Exelixis Inc (EXEL) 2013 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the third quarter 2013 Exelixis financial results conference call. My name is Celie and I'll be your Operator for today. At this time all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. Charles Butler, Vice President of Investor Relations. Please proceed, sir.

Thank you for joining us for the Exelixis third quarter 2013 financial results call. Joining me on today's call are Mike Morrissey, our President and CEO; Frank Karbe, our CFO; Scott Garland, our Chief Commercial Officer; and Gisela Schwab, our CMO, who will together review our corporate, financial and development progress for the quarter ended September 30, 2013.

They also will discuss priority activities for the remainder of the year, provide an update on the COMETRIQ launch, and ongoing clinical development activities for cabozantinib.

As a reminder, we're 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 at exelixis.com.

During the course of this presentation we'll be making forward-looking statements regarding future events or the future performance of the Company, including statements about possible future developments regarding clinical, regulatory, commercial, financial and strategic matters. Actual events or results, of course, could differ materially.

We refer you to the documents that Exelixis files from time to time with the Securities and Exchange Commission, and in particular the Company's quarterly report on Form 10-K, filed today, October 30, 2013.

These documents contain and identify under the heading risk factors, important factors that could cause actual results to differ materially from those contained in any forward-looking statements, including the risk that unanticipated development could adversely affect the launch, commercialization, distribution and availability of COMETRIQ; the degree of market acceptance of and reimbursement for COMETRIQ; risk and uncertainties related to compliance with applicable regulatory requirements; market competition, the availability of data at the referenced times, and risk and uncertainty related to the initiation, conduct and results of clinical trials.

With that, I'll turn it over to Mike.

Okay. Thank you, Charles, and thanks to everyone for joining us on the call today.

We met important milestones in the third quarter and we continue to focus on our key priorities from a clinical, commercial and financial perspective. Our progress in 2013, and specifically in Q3, continues to point to 2014 as a critical year for Exelixis as we expect to complete multiple clinical and corporate milestones.

Our overall goal for the Company remains the same -- to capitalize on the potential of cabozantinib to become an oncology franchise across a range of important cancer indications. We're working very hard across the entire organization to achieve this overarching goal as quickly as possible and with the highest quality possible.

Before handing the call over to Frank, Gisela and Scott for a review of our financial, development and commercial efforts, I'll take a few moments to outline our status at a high level.

First, we have two late-stage assets -- specifically, the MET/VEGFR inhibitor, cabozantinib, and the selective MEK inhibitor, cobimetinib, under investigation in six global, randomized pivotal trials.

Cabozantinib is being evaluated in five pivotal trials for patients with MTC, prostate cancer, renal cancer and liver cancer. Cobimetinib, our MEK inhibitor partnered with Roche/Genentech, is in an additional pivotal trial named coBRIM in combination with Zelboraf in first-line patients with BRAF mutation-positive metastatic melanoma.

Second, we expect top-line data from four of these pivotal trials in 2014. For cabozantinib we expect having overall survival, or OS, data from the COMET-1 trial, and pain palliation data from COMET-2 in 2014, as well as OS data from the MTC EXAM trial.

In addition, Roche/Genentech confirmed guidance on their recent Q3 earnings call that they expect to have top-line data and pursue regulatory filings for cobimetinib from the coBRIM study in 2014 as well.

Third, we continue to advance our appropriately-sized commercial effort for COMETRIQ in progressive metastatic MTC. This activity is critically important to get this drug to MTC patients in need of additional therapeutic options, and helps us mature as a commercial organization so we're ready to rapidly and effectively launch cabozantinib in potentially larger commercial indications once we have met the obligatory clinical and regulatory milestones.

Fourth and last, we continue to maintain a position of significant financial strength by focusing the Company's activities and operating expenses on cabozantinib. We've had a productive year in 2013 and expect, and certainly have a lot more important work to do, as we close out the year and move into 2014.

I want to take a moment upfront to thank our key stakeholders, including patients, investigators, employees, shareholders, and our broad network of contract manufacturing, development and sales organizations for their unwavering efforts, support and encouragement.

So, with that, I'll turn the call over to Frank for a review of our third quarter financials. Frank?

Thanks, Mike. As usual, I will focus my comments on the highlights of our financial performance for the quarter, and refer you to our press release and today's 10-Q filing for additional details.

Net revenue for the quarter was $5.5 million, of which $4.8 million related to the sale of COMETRIQ, with a gross to net discount of approximately 4.3%.

As indicated in prior calls, our license and contract revenues continue to decrease, amounting to $0.7 million this quarter, which now fully depleted the remaining deferred revenues for this line item.

R&D expenses for the quarter were $47.4 million. The increase of $16.7 million as compared to Q3 last year, was predominantly due to a $13.9 million increase in clinical trial expenses, which was primarily related to activities for the COMET-1 pivotal trial, as well as costs incurred in connection with the startup for our phase 3 trials for metastatic RCC and advanced HCC. As you may imagine, the rapid enrollment of COMET-1 was the main driver behind the year-over-year increase in R&D expenses.

The increase in clinical trial expenses was partially offset by decreased expenses for our randomized discontinuation trial as well as EXAM and other studies that are winding down.

SG&A expenses were $13.6 million for the quarter, compared to $7.3 million for the comparable period in 2012.

Approximately half of the increase was the result of an increase in expenses related to consulting and outside services provided by our US sales force and our European distribution partner for the sale of COMETRIQ. The remaining increase was related to legal and accounting fees, wages and benefits, employee stock-based compensation expense, and patent costs. These increases were partially offset by decreases in facilities costs.

Total costs and expenses for the third quarter were $61.4 million. The increase of $22.6 million as compared to the third quarter last year, on the one hand reflects the ramp-up in our clinical trial activity; and on the other hand, the fact that we have matured from a pre-commercial biotech company to one that has an approved product in the market.

As previously mentioned, the completion of enrollment on COMET-1 is worth pointing out as the single most important driver of the increase in expenses, in addition to the fact that we are now running five active pivotal trials, on top of a large number of earlier-stage clinical studies.

Our 2013 full-year financial guidance for total costs and expenses remains unchanged, in the range of $200 million to $230 million. That said, we expect to come out at the high end of this range, and depending on how enrollment progresses in our newly-initiated phase 3 studies in RCC and HCC, possibly even a little bit above.

For other income expense, we incurred a net expense of $11.2 million for the quarter. The increase of $3.8 million as compared to Q3, 2012, predominantly relates to the interest expenses associated with our 4.25% Convertible Senior Subordinated Notes due 2019, issued in August of last year. $6.7 million of the interest expense incurred in this -- in the third quarter, reflects non-cash charges.

Let me wrap up by commenting on our cash position. We ended the quarter with $465 million in cash and investments. Our guidance for year-end cash also remains unchanged, with an expected year-end cash balance of approximately $400 million. With that, I will pass the call on to Gisela.

Thank you, Frank. In the next ten minutes I will provide an update on the progress of the development programs for cabozantinib.

Specifically, I will cover the status of the COMET trials; the status of the RCC and HCC phase 3 studies; activities in RET fusion gene-positive non-small-cell lung cancer patients; and I will close with a brief update on our activities in MTC, or medullary thyroid cancer, on the regulatory front.

Our clinical and regulatory effort is intensely focused on expanding the cabozantinib opportunity across multiple indications. As we have discussed previously, we have a broad strategy in place for evaluating the compound in a variety of indications, using internal resources to support phase 3 trials, and working in partnership with a wide array of individual physicians as well as cooperative groups through our collaboration with the National Cancer Institute's Cancer Therapy Evaluation Program, or CTEP, and an investigative sponsored trial program.

I will start the update with the ongoing COMET trials, which are our two phase 3 pivotal trials in metastatic castration-resistant prostate cancer.

As you know, COMET-1, a randomized study of cabozantinib versus prednisone, is focused on assessment of overall survival as the primary endpoint; and COMET-2, a randomized study of cabozantinib versus mitoxandrone and prednisone, is focused on pain response.

I am happy to report that we have recently completed enrollment for COMET-1, the study assessing overall survival. This study involved more than 960 patients globally in approximately 14 months.

As always with large global phase 3 studies, enrollment was commensurate with site activation, and started out slowly initially; but once the majority of sites were activated in early 2013, the enrollment proceeded very quickly, with about 900 patients having been involved in this study between January and September 2013.

This has only been possible due to the enthusiasm of our global investigators for cabozantinib in this patient population, for whom there is a high unmet medical need, despite the fact that multiple compounds have become available for the treatment of CRPC in recent years.

COMET investigators have also highlighted the fact that an agent addressing a different mechanism of action compared to chemotherapy or hormonal agents is important, as there are emerging data suggesting the development of cross-resistance when using agents targeting the androgen receptor axis sequentially.

I also want to highlight the remarkable and dedicated efforts of our internal team and the CRO, who all ensured timely site activation and monitoring of patient eligibility to ensure that the appropriate patients were enrolled in the study.

With this big milestone under our belt, our focus remains on enrolling patients in COMET-2. This is a smaller study aiming to enroll 246 patients and it is being conducted exclusively in English-speaking countries, as the primary endpoint is patient-reported pain response, and we wanted to avoid any language validation issues with the PRO tool.

In fact, US, UK and Australian COMET-1 investigators are now rolling on to COMET-2 to contribute to the study and to continue to make a cabozantinib trial available to their CRPC patients.

We continue to expect that top-line data from both COMET trials will be available in 2014. If both trials are successful, the combined data package would demonstrate a survival benefit and improvement of pain associated with bone metastases. We believe this would differentiate cabozantinib from other agents used in the treatment of CRPC, and support the product's activity in this indication.

In addition to the COMET studies, which evaluate cabozantinib in the late line of treatment of CRPC patients post-docetaxel and abiraterone, or enzalutamide, we are also actively working on advancing cabozantinib in the earlier line of treatment of CRPC patients prior to chemotherapy.

We are on track with our plan to initiate two earlier-line phase 1 or 2 studies in the near future. The first will evaluate the combination of cabozantinib with abiraterone. We project that this randomized phase 2 study will start in the fourth quarter of 2013.

Data from an investigator-sponsored phase 1 study conducted at the Dana-Farber Cancer Institute was published at AACR earlier in the year and has shown that cabozantinib can be given safely in combination with full-dose abiraterone.

In our planned randomized phase 2 study, we will now compare full-dose abiraterone versus cabozantinib, given at three different doses, 40 milligrams daily, 20 milligrams daily, or 20 milligrams every other day, combined with full-dose abiraterone. The patient population in a -- is a pre-chemotherapy population of CRPC patients with bone metastases, and the primary endpoint is radiographic disease progression.

A second trial will evaluate the combination of cabozantinib with enzalutamide and is expected to start in the first half of 2014. As enzalutamide is a strong CYP3A4 inducer, and cabozantinib is a CYP3A4 substrate, the objective with the first phase 1 combination study is to evaluate drug-drug interaction and resulting impact on pharmacokinetics, as well as safety, for different doses of cabozantinib given in combination with full-dose enzalutamide.

Regarding the status of cabozantinib in other indications, we are actively working on the execution of our two new phase 3 pivotal trials in metastatic renal cell cancer and advanced hepatocellular cancer.

Just as a reminder, the phase 3 trial in RCC was initiated in May 2013 and is now actively enrolling patients. It is a 650-patient, randomized, open-label study that is comparing cabozantinib with everolimus in patients who have received and progressed on or following at least one prior VEGFR tyrosine kinase inhibitor; that is, second- or later-in-line therapy. The primary endpoint is progression-free survival, or PFS, and the secondary endpoint, overall survival. No crossover between treatment arms is allowed.

Patient-reported outcomes, biomarkers, safety and pharmacokinetics will be evaluated as exploratory endpoints. We have selected the study sites and are planning the global execution of this study with balanced accrual weighted towards Western Europe, North America and Australia.

The HCC trial has also been initiated recently. It is a 760-patient study in patients who have received prior sorafenib and will compare overall survival between patients treated with cabozantinib and those receiving placebo.

Overall survival is the accepted endpoint in this indication, the endpoint used to support approval of sorafenib as first-line treatment for HCC.

There is a tremendous amount of enthusiasm for these trials in the community, based on the early-stage data and the design of these phase 3 trials. Both studies are off to a good start, and we hope to see top-line data on RCC in 2015 and HCC in the late 2016 or early 2017 timeframe.

These studies, together with CRPC, if positive, could support the next wave of indications for cabozantinib after MTC.

We are also working on the initiation of a single-agent phase 2 study in about 100 non-small-cell lung cancer patients carrying the RET fusion gene. This genetic alteration is seen in about 1% to 2% of non-squamous cell, non-small-cell lung cancer patients, and is seen in patients whose tumors are negative for eGFR, KRAF or ALK mutations.

Cabozantinib has been shown in preclinical studies to potently inhibit RET nanomolar IC50 values, and initial clinical data showing activity of cabozantinib in a small group of non-small-cell lung cancer patients with RET gene fusions, has recently been published.

These data have also recently resulted in an NCCN category 2A compendia listing for cabozantinib for this patient population. Also on the basis of this data, the phase 2 study in RET fusion gene-expressing patients is designed as a single arm trial with the primary endpoint of objective response rate.

Based on recently-completed regulatory meetings, we believe [a] robust response rate in such a selective patient population could potentially lead to regulatory approval in the US. So, we are now moving forward through startup activities the execution of this trial.

Before closing, I would like to provide a brief update on the review process of our EU filing for MTC. The filing was accepted for review in November 2012. We are addressing the EMA's questions and are now in the last phase leading up to the opinion from CHMP. We will keep you updated as we are reaching this milestone.

So, to summarize, we have made very good progress on the clinical and regulatory fronts. COMET-1 has reached its enrollment target recently; multiple phase 3 trials are actively enrolling; and we are working actively on startup of the combination studies in the earlier line of CRPC, and the study in non-small-cell lung cancer patients with RET fusion genes. And the ISG and CTEP programs are also advancing well.

So, with that, I will turn the call over to Scott.

Thanks, Gisela. We continue to make solid progress on the commercial launch of COMETRIQ and progressive metastatic medullary thyroid cancer. As Frank mentioned -- that product revenues in Q3 were $4.8 million, representing a 20% quarter-on-quarter increase.

As with previous calls, we will not be providing any further breakdown of product sales, and I will restrict all my comments to the MTC market.

Our penetration in our labeled indication of progressive metastatic MTC continues to grow. Our brand awareness amongst oncologists is now over 80% and exceeds that of our competitor, which is noteworthy given the size of our sales team.

In recent market research (inaudible) [%] of healthcare practitioners surveyed rated their impressions of COMETRIQ as either favorable or highly favorable, and close to 90% said the drug exceeded their expectations.

In addition, anecdotal feedback from prescribers, particularly those with experience using other VEGF TKIs, indicates that they are comfortable managing the side effects associated with COMETRIQ.

To date, 20% of patients have dose-reduced, with the majority of reductions occurring in the first 3 months. About 50% of thyroid patients are being treated at the 140-milligram dose, with the remaining half split evenly between the 100-milligram and the 60-milligram doses.

Recall that in Q3 we increased the size of our sales team to 15 reps and two managers. This larger sales force has allowed us to dramatically shrink the size of the individual territories, thereby increasing the reach and frequency of our sales calls on customers.

The new expanded sales team started calling on customers at the end of July. In Q3 the sales team made over 3,000 calls on targets with an average frequency of 2.6 visits per target in the quarter. Our marketing and sales efforts continues to focus on three key areas -- finding the appropriate MTC patient for treatment; differentiating COMETRIQ from the competition; and keeping patients on therapy once treated.

We've instituted a number of tactics to accomplish these goals, including designing novel targeting strategies and initiating high-touch compliance and persistence programs with our specialty pharmacy partner, Diplomat. I want to emphasize that all promotional tactics focus exclusively on labeled patients and comply with all (inaudible) regulations.

The recent publication of the EXAM manuscript in JCO has added another important promotional tool for our sales reps. Physicians tell us that the patient population studied in EXAM is more representative of patients they treat in their practice, and serves as yet another source of differentiation from our competition.

We also continue to hear that a lack of a REMS protocol for COMETRIQ is viewed favorably.

Moving to reimbursement, our payer field team continues to call on our payer targets, which represent approximately 99% of all covered lives. Coverage policies are now largely in place in over 31 pairs of paid claims for COMETRIQ.

As I've said on previous calls, payer reaction to COMETRIQ has been positive, and coverage is consistent with our labeled indication in Category 1 NCCN rating. To date, payers have covered essentially all MTC scrips submitted for reimbursement. Average copay to date has been approximately $36, with close to 90% of patients paying less than $100 out of pocket for COMETRIQ.

Recall that we offer comprehensive reimbursement support services through Exelixis Access Services, including copay assistance, benefits investigation, appeals support, and referral to independent copay assistance charities.

Finally, as Gisela mentioned, we are now in the last phase leading up to an MTC opinion from CHMP in Europe. We've been working closely with Sobi, our distribution partner, to get ready for a potential approval there. Progress has been made on several fronts, including (inaudible) country affiliates for launch, assembling the necessary documentation to support reimbursement with national payers, and setting up our distribution network.

And with that, I'll turn the call back over to Mike.

All right. Thanks, Scott. I'll keep my closing remarks brief so we can get to your questions. As you heard from the team today, progress continues on all fronts and we're vectoring towards an important set of milestones in 2014.

We have a singular focus to advance the near-term cabozantinib opportunity in metastatic CRPC and expand into other important oncology indications in the short term with our initial set of pivotal trials. Our overall goal is unchanged -- to bring new therapies to patients with cancer and build value for investors.

So, with that, we'll stop here and be happy to take your questions. Operator?

(Operator Instructions). Eric Schmidt, Cowen and Company.

Scott, just hoping you could comment a little bit on the quarter-over-quarter growth that you saw with COMETRIQ. You mentioned it was up 20%. But given the very substantial increased rate of adoption between Q1 and Q2, it seems like if you just kind of kept patients on the drug during Q3, we might have had an even higher sales number to talk about. So, was there a persistency issue in the quarter?

No, Eric. No persistency issues in the quarter. I mean, I would say, you know, generally, a few sort of top-line comments. One is, MTC's a small market, and we've been saying that all along. In terms of what we've been seeing on a quarterly basis, I would say that things are pretty much in line with our expectations.

I will say, you know, our penetration is actually ahead of what I would have expected at this point. As you get into the upper range of expectations for penetration, the growth from penetration perspective, quarter on quarter, obviously starts to slow. That's true for any drug at this point in launch. And I think that's what you're seeing reflected in the differences in the quarters.

So, all in all, I'm not really concerned, and there's no sort of underlying issue from a, sort of -- I forgot what word you used; but, for a persistence perspective.

Persistency. Okay. And then, for Gisela, it sounds like you're getting near the end of the EMA process on MTC. Can you comment on whether you'll be at the CHMP meeting in November -- whether the drug will be reviewed then?

We can't really comment on that. We are moving through the process and are responding to questions as appropriate. And so, we'll have to just wait for the final outcome.

Okay. And then, with the RET meeting that you had with the FDA concerning a potentially pivotal single arm trial, could you talk about the size of that potential pivotal study, and when that might begin?

Yes. We are planning about a 100-patient study. And it's a single arm trial, as you mentioned. We are working through the startup activities right now. So, we are thinking in the first half of 2014, that this study will start.

And, last question -- with COMET-1 now fully enrolled, do you see a pickup in COMET-2 activity as some of the same centers shift patients to the other trial of cabo?

Yes. So, COMET-1 investigators have been interested in continuing to participate in cabozantinib studies to make the drug available to their patient population. So, they are starting now to participate in COMET-2 and the accrual is ongoing. So, that's quite gratifying.

Okay. Thanks a lot.

Lee Kalowski, Credit Suisse.

As far as the timing of COMET -- so, you're saying it's 2014. I know in the past you've been pretty clear about the -- there being an interim. So, just to be clear, are you confirming that the interim is not expected in the remainder of 2013?

We're expecting data for COMET-1 in 2014.

Whether the -- whether on an interim or final analysis?

We haven't really spoken to that, but yes.

Okay. And as far as the timing of both COMET-1 and 2, are they going to be -- would -- is it your expectation that they'll be released as the data comes out? So, it could be potentially at different times?

Yes. That is a correct assumption.

Okay. And then as far as the EXAM trial is concerned -- so, you said that the OS will be next year. Maybe a commercial question related to that -- do you think the release of the EXAM trial might have any impact on the uptake in the launch of the MTC indication? Maybe put slightly a different way, do you think what we're seeing so far would be impacted one way or another by OS results?

You know, obviously, having overall survival would be nice to have. I will say, it's not been an issue for us in the marketplace. Physicians actually view the data that was presented and published in the EXAM manuscript very favorably, and it compares well to our competition.

I think the biggest issue in MTC -- it's just a very small market. You know, I'll certainly be happy if we get it, but it's not going to be an issue for us if we don't.

Okay. Maybe one last question. So, as far as the earlier trials in prostate cancer -- so, it sounds like you're thinking about pre-chemo use. Obviously the duration will be a lot longer than post-chemo and post-Xtandi and Zytiga. Have you had any experience with keeping patients on-drug for that sort of length of duration?

Yes. We have actually quite a bit of information on that. And remember, the MTC study has been ongoing for quite a long time, since 2008, and there are still patients on treatment. So, we have had patients on cabozantinib for 3, 4, 5 years at this point.

Okay. Thanks.

Cory Kasimov, JPMorgan.

Hi. This is actually Whitney on for Cory today. A question on the RET fusion study. You mentioned that a robust response rate could be sufficient for registration. I'm just wondering how we should be thinking about robust, if you could maybe just give a range, or kind of how you guys are thinking about that.

And then also, on the last call I think you mentioned for MTC that the -- it was shifting more towards community, and I think it was greater than 50% of prescriptions were coming from the community. Can you provide any updated metrics on that?

So, to your first question, what is viewed as a robust response rate, I think -- certainly, the ALK experience has set an example there -- so, on the order of 50%, plus or minus.

And in terms of the relative concentration of MTC prescriptions, the trend remains pretty stable. So, we are seeing a fair amount of adoption in the community for COMETRIQ at MTC.

Great. Thanks.

Ted Tenthoff, Piper Jaffray.

Thanks for the update and all the progress -- really exciting to see the COMETRIQ launch off to such a good, strong start. I guess my question really has to do with the opportunity with the timing on the COMET data. Can you remind us what your expectations are for placebo control and what the powering is around COMET-1?

Sure. So, just to describe a little bit the statistics and the assumptions underlying it -- the trial design, the study's designed as a 960-patient study and 578 events provide a 90% power for an HR of 0.75.

The underlying assumption regarding the prednisone arm was that the (inaudible) overall survival for that arm would be 7 months, and that was derived from the COUGAR 301 experience, where the timeframe from end of treatment to death was 7 months for the abiraterone arm.

So, those are the assumptions that -- we obviously vetted at the time very thoroughly our assumptions with key opinion leaders -- the leaders of the trial, really. And I think it was a general feeling that this was a generous assumption.

Excellent. And then just additionally, too, I'm -- if I recall correctly, I think COMET-1 does have an SPA. And are there any changes with background therapy that you may -- that you think may put in jeopardy, pred as the control?

So, just to clarify, we don't have an SPA for COMET-1. Obviously, we had extensive regulatory discussions before starting the study, but no SPA.

In terms of the background therapy or competing therapy, there are no issues at all. And if there had been, one would have noted with slowdown in accrual.

Okay. Thank you.

Biren Amin, Jefferies.

On the COMETRIQ launch, I noticed in the Q that the Company took a 5% price increase recently. Just wanted to get your thoughts around that, given the recent launch of the drug; and whether we can expect, I guess, frequent price increases with the franchise. Thanks.

Yes. That's correct. We took a 5% price increase. The new price for COMETRIQ is $10,395 for a 28-day supply.

We obviously look very closely at price increases -- relatively common -- actually, I would say very common for oral oncology drugs to take at least one price increase, and in many cases taking two price increases per year. The 5% price increase we took was very consistent with what we see for other oral oncology drugs. And we believe this reflects both the relative value that COMETRIQ brings to the market, and also is very much in line with what we see for our competition.

Okay. That's helpful. And I guess I just have a couple more follow-ups. So, on COMET-1, I guess with data expected in 2014 and with the trial fully enrolled, can the Company share with us any patient baseline characteristics from the trial, and whether they were in line with the Company's estimates for the trial?

Obviously, we want to preserve the integrity of the study, and so we don't look at that, and cannot share that at this point.

Okay. That's helpful. And then I guess, with the HCC trial which has recently started, I was noticing -- you know, it's a quite sizeable study compared to the BRISK-PS trial. And in particular I think you're looking at a healthier patient population than BRISK-PS as far as Child-Pugh class score of A in your current trial, versus A or B with BRISK-PS. So, you know, why pursue a healthier patient population in the second-line HCC study?

So, we are focusing on the Child-Pugh A population. Obviously, as patients develop worsening of their liver disease and move into Child-Pugh B or even further, there are other confounding factors, and we wanted to avoid such factors to come to play. That's why we're focusing on this population.

And we've, I think, appropriately sized, learning from the BRISK study, that the background rate on placebo in terms of overall survival was 8.3 months. And I think in previous studies for other compounds, there has been a tendency to underestimate the placebo rate.

Great. Thank you.

(Operator Instructions). Joel Sendek, Stifel.

I'm going to try one more time on the interim. I mean, I guess my question is, if you miss the interim, will we even know about it, or will you just go to the final analysis on the COMET study? Thanks.

So, Joel, it's Mike. Our plan is to certainly communicate when the interim is done. Obviously, if it works, we will communicate that. If we need to keep going, we'll communicate that as well. So, I -- we think it's a material event in terms of running the interim analysis, and our expectation is to communicate around that topic.

When I'm talking about when, we're communicating, I think, in a very consistent, conservative style. We'll certainly talk about things when they happen, but we're not giving, I would say, higher-resolution guesses around when it could be.

Okay. And even throughout 2014, you're not going to narrow it down. You're just going to say, at some point we'll get that release.

That's correct. When we have the data and we have the event, if you will, then we will share that information with investors. Yes.

Okay. And then, on the spend side, I'm just wondering if the 4Q is a good run rate for 2014. I know it's got to be a little bit tough, given the fact that you don't know when we're going to get the data. But that makes it a little bit difficult for us to make our projections. If you can give us any insight on that. Thanks.

Yes. Joel, it's Frank. As you know, we only provide financial guidance for the current fiscal year. So, we'll have to defer that discussion until the next earnings call, when we will provide our financial guidance for 2014.

Okay. Thank you.

At this time there are no further questions in the queue.

All right, then. We'll end it here. Thank you, everybody, for your time and your interest, and we'll look forward to seeing you on the road. Thank you.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.