ImmunoGen Inc (IMGN) 2011 Q1 法說會逐字稿

Good day and welcome, everyone, to the ImmunoGen's First Quarter Fiscal Year 2011 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-Investor Relations and Corporate Communications, Carol Hausner. Please go ahead, ma'am.

Thank you. At 4.00 this afternoon we issued a press release that summarizes our financial results for the quarter ended September 30, 2010, which is the first quarter of our 2011 fiscal year. I hope you have all had a chance to review it. If not, it is available on our website.

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 be accessed through our website.

In our call today, our Chief Executive Officer, Dan Junius, will provide an update on ImmunoGen, and our Chief Financial Officer, Greg Perry, will discuss our financial results and guidance. We will then open the call to questions. Dan?

Thank you, Carol, and good afternoon, everybody. Thank you for joining us this afternoon. I want to start just with a reminder for everybody about our business model, because I think the events over the last quarter provided a pretty good illustration of how this model fits and how we're trying to execute against the model.

The core of it is to develop our own compounds for our proprietary pipeline. At the same time, in the context of business development to use that as a means to advance our technology and have it be a source of non-dilutive cash. This business model, then, gives us a number of ways to generate value for our shareholders. It certainly is through our partner product achievements and, I think, for ImmunoGen certainly over the last several years that's been the most dominant avenue because T-DM1 has gotten as much attention as it has, and we'll talk about that in a moment.

But I think that increasingly we're going to see advancement of our own products. We have data that we'll talk about that's just come out from ESMO and certainly from business development. In the last couple of weeks we've had a prominent development there. So I think you're seeing, certainly, in the last several months how all of this fits together for our business model.

Let me talk a little bit about T-DM1 given that that seems to attract the most attention. Since we spoke at our last quarterly conference call, you are all aware that Roche received or refuse to file letter from the FDA for third-line HER2 positive metastatic breast cancer, which is a U.S. event. This was announced in late August. It only affected their regulatory plan in the US.

At the same time and since then, Roche has continued to talk about their commitment to T-DM1 and how it's a very strategic product to them. So as I said when we talked to you at the time of that announcement, this is still viewed to be a technical issue and not a fundamental one relative to T-DM1.

It did impact the regulatory plan that Roche has for T-DM1 in the US, and they now have been forced to look at the first filing for approval for T-DM1 as being in mid-2012 using data from the second-line Phase III EMILIA study. They also modified that study to add overall survival as a co-primary endpoint, the other primary endpoint being PFS, which it was at the outset.

At the same time, they've substantially expanded the trial now to 980 patients. It had previously been 500 and change, just under 600. So a meaningful increase but not one that's going to change the availability of the data for filing in mid-2012. Recall that EMILIA is second-line, so they will be filing for second line. But, at the same time, they'll be adding third line to give them a broader label.

They have indicated that they are looking to file for accelerated approval with PFS and then for full approval with OS, but all that is going to be subject to discussions with the FDA.

Now, the impact on us is that it moves the potential approval, which would have been for third line out to 2012 with the -- or the filing, I should say, to 2012 and approval probably into 2013 if the FDA chooses to approve. The second-line filing is unchanged. That was always going to be based on data and filed in 2012 with the EMILIA study. And there has been no change in the EU, either in timing or strategy, as second line and beyond was always to be part of a filing to take place in 2012.

The more direct impact on us is the potential approval milestone that we were looking at to receive in fiscal FY11, our current fiscal year. Obviously, it gets pushed out to whatever approval would take place post the second-line filing. Recall we had to mention that as being an eight-figure milestone but low eight digits, less than $15 million. And then the start date for any royalties on third-line sales would now come with that subsequent to the filing and again with the potential approval. So that gets pushed out as well. But within our financial plans and the guidance we've provided, our ambitions around royalties were conservative. So that's not a meaningful impact on our financials.

The other event that took place since then was the interim first-line data that was disclosed on T-DM1 at ESMO a couple of weeks ago. The CEO of Roche didn't equivocate. He called the data "stunning." I think that's an excellent adjective. Recall this is a study that is measuring T-DM1 as monotherapy in one arm and herceptin plus docetaxel in the other arm. The comments that came out in the data, which support that as being the as the T-DM1 arm being at least as good, if not better in efficacy, than the existing first-line therapy of herceptin plus docetaxel. But the emphasis by the presenter at the Presidential Symposium and by ESMO in their release was around the fact that the toxicities were significantly less than what patients experienced in current first-line therapy.

So -- that was very impressive. This is early data. It's interim data with the cutoff going all the way back to April but, at the same time, the presenter did comment that there was the potential for the overall response rate to increase. She noted that there were patients that are currently categorized -- or were currently categorized in the data as having stable disease that had unconfirmed PRs. So there was the potential for those to, at some point, be reclassified as full PRs. At the same time, there were other patients with stable disease that could, over time, become responders. And she did even dimension that to say that was 11 patients with unconfirmed PR. So depending on how that evolves, over time, that could meaningfully impact the efficacy data seen in the T-DM1 arm.

It was indicated that final data from this study -- again, this is a Phase II study -- would be expected in the second quarter of 2011. That data would then include PFS, which is the primary endpoint of the study.

Other clinical information around T-DM1 -- Roche indicated they expect T-DM1 plus pertuzumab data to be available at the San Antonio Breast Cancer Symposium in December. This would potentially include findings in first-line use. Recall that there was data at ASCO in June around the combination of T-DM1 plus pertuzumab but it only included patients with second line and later therapy.

This becomes important because one leg of the first-line Phase III that's currently underway is T-DM1 is monotherapy versus standard of care, which is herceptin plus ataxane, but the other arm is looking at T-DM1 plus pertuzumab versus the current standard -- of current first-line therapy. So this will be informative of what we may be looking to see as that Phase III first-line data evolves.

As a final note on T-DM1, I'd point out that there is currently now a Phase II safety study underway looking at T-DM1 use in the adjuvant -- neo-adjuvant setting that -- we were aware that that study was inclintrials.gov, and we've been informed this patient dosing has now begun. So they're at least beginning to collect data in that area as well.

Let me talk briefly about the other partner compounds. Sanofi-Aventis, just last month, put their third compound in the clinic. This is one that's been designed SAR566658. This is a TAP compound. The target is ovarian, breast, cervical cancer, lung, and pancreatic cancers. So, again, a solid tumor target. DS6 is one designation for the target, and so that now is in the clinic.

The other compound that went in the clinic over the last several months is a naked antibody. The designation here is SAR650984. And this goes after hematologic malignancies. So that, along with SAR3419, which continues to be moving through the clinic. It's expected to go into Phase II in the second half of next year, and this, you'll recall, targets non-Hodgkin's lymphoma, but that brings up to three the Sanofi-Aventis compounds in the clinic. So they continue to move our technology forward and the technology that they picked up through the collaboration that ended a couple of years ago. So we're enthused with what we see taking place with Sanofi.

I'd also point out Biogen Idec, with their BIIB015 compound also expects to be moving forward into a Phase II in the second half of next year. Recall that this Cripto target is found on breast and lung tumors. Biotest with their BTO62 is now being evaluated in a Phase I/Phase IIa study, and this is looking at a more frequent dosing schedule, which they had been planning for some time.

And with our partners, we continue to expect another two to three TAP compounds going into the clinic through the end of next year. And so we're seeing very good progress on the partner front, both in terms of number of compounds in the clinic and where they are in terms of advancing into later-stage trials.

Let me now talk about our proprietary pipeline, because we've been making some decent progress there as well. At ESMO, we reported updated clinical data for CD56-positive solid tumors, where we are continuing to see encouraging activity and tolerability. Recall that we are now at the stage in the study where we're focusing on three particular subgroups. That would be ovarian cancer, Merkel cell carcinoma and small-cell lung cancer. For ovarian, we didn't have any data at ESMO. We are starting to see ovarian patients come into the study, but they were enrolling too late to generate any data to include but were, nonetheless, very pleased to start to see ovarian patients begin to be dosed and at an increasing pace. So that's encouraging. We want to learn more about the potential for 901 with ovarian patients.

For the Merkel cell subgroup of 13 patients, we noted that we had a second complete response. This is a patient who has been disease-free for at least 17 months. This is to go along with the first complete response. That patient has now been disease-free for over five years. And, along with that, we had three patients with clinically meaningful stable disease. So taking the responses and the clinically meaningful stable disease, it's gotten us to a clinical benefit rate of around 38%. So I think a good indication of activity.

We continue to be drawing Merkel cell patients into this study, so we'll look to see what more comes forward. Recall this is a disease with no approved therapies, and it's a very aggressive disease with median survival of under seven months. We continue to look to have a decision around a pivotal study by the end of this year and, recall, this is a compound for which we filed and received orphan drug designation in the US and EU over the course of 2010.

The other subgroup that was disclosed at ESMO was on our small-cell lung cancer patients in this study here. There have been 26 patients. Again, we've seen signals of activity despite the fact that we're coming into this particular disease area at best at second line. Generally, quite a bit later than second line. And like Merkel cell this is a very aggressive disease, once patients relapse from first-line therapy, it's difficult to address or -- or arrest, I should say -- the progress of the disease.

We've seen one unconfirmed PR in a patient with refractory disease and three clinically meaningful stable disease cases. And so, again, certainly indications of activity. This compound has also received orphan drug designation as well in the US and now it's finalized in the EU.

We've said in the past we want to take a look at 901 in combination and, in particular, in small-cell lung cancer, and this is based both on the attractive tolerability profile that we're seeing thus far, as well as preclinical data that suggests the opportunity for a significant improvement in efficacy when dosed in combination. And on that basis, we are on the cusp of starting a Phase I/II randomized study in small-cell lung cancer. We've initiated our first site this week. This will be first-line therapy for small-cell lung cancer. We'll dose escalate with a triple combination of 901 plus etoposide and carboplatin, and once we established MTD, we will then randomize into first-line standard of care today, etoposide and carboplatin, and the other arm will receive that same therapy plus 901. So we're very excited to be starting this study.

At the same time, we continue to have our myeloma studies underway. In the monotherapy study, there will be additional data at ASH, and we are assessing our next steps with that study. At the same time, we'll have the first data on combination use. Recall that we have a combination study underway in multiple myeloma looking at 901 in combination with revlimid and dexamethasone. And so that data will -- some preliminary data from the dose escalation phase will be available at ASH as well.

We have other activity in our proprietary pipeline. IMGN388 continues to move forward. We've reached MTD, evaluating dosing every three weeks. We'll have updated data at EORTC next month. We've talked about IMGN529. This is a compound that we've been developing for certain types of liquid tumors. We expect to report our first preclinical data on this compound in the first half of 2011 with an IND to file sometime around the middle of next year.

And, finally, a compound that I think we're designating for the first time. We're calling it IMGN853. This goes after a target, which is folate receptor 1, and that target is found on ovarian and other epithelial malignancies. We'll have some preclinical data related to this program next month at EORTC, and that's on track for filing an IND sometime in early 2012. So I think continued good progress around building a broad and deep pipeline of proprietary programs.

Getting to the last element of generating value through the business model is business development. Again, we announced just over a week ago a collaboration with Novartis that will bring in a substantial amount of cash in the up-front portion of the economics. And that will more than offset the impact of the delay in the milestone that we talked about from T-DM1. Greg will cover in detail our overall financial guidance.

But this is an outgrowth of interest that we've been talking about some time that we're seeing in our technology from the major players in the pharmaceutical industry. I think it stems from the fact that there has been data emerging that shows that the technology certainly is validated. Some of the steps that we've taken have allowed us to be patient in ensuring that we receive current value for the technology. We think that we realize that in the Novartis relationship. We are very excited to have them as a partner. We continue to have discussions with others around where there may be opportunities for us to work together utilizing our technology. But it's always difficult to predict how those will unfold. So we will just have to wait and see.

So, with that, let me turn it over to Greg to walk you through the financial results for the quarter and our guidance.

Thanks, Dan. I believe our financials reflect the strength of our business model, which, as Dan noted, is to aggressively develop our own compounds to value inflection points and use business development as a way of advancing our technology while generating non-dilutive cash to develop our proprietary pipeline.

Looking at the financials for the quarter, our net loss for the first quarter of our 2011 fiscal year, was $12.9 million, or $0.19 a share. With the first quarter revenue of $3.4 million and expenses of $16.8 million. These compare with revenues of $3.1 million and expenses of $15.8 million in the same period last year. With the increases in expenses in the current quarter principally due to our increased investment in our proprietary programs.

We project that our net loss for our total 2011 fiscal year will be between $60 million and $64 million. While we are increasing the spend on our own compounds, we project our cash use in operations in our 2011 fiscal year will be less than $4 million. This reflects the power of selectively out-licensing our technology to generate non-dilutive cash to fund our product programs and reflects the impact of the Novartis collaboration, which we established after the close of the quarter.

We expect to end the year on June 30, 2011, with between $106 million and $110 million in cash and marketable securities. We believe this is sufficient to fund our operations well into the second half of our 2013 fiscal year. We are focused on aggressively advancing our own compounds to value inflection points, and we remain open to partnerships that create value long term while providing an important source of non-dilutive capital in the near term.

I'll turn it back to Dan.

Thanks, Greg. Let me just wrap up before we get to the Q&A by talking about what we see taking place over the balance of this quarter and then through 2011. Clearly, with the breadth and increasing depth of the pipeline, it leads to an awful lot of information. We certainly have had an active start to the fourth calendar quarter this year with data on T-DM1 and 901 at ESMO. We will have data on IMGN388 at EORTC as well as preclinical data on IMGN853 at EORTC. And then at ASH we'll have both monotherapy and combo data on IMGN901 and our partner, Biotest, will have data on BT-O62 at ASH as well.

And then the final data event would be the San Antonio Breast Cancer Symposium where there will be, at a minimum, the combination data on T-DM1 plus pertuzumab and potentially other data on T-DM1.

In terms of events, the T-DM1 adjuvant study has already begun. As I noted, we'll be starting our small-cell lung cancer combination study very shortly, and we also look to have the Merkel cell carcinoma pivotal decision sometime before the end of this year. We've already seen, I think, a major event from a business development standpoint, and we'll just have to see how that unfolds.

All of that leads to what I expect to be a very active and exciting 2011 for ImmunoGen. We'll have clinical data on our existing clinical compounds of 901 and 388. That will lead us to be talking about strategy for those two compounds as well as what the plans are for IMGN529, which will have some preclinical data early in the year and then midyear looking for an IND filing and initiation of clinical testing.

We should also have expanded preclinical data around the IMGN853 compound that I mentioned that targets folate receptor 1, and then with business development, we could have further activity either on the technology platform or on product candidates. Because I think that we're looking at the full spectrum of opportunities in terms of business development.

On the partner side, again, a very -- an opportunity for a very active year. Certainly, T-DM1 there's the opportunity for further data and further direction coming from Roche around that compound, 3419 and the Biogen BIIB015. We'll have data, we would expect, over the course of the year as would the Biotest compound and potentially the new compounds from Sanofi.

For both the Biogen compound and 3419, there should be a -- we're looking for a Phase II to start over the course of the year. And then we would look to see two to three additional TAP compounds coming into the clinic from our partners over the course of 2011, which, along with the IMGN529 would put us in a position of having as many as 12 compounds in the clinic by the end of 2011. And, at the same time, seeing a number of those compounds moving into Phase II. So while it would be almost a dozen -- not quite half of that would potentially be in Phase II or later studies by the end of next year.

So that, from the Company standpoint, that's a pretty exciting position to be in.

So I'll stop at that stage and turn it back over to Carol, who can give you the guidelines for questions.

Great. Thanks, Dan. We're about to open the call to questions. We do ask that you limit your questions to one to two per person until everybody has had a chance to ask questions. You can then come back on the call and ask additional questions at that time if there's time. Operator, we are now ready to open the call to questions.

Thank you, Ms. Hausner. (Operator Instructions) George Farmer, Canaccord.

Dan, can you go into the thought process regarding 901 and Merkel cell? What is driving your Phase III decision or registration trial decision? And when do you think you would have data from that program? Also, regarding the responses that you see in Merkel cell, you mentioned there were two CRs and some stable disease. Were there any PRs or is this antibody -- is it kind of an all-or-nothing response in these patients?

Yes, George. I don't think it's necessarily all or nothing, although I guess from a rejector response rate, that is something of what we've seen thus far because, with the 13 patients we reported on, it was 2 CRs, and then three cases of stable disease. But, again, you're dealing with 13 patients. So it's difficult at this stage to extrapolate and draw very broad conclusions.

Now, we have dose patients beyond the data cutoff for the poster in ESMO, so we want to continue to see what happens there. We are having discussions with KOLs around the disease around what they're seeing. We want to digest what their input is. At the same time, actually, we also -- we won't have much of a look, but we do want to get into the clinic with the small-cell lung cancer study and get a few patients dosed and see if there's anything that we ought to anticipate out of that.

So I'm encouraged that we're seeing the activity that we are in a disease as difficult as Merkel cell. I also am encouraged that a decision is going to be -- going to take into consideration what, frankly, was -- and I think the data has been disclosed at one point -- some pretty compelling combination preclinical data around 901 and small-cell, and the characteristics of small-cell are shared with Merkel cell. So all of those factor in.

We also want to be looking at the CMC path at the same time. So there are a number of factors to put together to be able to make an informed decision around where we go with 901. But I think that we should have a bias to being aggressive here.

Okay, and then one more question, if I may. Just for clarification -- the T-DM1 data that's going to be at San Antonio with pertuzumab, did you say that that was a comparative study? Because I believe that trial started off as just a single-arm trial.

No. Let me tell you where the confusion came in. It is not. It's a single-arm study. The incremental data that we would hope to see, and it's our hope. I don't know -- it's not been suggested by Roche or Genentech it will be there, but it would include first-line patients, because that is a population that was not included in the data disclosed at ASCO. Where the confusion may come in is in reference to the first-line Phase III, which does include a randomized -- I mean -- it's got basically three arms. It's T-DM1 versus current standard of care, and it's T-DM1 plus pertuzumab versus current standard of care. But that's the Phase III study, that's not this Phase II for which data would be updated at SABCS.

Shiv Kapoor, Morgan Joseph.

I have a few questions related to business development and just financial statements. First, I want to understand how you come to your 2013 fiscal year. You have enough cash until then. What kind of expense and revenue projections are inherent in that sort of guidance? In other words, what's the ongoing cash burn for the company currently?

Yes, Shiv, this is Greg. I think probably the most simple way to look at that is our current guidance is to have a cash balance of between $106 million and $110 million at the end of fiscal year '11. And if you look at last year, the company burned about $40 million in cash. And so if you use that as a proxy, going forward, that gives you just under three years' worth of cash. So that basically gets you into that zone.

Okay, that's fair enough.

Shiv, what we do plan, just because I want again to get the emphasis on developing our own compound, we do expect to see some increase in expenses, going forward, but we expect to see that matched by increasing revenue to keep us at that net level.

Okay, fair enough. Now, does this guidance include any additional business prospects, any additional business development either on technology or the product side?

Yes, there is, Shiv. As we generally do, there is some modest expectation around business development deals. So there remain some modest expectation for BD cash in this forecast.

Okay. And just a clarification -- Dan, you mentioned you've already seen some major business development possibility unfold. Were you talking about Novartis or is there something that you haven't announced yet?

No, I was referencing Novartis.

Okay.

But there is -- Novartis was not the only conversation that we've been having. I will come back and say we are being -- "demanding" is maybe too strong of a term, but I think what we're looking to ensure that we get fair value from both an economic standpoint. And we are cognizant around non-economic terms and conditions that also have a value component to them as well. So the point being, we're not jumping to do every deal that we possibly can. We want to do deals that are right for the company in every respect.

And -- sorry, this will be my last question on the same topic. Because this deal that you did with Novartis, you did not necessarily contribute targets from your side? These were targets coming from Novartis. Other potential competing deals were also similar to that. So they are not necessarily competing with what -- a different deal that you might do with another company might not have anything to do with what Novartis just did?

No, Shiv. This is Greg. In fact, basically, our licenses are exclusive to a target, generally, and so, by definition, prospective partners will be looking at different targets.

Just clarifying -- thanks.

Jason Kantor, RBC Capital Markets.

Hi, this is Adnan on Jason's behalf. So a couple of questions on 901. In terms of the go/no go decision, can you remind us if you'll seek any regulatory feedback, or is that basically a KOL, and what kind of results do you see type of decision? And basically what will help you decide that you're going to the next stage? And number two, in terms of Phase I/II small-cell lung cancer trial -- can you remind us again how many patients, how many sites, and what's your threshold for deciding to go from Phase I to Phase II? Is that basically safety, or some kind of response rate as well?

Let me get the second question first. There is no, necessarily threshold point for a decision. The Phase II is when we randomize. So absent something that we see in the dose escalation that says it would be unwise to continue this study, once we get to MTD, we will then flip over into randomized, and that would constitute the Phase II.

We're looking to recruit -- Carol, correct me -- I think it's like about 30 patients per arm.

(inaudible).

Oh, is it 40 -- yes, okay. So 40 -- I beg your pardon -- so it's still 60, I just split them wrong. So once we get to the randomization, we would get 40 into the triple arm in essence. So standard of care plus 901, and 20 into the control arm.

And we're looking to have probably in the neighborhood of six or seven sites up and running for that study.

Including (inaudible).

Yes, including a couple outside the US. Now, your earlier question around Merkel cell, we already have had discussions with regulators, but that was in the context of the application for orphan drug. So we got some feedback there. We will continue to look for additional input, but that wouldn't necessarily be -- I think we have enough to understand how that would factor into go/no go. We may need some additional input to refine study design, but I think we've got enough -- and the feedback that we received from the EU regulators, not from the FDA, was that they appreciate that Merkel cell is a very rare disease. They have expressed some flexibility around study design, mostly from an absolute scale standpoint, because they find it to be potentially self-defeating to demand a large-scale study to achieve a high-level of statistical significance for what is a relatively small patient population with a very significant need.

Okay, and if I could just ask a follow-up on the small-cell lung cancer trial -- can you give an estimate on how long it might take you to get to an MTD before you start randomization to the competitor arm?

Well, a lot of factors come into play there. I mean, how quickly do the sites get up? How quickly do they enroll? I would like to think that by the middle of 2011, and also when you're dose-escalating, you run into the problem that as you get through a cohort, you then have to wait until those patients get through a full cycle before you can move on to the next one as you're looking for any issues of toxicity. So dose escalation can be a little slow.

That said, maybe some time around the middle of next year to the end of the third quarter, we should be through dose escalation and into the expansion phase. I'm encouraged that we have a site initiated. Maybe we'll get patients in quickly. But all this becomes a function of recruitment at individual sites. But I think having the six or seven sites in place will help quite a bit.

Thanks, and I'll get back in queue.

Yes, one other point -- we don't have to start at the lowest dose given that we do know something about dosing with 901. It gives us the opportunity to start at a little bit higher dose, which tends to accelerate the dose escalation process.

Ling Wang, Brean Murray.

I have a follow-up question on 901. I was wondering when should we expect to see the initial readout for 901 in ovarian cancer in a Phase I expansion trial?

Ling, it's going to relate to -- while we've brought some ovarian patients in, and we seem to be now have solved what was a little bit of an impediment around recruiting, I think we have to wait and see how many patients we do bring in. I'm optimistic there. I think once we get to a decent number of patients, we'll look for what the next opportunity is. I would say certainly not later than ASCO. And if we recruit enough patients, and it's worth getting at it earlier, we'd look for an earlier opportunity. But it's going to be function of how quickly we continue to bring patients into the study.

One advantage there versus what we just talked about with the combination study, given that we are at the expansion phase, we do have the dosing in place. And so we can, essentially, enroll patients as quickly as we can screen them and confirm CD56 -- the presence of the target, and we can get them into the study.

I see. So how many sites are you using for the expansion study?

The expansion phase is open at about six or seven sites. Two of them are heavily focused on ovarian. So -- and, as I say, that's been very useful in breaking that logjam.

Bret Holley, Oppenheimer.

I'm wondering about your expectations for the 901 combo revlimid data. Is there sort of a mechanistic rationale for potential synergy there or how should we think about that going into that data?

I don't know if it's so much mechanistic. I think that while there are a number of therapies that are out today for multiple myeloma, they all -- at some point, patients relapse, Bret. The issue, I think that we looked at preclinically, was we were looking at another mechanism of action to -- and we looked at the full range of existing therapies and found that the activity in [RevDex] in combination with 901 offered very strong activity. And also was the least likely to lead to overlapping toxicities.

So it showed actually beyond simply being additive, at least preclinically, it was synergistic. So I think that without knowing necessarily how that relates to the mechanistic question, someone other than me would have to answer that. It certainly was encouraging to see that level of activity.

Matthew Lowe, JP Morgan.

I was just wondering if you know that survival assumptions and the powering assumptions built into the EMILIA study?

I'm sorry. Could you ask that again? I didn't quite hear that.

I was just wondering if you know the survival assumptions and the powering assumptions built into the EMILIA study?

I don't know that we know that. Carol, do you have -- that hasn't been disclosed by Roche, Matt. So we don't have that information. We've had some questions around some of the studies. Unfortunately, we just don't know.

Okay. And then I guess my second question is do you know how long, roughly, a Phase II adjuvant study should take to run?

No. How many patients -- have they indicated how many patients they're looking at in the adjuvant/neo-adjuvant study?

(inaudible)

Well, we can take a peek at that, Matt. Again, they haven't -- generally, they will put -- it's in clintrials.gov and, generally, they will suggest an endpoint, but often it's an endpoint that's well out there and doesn't necessarily reflect what their real expectations are.

Okay, that's great. Thanks very much.

We'll look that up, and if we find it while we're still on the call here, we'll give you that.

(Operator Instructions) Jason Kantor, RBC Capital Markets.

Yes, it's Adnan again. Just on the change in the EMILIA study trial, do you know if Genentech has met with regulators to get that? And the second question, last question, in terms of the milestone received from Novartis, how does recognition for that take place? Thanks.

If I could, I'll jump in and answer. When you say the milestone, I believe what you're referring to is the $45 million up front, and from a P&L standpoint, we've assumed a modest amortization over some eight years, I believe it is, in our forecasting. However, there is a change in accounting, and so we're working through that and will be working through that with our auditors in terms of how to treat revenue associated with these multi-part agreements. And so that could very well change, going forward. It could result in a longer amortization period of that $45 million, or a shorter period. It's a bit early to determine.

Yes, Greg, I think I'm right in saying that the guidance that we've given is under the old rules, given that we just don't know how to apply the new rules at this point.

In terms of your first question, unfortunately, the answer to that is I don't know as well. Again, and this is as recently as a week or two ago, they indicated that they would be discussing with the FDA the proposed changes around the EMILIA trial. But there has been no further guidance to whether they've had that meeting or what came out of the agency.

Mark Monane, Needham & Company.

This is [Curtis Wang] for Mark Monane for him the questions. I'm sorry if things have been discussed before. In regard to the (inaudible) is Roche's (inaudible) from application in later (inaudible) trials. (inaudible) all data will also be available at that time?

We couldn't quite hear you.

I don't know if you're on speakerphone or if you can move back from the speaker, but that was unintelligible. So could you take another shot at that, please?

Okay, okay, I'm sorry.

There you go, perfect. Better, much better.

So my question is regarding to EMILIA trial. So Roche expect to file for market application in later (inaudible) trial, but do you think it is going to be solely based on PFS data or do you think overall data will also be available at that time?

Well, the comments that they've made is that the submission in 2012 -- and that would be both from the US and in Europe, would be on PFS. And because PFS is an acceptable endpoint in Europe, and it would be submitted. Now, again, this is what they want to talk to the agency about. And it would be PFS in the US for accelerated approval with OS to then be the confirming study. So I think that's how they are trying to ensure that they cover the full scope of where the agency might have an interest, is by continuing to use PFS as one of the primary endpoints. But in adding OS, they would have the study underway and that data, with the passage of time, would mature and be available to confirm whatever they had with PFS.

Okay, thank you. And just a follow-up -- do you know if the trial is designed to show (inaudible) inferiority or is designed to show superiority?

I don't know. It has not been disclosed.

That concludes today's question-and-answer session. I'd like to turn the conference back over to Ms. Hausner for any additional or closing remarks.

Okay. Thank you very much, and I'd like to thank everyone for their interest. If you have additional questions, give me a call at 781-895-0600, and I wish you a good evening.

That concludes today's conference. We thank you for your participation.