ImmunoGen Inc (IMGN) 2008 Q2 法說會逐字稿

Good day everyone and welcome to this ImmunoGen Second Quarter Fiscal Year 2008 Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to the Executive Director of Investor Relations and Corporate Communications, Carol Hausner. Please go ahead, ma'am.

Thank you. Good afternoon, everyone and thank you for joining us on our quarterly conference call. At 4:00 this afternoon, we issued a press release that summarizes our financial results for the second quarter of our 2008 fiscal year, the quarter ending December 31, 2007. I hope you've all had a chance to review it. If not, it's available on our website immunogen.com.

During today's call, we will make forward-looking statements. Our actual results may differ materially from the projections made. Descriptions of the risks and uncertainties associated with an investment in ImmunoGen are included in our SEC filings, which also can also be accessed through our website. With me today are Mitch Sayare, our Chairman and Chief Executive Officer; and Dan Junius, Executive Vice President and our Chief Financial Officer.

Mitch will provide an update on ImmunoGen and Dan will discuss our financial results. We'll then open the call to questions. I'll now turn the call over to Mitch.

Mitch Sayare. Thanks Carol. I'm delighted to report that last month new clinical data was reported on four compounds that are in development by us and by our partners. You may recall that we also expanded our proprietary pipeline through the addition of IMGN388. In fact, we expect to file an IND application for this compound during the second quarter of the calendar year.

On top of that, two of our partners are in the process of finalizing their IND submissions for their new TAP compounds. What this means is that we expect the number of TAP compounds in the clinic to increase from five, right now, to as many as eight by this summer. And of course we have a naked antibody in clinical testing through our collaboration with Sanofi-Aventis that's also making progress.

As I mentioned, new clinical findings were recently reported with four compounds, one in development by us and three by our partners. We reported additional findings with our IMGN901 compound for the treatment of multiple myeloma at the ASH meeting in December. At the time of the presentation, four dose levels; 40, 60, 75 and 90 mgs per meter squared; had been evaluated in three patients each, and we'd started evaluation of 112 mgs per meter squared.

These study patients all have CD56-expressing multiple myeloma that had failed treatment with a number of prior therapies. At ASH, the study investigators reported that two objective responses were seen in patients who received higher doses. The patient treated with 60 mgs per meter squared of IMGN901 had a minimal objective response and remained on treatment for 45 weeks. This patient had previously received multiple rounds of thalidomide, Revlimid, and other approved and experimental agents.

And the patient treated at a higher dose, 90 mgs per meter squared, also had an objective response. This patient was responding well to IMGN901 and achieved a minimal objective response at the time of the data cutoff for presentation at ASH. We're continuing to dose escalate in this study and expect to complete it in 2008.

But what we learn at these higher doses will inform our next steps with the compound. For example, if we see good activity with IMGN901 as monotherapy in the salvage patient population, then we might consider monotherapy as a pathway to approval for the compound.

Alternatively, studying the compound in combination with other approved agents such as Revlimid, offers the opportunity to make use of our agent in a less heavily pre-treated population; also a possible pathway for regulatory approval. We expect to decide on the next steps by mid 2008 and we'll share them with you at that time.

I should note that patient enrollment also is underway in our two trials in CD56-expressing solid tumors; studies 001 and 002, and we expect to complete these this year as well.

Our partner Sanofi-Aventis reported encouraging clinical findings at ASH for both the AVE9633 TAP compound and the AVE1642 naked antibody. At higher doses, AVE9633 showed good activity in a number of patients and was very well-tolerated. While AVE9633 was dosed on day one and day eight in a 28-day cycle in the study reported at ASH, Sanofi-Aventis is also assessing the compound when administered on days one, four and seven of a 28-day cycle. They believe this dosing schedule will yield even better results.

The findings reported at ASH with the naked antibody AVE1642, were from a Phase I study evaluating its safety as monotherapy. As you may know, AVE1642 was designed to block a survival pathway used by cancer cells to resist exposure to chemotherapy. Sanofi-Aventis had to test AVE1642 as monotherapy before they could test it in combination with chemo.

It was reported at ASH that the compound was well-tolerated and that it is now being tested in combination with Velcade for treatment of multiple myeloma. It's also being tested in combination with Taxotere for the treatment of solid tumors. We expect findings for release one of these two trials to be reported later this year.

Then in mid-December, our partner Genentech reported additional clinical data with Trastuzumab-DM1 or T-DM1 at the San Antonio Breast Cancer Symposium. The findings reported were again from the Phase I study, evaluating T-DM1 when administered once every three weeks to patients with HER2-positive breast cancer that had progressed on treatment with Herceptin plus chemotherapy.

The data offer additional insight into the duration of the benefits seen with T-DM1 in this trial. It was previously reported that six patients had an objective response to treatment with T-DM1. The one patient treated at 2.4 mgs per kg, and five of the fifteen patients treated at 3.6 mgs per kg.

At San Antonio, it was reported that five of these six responses were still ongoing. In fact, the patient receiving 2.4 mgs per kg had been on treatment for more than a year. Dosing of patients with 3.6 mgs per kg started later, so the longest response seen at that dose was just over eleven months at the time of the data cutoff for presentation.

It was also reported that of the ten other patients in the 3.6 mg per kg cohort, seven had stable disease. So adding it all up, twelve of the fifteen patients receiving 3.6 mgs per kg had measurable clinical benefit.

Let me remind you that all of these patients had seen prior chemotherapy; in fact, a median of three prior chemo regimens. All suffered from incurable metastatic breast cancer and all had been treated with and recently failed Herceptin prior to entry into this study.

I should also point out that T-DM1 is very well-tolerated and it shows a better response rate as monotherapy on Herceptin failures than Herceptin did as monotherapy on Herceptin-nave patients.

Before I leave T-DM1, I should note that Roche has now exercised its right to opt in on the international commercialization of T-DM1. As you know, Roche has the ex-US marketing rights for Herceptin and some other Genentech compounds.

All in all, six compounds are now in clinical testing through our own programs and those of our partners. Our IMGN901 and IMGN242 TAP compounds, the T-DM1 TAP compound with Genentech, the AVE9633 and SAR3419 TAP compounds with Sanofi-Aventis, and the AVE1642 naked antibody with Sanofi-Aventis.

As I said earlier, we expect to have our third wholly-owned compound IMGN388 in the clinic this summer. This TAP compound consists of our DM4 cell-killing agent attached to an antibody developed by Centocor against an integrin target. The target is found on a variety of cancers; including ovarian, melanoma, renal, breast, gastric and colorectal tumors. However the target is also on endothelial cells that are engaged in forming new blood vessels. IMGN388 has the potential to disrupt angiogenesis as this process is known, which could increase its activity against tumors that express the target and that may well show activity even against those that don't.

The cost is nothing to obtain IMGN388 for our product pipeline and will cost us very little to conduct an initial clinical evaluation. If the product is fabulous, then we've gained a great product at little cost. If it's not so fabulous, then we've invested very little to find that out. We expect to have IMGN388 in the clinic this summer and we'll keep you posted on its development.

In addition to our own progress, two of our partners are in the process of finalizing IND submissions for their TAP compounds and we expect both of these products to be in the clinic by summer. We'll announce one of these IND submissions when it occurs as it triggers a milestone payment to ImmunoGen. For the other compound, we'll announce the start of clinical testing, as that's when the first milestone payment is earned.

And of course behind these products are a whole host of compounds earlier in pre-clinical and in research through our own efforts and those of our partners. In fact, we earned a half-million-dollar milestone payment from Sanofi-Aventis in the second quarter of our 2008 fiscal year on earned achievement related to the advancement of one of these pre-clinical compounds in the collaboration.

So on that note, Dan will now discuss our financial results.

Thank you, Mitch. Let me take you through the results for our second quarter which ended December of 2007.

In terms of the income statement, our revenues were $9.8 million, which is down from the $12.1 million in the second quarter of last year.

In terms of the individual components, our research and development support fees; which primarily represent funding earned under our research collaboration with Sanofi, were $3.7 million in the quarter which is down from $6.6 million last year. This includes revenue from other partners to a lesser extent than that received from Sanofi.

Recall that while we earned lower research and development support for Sanofi in the current quarter, we've noted in the past that we expect this to be lower for the full year, as development activity is assumed by Sanofi in this final year of our contract.

License and milestone fees were $2.7 million in the second quarter of fiscal 2008, down from $3.4 million from last year. Our second quarter of fiscal '08 includes $1 million related to initiation of Phase I testing of SAR3419 by Sanofi-Aventis.

Clinical material reimbursement for the quarter was $3.4 million, up from $2.1 million in the comparable period last year. In this category, we make clinical materials on behalf of our collaborators and earn clinical material reimbursement revenue with the supply of materials to those collaborators.

The higher revenue this year related to primarily the timing of batch acceptance by our collaborators as opposed to a lower level of acceptance last year.

Operating expenses in the second quarter of fiscal '07 were $16.7 million, up from $15.9 million a year ago. Here research and development fees were $10.7 million, down just over $1 million from the prior year. This reduction was primarily driven by a decrease in antibody cost incurred in second quarter fiscal '08 versus second quarter fiscal '07, and to lower development costs for the potential production of later-staged materials incurred at a CMO. We anticipate costs in both of these areas to increase over the balance of the fiscal year.

Our cost of clinical material reimbursed were $2.4 million in fiscal '08 compared to $1.6 million in the second quarter of last year. Our costs here are higher obviously than a year ago, consistent with the higher revenue for this category noted earlier.

A significant portion of the DM1 and DM4 included in our clinical materials during the current year and the prior periods, previously have been categorized as excess inventory under our policy and written down to zero value, favorably impacting our margin on clinical materials reimbursed.

Our general and administrative expense was $3.5 million last quarter, up from $2.6 million for the prior year.

During the second quarter of fiscal 2008, the Company recognized $0.8 million of expense related to the rental of laboratory and office space that the Company plans to occupy in March 2008; classifying such as G&A expense. This was the first period that we began to recognize this expense associated with our move to a new facility later this quarter.

The combination of these led to a loss from operations of $6.9 million in the second quarter, greater than the $3.9 million we recorded as a loss in the second quarter of fiscal '07.

Other income of $700,000 was in line with last year, leading to a net loss for the second quarter of fiscal '08 of $6.2 million or $0.15 per share, compared to a loss of $3 million or $0.07 per share in the comparable period last year.

Turning to the balance sheet, we ended the quarter with $47.8 million of cash and marketable securities. This is down from the $59.7 million that we had at the beginning of this fiscal year. Our capital structure is unchanged as there was no debt converts preferred or warrants on our books as of the end of this separate quarter.

Our cash used in operations was $6.9 million in the first six months of fiscal '08, compared to $7.9 million in the first half of fiscal '07.

Our capital expenditures were $5.3 million in the first six months of this current fiscal year. This compares with just under $1 million in the same period last year.

Included this year are capital expenditures of about $2.8 million associated with improvements of our capabilities in our manufacturing plant in Norwood, Massachusetts.

Turning now to an update of guidance for the full fiscal year, we look at-- our expectation is that our net loss will be between $28 and $31 million for fiscal 2008. This compares with previous guidance of a loss of $30 to $33 million.

Our expectation for cash used in operations is now going to be between $14 and $17 million, compared with the previous guidance of $30 to $33 million and we expect capital expenditures to be between $20 and $21 million. This compares with the previous guidance of $8 to $9 million for our fiscal 2008.

You will note these are pretty wide swings, but let me explain because they are not as dramatic as they appear. Embedded here is a $12 million increase in capital expenditures related to leasehold improvements for the facility the Company will be occupying in Waltham, Massachusetts; and a corresponding $12 million decrease in expected cash used in operations related to a payment to us by the Waltham landlord for these leasehold improvements.

So there was no net cash effect based on these two items, the $12 million in increased CapEx being offset by the reimbursement from the landlord.

If you look at this on a non-GAAP basis, adjusting for this $12 million impact; it would be an adjusted cash used in operations of $26 to $29 million, which compares to our previous guidance of $30 to $33 million, with capital expenditures unchanged from previous guidance at $8 to $9 million.

This updated guidance and improvement both in the net loss and the adjusted cash used in operations, reflects an increase in our anticipated revenue and cash inflow related primarily to additional partner activity now expect to occur during this fiscal year.

Additionally, our expected expenses have been reduced because of lower than anticipated spending in certain areas, and because some expenses previously expected to occur during our 2008 fiscal year are now expected to occur in fiscal 2009.

I should note that our fiscal 2008 expenses include nearly $2 million in non-cash expense associated with our relocation to Waltham, scheduled for March of this year.

So with that, let me turn it back over to Mitch.

Thanks, Dan. Well, as you can tell-- or maybe you can't tell, but I can assure you, we're really excited about our progress and that of our many partners. So what to expect in 2008?

For IMGN901, our wholly-owned product for melanoma and small cell lung cancer; we expect to complete our study in multiple myeloma and to report the final results. We also expect to outline the next steps in the development of the compound.

Assuming the continued development of IMGN901 for multiple myeloma, we intend to initiate our next trial on this indication before the end of calendar year 2008. We expect to complete the two studies evaluating IMGN901 in solid tumors and to report these study findings as well.

For IMGN242, we expect to disclose the results of dosing the first 21 patients in our Phase II gastric cancer study and whether at least one objective response was seen, triggering the expansion of the study to 40-plus patients.

We expect to report the first clinical data from this Phase II trial most likely at ASCO. We also expect to complete the Phase I study and report its final results as well.

For IMGN388, we expect to submit an IND application in the second quarter of 2008 and to begin clinical evaluation this summer.

And so far as our partner compounds are concerned, we expect new clinical data to be reported for most if not all of the four compounds already in the clinic-- T-DM1, which is being evaluated in a Phase I weekly dosing study and in a 100-patient Phase II study; AVE9633, which is now being evaluated with a day one, four and seven administration schedule and a four-week cycle; AVE1642, which is being evaluated for the treatment of the multiple myeloma in combination with Velcade and for the treatment of solid tumors in combination with Taxotere; and SAR3419, which is being evaluated for the treatment of non-Hodgkin's lymphoma.

We anticipate that at least one of these compounds will advance into the next stage of clinical testing before the end of 2008. And we expect our partners to advance two additional compounds into clinical testing by summer.

And finally, we expect to have several partner-related announcements during the course of the year and I look forward to keeping you posted on our progress. Carol--?

Thanks, Mitch. Operator, we are now ready to open the line to questions.

Thank you, ma'am. (Operator Instructions)

And we will take our first question from Brian Rye at Janney Montgomery.

Good afternoon and thanks for taking my question. Mitch, just a couple of things I guess; on IMGN242, assuming you for whatever reason don't see a response in the first 21 patients- would that signal the end of that product's development or would it just be the end of it in gastric cancer? Would you look to expand or look to move I guess into other indications where the CanAg over-expression might warrant investigation?

And then secondly, you mentioned that in terms of pre-clinical evaluation- pre-clinical research and development that both your partners and yourself are exploring a number of things. I was wondering if you could maybe talk a little bit more about some of the things that you all are doing internally in pre-clinical development; if you foresee any potential IND filings in the next couple of years. And I'm also curious if everything you all are doing still involves DM1 or DM4 or if there is work ongoing to look at some other [metanzenoid] toxic conjugates?

Okay, well thanks Brian. So the question number one; if we do not see a meaningful objective response; that is at least a 50% reduction in all lesions for 60 days amongst the first 21 patients in the gastric study, then we will discontinue the development of the product for any indication.

That doesn't mean the product itself will stop development. It's just that ImmunoGen won't be paying for it. We might consider selling it or licensing it to a third party. But we will discontinue development.

In our internal projects, we don't usually give guidance for more than the fiscal year. So asking us if we're going to have an IND application in the next couple of years goes beyond that. But suffice to say, that we are making very good progress. We have five compounds in research and pre-clinical development that we're very pleased with. A couple are naked antibodies. A couple are TAPs. The TAPs are exclusively presently at least, DM1 and DM4. We have a variety of other linker systems that we're looking at that might change the properties of these products, but we're not certain yet.

So it's a little early for us to be talking about these compounds. But we're quite sanguine that you'll be seeing more of them in the reasonably near future.

For our partners, we know that Sanofi-Aventis has a very rich pipeline of products that we helped them develop. So we're aware of what they are and where they are in the development. We can't get ahead of them and disclose it, but we're sanguine that there is a good deal going on there.

And then if you look at another one of our partners, Genentech; you know we have three other undisclosed target licenses with Genentech to make use of our [metanzenoid] technology. Plus we have a revolving door agreement that gives them the right to test a few more on an annual basis. So there's a lot going on with our technology platform. So in addition to the six products in the clinic and three more before the end of the summer, nine total; there's a whole bunch more going on pre-clinically.

Okay. And then just one follow up in terms of your own internal programs. Are they all in oncology or have you explored some non-oncology uses?

So that I can say definitively. They are all in oncology.

Great. Thanks, Mitch.

Sure.

And we will go next to Shiv Kapoor at Ferris Baker Watts.

Thanks folks for taking my question and congratulations on the quarter. First, can you help me understand how the decision on IMGN901 will take place; how you will decide if the progress of this candidate? Do you have a scientific committee that you're consulting with on this?

We do. In fact, we have a committee of experts in both solid tumors and expressed CD56 and in multiple myeloma that will help us, based on what the data are telling us; make a decision as to how best to bring the product forward. And that group, that meeting is set up. It will be happening in the near future and it is out of that that we'll be able to formulate a plan that we will disclose to the Street at that time.

Wonderful. One question of Dan; Dan, you mentioned as one of the explanations for lowered expectation of operating loss this year was due to increased partner activity. Can you give us some more color there? Are you now more certain about current partners or are you talking to several additional partners?

I don't think I can give you color there. There are a lot of things that we look at when we put our-- initially our budget and then our revisions together in terms of expectations. And some things that we may look at as being a low likelihood at the outset may look like they're more likely as they progress through the year. But I really think it would be going a little bit too far at this point, Shiv, to provide more insight than that.

Sure. One last question on T-DM1; what are the next possible milestones for T-DM1? Would you get milestones for completion of Phase II or will it only be coming or will there be only additional milestones if you (inaudible) Phase III program? And does your guidance include any milestones from Genentech on T-DM1 this year?

Well, the first part of your question I would answer by saying- the total milestone package for T-DM1 is $44 million and so far we've gotten $7 million. And none of the milestones are associated with sales. So it will all happen before first sale. And so from that you might infer that they're associated with clinical progress and regulatory approvals and you would be right. But to give more color than that I think would be inconsistent with what we've done in the past, Shiv.

And the second question--

Your T-DM1 milestone--

Do we include in our guidance? Oh, I see. Forgive me. And the answer to that is we can't disclose that. Sorry.

Okay. Thanks a lot.

Sure.

And we'll go next to Joel Sendek at Lazard Capital Markets.

Hi, thanks. So a couple of questions; first of all with regard to the Roche opt in; I'm wondering what that means for you guys, what your arrangement might be with them. Is it the same royalty that you would get on US sales by Genentech?

Well, the way that the deal between Genentech and Roche is structured is that as we understand it, Roche has an opt-in on any product that Genentech is developing on oncology at various stages during clinical development. We know that one of those stages was pre-clinical or pre-IND submission or right after IND submission. And another is we believe at the beginning of Phase II or after Phase I is completed. And then here they've done that.

But the result of it is strictly between Genentech and Roche. What it means is that Roche will be doing the regulatory development and potentially clinical development and sales of the product ex-US or ex-North America. I'm not quite sure how the deal works for Genentech.

So that's what we can tell you.

So you don't have your own relationship with Roche, then?

No, we only pointed it out because we thought it was somewhat validating. But it doesn't change our economics at all.

Okay. Then it would mean then-- is it safe to assume that if there is product sold ex-US, that you would get a royalty on that?

Of course. We-- our deal with Genentech is a worldwide deal. So what they're doing is they're effectively sublicensing the rights to this product to Roche for ex-US sales.

Okay, and at the same economics presumably?

For us it's the same economics. We don't know what the economics are between Roche and Genentech, although that may have been disclosed way back when we first got that deal.

Yes, okay. Thanks. And then another question with regard to the clinical material reimbursement; I'm wondering if is any of that Sanofi-Aventis? Can you disclose that?

We don't generally break that out. And I'm not going to get into the individual pieces Joel, but it generally lines up with the trials that are taking place and who it is we're supporting. So I don't know that it would be critically significant if it was or it was not in this individual quarter.

But you can say that we do manufacture on behalf of Sanofi-Aventis.

Absolutely, as we do on behalf of all of our partners. The one exception would be-- we for example 1642- we don't manufacture 1642, that being a naked antibody; they take care of that on their own.

Okay. And actually it gets to a bigger question which is obviously they're going to take over the program and pay for everything themselves. So I'm just trying to figure whether there will be kind of residual expenses that they might cover for you or is that not the case and it's pretty much just milestone payments would be the only thing that you would see on the top line from Sanofi after the deal comes to an end?

Well, the obligation to manufacture early-stage material would end with the collaboration agreement. But there is no reason to believe- I don't think they have that capability internally. There's no reason why we wouldn't do that on their behalf. I would expect on a compound-by-compound basis, we'd still be working with them to develop manufacturing processes that would naturally fit into what we do.

Given the fact that we have what is in essence a pilot plant, that's something nobody really wants to put in place on their own behalf because of the issues of maintaining volume and the economics of it. People would be much happier putting in a large volume plant than they would something they produce at the scale that we produce.

Could I also add that the agreement; the research portion of the agreement ends after the conclusion of this fiscal year for ImmunoGen. So we're really talking about issues that will happen next fiscal year. But it wouldn't shock me Joel, if they continue paying some expenses going forward after the deal ends. I mean if you think about what this deal did for them, is it provided them technology expertise and know-how and so forth and so the question becomes whether or not all that know-how is in place and everything is in place needed for them to be completely autonomous here. So it wouldn't be shocking if they decided that they weren't quite autonomous yet and wanted our help for a few things.

Understood. Okay, that's helpful. Thanks a lot.

Sure thing.

And we'll go next to Pamela Bassett at Cantor Fitzgerald.

Hi, thanks for taking my call. A couple of clarifications; did I hear that there will be two products entering the (inaudible) of two IND filing by two partners?

Yes, you heard that correctly, yes; so two partners and ImmunoGen will all be filing IND applications before the end of the summer.

Okay. And--

For separate products-

Right, okay so it is two separate partners. And also with respect to the focus on new partnering activity; is that focus really on the current pipeline or might these be partnerships that involve something that a partner is bringing to ImmunoGen or both?

Right, I understand your question. I think it's pretty fair to say that we're holding on to our products for awhile yet. We want to see good data before we consider partnering them because there is good money involved the better the data you have.

So when we say partner activity, we're basically talking about new TAP licenses or deals of that nature that we do with third parties. And quite frankly ever since ASCO and the disclosure of the Herceptin T-DM1 data, the numbers of companies knocking on our door wanting to talk with us about the possibility of doing deals has stepped up. And so it's from that that we're really talking about an increase in partner activity; I mean announceable partner activity kind of deals.

Okay, great. Thank you very much.

You're welcome.

(Operator Instructions) - next to Jason Cantor at RBC Capital Markets.

Hey, it's Mike Yee for Jason. I've got a couple questions for you guys. On 242 Mitch, I guess we're trying to understand what you think personally a good outcome would be in that first stage. I mean I know I guess you're looking for one response but what do you think personally is a good outcome there? And then also just thinking about it, a registrational path; how are you thinking about Phase II and going forward?

It's exactly that study that will help us define what the strategy is, depending upon what the data is saying. And isn't it nice that we can actually have the luxury of examining those data to be able to define what the approaches are? We know the approaches we'd like to take. If we see multiple responses; if we see at least one response amongst the first 21 and multiple responses as we expand beyond 40; then that would suggest to us that maybe on the salvage population that we would be able to do a response-rate study in a pivotal fashion to seek conditional approval with FDA. So that would be one approach.

The second is if we only see one or two responses in this patient population and these are effectively salvage patients again; then it's probably not going to-- we're not going to try to go after regulatory approval based on monotherapy. So you want to do combinations or do (inaudible).

And we have a plan set out to do that. But the data will dictate which of those directions, if we go in either; which of those directions we go. And what I promised in past communications with the Street is that when we know, we'll let you know. And we don't know yet because we don't have enough- we haven't reached the 21 patients yet in the first part of the Phase II and when we do, we'll keep you posted.

So presently, we are prepared; based on what the data say to go one of two or possibly three different routes seeking regulatory approval.

So, does that answer your question?

Yes. That's helpful. I mean ultimately we need to I guess see the results of the second stage--

Precisely. And without those results in hand, it's hard to-- I mean to answer your question what I would like to see; I'd like to see a dozen responses, obviously. But this is a horrible patient population and the disease that they have has enormous momentum and huge bulk and so monotherapy is a challenge but we'll keep you posted.

And I guess same question-- and it was touched upon a little earlier in multiple myeloma. How are you thinking about that path at the end of the year, given you've got a couple of responses already but--

Right. The good news is we're not thinking about it alone; that with the help of this group of experts and they're all people that are sort of household names in the myeloma field in addition to CD56 positive solid tumors.

We're going to be able to make some decisions. We have alternatives laid out in front of us but we don't want to prejudice the outcome of the discussions with our strict point of view. And so it's really premature for us to talk about directions with that. I'd love to go after a salvage population. I mean that's one way to avoid the crush of competing products in that field because inevitably these patients end up post Revlimid or Velcade or whatever, they end up in that population. And if our product shows good activity as monotherapy in that patient population, I think again-- well it's my prejudice, but my prejudice would say we go after that as an indication.

But suffice to say we will be meeting with that group relatively soon and when that group meets and we have a product from that discussion and have formulated a plan, we'll let you know. Our hope is that we'll have enough data at the time of that meeting to make some meaningful decisions. We're at 112 mgs per meter squared now. We've dose escalated to that. We're continuing to dose escalate and further information will be forthcoming until we do. But we haven't seen any toxicity. I mean this is at 112 mgs per meter squared. The stuff is very well-tolerated benign and is active. So who knows? We might get lucky here and have a good response rate amongst this patient population as monotherapy. But we'll keep you posted.

So if we've seen robust responses in Phase I we can see a monotherapy Phase II but potentially a combination study, depending on--?

Correct. Absolutely correct; so the data will dictate the route that we go.

Okay. Very good; thank you, guys.

Sure.

This does conclude our question-and-answer session. Miss Hausner, I'd like to turn the conference back to you for any closing or additional comments.

Thank you. I'd like to thank you all for your attention and just remind you that if you have additional questions that arise, give me a call at 617-995-2500 and have a very good evening. Take care.

This does conclude today's conference. We do thank you for your participation. You may disconnect at this time.