Exelixis Inc (EXEL) 2007 Q1 法說會逐字稿

Ladies and gentlemen, welcome to the Exelixis Q1 2007 earnings call. (OPERATOR INSTRUCTIONS) As a reminder, this conference call is being recorded for replay purposes.

I will now turn the presentation over to Mr. Charles Butler, Director of Investor Relations. Please proceed, sir.

Thank you, all, for joining us on our Q1 2007 earnings call. Joining me as usual is George Scangos, CEO; Mike Morrissey, President of R&D; and Frank Karbe, who is the CFO. Before introducing them, let me just refer you to our forward-looking statement.

We will be making forward-looking statements related to our financials and our clinical pipeline and posted which is available on the webcast slides and it's posted on our website. I'll now turn the call over to George.

Thanks, Charles and again welcome everyone for joining the call. First quarter has been I would say very productive and we started the year with great deal of momentum. On the financial side, we had a great quarter, which ended with over $305 million in the bank. Our revenues are up substantially. Our net loss is down, although we've made great progress on our compounds.

Frank will go into the financial data later in the call but I wanted to point out that as a result of the Business Development activity over the past year or two, we're in solid financial shape. I want to focus now on the progress we've made with some of our compounds particularly XL 647 and XL 999. As you know, those two compounds and a number of others are part of our collaboration with GSK. When each of these compounds reaches proof of concept which is a pre-determined measure of efficacy in Phase II, GSK has options to choose up to three of the compounds in the collaboration. We previously provided guidance that we would accumulate an update as to determine if we reached proof of concept by mid year.

I'm happy today to say the following--We have achieved proof of concept for XL 647, earlier than anticipated. We notified GSK of our achievement, they will review the proof of concept data package and we anticipate their decision on whether or not to select the compound for further development in late July or early August. I want to emphasize that we're really excited about the data and we're confident that 647 merits rapid further development whether at GSK or Exelixis. The encouraging proof of concept data for 647 arrives from the ongoing Phase II trial in previously untreated patients with stage 3B or 4 nonsmall cell lung cancer. The trial is designed to be enriched for patients with activating mutations in the EGF receptor to a level of about 30%. Based on this trial design we have been able to accumulate data for patients with and without the EGF receptor mutation. We achieved proof of concept earlier than expected due to the pace of recruitment which continues presently and to the apparent activity of the compound. We believe that the patient recruitment reflects the excitement about the compound in the oncology community.

In the XL 647 Phase II data have been submitted for presentation to the international association for the study of Lung Cancer meeting in Seoul, South Korea September 1, through 5 and we hope to share data with you at that time. We want to be respectful of the meeting and our investigators and we want to be scientifically rigorous, so full disclosure of the data will come then. For now here is what we can say about the data. In the context of our GSK collaboration, proof of contact is achieved when a predetermined level of efficacy is seen and in this trial it's defined as the number of responses. Obviously then we've seen a number of responses in the trial. We have seen responses in patients with and without activating mutations in the EGF receptor. All of the patients who received tumor responses are still on study so we don't yet know the durability of response in this population.

We believe that XL 647 has tremendous potential and the early submission of the proof of concept data to GSK should clarify ownership rights soon but let me be very clear. We believe that the current data warrants that 647 be fully developed. If GSK chooses not to exercise this option for 647 we intend to continue to develop it as aggressively as possible in nonsmall cell lung cancer, in breast cancer and beyond that in other indications as appropriate. We view these data as very exciting independently of GSK's decision.

Now let me also make a few additional points before turning the call over to Frank and Mike. As we recently announced, we've reached agreement with the FDA about the clinical development track for 999, based on the current activity of the compound and three of the nine late stage nonsmall cell lung cancer patients would have been treated in the previous Phase II study will move X 999 initially in this indication. We anticipate that this new dose ranging trial will get underway in the summer. XL 880 is on track for achieving proof of concept this summer as patient enrollment is moving forward as expected. XL 784 is enrolling as anticipated and we expect to complete enrollment in the summer for a three-month follow-up so the last patient will then be completed in the fall so we're on track to reach proof of concept this year for XL 880 and 784 in addition to XL 647. Let me turn the call over to Frank who will discuss the quarter financials and Mike will provide a pipeline update before I make a few closing remarks. Frank?

Thank you, George. I think it's fair to say that 2007 is off to a good start. Not only in terms of our accomplishments on the R&D side but also in terms of our financial results. Year-over-year, revenues are up over 50%. Net losses decreased. We have cash inflows of over $95 million during the quarter, and we ended the quarter with over $300 million in cash, topping our record from the previous quarter as the highest cash balance ever in the history of the Company.

With a submission of our first compound to GSK for their development election, we're entering a very exciting sequence of events. Both with regards to the collaboration with GSK as well as our agreement with Symphony. We expect to have more clarity on the ownership of the most advanced compounds in our pipeline and we may see significant financial events triggered under both of these partnerships over the next several months. I will clarify the possible scenarios in a moment but let me first cover our Q1 financial results in more detail.

We stated on our last earnings call that as of Q1 '07, we will be reporting our financial results on a GAAP basis only and as usual, the complete press release with our results can be accessed through our website as Exelixis.Com. Let me begin with revenues. Revenues for the first quarter '07 were $28.1 million up 55% compared to $18.1 million for the comparable period in 06. The increase in revenues from '06 to '07 was primarily due to revenue recognition associated with our Sankyo collaboration for the Mineral Credit Card program signed in April '06 and our new collaboration signed in December last year with Bristol-Myers Squibb for three oncology compounds as well as Genentech for the co- development of XL 518. The increase was offset by the completion of the revenue recognition in December '06, related to our collaboration with Wyeth for the FXR program.

Research and development expenses for the first quarter '07 were $50.2 million compared to $39.9 million for the comparable period in '06. The increase reflects the increased development expenses associated with the continued expansion of our clinical trial activity and the advancement of our compounds through pre-clinical development. General and administrative expenses for Q1 '07 were $11.2 million compared to $9.0 million in Q1 '06. Increase was primarily due to personnel related expenses and legal and accounting expenses to support our expanding operation. Net loss for Q1 '07 was $24.2 million, or $0.25 per share compared to $27.1 million or $0.32 per share for the comparable period in '06. Cash and cash equivalents short-term and long term marketable securities, investments held for Symphony of Illusion and restricted cash and investments totaled $305.9 million at the end of the first quarter '07 compared to $219.5 million at the end of Q1 '06.

I think the first quarter of this year was again a good demonstration of our ability to bring insignificant amounts of money in non-dilutive ways. We realized cash inflows of over $95 million mainly from up front payments associated with our new collaborations, milestone payments, and ongoing R&D Support. I would now like to take a moment to explain what we expect to happen under our collaboration with GSK following the submission of XL 647 for development election. Next week, GSK will begin reviewing a comprehensive data package on XL 647. GSK then has approximately three months to decide whether or not to elect this compound for further development.

There are two possible outcomes. If GSK selects XL 647 for further development, GSK will pay us a substantial milestone and we will transfer the program. GSK will then be responsible for the further development of the compound including potentially seeking FDA approval, market introduction, and sales. Exelixis will have no further expenses associated with this program but we will be eligible for further milestone payments, double digit royalties and certain co-promotion rights for North America.

If GSK does not select XL 647 for further development we will obviously not receive any milestone payments or royalty, but Exelixis will retain ownership of the compound and we would be free to develop it either on our own or in conjunction with other partners. Based on the the very promising data on XL 647 to date, we plan to aggressively develop the compound on our own.

Let me emphasize that both outcomes are positive for us. We believe the selection of XL 647 by GSK would be a strong validation of our efforts and provide comparatively rich financial returns over time. Retaining full ownership on the other hand of a compound with exciting data, tremendous potential, and which could be rapidly moved into late stage clinical trials would also be a great outcome.

Let me now briefly touch upon our agreement with Symphony. As many of you know, our collaboration with GSK is closely intertwined with our agreement with Symphony. As a reminder, Symphony provided us $80 million primarily for the Phase II development of XL 647, 999, and 784. In return, we gave them ownership to the IP of these compounds. If GSK were to select XL 647 or any of the other two compounds, we would need to exercise our buyback option with Symphony. In this case, however, we would receive a milestone from GSK , which would offset a significant portion of the buyback price from Symphony. Any remaining portion of the of buyback price, not covered by the milestone, can be settled at our discretion in either cash or stock or a combination there of. What exactly we would do will depend on the specific timing of the buyback and the outcome of many of the events we alluded to on this call.

Without doubt, the next few months will be exciting for us as some of these events play out and we obtain more data on all of our programs, particularly those that are currently in Phase II. Let me now turn the call over to Mike who will provide an update on our pipeline.

Thank you, Frank. Exelixis currently has a portfolio of 14 compounds in development. Our top priority is to effectively manage and aggressively advance the compounds in our pipeline. I'd like to take this opportunity to update you on the status of our clinical programs. I'll start by saying that achieving POC with XL 647 is a big step forward for the entire organization. I want to thank everyone in R&D as well as the patients and investigators involved in the 647 studies for helping us meet this important milestone.

I'll next turn to our MET inhibitor program. We continue to build upon our leadership position in the increasingly competitive field of MET inhibition as we've discussed previously activation over expression of MET is a prevalent feature of a wide variety of human tumors and is a negative prognostic indicator in patients with multiple myeloma, (Inaudible) and certain tumors. In addition we have proactively designed our lead MET inhibitors to have potent and balanced VEGFR-2 inhibition as both pathways are highly activated in many human tumors. We have two dual MET VEGFR-2inhibitors currently in clinical development, XL 880 and XL 184. XL 880 continues to rapidly advance through its Phase II clinical development program. Phase II trials currently are ongoing in papillary renal cell carcinoma or PRC and gastric cancer. We expect to initiate a trial in head and neck cancer patients shortly.

Let me spend a few moments on the papillary renal cell trial. This trial is a stratified Phase II study with the first stratum including 17 patients with sporadic PRC who do not have an activating MET mutation. The second stratum will consist of 17 patients with an activating mutation. We have completed enrollment in the first stratum, and the second stratum will now begin enrolling which we expect will predominantly come from patients with hereditary PRC. To that end we have recently signed an agreement with a National Cancer Institute for the NCI to participate in the PRC trial. The NCI maintains a database of hereditary PRC patients and should facilitate rapid enrollment of this patient population. We're excited to work with the NCI and the XL 880 Phase II program and we believe this new collaboration reflects the enthusiasm that leading oncologists have for XL 880.

Just to reiterate what George mentioned in his opening remarks, XL 880 is subject to our GSK agreement and with the progress we are making in the ongoing Phase II PRC trial, as well as the early observations in Phase I showing encouraging activity in this indication, the compound remains on track for a potential proof of concept determination by the end of this Summer. We also expect to advance XL 184, our second MET inhibitor which continues to progress well in its Phase I trial, and we plan to move it into Phase II in the second half of 2007. We continue to believe MET is one of the most exciting targets in oncology today and we expect to reinforce our leadership position with the advancement of both XL 880 and XL 184.

I'll next move to 784 where we're continue to make excellent progress in enrolling and treating patients in the ongoing Phase II trial. As you may recall XL 784 Phase II trial is a double-blind placebo controlled trial in patients with (Inaudible) associated with diabetic kidney disease. The trial was initiated in the first quarter of 2006 and is being conducted at approximately 50 sites across the U.S. We anticipate that we'll finish enrollment this summer and we expect to have the data from the trial compiled by early Q4.

I would like to update you next on the status of the XL 999 clinical program. XL 999 was previously evaluated in Phase I and II clinical trials in which cardiovascular adverse events were observed and new patient enrollment was suspended in November of 2006. In the previous Phase II study, conducted in patients with nonsmall cell lung cancer who had received at least one prior systemic therapy, we saw two patients with partial responses and one patient with prolonged stable disease among the nine patients included in the study. In light of this encouraging early evidence of any tumor activity, we will initiate a new Phase I clinical trial for XL 999 in nonsmall cell lung cancer patients who have failed at least one previous therapy.

Patients will receive XL 999 in a dose escalation format starting at 0.4 mgs per kg dosed weekly. Cohorts of ten patients will be enrolled and patients will be closely monitored for potential cardiovascular adverse events including ECG, cardiac specific enzyme levels, and determination of the left ventricular ejection fraction. Dose escalation will be determined on the basis of all adverse event information when ten patients have completed a four week treatment period. This trial design is expected to provide us with solid data on the tolerability of XL 999 and could provide us with the opportunity to move into a late stage clinical trial if XL 999 demonstrates any tumor activity with an acceptable side effect profile in this well defined nonsmall cell lung cancer patient population.

I'll next move to briefly discuss our activities in Phase I. We've made significant progress during the last quarter in advancing our early pipeline by filing IND's and executing Phase I trials. We continue to actively enroll patients in Phase I trials for XL 184, and XL 820 which are subject to the terms of our GSK collaboration. We anticipate moving both compounds into Phase II in the second half of this year.

We also initiated a Phase I trial for XL 518, a potent and selective inhibitor of MET in collaboration with Genentech. In addition, we've initiated a Phase I trial for XL 228, which inhibits IGF 1-R enable and XL 281 which is a potent and specific inhibitor of RATH. We're also advancing an exciting program focused on the PF kinase pathway that comprises three compounds, XL 418, XL 147, and XL 765. Each of these compounds target different point points along the PS33 pathway including PS3K itself. XL 418 is part of our GSK collaboration while XL 147 and 765 are unpartnered and owned outright by Exelixis. We recently initiated Phase I for XL 418 and filed IND's for XL 147 and 765. We expect to initiate Phase I trials for both compounds shortly.

Finally XL 019 which targets JAK-2 is advancing rapidly and we expect to file an IND in the very near future. As many of you know, JAK-2 is a very promising target in myelo proliferative disorders and there's increasing evidence of its potential in inflammatory diseases. Like XL 147 and 765, XL 019 remains unpartnered and is solely owned by Exelixis. So as you just heard the R&D organization is executing on a broad range of critical objectives. I believe that our recent reorganization has brought a new level of urgency and focus into our integrated discovery and development activities that we hope will lead to a higher rate of success as we advance our compounds through the clinic. And with that, I'll turn the call back to George.

All right, thanks, Mike. So let me just take a few minutes to give you all an overview of some upcoming events. First, we'll be presenting data at ASCO again this year, data from the XL 880 Phase I studies will be presented in an oral presentation on Saturday, June 2. We'll also have a poster presentation on the combined Phase I and II data for XL 999. In addition, we'll host a company sponsored briefing at 6:30 p.m. on Saturday, June 2, in the Boulevard Room at the Chicago Hilton where we'll provide a pipeline overview, a pipeline review and data update.

We also anticipate a very busy second half of the year. We'll learn of GSK's decision on 647, we expect to achieve POC proof of concept for 784 and 880 and submit those to GSK. We hope to present the 647 Phase II data in September and data on 880 and 784 in meetings later in the year. Many of our compounds are making good progress in Phase I and we also hope to present data from some of those at the various cancer meetings later in the year as well.

We're in discussions about additional partnerships and could enter into another collaboration later this year, although I want to emphasize that we will not automatically do so. We have several Exelixis owned compounds that will move through Phase I this year and our default position is to take them forward on our own to retain full ownership; however we're always into listening to interesting proposals. We're an track to start two additional Phase II clinical programs in the second half of 2007, one for XL 820, one for XL 184. These compounds will mark the fifth and sixth that we're moving into Phase II.

I hope that we've been able to convey some of the sense of momentum at Exelixis and the excitement that we feel about the status of our pipeline and the progress that we're making. As always, I want to thank our employees for the committment, talent, and hard work that they bring to the job. I'm the one here talking but the progress that we've made is a result of the combined efforts of all of our employees, so thanks to all of you who are listening. So at this point, let me thank you for your participation in the call today and your continued interest in Exelixis and now we'll be happy to take any questions.

(OPERATOR INSTRUCTIONS) Your first question comes from Brian Lian with CIBC World Market.

Hi, thanks for taking the question. Congratulations for reaching the proof of concept milestone. I guess I have an obvious question to start off with. Does this mean that you're going to be postponing the additional trials that you'd planned for 647 and the tarceva relapsers and in breast cancer until after the GSK decision?

Brian, it's Mike. We're going to initiate the Phase II in the tarceva relapsed responders in the very near future and the trial in the breast population will probably take place after GSK makes their decision.

Okay. And then I think the plan was originally to do a two stage trial design where you went 19 in stage one, you saw a certain number of responses you would enroll up to 40 or so in the second stage in the first line nonsmall cell lung cancer trial. Can you say if you reached full enrollment?

Well, let's say we're beyond the first stage.

Okay.

Okay? The trial is not fully enrolled but we're certainly beyond the first stage.

And proof of concept was not just getting into the second stage. It was well into the second stage?

Proof of concept is defined as a number of responses, not as where we are in the trial. So I'm not prepared to give any numbers out here, but - just complete hypothetically, if proof of concept had been defined as seeing five responses say, if we see those in the first five patients, we would have achieved POC. On the other hand if we don't see that until we enroll the 40th patient then we would see POC at that point. So, but without giving you the exact numbers which we really want to hold for the scientific presentation, that's the concept behind POC.

Okay, great. Thanks very much.

And don't take five, that's only an example.

Understood.

Your next question comes from Eric Schmidt with Cowen & Co.

Good afternoon. Just maybe a couple of general questions around the Glaxo relationship and the proof of concept decision. George, can you say whether the criteria for future compounds is the same as for 647 number of responses?

No. They are all different and they are all, for example, for 880 we sat down with GSK, we have worked out a proof of concept clinical development plan, we have pre-agreed as to what level of activity would constitute proof of concept, and that's not the same as 647 or of the other compound. They are each decided independently.

And given GSK has a certain limited number of craft picks here, do they at the time they -- during the time they have to make the decision on 647, can they look at other compounds for example? Do they get an update on 880?

Yes, I mean, they get an update on all of the compounds at our quarterly meetings that we have with them. Not just when we achieve proof of concept, but--.

They get a further than quarterly update on 880 for example?

Well, we didn't certainly envision that. I think people we focused pretty much full time on 647 during that period.

And then if they choose to exercise the option on 647, are you required to buy all three compounds back from Symphony? Could you just remind us how that works?

Yes, Eric, it's Frank. We would be required to buy back all three compounds together.

And can you remind us of the terms, Frank?

Yes. We have to pay back Symphony the $80 million that they've given us plus a 25% compounded return, but keep in mind the return is paid on the amount of money that they give us and over the time that we've had this money and the 80 million were drawn in two separate draw events, the first 40 were drawn in June of '05 and the second 40 were drawn in June of '06.

Okay. And then I guess last question is just on 646 development in the future with or without Glaxo. I understand that if they pick up their option here, it's all up to them, but assuming they don't pick up their option , what could we expect from 647 now that you internally have figured out that you want to move forward with this

In terms of clinical?

Yes, when might for example, the next phase of studies start and what type of trial might that be? A Phase II registrational study?

Eric, it's probably too early right now to comment on some of those issues. We're thinking a lot about that. We're planning a lot, but it's just really premature to kind of roll that information out.

Okay, thanks for taking my questions.

Yes.

Your next question is from [William Sargent] with Banc of America Securities.

Hello. Thank you for taking my question. George, I was wondering if you could make some more I guess general statements about the 647 POC study, i.e. was the proof of concept just PR's or was it PR's and CR's and were there actually CR's seen and if you could make any general comments about the tolerability in the trial?

Yes. I'm not going to go into anymore details on the data that we've seen and types of responses or the number of responses. We really do need to save that for the scientific presentation, so we don't jeopardize our investigators ability to publish. I can tell you that compound seems very well tolerated and everything we've seen was completely consistent with the data we've already presented in the Phase I. Nothing surprising.

Could you say if POC consisted of CR's plus PR's?

No.

Okay. Thank you for taking my question.

Okay.

Your next question is from Han Li with Stanford Group.

Yes, thank you for taking my questions. Two parts. First, regarding ASCO, are you going to give us some update at the Analyst pipeline, Analyst meeting regarding 647, like preliminary Phase II data?

No. Look, we're feeling in an awkward position here because we would love to share the data with everybody. We know everybody wants to see the data. We would love to provide you with the data. We need really to be respectful of the ability of our investigators to present the data at a scientific meeting and so we are being cautious about what we say, and so ASCO is about a month away from now. I think for 647, we won't provide too much more color than we've provided here at this call, at the ASCO meeting, that will come in September.

How about the ERTC?

Oh, prior to ERTC, we've submitted the International Association for the Study of Lung Cancer meeting which is held at the beginning of September, September 1, to 5.

Got it. The second part of the question is are we going to see some of the Phase I data of 820 at ASCO?

No.

Okay. Thanks, Frank for filing the 10-Q so quickly. That saved a lot of headaches.

You're very welcome.

Your next question is from George Farmer with Wachovia.

Thanks for taking the question. I promise not to ask about 647 data; however, I am interested if there was any TFS data included with that package sent to GSK.

Well, we can tell you, I guess we can tell you that of the patients who responded, none have yet progressed.

Okay.

All right? And so I don't know what the PFS data will look like.

Fair enough. Also, Frank, given that you are required to buyback all three compounds from Symphony should GSK exercise its option, will the milestone from GSK cover the entire purchase price?

No. It will not cover the entire purchase price but it will cover a significant portion.

Okay. And the 15 million that you earned from GSK for Q1, how is that going to be recognized? Is that going to be amortized?

I think you are referring to to the 15 million that we got from Genentech.

I'm sorry, Genentech.

Yes, that was a milestone in connection with the filing of the IND for XL 518 in December of last year, and that is recognized over a three year period.

Okay. And sorry if I missed it. What were your, what was your stock option expense this quarter?

The total expenses were about $4.5 million.

Okay. Thanks.

Your next question is from May-Kin Ho with Goldman Sachs.

Hi, George. On the Symphony buyback, what is your thinking in terms of cash versus stock? Obviously it depends somewhat on the stock price.

Yes. Look, May-Kin. First of all let me say that we'll only have to buy it back if GSK selects it, and the milestone we get from GSK will cover a substantial part of our obligation to Symphony. There are so many events that are going to occur between now and when we have to make a payment to Symphony which comes much later in the year. We'll certainly know about GSK's decision, we hope to have 880 and 784 presented then, the 647 data will be published, there will be other events that might occur, so it's not that we haven't thought about it. We certainly have given a lot of thought on it but there are so many balls up in the air right now that I think we'll defer that decision until later in the year. But I can say that we're not too concerned about how we're going to deal with it.

So what is the time lag, if any, let's say GSK decides September 1, or August 1, when do you actually need to pay back or buyback?

We'll have a certain period of time after that. It's not the next day. I think we'll have to be reasonably diligent about going to do it, but some time later in the third quarter, early fourth quarter would be the timing when we would have to do that.

And if I do the back of the envelope calculation, it's about $120 million total. Is that the right ballpark?

Yes, that's about right. It's a little less than that but your in the right ballpark.

And then a question on 999. That you resume the study now, but at 0.4 milligrams per kilogram, if I remember correctly, that's really kind of the pretty low end of the range that you tested. Do you think that it's a dose that is efficacious enough?

Well, we can tell you in the Phase I study, we saw PR's at 0.2, 0.4, and 1.6 mg per kg dose every two weeks, so we have seen activity at that dose range in the past. And again, I want to remind you, we're going to start at 0.4 and we'll escalate pending the safety data.

Okay. Thank you.

(OPERATOR INSTRUCTIONS) Your next question comes from Karen Buchkovich with JPMorgan.

Hello. I'd like to know if you learned anything new about the PKPD for 647 or if it was very consistent and predictable?

Again, Karen, I think we'll defer any discussion of the data until that meeting. I can tell you, there is nothing surprising in terms of PKPD talks or anything that came out in the course of the trial, it's all consistent with what we saw in Phase I.

Okay. Can you tell me if the Symphony reimbursement rate for the first quarter is a good run rate for the rest of the quarters?

Yes, I think, Karen, you can take that as a rough estimate. Obviously, it's driven by the level of activity in the 999 study, the ongoing activity on 647, and 784. If anything, you may imagine that towards the end of the year, it may level off a little bit if we get towards completion of enrollment on the 784 study.

Okay, and just to make sure I know the dose use for XL 647, was that the fixed dose, 350 mgs?

In the Phase II?

Yes.

Yes, that's correct.

Okay. And when is the 999 poster being presented at ASCO? Is that June 2, too?

Sorry, that's on Sunday, so I think that's the 3, of June.

Okay, thank you.

Your next question is from David Garrett with Fortis.

Hi, good afternoon. Regarding the 647 study, since it's a very specific patient population, could you just give us an idea of what you're using as an internal benchmark to judge the study against, especially since the trial is not randomized? Thanks.

Yes, I guess I'm not quite sure how to interpret that. I think your question refers to the fact that we have a patient enrollment criteria which are designed to enrich the trial for patients with active mutations in the EGF receptor. The enrollment criteria, we hope, would get the population of about 30% of the patients who have the activating mutation and of course that would leave 70% of the patients who don't have the activating mutation, the idea being we would be able to get insight into the activity of 647 in both types of patients. We have been able to do that. We have seen activity in patients with the EGF receptor activating mutation and in patients without the activating EGF receptor mutation and I can tell you that the trial is not over. We don't have the genotype on all of the patients yet, but the fraction of patients who have activating mutations of EGF receptor doesn't seem to be too far off from our 30% estimate.

So do you think a fair historical comparison is still against say carbotaxol regimen?

Well, I'm not sure, I mean, what the relevant historical control is. I would say we don't have yet enough data. We don't know, as I said earlier, all the patients who have responded are still on study.

Okay.

They are still going, and so we need to know the duration of the responses and the PFS time so we're still gathering those data.

Okay, thank you.

So far so good.

As there are no further questions in the queue at this time, I'll hand the call back to management for any closing remarks.

Okay. Well, I think we've again had a great quarter. We're making great progress, and this is the first of a number of events this year related to our Phase II and our Phase I compounds. We look forward to sharing more and more data with everybody as we go through the year. So thanks, everybody for tuning in and stay tuned. We'll have more news to come. Thanks.

Ladies and gentlemen, we thank you for your participation in today's conference call. This does conclude the presentation and you may now disconnect. Have a great day.