Geron Corp (GERN) 2009 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Q3 2009 Geron Earnings Conference Call. My name is Cathy [ph?], and I will be your operator for today.

At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session. (Operator instructions)

I would now like to turn the conference over to your host for today's call, Mr. David Greenwood, Executive Vice President and Chief Financial Officer. Please proceed.

Good morning, and welcome to the Geron earnings call. I'm David Greenwood. With me is Tom Okarma. This is an earnings-related conference call, and we'll begin with a summary of our operating results for the third quarter. The agenda, that includes an overview of recent operating highlights at the Company and a summary of our operating plans for the remainder of '09 and into 2'10. Following that presentation by Tom, we'll have a general Q&A session.

Two informational items --

In the event of forward-looking statements, please understand those comments are made subject to the safe harbor provisions of the '95 act. Any forward-looking statement involves uncertainty, and we refer you to our risk factors detailed in filings with the SEC.

And as mentioned, all participants are currently in listen-only mode. The lines will open for the Q&A, and the call will be available for webcast replay until November 30 on our website.

Revenues from license fees and royalties were up over the comparable three-month period in 2008, and the comparative number for nine months year to date is up over 2008, adjusted for a milestone payment, but at the $1.5 million level, these numbers are not overly significant.

Other cash inflows to the Company during the year included [$240,000] of interest income, down substantially from the 2'08 period, which reflects the positioning of the yield curve only. Our marketable securities portfolio remains intact with no write-downs or provisions for write-downs.

Third quarter R&D expenses were down somewhat period to period, but that is simply timing differences in purchasing drug product. Nine-month R&D expenses increased 7%, mostly external costs related to clinical trials.

G&A expenses were down 15% for the quarter and 12% for the nine-month period. We ended the quarter with 179 million cash on the balance sheet. I would peg our current running rate net burn number at $48 million. The Company is obviously funded for the near term.

Before I turn it over to Tom, I'll comment briefly on the small financing done in September. As you know, Geron holds a 27% interest in ViaGen. The other stakeholders are Exeter Life Science and Smithfield Foods.

ViaGen is our licensee of the foundational IP for nuclear transfer of cloning technology that we acquired from the Roslin Institute in [Edinburgh]. That license is exclusive for all non-human applications of cloning technology, principally the development of superior quality, volume, disease-resistant traits in food-producing species, and the creation of disease model systems for use in drug discovery, the production of biopharmaceuticals, genetically modified animals, and so on.

ViaGen is the premier provider of cloning services. The company has a revenue stream from on-licensing activities, contracts to deliver cloned embryos and live animals, and the banking of prized genetics.

With the release of the FDA's risk assessment, the business is growing. We believe this capital contribution by the partners may bridge the Company to cash breakeven operations.

Specifically, we sold 3.6 million of Geron stock to an institutional investor and invested those proceeds into ViaGen. In turn, ViaGen prepaid a $1.5 million loan we had extended a year ago to help fund the acquisition of a company that develops [porsing] model systems for [admetox] and efficacy studies in new drugs.

Tom?

Thank you, David.

Good morning, everyone, and thank you all for dialing in this morning. I will go over the major events of the third quarter and then turn to some new guidance on our FDA hold and our Phase II program for Imetelstat.

As you probably remember, we presented at four investor conferences in September -- the Rodman Conference in New York, the Tommy Weisel Partner Conference in Boston, the G6 ThinkEquity Conference in San Francisco, and the UBS Global Life Science Conference in New York, which was webcasted. My next presentation will be at Lazard on the 18th of November.

That will also be webcasted, and that will be a significant presentation, as I will detail our Phase II Imetelstat plans for 2010, provide some new data on Vac1 cardiomyocytes, [eyelets], and a program that I've not spoken much about, which is now maturing in animals, the chondrocyte program.

In July, we published in the Journal of Regenerative Medicine a paper that characterized and described the scalable production of embryonic stem cell-derived dendritic sales.

ES-derived dendritic sales display the identical functional characteristics, as do blood monocyte-derived DCs, which are in widespread clinical testing currently. Their use of a standardized off-the-shelf cellular vaccine, we believe, will be more cost effective and reliable compared to the current patient-specific approaches.

Also, obviously, the ES-derived DCs are not subject to the variability that is caused by individual patient genetics, the patient's disease, or the patient's prior chemoradiotherapy, all of which can affect their immune responsiveness.

Specifically in the paper, we show that the ESDCs will take up, process, and present antigen in the entirely normal manner. They will migrate through tissues. They produce pro-inflammatory cytocons and induce an antigen-restricted T-cell response to viral and tumor antigens, including Telomerase. These cells are produced without serum or feeder cells and they're, therefore, scalable.

So we believe that this publication puts a stake in the ground on a broad enabling cell type that can bring cell vaccination into the 21st century for both cancer, infectious disease, as well as autoimmune applications.

In September, we announced that Cal Harley retired as the Chief Scientific Officer of Geron. I mention this today to really honor Cal's contribution to Geron, as well as to the field of telomerase biology, which, as you know, is the core of our oncology program that was recently awarded a Nobel Prize in physiology or medicine. Cal will continue as a formal paid advisor to Geron, helping us advance the telomerase inhibitor program and the telomerase activator program.

Later in September, Corning, Inc. and Geron announced that we had introduced a new synthetic surface matrix to enhance stem cell growth at the 2009 World Stem Cell Summit.

This is a major advance for us and for the field. We have invented a synthetic peptide-acrylate surface that can be applied to any polystyrene vessel, and this surface with the peptide embedded in it allows the expansion of the undifferentiated embryonic stem cell without the addition of any animal-derived matrices which are, up till now, required for their growth, like [natrogel].

New growth on this surface is robust and much more reliable because the animal-derived protein variables are eliminated and the surface is extraordinarily uniform and capable of mass production and sterilization with gamma radiation.

Most importantly for us, the surfaces can be fabricated into beads for scale-up production in standard bioreactor devices that are widely available.

Importantly, the surface allows the differentiation of embryonic stem cells while still attached to the surface without any modification other than changing the cytokines and growth factors in the medium, and we've demonstrated this with cardiomyocytes.

So this is really the next inventive step for Geron's manufacturing sciences beyond our initial feeder-free invention. So Corning will commercialize lab products that contain these surfaces subject to certain commercial use restrictions. Geron will seize a royalty on these sales, and we have exclusive rights to use the surfaces in the manufacturing of certain therapeutic products.

This is the second commercial royalty-bearing collaboration with a large partner on the regenerative medicine side of the Company, the first being the GE Healthcare deal, which will enable the marketing of ES-derived cells for ADME tox testing by pharma, and the first product from that collaboration will be on the market next year.

I'd now like to turn to the subject of our FDA hold on our OPC1 spinal cord trial. On the background, as you probably remember, it was in August while we were initiating multiple clinical trial sites, screening patients at one site, and getting additional IRB approvals for the Phase I study of OPC1 in acute thoracic spinal cord injury, we received results of an additional non-clinical animal study that showed a higher frequency of microscopic cysts in the lesion site that had been previously seen in over 400 animals in five separate studies that lasted from between 2 and 12 months using OPC1 preps that had passed the then-existing release specs.

Like the cysts previously seen in lower frequencies and previous studies, the new cysts had similar characteristics. They were nonproliferative. There was no division. They were confined to the injury site. They never migrated out of the injection site. They were smaller than the injury cavity and not associated with any detectable adverse effects on the animals. No animals ever developed any teratomas, including those in this new study. Cysts of much larger size appear on the spinal cord scar tissue of up to 50% of the patients with severe spinal cord injury.

Fortunately, as part of ongoing work at Geron to optimize OPC1 product characteristics, improve the manufacturing efficiencies and scale, and to test the product in animal models of other CNS diseases, we have identified new candidate markers and assays for product release that correlated with cyst formation across all animal studies in which any cysts were found.

Importantly, a manufactured lot of OPC1 that was prospectively analyzed using these new markers and assays showed zero cysts in a second recently-concluded animal study in spinal cord [injuries].

So, accordingly, we sent the reports, some with raw data, for both new animal studies and the new candidate release assays to FDA. We were then placed on hold pending data review and telecoms and the usual to-ing and from-ing with the agency to define the path to reinitiate human trials for spinal cord injury. I can now report that we have reached agreement on that path forward.

The path forward will enable two objectives -- first, importantly, the reinitiation of the clinical trial; and, second, it will support the expansion of the trial to patients with the more common cervical injury sooner than originally planned.

So, first, with regard to reinitiation, Geron will complete an ongoing confirmatory preclinical study using an additional OPC1 lot that has also been prospectively characterized by the new candidate markers and assays. This ongoing animal study will test a lot of OPC1 that is intended for clinical use in the complete thoracic-injured patient trial when the hold is lifted.

Assuming the data are positive, this study, along with final qualification of the new release assays, will be used to support the reinitiation of the thoracic injury clinical trial.

Now, importantly, because this ongoing study is in an animal model of cervical injury, FDA has agreed that this study can also be used to support the expansion of the trial to cervical injured patients.

It is our intent, therefore, to limit the low-dose safety study to thoracic injured patients and to perform our dose escalation studies in the more common cervical injury setting rather than in thoracic-injured patients, as was initially planned.

This will, hopefully, enable us to accelerate product development in a more accessible subset of patients with severe spinal cord injury earlier than originally planned. We expect, therefore, to reinitiate the trial in Q3 next year and initiate human cervical studies in the year after, in 2011.

So the bottom line here is that although the initiation of our trial was delayed, we believe we now have a much improved product suitable not only for development in spinal cord injury but for possible applications to other large CNS diseases, like stroke and Alzheimer's. So let me just make one comment about the Alzheimer potential application.

A manuscript is now in press in neuroscience authored by our Alzheimer's collaborator, Dr. Frank LaFerla at UC-Irvine, and this manuscript describes the rescue of cognitive dysfunction in a triple transgenic mass model of Alzheimer's disease by [miramine] glial cells, the very cells our OPC1 product mature into after injection.

In this mass model, the glial cells increase synaptic density, now thought to be the main pathogenic feature of Alzheimer's disease, not the [tangles] or the [plaques]. The effect is mediated, in part, by the local secretion by the glial cells of BD&F, a neurotrophin that we've published to be secreted in high quantities by our own OPC1 cells. So, obviously, the next step is to directly test our OPC1 product directly in this animal model of Alzheimer's.

Lastly, I'd like to turn to our telomerase inhibitor program, Imetelstat. I'm happy to report today that we've met our Phase I objectives, and four out of the six currently ongoing Phase I studies will close to enrollment by the end of this year. The other two will close before the middle of 2010.

So what have we learned to enable us to move forward? Well, first, we've now determined the bioavailability, the tolerability over multiple cycles, and the pharmacodynamic activity of the drug in three different tissue sites -- blood, bone marrow, and hair follicles -- in terms of telomerase inhibition, the desired TD outcome.

Second, we've implemented alternative dosing schedules to increase the exposure to Imetelstat while reducing the hematologic tox, which is predominantly thrombocytopenia.

Thirdly, and probably most importantly, we've achieved an area under the curve, or total exposure, at doses of 7.5 mgs per kilo and higher that exceed the exposure that's been associated with tumor reduction in multiple xenograft models.

Fourthly, and also importantly, we've demonstrated telomerase inhibition in the cancer stem cell fraction of human bone marrow in the single-agent multiple myeloma trial, and as you, I think, know now, we are quite confident that this drug will turn out to be a broadly active anticancer stem cell reagent, and that observation in theory underpins much of the Phase II program, which I'll describe in a moment.

Lastly, we've gained the understanding of how to use this drug in both solid and liquid tumors alone and in combination, so therefore, we'll now advance the program into four Phase II trials in 2010. I'll detail these protocols at the upcoming Lazard conference in November, and I just today want to give you a very brief overview of what's to come.

The first will be a randomized Phase II study in non-small cell lung cancer, where we are testing the ability of Imetelstat to maintain remission in patients who have advanced non-small cell lung and have been induced by first-line chemotherapy. So, in other words, we're testing the impact of this drug as maintenance therapy after first-line injection, with a primary endpoint of progression-free survival.

The second Phase II randomized study will be in breast cancer, where we'll be looking again at progression-free survival of Taxol, Avastin, plus/minus Imetelstat as a first-line therapy for patients with metastatic breast cancer previously untreated.

We'll also do a Phase II single-arm study in multiple myeloma where here, we are going to advance the understanding and demonstration of our activity of the drug against the myeloma stem cell and bone marrow. This protocol will not only look at telomerase inhibition but, more importantly, ex vivo activity of the myeloma stem cell to confirm that this agent knocks out the myeloma stem cell, which will inform the registration trials which would follow this successful program.

Then, lastly, a Phase II that tests a different theory in a disease called essential thrombocytosis. This is a disease that has a stem cell origin and very short telomeres. We'll be using Imetelstat as a single agent. The primary endpoint here will be objective response rate and duration, and secondarily, a reduction in necessarily companion cyto reduction therapy.

We've obviously chosen our Phase II doses, which will be 9.4 [mgs] per kilo, and the dosing intervals will vary depending upon the combination from the now-established two on, one off to another one in breast, which is every other week.

So this is obviously a major milestone for the Geron oncology program, and we are very pleased to be able to take this compound forward and, hopefully, demonstrate the up side for its development in cancer.

We will have two oncology presentations before year-end, a presentation on Imetelstat at the AACR EORTC meeting, and one of our investigators will be presenting the ongoing Phase II results in AML at ASH.

With that, I'm happy to turn the call over to Q&A.

Thank you, sir. (Operator instructions)

Your first question comes from the line of Mark Monane of Needham. Please proceed.

Hi. It's Mark Monane. Good morning from the East. Thanks for going over the programs with us, Tom and David.

Question for you. Let's start, please, on the embryonic stem cell program. If I heard you correctly, as the sun is shining here, it sounds like this is the first time that we're hearing sunshine again on the program, that you're going to be able to start recruiting patients in the third quarter of next year for thoracic and potentially a year after that for cervical. Is that correct?

That's correct, Mark.

And in the meantime, will you have the opportunity to train the centers for going forward? What activities would you all be partaking in in the meantime?

Yes, thank you, Mark. That's a good question, and I failed to speak to that. So we have agreement with several of our centers, who are very supportive, by the way, of the trial, obviously, and also with whom we've shared all this data directly, to process the new protocols and the new data in parallel with the FDA so that the final IRB approval would be contingent upon the FDA lifting the hold, but it will be done in parallel. So when the hold is lifted, we should be able to recruit patients in several of our sites almost immediately after the hold is lifted.

Got it. That makes sense. Sounds like a good plan.

And any follow-up on the program in Japan on the small molecule program to active telomerase?

The program is in China. Close, but...

Sorry. I was never very good at geography, American, you know?

Yes, right.

So, yes is the simple answer. We are doing really two things on the small molecule telomerase activator program. One is sort of standard crystal-driven drug discovery approach done at a CRO in Shanghai, which we like, taking off from the publication of the red beetle crystal of telomerase, which has a lot of similarities in the active site.

So we are using co-crystallization of the red beetle telomerase with our Imetelstat and other small molecules to better understand the parameters of docking of a small molecule in the active site.

We are also making many constructs of the human telomerase with an attempt to perform co-crystallization of that, as well. That is driving a number of small pharmaco-4 -- small-molecule pharmaco-4 efforts that are being screened both in China and here, and we've identified six or eight compounds that are interesting.

The second parallel approach, which, frankly, I have more confidence in, is the one being done at Geron with our nucleic acid chemists, where we are taking our own data and the data from the crystal work in China to design from the ground up nucleocytes that are [dimers] that are derivatized, which we have a small collection of, that are extremely exciting. They are able -- we can synthesize these compounds in liquid form. We don't need solid phase. They are [dimers], not 13ers, and the [sideshane] chemistry is very scalable.

And we have a couple compounds that are very exciting in terms of their potency. They've not been through all of the parallel screens to determine their specificity yet, but we're pretty excited by that.

So good progress. We would hope to emerge from this effort with a molecule that was more potent than Imetelstat with perhaps equal cytotoxicity and, hopefully, lower cost of goods.

Got it. And then for David -- that was helpful. And then for David, please, how many people now at the Geron Corporation, and what's the optimal number, in your opinion, going forward?

179, and as many as we need to bring products to market.

Fair enough.

So let me comment for a minute. I think we're stretched very thin. I mean you all have a full appreciation for the number of programs that are being advanced here, and how do we accomplish that with 179 people? It's a real stretch, and people have to work on multiple projects, and they have to work hard. So are the program teams fully resourced? No, they're not, and we're thinking about that a lot. We've got a good balance sheet today, but we have to maintain a strong balance sheet that provides all of our strategic flexibility, but frankly, we want to ramp up the resourcing of a number, if not all, of these programs, and we're strategizing ways to do that. I can't lay that out for you this morning, but you'll hear more going forward.

Okay. We'll look forward to more information, and thanks again for the comprehensive review today.

The next question comes from the line of Joe Pantginis of Merriman. Please proceed.

Hi, guys. Thanks for taking the call, and thanks for the great visibility today. A couple quick questions.

It's good that you're going to be expanding also into the cervical indication. I was just wondering if you could add a little visibility. I know the thoracic had some potential issues with enrollment because of the stringent criteria, so why it's important that the cervical indications being included.

Secondly, just quick on Imetelstat. What is the rationale you've used, say, with regard to, say, preclinical data to go after the combinations that you're going after, such as the Taxol/Avastin arm?

Okay, thanks, Joe.

So a couple points about thoracic completes versus cervical completes.

First and foremost, most complete injuries in the United States today are cervical, not thoracic, so the fraction of the available patient pool for the studies is dramatically enhanced when we move from thoracic completes to cervicals.

Secondly, the amount of collateral damage or comorbidity in the thoracic patients is enormous because if you visualize the thoracic spine, those vertebra are robust, thick, and heavy, and it takes a lot more force for a thoracic injury to disrupt the spinal column than it does for a cervical injury, where the vertebra are much smaller. So the patients with complete thoracic injury are much sicker and more difficult to care for than the cervicals.

Again, the reason for starting in thoracic, however, is frankly, the distance from the respiratory drive centers in the cervical region. So the rationale has been, and still is, that if there is toxicity from the injection of these cells, it has to be manifest one or two segments above the injection site because there's complete anesthesia and paralysis at the injection site and below.

So if I'm a T4 thoracic complete injury and I have tox and move to T3, it's inconsequential to my long-term care. However, if we had started in a cervical patient, say, at a C3 level, and I went to a C2 because of tox, I could damage respiratory drive, which would have major consequences for long-term care. So that's why we set out to establish safety first in the thoracic patients, where the potential danger to those subjects is minimal.

The perceived difficulty in recruiting them is really more due to their rarity and their severe injury than it is to any specific inclusion/exclusion criteria in the protocol.

However, being able to move to cervicals earlier as we dose escalate, we think, will really aid enrollment kinetics, and obviously, we are planning to have seven to eight centers in the United States enrolling in this study because they are with us for the long haul as we segue from thoracics to cervicals, from completes to incompletes.

Now, your second question related to the rationale of moving Imetelstat into the specific combination settings that we've just announced, and the rationale is really quite simple, both from the perspective of invitro and xenograph animals -- studies, we've demonstrated synergy between Imetelstat and the companion therapies in both the non-small cell lung and breast cancer settings.

We are also subjectively receiving a lot of enthusiasm from our breast cancer combination investigators, who are noticing that they are able to reduce the Taxol dose in these patients who are also getting Imetelstat without sacrificing the early duration or frequency of responses. So there's a pull from our investigator pool to do this combination study in breast cancer.

Great. Thanks so much, Tom.

You're welcome, Joe.

The next question comes from the line of Ren Benjamin of Rodman. Please proceed.

Good morning, guys, and thanks for taking the questions. I guess, just to flush out a little bit more about the amount of time that it's taking to initiate the trials, Tom, can you give us some details as to -- I know you have to do the preclinical experiments, but what all is going into the preclinical experiments and why -- you know, based on the rapid response that you had before, why would it take this long, and is there a way to potentially speed it up so that the trials actually start earlier?

Right. Well, the simple answer, Ren, is the duration that we've agreed with FDA to conduct this ongoing animal study. So to your good question, it was -- one of our ideas was to terminate this study at the end of December of this year, and we could've done that -- FDA agreed -- in terms of that being a sufficient demonstration that our new release specifications identify lots that do and do not produce these cysts.

However, had we done that, the agency would not have allowed us to apply that study to the cervical trial because they want nine months of observation, not for the cyst issue but for basic toxicology, and they're right on that. Interventions that are applied in the cervical region often have more side effects like allodynia.

So we agreed to keep the animal studies in life for a total of nine months, which is the bulk of the time delay between now and initiation. These are large studies. They are performed by a very good CRO in the United States, and there's a lot of sectioning of a lot of animal spinal cords that have to be stained and then read and re-read by trained veterinary board-certified pathologists before the data in the slides come to us for our confirmation of the data, and then the final report comes to us from the CRO, that we then submit with our supporting data to the agency. So the bulk of the delay, as you rightly ask about, is due to the fact that we want to leverage this ongoing animal study for not only reinitiation of the trial but for a more rapid segue into the cervical patients.

Okay, that makes a lot of sense. Let's -- just switching gears now to the telomerase program, you had mentioned that four of the six studies will complete enrollment by the end of the year. Can you just let us know which of those studies are completing enrollment by the end of this year?

And then, also, you mentioned that there are two oncology presentations this year, AACR and ASH, but I mean, obviously, with the remaining studies completing enrolments, do you have some sort of a sense as to when we might get a data update from those studies?

Well, I can't tell you which are being stopped because we haven't contacted all of our investigators yet, so I can't get ahead of that process, but I think the take-home message is that by Q2 of next year, all of these studies will be completed, and four of them will be done by December.

The update on these studies in terms of what I think you're asking about, it was going to require more follow-up. I mean it's the same answer if you would ask me that question on the Phase II in [AML]. There we're seeing 12 out of 18 patients that are still in remission, but the significance of that AML study in terms of the remission duration will take more observation time, as will the question you asked, well, what's the final data wrap-up on all these phase 1s.

But the significant piece of the answer, Ren, is what I gave earlier today, that we have established the Phase II dose. We understand how to maximize exposure and minimize hematologic tox. We understand how to use the drug as single agent and in combination in the specific protocols that we are designing, and these have all been discussed with our investigator pools.

So this is pretty much going to happen. I mean it's going to happen, and there are details still be worked out, obviously. The protocols are not completely done yet, and as we reach toward initiation, first patient in on these studies, we'll obviously announce then in much more detail.

Perfect. Thank you very much, and good luck.

Thank you.

The next question comes from the line of Joel Sendek of Lazard Capital Markets. Please proceed.

Thanks. Just a clarification on the spinal cord injury study. Do you need a certain number of patients in the thoracic part of the study before you can start the cervical? And can you just comment on what the requirement would be?

Good question. So we need a number of things to go from thoracics to cervical.

First, safety data and feasibility and tolerability data of, I don't know, four to six to eight patients we have in the thoracic region. We have approval to go up to 10, I think. Hopefully, we won't need all 10.

In addition to that clinical result, we need to have the results of the ongoing cervical animal study that I referred to plus studies that are now being initiated in animals for biodistribution and efficacy. We've done pilot work in the cervical region for both distribution and efficacy, and those studies were successful, but it's an additional animal burden before we can segue to the cervical region.

So it's both some safety data in thoracics, as well as additional animal studies done in thoracic modeling while with the cells.

Okay, thank you.

The next question comes from the line of Steve Brozak of WBB Securities. Please proceed.

Hey, congratulations, gentlemen, on the negotiation with FDA. I won't jinx anything, obviously, because it's never done until it's done, but I'm looking at this saying with the expansion you're looking at, I'd just like some clarification because we've dealt with the monitoring system, the Asia system. This would give you a greater ability to show improvement on the Asia scale, if I interpret it correctly.

And then I have a follow-up question relating to new legislation.

So could you give us some granularity on how the Asia system works in terms of showing improvement for patients that you're addressing?

Well, the application of the Asia exam and other validated instruments will be the same, Steve, in the thoracic and cervical. So these exams have been normalized to follow progression or regression of the injury from all injuries, so there's really no difference in the information we'll get back by the Asia exam from cervical or thoracic patients.

The importance is that the exam is extremely detailed. It takes several hours to actually implement, and even more importantly than that, it has to be administered the same way each time because subtle changes for the better or for the worse need to be real and not just misapplication of the diagnostic intervention.

So we have really gone the extra mile in terms of training the physiatrists and physicians assistants and, in some cases, nurses who will have to travel from the medical center to the patient's home, which could be hundreds of miles away, because most of these patients are discharged from rehab within two months of the injury, and we need to follow these patients intently with both MRIs and multiple physical exams for a year.

So we're most concerned about the precision and the reliability and the uniformity of the application of the Asia exam, but it really won't be any different in terms of the cervical or the thoracics.

If you were, perhaps, thinking about my comment of the comorbidity in thoracics that is reduced in cervicals, the Asia exam actually is not affected by that. It's just that these patients are much sicker and more difficult to care for, which makes the overall burden on the trial much higher in the thoracic patients.

Okay. Next question, last question -- I'll jump back in the queue -- obviously, with the legislation now that's basically freed up stem cell research, have you noticed any -- or are you starting to notice any kind of increase in collaborator requests from academic institutions, not-for-profits, and such given the fact that they now have physical freedom to go out there and collaborate with you, and/or are you seeing a trend in terms of queries that are coming back saying, "Hey, listen, we'd like to do this." What kind of a status can you give us on that?

Sure. Well, first of all, unfortunately, there is yet no new legislation. All we have is a piece of paper, an executive order, signed by President Obama in March, I believe -- I was at that ceremony -- that simply reverses the executive order of Bush.

The plan, as I understood it, was then for Congress to codify that executive order by passing legislation that couldn't be simply re-reversed but by a subsequent administration. Because Congress has been obsessed with healthcare reform, that legislation has not even been submitted or introduced, so there is yet no legislation to support the executive order by Obama.

Secondly, the NIH has been hampered by pre-existing rules and constraints of the prior administration in terms of deciding how to implement a broader, less-restrictive funding program. That money really hasn't trickled out yet.

So your bottom line, are we seeing a resuscitated academic community? In part, yes. I would say not so much in volume but in terms of quality of publications, actually, several of which, to be specific, have helped us in our deep dive into the OPC1 issue, some basic biology that confirms from a biological perspective the new assays and specs that we have identified. So that's a good example of how the literature is actually helping us, which is a new event.

In terms, though, of the collaborations, we still drive them. I don't think we are in a position where we need more basic science. What we are in a position of is needing collaborators who have the appropriate animal models, and that's best illustrated by the collaboration that we'll announce soon between Geron and Frank LaFerla at UC-Irvine on the Alzheimer's model.

So most of our current academic collaborations on the stem cell side of the Company involve our sending ourselves to them for them to put in the animal model.

Another example is the pig studies, which I'll report on at Lazard. We're not interested in starting a pig farm, so we send our cardiomyocytes to a very sophisticated group with a real good track record of putting cells into pigs, and we've got some very exciting news on that study.

So, again, because we've been in this field from the beginning, for over 10 years, the basic science that we have reduced to practice is pretty much sufficient to support the products that we're now developing.

Got it. Good luck, and thanks again.

Thanks, Steve.

At this time, there are no more questions in the queue. I would now like to turn the call back to Mr. David Greenwood for closing remarks.

It's a very long list of participants on this call. Thank you. We appreciate it very much, and we hope to see you all again at the Lazard conference. Happy Halloween.

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