ImmunoGen Inc (IMGN) 2012 Q1 法說會逐字稿

Good day, everyone, and welcome to the ImmunoGen first quarter fiscal year 2012 financial results conference call. (Operator instructions) 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. Good afternoon. This afternoon at four we issued our press release with our financial results for the quarter ended on September 30, 2011, which is the first quarter of our fiscal 2012. However, there was a -- there's an issue with our provider and so the release doesn't actually show up until about four-twenty-five.

If you look, if you haven't seen it yet, it should be out there now. It's actually been issued twice by two different providers to get it out, so apologize for any difficulties you've had accessing it. It should be available as we speak. I don't know how much chance you've had to review it. Of course we will cover highlights of it in our quarterly call today.

In this 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 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'll then open the call to questions. Dan?

Thanks, Carol and good afternoon, everyone. Thank you for joining us this afternoon. What I want to go through this afternoon is recent progress across a number of compounds, both those that are wholly owned by ImmunoGen, as well as number of those from our partners. And that will include trastuzumab and emtansine, or TDM-1, because there's been presentation of what I think are impressive findings from the Phase II randomized trial assessing this compound for first-line use.

And there's also been clinical progress across the range of HER2-positive breast cancer indications, including first, second and third-line metastatic as well as adjuvant.

There's also been progress by other of our partners, which includes Sanofi, with their initiation of Phase II testing for SAR3419, from Bayer Healthcare with their initiation of clinical testing for BAY949343.

There are two other TAP compounds that are advancing to IND stage through our partners and there's been continued progress with some earlier studies, BT062 from Biotest and two Sanofi compounds, SAR566658 and SAR650984.

For our own compounds, the progress includes that we're nearing completion of the Phase I portion of a trial underway -- I'm sorry, a Phase I trial for 388 and a Phase I portion of a Phase I/II trial for IMGN901.

We also are advancing our next wholly owned compound IMGN529 to active IND and we remain on track for our next IND in the second quarter of 2012. This is for our fully targeting IMGN853 TAP compound.

Our remarks today will focus on our lead partner compounds. Those would be TDM-1 and SAR3419, as well as our lead proprietary compounds IMGN901, IMGN388, and IMGN529.

So, starting with trastuzumab DM1, there was recent clinical data reported at ESMO. What that showed -- and that was for patients newly diagnosed with HER2-positive metastatic breast cancer in a Phase II study. It was a randomized, 137-patient trial and it compared TDM-1, when used as monotherapy, head to head with Herceptin plus a Taxane, which is the standard of care for this indication.

The efficacy findings, I believe, were really impressive. The study showed a higher overall response rate with TDM-1, 64.2% versus 58% for the control arm and while the -- but this difference, however, is not statistically significant because of, in part, the size of the study. The median duration of response was 9.5 months. With the standard of care, this median duration of response has not yet been reached with TDM-1.

Single agent TDM-1 significantly increased progression free survival, compared with the standard of care. With TDM-1 they showed a PFS of 14.2 months versus 9.2 months in the Herceptin plus Taxane arm and the study led to a hazard ratio of 0.59. So patients receiving TDM-1 had a 41% lower probability of their cancer progressing than those receiving standard of care.

TDM-1 demonstrated tolerability advantages, as well as what was seen in efficacy. There are half as many Grade III or greater side effects with TDM-1, these Grade III or greater obviously being the more serious side effects. The frequency of Grade III or greater side effects was 89.4% with the standard of care and 46.4% with TDM-1.

This was largely driven by hematologic adverse events. For example, neutropenia, Grade III or greater neutropenia is seen in the Herceptin chemotherapy arm at a 61% rate of incidence. This compares with 6.0% for TDM-1.

This data for the Grade III or greater does not reflect the profound difference in alopecia, or hair loss, which actually is viewed to be very important given the quality of life consideration. This particular adverse event can't be categorized above Grade II. However, just to give you the data, it came in at 67% in the Herceptin plus Taxane arm compared with 4.0% in the TDM-1 arm.

Roche does plan to report quality of life findings for this study at the San Antonio Breast Cancer Symposium in December.

Development continues on a broad basis for TDM-1. In second-line metastatic, we learned that patient enrollment had been completed in this EMILIA Phase III study. Roche expects data in 2012 and to apply broadly for marketing approval in 2012, including being in the U.S. and in Europe. Japan is not far behind. Roche's Chugai affiliate expects to apply for approval in 2013.

In the first-line metastatic setting there's continued progress in the Phase III study, the MARIANNE study, which is where Roche expects to submit this data in 2014.

And finally, for adjuvant and neoadjuvant, patient enrollment has been completed in this Phase II safety study and Roche has indicated that data should be available in the first quarter of 2012.

As a final item, Roche has started a Phase III trial in third-line metastatic. This is a study that they're calling TH3RESA that enables third-line and later patients to receive TDM-1 in a controlled setting. It's a randomized comparison of TDM-1 to the physician's choice, as there are no approved therapies in this third line patient group.

There's going to be a Roche analyst event on November 7th. There's the potential that we will hear more about their development plans at that time, so we'll be paying close attention to that.

Moving to SAR3419, this is a compound being developed that was developed by us and licensed to Sanofi, now under development by Sanofi and this targets CD19. Sanofi initiated Phase II testing in this study earlier this month that generated a $3.0 million milestone for ImmunoGen and is the first step in what we believe is an aggressive development program by then.

In the study that just was initiated, which is for refractory or relapse acute lymphoblastic leukemia, it is a single arm study for approximately 51 patients, but they also have a second Phase II planned in diffuse large b-cell lymphoma. In addition to that, we also understand that they're planning to evaluate 3419 in combination with other NHL therapies. I should note that when they start the second Phase II in diffuse large b-cell that will not trigger a milestone payment to ImmunoGen. We received our milestone with initiation of the first Phase II.

They did report data at ASCO and at the Lugano conference in June on Phase I data. Here they showed a 33% objective response rate at the maximum tolerated dose and they also showed activity across the various types of NHL, including recurrent DLBCL. They also showed activity in both Rituxan refractory and Rituxan responsive patients and the compound was generally well tolerated with a notable lack of significant myelosuppression.

Moving to ImmunoGen's proprietary compounds, we're making good progress in the Phase I part of the trial for newly diagnosed small cell lung cancer patients. We think we're close to the Phase II dose for IMGN901 and this is being dosed in combination with etoposide and carboplatin. Assuming that we are close to the Phase II dose, we should begin that portion of the study in the next few months.

The design calls for 120 patients to be enrolled in over 20 centers across four countries. This gives us the goal of being able to complete enrollment within 15 months or so of first patient dosing. So we're investing very heavily to have a number of centers available to allow us to get this study enrolled as quickly as possible.

If we're successful there, that should allow us to report some initial data by late 2012 and that would allow us to have full results by late 2013. If we're successful there, that would get us the opportunity, if the results warrant, to begin pivotal testing in 2014.

While this study is underway, we're also enrolling patients in the expansion phase of the trial evaluating 901 with Revlimid and dexamethasone for multiple myeloma. All of the earlier single arm studies with 901 have now been completed.

For IMGN388, recall these targets an integrin found on both neovasculature and on a number of solid tumors. The Phase I study here is nearing completion evaluating IMG388 as monotherapy for treatment of solid tumors. We already have completed assessment when dosing once every three weeks and we're close to completing assessment of a more frequent dosing interval. Once we have that data, it'll give us the opportunity to determine the next step for this compound.

Finally, for our upcoming compounds IMGN529 and 853, recall IMGN529 targets CD37, which is found on both different types of non-Hodgkin's lymphoma as well as on CLL. Here we have submitted our IND and just last week we indicated that that IND has now become active. We're working with a number of clinical centers to get the Phase I here underway and we expect patient dosing to begin here either very late this year or early next year.

Our second compound moving towards the clinic, IMGN853, which targets the folate receptor, remains on track for IND submission in the first half of next year and we're also making good progress on our next preclinical candidate and we think that will come in about a year behind IMGN853.

So let me pause here and pass it to Greg and let him take you through the financial results for the quarter.

Thanks, Dan. Looking at the bottom line, our net loss for the first quarter of our fiscal year 2012 was $19.5 million, or $0.26 a share, which compares with $12.9 million, or $0.19 per share, for the same quarter last year.

Our revenues for our first quarter were $2.5 million, as compared to $3.4 million in the same quarter last year. The prior quarter included a $1.0 million milestone from Sanofi earned with the start of SAR566658 clinical testing.

The current year quarter does not include any milestone payments, as we recorded the $1.0 million Bayer milestone on BAY94-9343 IND last quarter and the $3.0 million milestone from Sanofi for SAR3419 Phase II start will be booked in our second quarter. We also received a $2.0 million payment from Sanofi for their renewal of their right to test agreement and this will be amortized over time.

Our operating expenses for our first quarter were $22 million, as compared to $16.8 million in the same quarter last year and this increase is primarily due to the increased investment we're putting behind our proprietary product programs.

Our guidance for the full 2012 fiscal year remains unchanged since our last quarterly call. We project our net loss will be between $65 million and $70 million. Our cash used in operations will be between $60 million and $65 million, and our capital expenditures will be between $4.0 million and $5.0 million and we'll end our fiscal year on June 30, 2012 with cash and marketable securities of between $125 million and $130 million.

Based on these figures, we expect that our current capital resource, along with the expected future collaborator payments, will be sufficient to meet our operational expenses and capital expenditures throughout 2014 fiscal year. Not included in these projections are any major new partnerships.

We continue to see strong interest in our TAP technology among big pharma. This is not reflected in our guidance due to the difficulty in accurately predicting the timing and economics of major new deals and as Dan noted, we're seeing a big increase in momentum on the product side.

During this fiscal year we expect to see three compounds advance into Phase II, including our wholly owned IMGN901 compound. We expect to see five TAP compounds advance to having active INDs or to start clinical testing, including our wholly owned IMGN529 and IMGN853 compounds. And of course, in the coming months we should hear a lot more about TDM-1, including the outcome from the Phase III EMILIA trial.

Dan?

Thanks, Greg. So just to wrap before we get to the Q&A, as Greg noted I think the Company continues to be in a very strong financial position. We continue to see strong interest in the field, which over time should allow us to generate some additional activity in the business development area.

We're very pleased to see the pipeline getting broader and deeper into clinical testing. I think that we've been talking about that as we've come through both these types of sessions as well as investor meetings and we're very proud to be delivering on that. That's coming from both proprietary partners -- or proprietary compounds, rather, as well as from our partners and across a variety of solid and liquid tumors.

I think I'd add to that the fact that research engine, which we turned back for proprietary development once we got through our obligations to Sanofi, is proving to be extremely productive with what I think will prove to be, over time, with some very innovative compounds.

Let me just take you through what we see coming forward for upcoming events and then we'll move to the Q&A.

So, before the end of this year, we would look to see two additional compounds going through the FDA for IND submission and acceptance. As I noted in my earlier comments, there's a Roche analyst event on November 7th where they've indicated that they would be making some comments on TDM-1. We look forward to hearing what those are. There should be both clinical and preclinical data at the San Antonio conference, or the symposium on December 7th.

Our 529, now that we're through the IND process, we look to have that in the clinic and get our first patient dosed sometime end of this year, early next year, which also is the timeline for moving from the Phase I portion of our 901 small cell lung cancer study into Phase II.

In the first quarter of 2012, we should know more about the adjuvant study with TDM-1 and what safety data they saw as they dosed patients there over the past year. We would look to see our 853 compound be submitted and accepted by the FDA sometime before the middle of 2012. That moves us into the window where we think we'll begin to hear more about the second-line Phase III study from Roche around TDM-1 and accompanied with that should be the marketing application in the U.S. and EU.

And as I said earlier, if we're successful in bringing patients into the small cell lung cancer study once we get that Phase II portion up and running, given the number of sites that we're working with it may give us the opportunity to have some early data, as we get to the latter half of 2012, late 2012.

So, with that, let me turn it back to Carol and we look forward to answering any questions you might have.

Great. Thanks, Dan. We're now about to open the call to questions. We ask that our questioners limit their questions to one to two per person until each analyst has had a chance to ask questions. You can then get back in the queue. Operator, we are now ready to open the line for questions.

(Operator instructions) George Farmer, Canaccord Adams, Inc.

Hi, thanks for taking my questions. On TDM-1, can you speak to what you know about progress in adjuvant and is there any signal that Roche may move forward with a Phase III adjuvant study next year? And then, on 901, can you comment on any safety signals that you may have seen -- maybe you can, maybe you can't -- in the early portion of the study and kind of give us perspective of what sort of response rates we should be looking for when you ultimately do report some data on this program?

Hi George. As it relates to adjuvant, we have the advantage of knowing nothing, so we haven't seen any data and as I indicated, that should be coming out. We do know that the study was completed, but with respect to any of the underlying information, they're strictly looking at safety here. I think that people shouldn't be looking for any efficacy data out of this study.

But the fact that they initiated the study says it has -- it's something that they want to understand. That doesn't necessarily mean explore, but I think that given that the quality of tolerability and activity in metastatic certainly has to encourage them in this area, but I just don't know what their thinking is. So, we'll learn more maybe on November 7th, but it may take longer than that.

With respect to 901 and safety signals, I guess I should make you aware, or we've talked about it before, but do recall that in the Phase I portion this is not our target population for the Phase II. So this is anyone who would receive etoposide and carboplatin; we have added 901 to get a clear picture around safety.

And I guess the one comment I would make is that it's a little trickier dealing with a triple combination. But we have gotten to dosing levels where we would expect to see activity with 901. So, we're not done yet. We don't have -- we haven't confirmed the Phase II dose, but we have made, I think, a lot of progress there and I'm comfortable that we're going to be in range that would be appropriate to see some level of activity.

Alright, great. That's very encouraging. Thanks, Dan.

Yes.

Bret Holley, Oppenheimer & Co.

Yes, thanks for taking the question. I'm just wondering about if you know anything, because obviously you developed the compound for 3419 in ALL and what the rationale is. I guess I can kind of obviously see moving forward in DLBCL, but I'm just wondering about ALL versus that indication.

It's the basis -- well, ALL can be a very aggressive disease and so I think that they're probably looking at it, first of all, from that standpoint. I know there are other therapies being developed in that area, but they have had interesting efficacy. But I think that the safety profile continues to be an open question.

I don't want to second guess Sanofi. They're certainly very experienced in looking at approval pathways for compounds and so, as they've looked at it they feel that there must be a place for 3419 in that particular indication.

Just as a follow-up, did you have any preclinical evidence that it might be active in ALL?

The data that I recall from ASCO focused on NHL. I don't recall that there was any ALL data there, so it may be based on preclinical work that they've done specifically in ALL. I don't know that that preclinical data has been at any particular conference.

Some of it may simply be what does the expression look like versus what's seen with CD20. I think there is -- yes, CD20, I believe it's only a quarter of the patients with ALL express CD20, so CD19 is certainly a more attractive target for that particular disease. But with what they may have seen preclinically, I'm just not familiar with.

Okay, thanks very much.

Yes.

Shiv Kapoor, Morgan Joseph & Co.

Thanks for taking my question and congratulations on all the progress. I want to ask on IMGN529 what kind of design are you working on? Wouldn't this be a plain vanilla dose -- sort of safety followed by dose escalation? Or will you also look for some efficacy signals? And how are you planning, because it seems like have enough financial resources now, compared to historically, that you can do a much powerful Phase II program?

Yes. The -- as we're looking at that, with 529, I mean, clearly the Phase I is principally focused on safety, but you also put an expansion cohort in place that's sufficiently powered to -- well, not powered. But I mean, you want something that's large enough to not necessarily give you statistical data, but some suggestion of efficacy.

One of the issues I think we run into with 529, Shiv, is that it is an all-comers study. So, as a result, then you're going to see patients across the full range of NHL and while -- and I think you want that data to provide you some guidance as to what the rest of the regulatory pathway would be. So, hopefully, we'll have enough patients coming in the expansion phase and across a range of NHL subtypes and these will probably be later-stage patients that will inform what a Phase II study would look like.

And these would be failures of Rituxan?

Yes. You're not -- for an NHL study, you're not going to get Rituxan-naive patients. We have to look at the experience that Sanofi's just gone through with 3419 across, I believe, the 40-odd patients that they took in that study. All but one of them had to receive Rituxan. So, the regulatory pathway is going to be through Rituxan failures.

Okay, great. Thanks a lot.

Yes.

Ling Wang, Summer Street Research Partners.

Good afternoon. Thank you for taking my questions. I have two questions. The first one, can you clarify your comments on there will be three compounds enter into Phase II this fiscal year, and five compounds in clinical study? What are they? I guess the Phase II you refer to is 901, 3419 and what else?

The fourth is the biotest compound, which they're planning to initiate a Phase II sometime before the middle of 2012.

I see. And you mentioned five in clinic, 529, 583. What are the other, the rest of them?

Well that would be -- so it's 529. It's 853. We already have brought the Bayer compound and the Bayer compound is coming to clinic. And then there are two additional partner compounds that will be coming into the clinic. So that would constitute the five new conjugates coming into the clinic; two of them being from ImmunoGen and three of them from partners.

Oh, great and just a follow-up for IMGN388. When might we see the data from the more frequent dosing of this drug?

Not sure, Ling. The -- you know, we're working our way through that, the data. We really don't have a plan at this point in terms of when that data might be available. It probably would be sometime towards the latter part of 2012.

Okay, thank you. Congratulations on the progress.

Thank you.

Ryan Martins, Lazard Capital Markets.

Hi. Thanks for taking the question. I just wanted to ask about the adjuvant trial, the safety trial that's ongoing. Can you remind us again what the endpoints are? Is it just cardiovascular events and what's really being looked at in that trial?

Let me make sure I have the question right, Ryan. In this trial, you're talking about the EMILIA second line Phase III?

I'm asking about the adjuvant trial, the safety trial that's ongoing?

Oh, I'm sorry. Well, just a couple things. If I didn't state it, just to be clear, first off, the study is completed and they expect to have data in the first quarter of next year. It is a safety-focused study and what they're looking at with this patient population is the frequency in any level of incidents of cardiac events. That's what they wanted to get out of the way with this particular study.

And they have -- really, there's been a cardiac focus with all of the TDM-1 studies, not because there's been any suggestion preclinically, or out of early clinical studies that there's some frequency of cardiac events, but it dates back to the fact that there is some incidence of cardiac events with Herceptin. And so they wanted to clarify that particular safety aspect and whether that was going to be an impediment to developing TDM-1 in adjuvant.

In saying that, I'm not suggesting that if there are no cardiac events they're moving forward, but I think it was a precedent event to inform them in the rest of their decision making.

Sure and is there some range within which TDM-1 needs to fall in relation to what we've seen with Herceptin?

I'm sorry, could you repeat that? I didn't hear it right.

Is there any particular range within which the TDM-1 data needs to fall in on the safety side, in order to be eligible for a Phase III trial?

My -- I don't know, so my answer will be speculative. I think that it would be an elimination criteria. If they saw any incidence that was going to raise concern, from a cardiac standpoint, my guess is that would eliminate or probably eliminate their consideration.

Given the fact that that there has been -- as I say, they report no, nothing unusual in terms of cardiac events out of any of the studies conducted and it's something they watch very closely. I find that to be encouraging, but we have to see what the information is. They've given no guidance as to do they have a threshold level or what their criteria might be around the nature and frequency of cardiac events.

Okay, thanks for that color and then, finally, how do you see TDM-1 positioned in relation to the sub-q Herceptin for which Roche might have data towards the end of the year?

Well, the guidance from Roche or the comments from Roche, looking at their HER2 franchise and the positioning of sub-q versus the intravenous market said that they were looking at sub-q and they characterize it as I will say the convenience market.

Now I'm not sure exactly what constitutes convenience, but since -- what I understand is that that can be dosed in a shorter fashion, in a shorter time period than intravenous. That may be where they referenced convenience, but I think that it's been -- in some of their comments they referred to it as being they're looking at it for early stage, which would suggest adjuvant versus metastatic.

And I don't know if there's a sub-categorization, but they had a pyramid chart that they showed a couple years back that they used to diagram how they saw the markets and they clearly mentioned sub-q, but at least on a proportional basis it was a relatively small size, a small part of what they showed as the overall pyramid.

Okay, thanks for the added color.

Yes.

Tommy Nguyen, Jefferies & Co., Inc.

Thanks. Thanks for taking the question. I'm here for Thomas Wei. Maybe I can ask a question about this THR3ESA trial in the third line metastatic breast. Maybe you've gone over this before, but can you just remind us then what the weight is that Roche might be putting on this program, when we would see key data. And what is the approval endpoint there that we should be looking for in standard therapies and where the bar is for the standard therapy?

There hasn't been a lot of definition with that particular study that I've seen, so I'm not -- especially because they're comparing it to physician's choice. It starts to fall a little bit into an alternative category. I think that the motivation or one of the drivers to get this in place was that it gives them a more controlled environment to evaluate these late-stage patients than what they previously, which was under a compassionate use program.

And the compassionate use program was just as it suggests. It gave patients an opportunity to get access to the compound even if they didn't qualify for the MARIANNE or the EMILIA study, but this now gives them that avenue without continuing the compassionate use and also in a controlled fashion.

Alright. Maybe I can sneak in one more question on -- to follow-up on the question about adjuvant? So just a more general one. With the shifting ground in metastatic breast, from a regulatory point of view, how should we think about where the bar is on safety? Meaning that other than the cardiac events that we talked about looking for because of the Herceptin history, what other comps should we use in looking at the safety profile? Is it the specific events we should be focused on, or just the totality of the data, given the current TDM-1 profile?

Well, I think one, we'll get some insight in that when you get to the San Antonio Breast Cancer Symposium, I think, and I think we may learn a little bit more, because Roche is going to present a quality of life assessment of the first line Phase II data. And so, that is, I think, giving a comprehensive view in incorporating the safety perspective on first line patients today under the standard of care and looking at that in contrast to the safety data and granted, the efficacy, but focusing on safety relative with the TDM-1 patients.

So, when you're looking at -- as you say, what's the bar, I think the bar is going to be we'll get some insight there, but I don't know that the bar has changed from looking at the randomized study where they're looking at in first line TDM-1 versus Herceptin plus a taxane and second line TDM-1 again is monotherapy versus Tykerb plus Xeloda. I don't know that -- if your reference is to what everyone's witnessed coming along with Avastin, I don't know that that's a comp that has application here.

Great, thanks.

Jason Kantor, RBC Capital Markets.

Hi. I was wondering if you can provide some insight into your process for prioritizing the proprietary programs going forward and then, specifically, criteria for going forward with 901 and 388?

A lot of that is going to depend on the data that we see coming forward and you heard me reference it beyond the two compounds in the clinic, the two we have coming in the clinic. We're looking at another coming into the clinic about a year behind 853, so we are starting to build I think a reasonably deep proprietary portfolio.

The priority at this point and the focus is on 901, because we have that in -- going into a Phase II study. It's a randomized study. We think there's a significant unmet need in SCLC and if we get data that warrants it, we would look at how do we then get that developed in the first line setting as quickly as possible.

388 we have to see. 388 -- there's an opt in held by the subsidiary of J&J. So, as we go through and generate data there, there would be a dialog with respect to what their interest is in opting in and potentially developing that compound.

529 and 853 are just -- it's just a little bit early with those going into Phase I, but I will tell you that we are quite excited about both. We've received third party interest in whether we would consider partnering 853, which in a very soft way, at least off of preclinical data, is very encouraging quasi validation. But we'll have to see again how these particular compounds test in humans and off of that, then decide what we're going to do.

We do have -- one of the nice aspects of this business model is that it gives us the luxury of deciding where we do want to apply our financial resources as compounds evolve. So, with 901, were 901 to show compelling data, we have a decision about advancing that on our own, bringing in a partner for a geographic territory and that goes down the line with future compounds.

The philosophy is that we want to bring compounds into the clinic on our own, get them to proof of concept and we'll decide what the appropriate next step is based on a variety of factors, including our wherewithal to support these and advance them on our own, etc. So we don't need to make decisions at this stage on compounds that are just going in the clinic.

(Operator instructions) Cory Kasimov, JP Morgan Securities.

Hi there, it's actually Matt Lowe in for Cory today. I just wanted to ask around your business development plans, maybe if you could speak to your strategy here going forwards, that'd be great. Thanks.

Sure. We've talked about business development and where it fits. As we talk about moving forward with proprietary compounds, it's not at the expense of what we might do from a business development standpoint. The gating factor, as we look at business development, is our ability to support a partner, because certainly in the early stages it tends to have a degree of intensity, because we're not simply turning over a chemical compound for them to synthesize.

We do need to do some work to test different structures, from a conjugation standpoint, and get them the appropriate -- the compound that has the greatest likelihood of success. So the gating factor becomes what's the availability of our resources to support partner activity without impeding the development of our proprietary programs. And so we look at that very closely.

Now that's not to say we haven't made -- added some resources to accommodate partners, but that was done to ensure that we maintain the progress that we would on our propriety compounds. So there is some appetite. There is some interest. I would hope that we'd be able to realize something there over the course of the current fiscal year, but we just have to see.

These things do take some time to develop, but we will still be active on the business development side, but looking for partners that we think where there's a good match, where we find the targets to be interesting, but ones that -- but we won't engage in activity at a level that will, as I say, impede us on the proprietary side.

Okay, thank you.

Yes.

And at this time we have no additional questions in our queue. I'll turn the conference back to our speakers for any closing remarks you may have.

Great. Thank you, operator and thanks, everyone, for your interest in ImmunoGen and if you have any additional questions please don't hesitate to call. Good evening.

And ladies and gentlemen this does conclude our conference. We appreciate your participation.