Enzo Biochem Inc (ENZ) 2004 Q3 法說會逐字稿

Welcome to the Enzo Biochem, Inc. fiscal 2004 third-quarter operating results conference call. Except for historical information the matters discussed on this conference call may be considered forward-looking statements within the meaning of section 27-A of the Securities Act of 1933 as amended and section 21-E of the Securities Exchange Act of 1934 as amended. Such statements include declarations regarding the intent, belief or current expectations of the Company and its management. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results. The company disclaims any obligations to update any forward-looking statements as a result of developments occurring after the date of this conference call.

All parties have been placed on a listen-only mode. I will now turn the floor over to your host Mr. Barry Weiner. Mr. Weiner the floor is yours.

Thank you very much. Thank you for joining with us and welcome to the conference call for the third quarter of fiscal year 2004. With me today is Dr. Dean Engelhardt, who is Executive Vice President and director of research who will discuss some of the advancements that are going forward in our clinical and therapeutic activities, as well as David Goldberg who is Senior Vice President of Enzo Clinical Labs who will briefly discuss that division's performance during this quarter.

Our press release concerning the results for the quarter was distributed earlier, and I hope you have had an opportunity to review it. In the third quarter both Enzo Clinical Labs and Enzo Life Sciences showed revenue increases both on a sequential basis as well as year-over-year. Our therapeutics group was extremely active, as well. It entered into two agreements with the University of Connecticut to license and develop novel medicines for the stimulation as well as the enhancement of bone formation. This is a project that could yield treatments for bone disorders such as osteoporosis and possibly fractures.

We also announced last month that we had cleared the last regulatory hurdles and today we are pleased to report that a Phase I clinical trial to study the effects of our new immunomodulation therapy EGS 21 (ph) has been initiated, and we have begun to enroll subjects.

Looking first specifically at the numbers, total sales increased approximately one percent to $11.8 million. Gross profit was essentially even with a year ago, 8.8 million versus $8.9 million. Most significantly, though, despite substantially higher expenditures for research and development and for legal expenses, the Company's cash flow during the quarter was a positive $600,000. Putting cash and equivalents as of April 30th of the year at over $75 million. This is a notable achievement for us and is indicative of our ability to continue to invest in our business and importantly, to control our expenses.

At Enzo Life Sciences the turnaround in our distribution activities to a more self-reliant posture in terms of our fielding our own direct sales force continues to pay off. Revenues in that division amounted to 4.2 million for the quarter; an amount that compares favorably with a year ago when sales totaled 4.18 million, which at that time included approximately $1.5 million in revenue from our last significant business from Affymetrix prior to our termination of their contract.

On a comparable basis, excluding the Affymetrix business, sales at life sciences actually increased year-to-year by approximately 55 percent. Sequentially life sciences sales have increased progressively thus far in each quarter this year with third-quarter volumes 50 percent greater than it was in the first quarter which is about when our direct sales program got underway. It's obvious that it will be difficult to continue to grow at these paces but clearly our own sales efforts combined with a raft of new products we have introduced for the genomics market are benefiting results.

Gross profit at life sciences also continued to gain grounds sequentially. The figure, while down slightly from a year ago was nonetheless up 6 percent from the preceding second quarter and ahead 54 percent from the first fiscal quarter of this year. Operating income sequentially was ahead 50 percent over the second quarter and almost four times greater than the first quarter of this fiscal year.

At Enzo Clinical Labs we also have experienced growth in sales. Sales over the corresponding year ago period was ahead about one percent. Gross profit at this segment was essentially even at 4.9 million, which was versus 5 million a year earlier. Compared to the preceding second fiscal quarter clinical laboratory sales in the third quarter was slightly above 7.5 million improving 5.6 percent while gross profit was ahead 8.9 percent.

During the third quarter the provision for uncollectible accounts increased to 2.8 million as compared to 2.2 million in the year ago quarter. The result overall was an operating loss of $315,000 as compared to a year ago operating income of $850,000. However, it represented approximately $800,000 improvement over the preceding second quarter.

Consolidated operations reflected two major cost items. One is research and development, which increased to 2.1 million for the third quarter. While down slightly from the prior fiscal 2004 second quarter, R&D expenditures still represented a 24.6 percent increase over one year ago. I need not point out further that R&D is the lifeblood of our and as many other biotech companies. And we are very, very excited and are committed to investing in these promising new modalities that are on the horizon. However, it is also noteworthy that our expenditures in this regard continue to be well below that of the industry average. And we believe our company gets more effective use of each R&D dollar Enzo spends than any other biotech that we know of.

Legal expenditures also increased in the third quarter. They rose slightly by over 1 million on a year-to-year comparison, but actually were .5 million dollars less than in the preceding quadrant. Last week we filed a lawsuit against Applera Corp. and its subsidiary Tropix charging them with patent infringement arising out of the misappropriation, with Enzo's proprietary and pioneering patented technology relating to D&A sequencing systems and other products. This complaint, that charged the defendants with infringing approximately 6 U.S. patents, 4 owned by Yale University and 2 owned by Enzo Biochem.

These asserted patents covered the pioneering technologies relating to compounds used in D&A sequencing systems to read the genetic code. These inventions cover compositions and methods for detecting and reading genetic materials. The applications for these inventions are diverse, ranging from detecting pathogens in human diseases such as cancer to decoding and analyzing the human genome. This complaint asserted that Applera and Tropix infringe on our patent rights and that they improperly make use and sell patented (inaudible) products as well as providing them with two others with unauthorized and prohibited access to the technologies which are covered by our intellectual property.

This particular action was one that is a particularly interesting one for Enzo in that it is a very broad reaching patent that has what we consider to be significant consequences in the industry. At the same time in the last few weeks, we have spoken about an issue which has arisen from our negotiations with Roche Diagnostics and Roche Diagnostic Systems, which was clearly stated in a release at that time in which after rejecting a settlement from Roche, which we obviously deemed inadequate, they filed its claritory judgment against us. As we have stated publicly, we believe that their actions reflect a concern on Roche's part that certain products and technologies funneled by Affymetrix to Roche rightly belong to Endo (ph) under the Enzo Affymetrix agreement. It's obviously not appropriate for us to comment specifically on any of these matters while they are before the courts but is important to appreciate how highly we regard our and value our intellectual property.

We can assure you that we feel very strongly about the value of this particular patents and also are very, very concerned and diligent in our actions in supporting and defending what is appropriately our property to the fullest extent. Last week we announced the issuance of a new patent at Enzo Life Sciences covering a new nucleic acid amplification, the first in a series of pending patent applications for genetic analysis technology to be awarded to us in this area. Our proprietary science is an important asset at Enzo, and while no one enjoys the expense and the time that has, that it has to be invested in these matters on terms of the legal actions, we remain steadfast in our determination to protect them. You can be certain that we monitor our legal costs very carefully, and while they may vary from quarter to quarter, we have taken steps to keep these expenditures within reasonable bounds.

Taking into account the increased R&D and legal expenditures, despite a net loss of half $1 million, results improved sequentially in the third fiscal quarter as I commented by roughly $1 million. We remain financially sound as I noted earlier. We have a substantial cash position in addition to working capital of 96.6 million, shareholders' equity of over 108 million and no debt. We are fortunate to have the financial resources to pursue our developmental programs and expand our marketing and sales efforts.

Our financial approach has served us well over the years as demonstrated by the fact that we have not returned to the equity markets for financing for nearly a quarter of a century. We are of course one of the few and perhaps any company in the industry that I am aware of that can make that claim. I would like to comment in terms of the legal front that we are involved in on one particular issue which has arisen very, very recently. On June 10th of this year the District Court in Delaware, U.S. District Court in Delaware, issued a decision on the construction of the claims of our 581 (ph) patent in the litigation that is being pursued with the Digene Corporation. This is referred to as a mark mint ruling, a ruling on the construction of a patent claim is a pivotal and important decision in any case. And in our case it is particularly important because it sets forth the scope of the products and methods that are embraced by the claims within the issued patent.

In its decision the District Court ruled in favor of Enzo Life Sciences and against Digene on all disputed issues concerning construction of the patent claims. We are very pleased with that particular ruling from the District Court in that it is a very positive statement directing the meaning and scope of the patent claims. The first phase of the trial have been scheduled to start tomorrow June 15th, and was going to be limited to issues of infringement and patent damages. All other issues including validity of the patent and Digene's counterclaims were to be tried separately on a later date.

Following the issuance of the June 10th mark mint decision the District Court adjourned the scheduled start of the first phase of the trial. The District Court has not yet set a new trial date but we expect that trial date will be scheduled within the next several months if the case is not otherwise resolved. Because this is an ongoing litigation, I am really quite compelled to leave more comments at this point in time.

On that note I would like to turn over the phone to Mr. Goldberg to give you some comments on the clinical laboratory group and then we will speak to life sciences and the clinical effort in our therapeutics division.

Thank you very much, Barry, and thanks to all of you joining us here this afternoon. Enzo Clinical Labs continued its strong growth in the third quarter. Unencumbered by the weather problems that plagued our service area during the second fiscal quarter, this division saw a top line growth on a sequential basis of about 7 percent and had an increase year-over-year. For the nine months Enzo Clinical Labs revenues exceeded $22 million, an increase of more than 3 percent year-over-year.

As we have told you on the last several calls Enzo Clinical Labs continues to expand its testing menu. This past quarter we signed an agreement to offer a new cardiac screening profile, the VAT test. VAT, or vertical auto profile is a specific group of screening tests that together can take a picture of a person's risks for cardiovascular diseases. In a paper recently published by the National Institutes of Health these tests were shown to increase detection level of at risk patients to 90 percent versus about half that number with conventional screenings.

This test panel enhances the already comprehensive offerings we have for our internal medicine and cardiology clients, and we will be releasing more information about this test in the future. In house we continue to add to our ever-increasing menu of flow cytometry tests. Flow cytometry, as a point of information is a technique that quantifies components or structural features of cells primarily by optical (ph) means. Currently Enzo is offering a comprehensive panel of lymphoctyte subclasses for infectious disease physicians for their HIV patients, and it will soon be offering a wide menu of (inaudible) assays for various cancers. We are one of the few labs our size running these assays as much as six days per week, reflecting the increasing demand for these tests as well as our organic growth.

In the pathology area, during this quarter we became one of the first preferenced laboratories to offer human papillomavirus testing directly from a choice of liquid base psychology collection methods. Our technical staff was able to complete a comprehensive study utilizing the single sample for both Paps and HPV testing to the satisfaction of various regulatory authorities. And we can now offer this convenience to our client and their patients. Thus gynecologists that use Enzo Clinical Labs can choose liquid based pap methodology that they prefer without the need of having to obtain extra specimens from their patients.

On the lab information system front we continue to rapidly increase the number of Enzo direct computer systems that we have installed in the field. During the past quarter we completed development and commenced installations of a Macintosh based version of our system to allow us to interface with those physicians that have Macs in their offices. This allows us to service an even wider segment of the market as a vast majority of competitive products are not Mac compatible. We have also rolled out an enhancement of our system which allows instant scanning of not only the laboratory information contained on our client order forms, but the billing information as well. In this way we can more quickly identify those encounter forms that do not contain certain items that we need in order to process third party claims, thus speeding up our ability to obtain this information and submit it in a more timely manner.

The ultimate goal, of course, is to more rapidly complete and process such claims so that they will be paid to us more quickly while at the same time reducing our need to contact the physicians' office to such information later. Finally, we continue to expand the last geographic reach in a systematic matter. Our sales representatives continue to add almost daily to our core physician clientele. While it is too early to make any firm conclusions about the fourth quarter, we believe that our growth will continue as the investments made early in the fiscal year continue to pay off.

Thanks, David. The lab actually has embarked on a very, very strong expansion platform and we are pleased to see that the fruits of this expansion seem to be coming into play at this point in time. As I mentioned earlier at Enzo Life Sciences the turnaround in our distribution activities to a more self-reliant posture in terms of fielding our own direct sales effort continues to pay off. Revenues were up slightly over the prior year ago quarter which included certain volume produced by Affymetrix at the time. We are pleased with this performance, and we are looking forward to implementing continuous programs to keep building that particular entity.

Turning to product matters for a moment, it is interesting that we are currently beta testing a new proprietary product in the GeneBeam line in the Life Sciences division that is applicable in this rapidly expanding field of comparative genomic hybridization or referred to as CGH. As a small introduction, CGH is used in genetic and cancer research to detect the number of copies of a particular chromosome that are present in a given cell. One can think of it as providing a scanning or bird's eye view of a tumor. Basically in a CGH protocol two different samples of DNA are removed, one from the tumor and one from the normal tissue. Each sample is then labeled with a different marker that produces a different color and in our case two of our labeled nucleotides.

In equivalent amounts these two now labeled DNA samples are introduced to a normal sample or spread of chromosomes. The DNA from the tumor cells that have any additional copies of the genetic material will then bind to the corresponding region in this chromosome spread, and via the color that our kit provides the location on the chromosomes where these abnormalities occur can be identified.

Conversely, if the tumor sample is lacking a normal DNA, this can also be identified with our kit. In either case, the DNA tumor is sample is easily distinguishable from normal DNA tumor specimens, and really this basically provides the clinician with a very, very interesting tool for evaluating specimens of this type. It is important to note that since many tumors are believed to have a genetic basis, it is easy to see the utility of a product that can assist a researcher in identifying where the genome, where within this genome the abnormality may lie.

The genetic makeup of a tumor is important so that a personalized therapeutic program may potentially be developed and administered to patients. And I think we all are witnessing an evolution within the treatment of cancer, and I think this can be a very important tool in aiding that treatment. Research studies have indicated that the market for products, cancer related products is growing significantly. It is the second leading cause of death in America, and I think the number that recently we reviewed was approximately half one million Americans are expected to die within 2004.

Additionally, it's estimated over 1.4 million new cases of invasive cancers will be diagnosed in 2004, and as our population ages we view that the market for cancer diagnosis will exceed $20 billion ultimately, a number that approaches the size of the total diagnostics market today. So we feel products of this type are very much in line with the strategic direction of building volume and building value within the life sciences company.

There is ongoing work using this CGH approach in the field of in vitro fertilization, were embryos before they are implanted are biopsied impossible abnormality screened for so the embryo with the highest normal pregnancy potential can be selected through an IVF procedure, and we are looking at a multiple of other utility with this particular product. We're quite excited about it and we hope that the beta testing will be completed soon and we will be introducing this product into the market.

On the diagnostics front, we announced last week that we received an important patent covering linear amplification of specific nucleic acids, the first in a series of pending applications for the Company's genetic analysis technology. In brief, this technology, a component of our inchworm system permits a sequential series of copying reactions to occur at a constant temperature producing a sensitive yet robust amplification. Our technology avoids some of the shortcomings of other amplification systems, such as nonspecific amplification of false signal generation and allows us continued access towards the development of the next generation of diagnostic products, which will be more and more based on DNA analysis and less conventional methodologies.

We are pleased with this patent issuance as it affords us an important protection over our work in this area and allows us to proceed in a number of commercialization approaches that are being explored.

This is Engelhardt speaking. We've used the word linear amplification to describe another product that we are actually currently selling and its being accepted very readily in the market. This is an amplification system which amplifies the messenger RA (ph) from very small number of cells so that in fact from 10 cells we can get a very accurate depiction of all the messenger RAs present. And it allows a new initiative in terms of doing a genetic analysis from living organisms using a Micro Array display or other array displays.

Linear amplification in the case of the patent that was just issued deals with the first step of an exponential amplification, an amplification that allows us to amplify a piece of DNA 10 millionfold and allows us again to take negligible small amounts of D&A and make so much DNA that the assay for determining the presence or absence of individual genes becomes trivial, trivial eyesight assay like cloudy tube for example. This assay system, the inchworm assay system is faster, better and cheaper than anything that exists right now. I am willing to defend each word, it sounds casual, but there is a substantial literature that backs it up. And in particular it is faster, better and cheaper than PCR and ultimately will become the method of amplification of nucleic acid in all genetic analysis, I suspect.

I would like to turn to Enzo Therapeutics. We also announced today that we received a patent (indiscernible) for gene editing technology. This technology is extremely exciting as it has the potential to allow for the correction of genetic defects, such as inborn errors of metabolism. This occurs when a person is born with an incorrect sequence in a single gene that manifests itself in a condition that might be viewed as something such as cystic fibrosis or sickle cell anemia.

If you look at sickle cell anemia, for example, this error causes a change in the structure of the person's hemoglobin, the blood component that carries oxygen to cells. These changes result in red blood cells that are not round but rather take on a crescent or sickle shape. As such, their structure makes them far less efficient delivering the needed oxygen and as a result such persons are subject to a variety of physical problems.

Our technology might be able to correct this genetic error, and I say might because it is in the early stages of development, such that a person would be able to produce normal blood cells and thus not suffer these debilitating effects. This is a pervasive disease in the African-American community and one which we think this technology may afford some interesting applications and benefits. For sickle cell anemia there are only a few individual point mutations that account for the vast majority of all those subjects who are patients with sickle cell anemia, so the technology is quite feasible to develop a very small number of reagents and add all of the reagents at the same time so that whatever the effect is, more than likely the reagents will take care of this defect.

This technology changes point mutations to wild type; it changes it to the healthy gene. This technology also if there is any way to improve the functioning of an individual gene can be used to do that. It can change a protein routine structure for a positive as well as correct a point mutation. So it has enormous potential long-term and in fact I consider this will be the strategy of choice for any, for most genetic manipulations going forward into the future. We're very excited about this.

Now what this displacer technology -- the advantage it has is that it goes to this site that its going to correct. It goes there very precisely and at very low concentrations. So therefore it is a commercially feasible technology. The traditional technology for correcting mutations or altering genes, which is homolugous recombination rather than displace or editing -- these are technology terms, I apologize -- which is to put a whole piece of DNA in as though you were having a genetic, a crossing over event in the genome.

This technology has been somewhat of a disappointment long-term because it doesn't go at a very highly efficient rate to the target to correct it. The efficient rate, the efficiency is orders of magnitude tens, hundreds, thousands fold lower than the efficiency of the effectiveness of displacer technology. So I -- we are fairly well convinced that this will be the technology that will lead to this non-invasive and very gentle method of genetic manipulation.

Is actually a very exciting approach because in reality the homolugous technology has been around since the late '70s, early '80s and has not really afforded practical solutions for treating point mutation errors. What we are basically doing here is inserting a single strand versus a double strand and allowing the rate of this insertion or the rate of the numbers of the gene exchanges to take place to be much more rapid and thus potentially deliver us a therapeutic effect. It's a very elegant, very sophisticated technology, which is somewhat long-term but has incredibly important implications.

Also in the past month we entered into a pair of significant agreements with the University of Connecticut Health Science Center regarding the commercialization of a compound that may have some utility in the treatment of various bone diseases and conditions. This technology relates to the modulation of signaling pathways in cell development, the use of specific proteins. These proteins have been shown to act in osteoblasts or these are pre bone cells if you look at them in that way. Their path ways, as they become mature bone cells, as well as in the primitive cells of the homeopathic -- it is actually hemopoietic system as these cells progress to mature blood cells.

This technology could potentially lead to products that could work on various developmental pathways to regulate them in a way that a desired effect in terms of producing more bone mass may occur. And we are excited because we are looking at the utility of this product in the areas of bone marrow transplantation, gene therapy and anemia.

The bone factors, we actually have one very good candidate, a pharmaceutical product from the first of these two licenses which is a bone factor, which is a protein that when it is absent leads to a destruction of bones; when its present leads to an increase in bone mass and bone density and bone strength. And we are looking forward to developing this product into a legitimate pharmaceutical candidate and carrying it through clinical trials. Both in the area of osteoporosis and also in the area of bone loss in the mouth both of which are areas that todate that have very little positive progress in my opinion.

The second of the two technologies we've licensed from the University of Connecticut is in fact an even more conventional product, which is a small molecule product that will go through the FDA as an ethical pharmaceutical product, not as a protein -- I'm sorry as opposed to a protein which is a different sort of ethical pharmaceutical product. This more traditional product has been shown to do the same thing, that is to say to strengthen bones, to cause bones to grow, to cause bone mass to increase. Bone density to increase, excuse me. Both of these products we are pursuing as aggressively as we can as product candidates, and these products now go into the base of our pharmaceutical pyramid. Which I hope you note from quarter to quarter is continuing to grow at a very high rate. We now have a very rich library of pharmaceutical candidates. Some of them in preclinical, some in Phase I and some in Phase II as Barry is going to discuss going forward.

As Dean mentioned this is really a very exciting addition to our portfolio of products and one which I think will give us a bit more breadth and scope within the pipeline. As I mentioned earlier, we have received approval, and we have initiated and begun enrolling patients in our EGS-21 trial which is taking place at Hadassah, in Jerusalem. This trial is based on preclinical data that was discussed earlier in the year at a number of meetings. It showed basically that this particular product stimulated certain natural killer cells that have an immune modulating effect. We are anxious to proceed forward to move into more advance studies which we hope to do sometime later this year.

Again, we're very excited. This is another example of a technology that has come on board. In this case through the work of Enzo scientists and our collaborators at Hadassah Hospital. This particular technology moves into the immune system and stops the functioning of one type of cell. And this changes the balance of inflammation to autoimmune response. It shifts the balance in such a way that if you have an inflammatory response -- for example Crohn's disease -- this has been shown in experimental animals to knock that out very effectively. We are looking forward to moving forward on in this product as quickly as we can through the Phase I into Phase II and into developing the final product, for many indications including Crohn's disease and hepatitis C virus infection. And as I mentioned before, even Type II diabetes has been shown in experimental animals to be sensitive to this particular medication.

I'd like to give you just a brief update on the Crohn's trials. Basically we now in the Phase II study, in which we reported interim data, have now enrolled I believe thirty-one patients, of which 28 are evaluable. We are pleased that the data todate has shown consistency in the results as was reported during the interim data. That study is moving forward aggressively. We are quite excited about it. We have begun the process to increase the numbers of patients in various arms in this particular study. We are looking to improve the claims, the diversity capability of the particular product, and it is moving forward quite strongly now.

Let me just affirm that we are moving in several fronts on this including of course initiating the next of the double-blind trials and formulating the material in a commercially acceptable manner. And moving into Phase III, we are not in a Phase III, and moving into a Phase III as soon as is possible. This product is very exciting, and it has a market potential that would be very encouraging for Enzo's revenue. We all understand it, we're moving as diligently as possible in this front.

The last product I would like to comment on is our HIV product.

Yes, we announced the initiation of the HIV trial at Weill Cornell Medical, Weill College of Cornell University, and we have been diligently working to set this trial up. There's an interesting problem that has arisen and that is in the first Phase I trial, in the Phase I trial of this particular product we were able to perform this in a laboratory that was not run under the trial, was not run under GMP standards and that is because these standards were not applied at the time. In the interim the medicine which we are delivering, which is actually the blood stem cells with our particular anti-HIV antisense gene inside of these cells is classified as a GMP qualified product.

And therefore we've been spending some time at Weill Medical College of Cornell University to affirm and to train our procedures to be run at a GP level. And at this point we have run preliminary runs, and we are very close to reaching the point where we begin to enroll actual subjects in this trial.

Again, you must understand we've been working very diligently on this problem, and we have as far as I am concerned broken its back at this point and are ready to go ahead.

Actually we are very anxiously awaiting the initial enrollment, which is scheduled to begin very soon. It has been a long detailed process of training, of translating this product into GMP capabilities. It has been an interesting experience, and we are very, very pleased because we think we are at the cusp of beginning the initiation here.

I want you to understand that this to the best of my knowledge, this product is more advanced than any other gene therapy product in the area of engineering blood stem cells. We are the leader, as far as I can tell. We've gotten farther and we have been more effective in dealing with the issues raised by gene therapy. And therefore I think it is perfectly appropriate that we move ahead as quickly as possible to enter into the efficacy phase of the clinical trials, to look for the creation of a large number of blood stem, blood cells that will not be affected by HIV and will continue to produce immune response against primary immunogens. We believe that this trial will lead to this conclusion.

Its also interesting to note that todate all the patients from the first trial are showing comparable rates of cellular levels as they were during the prior two to three years that we've been following them. It's an incredibly encouraging sign in terms of the durability of our vector and the durability of the construct once it inserts itself.

Just a few comments on hepatitis B. We have been working very hard. We are coming to the period of time where we will be moving forward with these particular trials, as well. We have brought in-house and are getting high yields of our manufactured hepatitis B product. We are extremely happy about it, and that project will be moving along, as well.

Were moving into the next phase of hepatitis B; we've finished the development work in the GMP level product and we are now moving into the next phase of this process. It has been a little slow, but the time spent has given us -- each cycle of time spent in doing this has given us a two to fivefold decrease in the cost of manufacturing of the goods. And therefore we feel that the time spent has been appropriately spent given that we want to make a product that can be sold for a profit at a reasonable price.

You can infer from our conversation that the therapeutic pipeline is swelling extraordinarily here. We are at a point I think in the history of Enzo where we have a therapeutic pipeline which we believe will rival many in our industry. Products that we are convinced may have very, very important applications as we move forward. Its aggressive program. It's one that we are very excited about. We are putting a lot of emphasis and weight and work behind all these products, but I think we have had very good fortune to date, and we're hopeful that the results as we move forward will be commensurate with the work levels that we have put in.

On that note I would like to thank you again for joining us; as I commented we are very, very excited. We are working very hard to bring to fruition so many of the different projects that we have in place. We are pleased with the results in our clinical programs. We've made significant progress in our life sciences. The direct sales efforts we believe are starting to pay off. We are happy to see the proliferation of new products come forward. And we believe things are extremely promising.

We expect to report the fourth quarter and full years results in October. We think the summer is going to be a very, very adventurous one -- there's a lot of things in the pipeline, a lot of activity going forward. Hopefully we will have some very, very promising things to comment on in October. Meanwhile, we are aggressively getting involved in getting our investment story out to the public. And we think that this story remains an excellent one and hopefully we will start to spread the word rather aggressively.

I want to thank you and wish you all a good afternoon. I look forward to speaking with you at the next call.

A replay of this broadcast will be available until Sunday, June 27 at 12 midnight. You may access this replay by dialing 1-877-519-4471. The pin number is 4869702. International callers can dial 1-973-341-3080 and use the same pin number. This replay is also available over the Internet at www.Vcall.com. This concludes today's teleconference. You may disconnect your lines at this time, and have a wonderful day.