back when could've accepted -- you know, the FDA -- it was just a 30-milligram and 40-milligram dosage strength that had a little bit higher standard deviation with the assay. But the 5-, 10-, and 20-milligrams were within the plus or minus 10%. So that NDA could have been approved for those strengths at that point in time. And those are probably the most important economically going forward.

So I feel very comfortable about where the NDA is. But it's not my NDA at this point; it's Pain Therapeutics', but I think the odds are pretty darn good for it.

I know particularly the FDA is a difficult business.

The attributes of REMOXY -- you know, third time around. There has been a history of having to go a couple times with these abuse-deterrent drugs before you get approved, so who knows? But hopefully this time it will work. Certainly seems to fit with the current mood of where the public discourse on opioids is.

Last time they outlicensed this thing to King for $200 million. Given sort of your industry knowledge, do you think they are looking to -- along those lines again?

I don't know. You know, business development always fluctuates with markets and everything else. I don't know whether they'll do a deal, or whether they'll -- you know, for the product or for the entire Company. I think they are probably open to more than one look at the whole thing. I wouldn't be surprised to see them have a very nice valuation based on this product. I think the potential is quite nice.

And if you look at the sales that are out there -- and if this can, as I said earlier, stand toe to toe and maybe even be better than the things that are out there in abuse deterrents, or at least equivalent to them, and have the 5-milligram dosage strength and also have the -- we didn't talk about it earlier much, but have the true 12-hour release rate. I think that's quite important.

If you look at that LA times article, that's a -- we've heard rumors for years that that's been a problem with the [Perdue] product. And I'd always kind of considered the patients coming back in pain, but what they focused on in that article is not just that, but also that these patients are going into narcotic withdrawal after eight hours.

And so to be able to be out there for 12, and we know ours delivers beautifully kinetically and protects the patients over those 12 hours -- that's really important. The government is also starting to move in a number of states to saying, if I'm a chronic pain patient, and I'm getting a twice-a-day label dosage form, I'm going to get 60 pills for a month, and that's it -- which means if I'm running out at eight hours, what am I going to do for the pain? And with our product, they should be covered.

And so I think the 5-milligram strength -- I think the true 12 hours, I think these are nice advantages for REMOXY as it gets out there. That plus, of course, the abuse deterrence of you can't mix it with the alcohols, and snorting it, and those kind of things.

And then I know you mentioned about a year to enroll with the new trial design. At what point do you anticipate top-line data for PERSIST at this point?

I think we're looking at -- you know, we're making a changeover right now. So figure about a year from now, we'd say maybe two or three months after that. So in the fall of next year.

So second-half 2017 is still in play?

For the next submission, yes. Resubmission, sorry.

You think the resubmission will be by second half of 2017?

Yes.

Okay, very good. Now, the 72 -- the 48 hours certainly would still be better than the 12 hours that EXPAREL has on its label. And you mentioned it's an easier target to hit.

Right.

Why 72 hours in the first place? Why not 48 hours all -- the whole time?

Well, you know, we started way back when. We actually -- we can kind of dial in what we want with this kind of dosage form. We've actually made -- as you know from the Relday work, we made one month and even more than a month duration for our technology.

So we can dial it quite long. And when we met with various surgeons, the orthopedic surgeons wanted things to last 5 to 7 days, but most of the soft tissue guys felt that three days was enough. And so that's why we went for three days.

And we also based our dose on what was done with regard to I-Flow, do you remember the ON-Q pump from I-Flow? And they showed with their literature, where they were quite successful in hernia trials and other surgeries, that you have to deliver about 10 milligrams per hour. And that's pretty much held true for our work and, I think, others.

And if you look at a dosage form that is delivering 260, or 400, or whatever, you can kind of divide by 10 and say that's how many hours they're going to get. If they are delivering 260, they're going to get 26 hours. If there are delivering 400, they're going to get 40 hours. And we are delivering 660, so we get pretty close to 72 hours. And I think that holds up pretty well.

So we did the three days based on our medical consultants, clinical consultants early on. But at this point in time, we're just looking to move the product through to approval. And we are ready have 72 well defined, I think, by shoulder and the hernia. So now it's about just completing this trial and showing that the safety we are looking for and the efficacy we are, of course, wanting to have against bupivacaine hydrochloride -- which we should, based on the 50-patient trial, be able to achieve.

Why not 36 hours or 24 hours? I know that EXPAREL only did 12.

You could, but at some point in time we just felt that 48 was fine.

And any challenges to changing the primary endpoint in the middle of a trial?

Well, remember, it's divided into two parts. So part one is now against saline. And that's going to be as it was before. In fact, that's just going to shift to becoming just a safety trial. So the first -- it's not quite 100 patients or so we'll have in that group. That will be all just safety information.

And then second group will be the 264 patients against bupivacaine hydrochloride at 48 hours. So that will be the primary endpoint for that study. And typically most trials you don't lock down the statistical analysis plan until right before you complete analysis. So that -- you know, you always have changed time to make adjustments to your staff. But I think at this point in time, we are announcing to the world that we are going to do 48, because that's what we're going to do.

Well, it makes sense. Thank you very much for taking the questions.

Sure.

Yi Chen.

Can you give us some color on the potential partnership for DUR-928? And also the potential for DUR-928 to get fast-track status or breakthrough designation, potentially, for indications like acute kidney injuries? Thank you.

Okay, sure. The first with regard to -- I'll answer the first one; then I'll let Dr. Lin, who's here -- she can address the potential for the regulatory opportunities.

With regard to the partnerships, we have had inquiries from most major companies in our industry around the world, and we've kept it kind of light in that we've not allowed too many to get too close to it. But we are considering and looking at the possibility of maybe a regional deal with 928 or possibly a deal for the chronic indications, the oral use.

As they are, as they were noted by a question earlier by Annabel, that they can be quite expensive and quite lengthy duration, so it makes sense at some point in time potentially for having that. But having that after proof-of-concept makes a lot more sense for us from a value standpoint. But that's kind of where that is.

WeiQi, Do you want to?

The set of questions about the FDA fast-track --

Correct, or breakthrough.

-- designation or breakthrough designation: so for the fast-track designation, certainly you can start to apply for that after you have preclinical data. For the breakthrough designation, it's required to have clinical data to apply for that.

So we are certainly, like Jim talked earlier, we are going to meet with the FDA by the end of September to discuss the IND filing. At the same time, we are going to show our preclinical data and get input from FDA about the designation.

Okay, thank you.

Len Yaffe.

Thank you and I apologize if this was asked earlier. I missed a few minutes. The NASH epidemic is well known, and it seems like several of the drugs that were further ahead of DUR-928 in clinical trials has had incredible difficulty in showing efficacy. And I was just wondering if you could briefly discuss your mechanism of action, where it acts along the NASH through cirrhosis paradigm, and how -- if you want to compare or contrast -- that may differ with some of the recent drugs, where there have been some problems? Thank you very much.

Sure, I'll let Dr. Lin address that.

Yes, thanks for the question. In fact, we believe our compound acts at a higher level. As a matter of fact at the upper stream are multiple nuclear receptors, which in turn modulate inflammatory responses and then cell survival, fibrosis as well as metabolic pathways. So our compounds, unlike most other compounds, may be acting on the very specific target point. And we are acting at multiple levels and then modulating multiple pathways simultaneously. That's why we believe our compound.

So earlier we talked about our compounds are major three pathways: lipids, and inflammation, and then cell survival. I would add today as we also have fibrosis, another pathway to be added on. So in fact, we actually covered all these pathways simultaneously. And we've been shown in many preclinical models that our drug actually is very effective in all of these four pathways and are modulating simultaneously. That's why we think our compound could be different from other compounds and then may be distinguished from that.

I think Dr. Lin makes a really good point. She has a very strong pharmacology team doing a lot of good work here, and I tried to hint to that in my talk. There's a potential this year that we could possibly patch together some human data plus the pharmacology data, possibly, for a poster or something, depending on how things go.

As a follow-on, if it's okay: similarly, in acute kidney injury, drugs that have been tried in clinical trials have failed recently. The last one was an AbbVie drug, I think about three years ago, because of some side effect issues. And again, I was just wondering, because that's not the disease state widely appreciated by Wall Street, and yet it's a huge unmet medical need -- both acute and chronic kidney injury -- I was wondering if you could discuss the applicability there?

Yes, actually that's very interesting. We saw many, many failed trials in the kidney diseases. As a matter of fact, when we talked to our nephrologists, they all told us AKI, for example, acute kidney injury, is not a singular disease. Quite often, it has multiple underlying diseases which induces acute kidney injury.

So when -- if a drug just targeting one specific link of the disease, typically it doesn't work, because there are so many underlying diseases happening. That's exactly we believe our drug could be potentially useful, because we target multiple organs. We target multiple pathways of the underlying diseases and then target multiple pathways regulating the pathogenesis of the disease.

Therefore, we thought that in particular that's why our compound has been shown in multiple preclinical animal disease models -- not just one, not just two -- in multiple of these models. So that's why we thought we are not only targeting the kidney, if the kidney is injured, but we are also targeting other tissues or other organs that were the underlying diseases.

And the opportunity on the side of the renal disease, when Dr. Jato spoke a couple of quarters ago, he was feeling that it was an opportunity every bit as large as NASH, if you look at the potential to make a difference in medical and healthcare.

Right.

Great, thank you so much.

Sure, thank you.

There are no further questions at this time. I would like to turn the call back over to Mr. Hogan for any closing remarks.

Okay. Well, thank you all for participating. And as always, if investors or analysts have further questions, please do call us. We'd be happy to be responsive. Thank you very much.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.