英賽德 (INCY) 2004 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Incyte Corporation first quarter earnings release and corporate update. At this time, all participants have been placed on a listen-only mode and the floor will be open for your questions following the presentation. It is now my pleasure to introduce your host, Ms. Pam Murphy, Vice President of Investor Relations and Corporate Communication.

Good morning and thank you for joining us. With me today are Paul Friedman, Incyte's Chief Executive Officer, and Dave Hastings, Incyte's Executive Vice President and Chief Financial Officer. Paul will begin with a review of our drug discovery and development programs, followed by Dave's discussion of Incyte's first-quarter financial results. We will then open up the call for Q&A.

Before beginning, we would like to remind you that the prepared statements that management will be making during this conference call and statements made in response to questions will contain predictions, estimates, and other forward-looking statements that are subject to a number of risks and uncertainties that may cause our actual results to differ materially. Such statements cover anticipated timelines, plans, and costs related to our drug discovery and development programs; anticipated therapeutic and potential shareholder value associated with our drug discovery and development activities; and the anticipated cash impact of our restructuring efforts in our 2004 financial guidance. These forward-looking statements and all other statements that may be made are subject to a number of risks and uncertainties that may cause actual results to differ materially. Please refer to the section entitled "Factors That May Affect Results" in our annual report on Form 10-K for the year ended 12/31/03 for more information on factors that could cause actual results to differ. Incyte disclaims any intent to or obligation to update these forward-looking statements. I will now turn the call over to Paul.

Thanks and good morning. The first quarter has been strong for Incyte. Specifically, with the advancement of each of our discovery and development programs, the raising of an additional $250 million, and the closing of our Palo Alto operations, we believe Incyte is now in a very strong position to focus and to deliver on the promise of our growing pipeline. In the next several minutes, I will provide you an update on the progress we have made in drug discovery and development, beginning with Reverset, our HIV medication.

We recently presented very positive results from a multiple-dose Phase II placebo-controlled trial, designed to evaluate Reverset as monotherapy in 33 naive HIV-infected patients. In the study, patients received either 50, 100, or 200 milligrams of Reverset once a day for ten days. The results were impressive. The mean reduction in viral load for all treated patients range from 1.67 to nearly 1.8 log copies per mil. It is clear to us that Reverset has the potential to be a very potent drug for treating HIV. The drug was also very well tolerated at all three doses.

Dr. Robert Murphy, the study's lead investigator, will prevent present these results, plus the results of a fourth arm of the study, at the 15th annual AIDS Conference in Bangkok this summer. The fourth arm of the study involved ten treatment-experienced patients, eight of whom received 200 milligrams of Reverset once a day for ten days and two who received placebo.

Based on the safety and efficacy we saw in this first study, we are moving forward with a second Phase II, which will be for three months in 18- treatment-experienced patients who will be equally randomized to receive 50, 100, or 200 milligrams of Reverset or placebo once a day. We are on track to begin patient enrollment in this study this quarter, and our goal is to complete patient enrollment as well as to conduct an interim analysis by year-end, and initiate Phase III trials in mid-2005. We intend to take Reverset through registration ourselves and may pursue a corporate partnership to launch the drug, depending upon the results in the second Phase II study and how large a market opportunity we see.

Moving on, I will now discuss our CCR2 antagonist program. CCR2, a member of the chemokine receptor family, is expressed mainly on blood cells called monocytes. Antagonists of this receptor are a very exciting new class of drugs with the potential to provide efficacy in treating a variety of chronic inflammatory diseases, among which are rheumatoid arthritis, multiple sclerosis, and atherosclerosis. While a number of other companies have tried to develop orally available CCR2 antagonists, we believe we are one of the first, if not the first, to take one into man.

Our lead compound from this program, Incyte 3284, is just about to enter Phase I. We began synthesizing and evaluating compounds for this program in May of 2002, and to be positioned for first dose in man in just two years is a test of the drive, experience and talent of our scientific team. Phase I will be a combined single- and multiple-dose study in healthy volunteers. During the multiple-dose portion of the study, we will conduct a test for delayed-type hypersensitivity, called DTH for short. This will constitute a pharmacological proof of principal, and has the potential to confirm the drug's anti-inflammatory activity in man. This DTH reaction is a classic cell-mediated immune response, and we have seen dramatic reductions in the DTH response after oral dosing of our CCR2 antagonist in both mouse and cynomolgus monkey studies.

Given these preclinical results, taken together with the positive Phase I results Millennium reported using this same test with its antibodies that targets CCR2, we expect that Incyte 3284 will also reduce the DTH response in man and provide the effective dose range for further clinical studies. Our goal is to complete this trial this year in the September/October timeframe and then begin Phase II studies in a rheumatoid arthritis indication and possibly in one other potential indication.

These first Phase II studies we will conduct alone or with a partner. We do plan to partner the program, because chronic inflammation is simply too large a therapeutic area for us to pursue on our own. It encompasses a number of large primary indications which require extensive development programs. Our intent is to form a strategic partnership with a pharmaceutical company with strong development and commercialization capabilities and experience in these therapeutic areas.

Lastly, I will describe our most advanced oncology program. This is also an internal program that has made rapid progress during the past year. We have discovered a series of orally active inhibitors of a key enzymatic activity called sheddase. Sheddase works at a critical step in the signaling pathways of the epidermal growth factor receptor family. Called EGFR for short, this family has received a great deal of attention, given the success of Receptin, Iressa, Erbitux and now Tarceva. And the pathways are now recognized as critical for the growth of a variety of solid tumors, such as non-small cell lung cancer, colorectal cancers, and breast cancer.

There are four distinct EGFRs, and confusingly, these are also called HER1, 2, 3, and 4. The activities of the drugs I just mentioned have each restricted to only one of these receptors. For example, the antibodies Erbitux and Herceptin bind to the HER1 and HER2 receptors respectively and reduce receptor induced intercellular signaling, which in turn reduces cell proliferation.

The tyrosine kinase inhibitors, Iressa and Tarceva, specifically reduce activation of the HER1 pathway only. They act downstream of the antibodies by interfering with phosphorylation of the receptor, which is also needed to induce intracellular signaling.

Our sheddase inhibitors act in the third distinct way on the EGFR pathways. And importantly, their inhibitory actions are not restricted to a single EGFR pathway. For example, in a preclinical HER2 receptor-dependent model of human breast cancer, one of our sheddase inhibitors was administered for 28 days and demonstrated tumor growth inhibition comparable in magnitude and duration to an optimal dose of Herceptin. And in another model, a preclinical HER1 receptor dependent human breast cancer model, one of our sheddase inhibitors was as effective as the maximally tolerated dose of the tyrosine kinase inhibitor Iressa. Additionally, at the dose we used, our compound was tolerated extremely well, while Iressa actually showed some toxicity in the mice, including weight loss and several deaths.

We've selected a lead candidate, Incyte 7839, to take through preclinical toxicology. Based on a number of non-GLP safety studies with Incyte 7839 and closely related compounds, we expect that the GLP preclinical tox results will give us a sufficient therapeutic index so that we will file the IND in the fourth quarter of this year to begin clinical trials late in 2004 or very early in 2005.

In closing, with what we've accomplished in the first quarter, I believe we are in a very strong position to make continued progress throughout 2004, including our plans to complete our first Phase I study for Incyte 3284, our oral CCR2 antagonist; file an IND for Incyte 7839, our oral sheddase inhibitor; select the final dose for the pivotal Phase III trials for Reverset; and update you on additional internal programs that would add to the strength and the value of our growing pipeline. Now I will turn the call over to our CFO, Dave Hastings.

Thank you, Paul. Good morning, everybody. Before I review our Q1 results, I would like to make a brief comment on the significant progress the Company has made in 2004 from a financial perspective. During the quarter, we have rationalized Incyte's infrastructure such that our resources can now be devoted entirely to executing our discovery and development programs, which we are confident can bring long-term value to our shareholders.

In addition, by completing a $250 million convertible note offering, we significantly strengthened our cash position. This financing gives us greater flexibility in managing our balance sheet, when we have the opportunity to maximize the returns on our investment in our drug discovery and development program.

With that, I thought it would be useful to walk you briefly through our results for the first quarter of 2004. Our cash balance at March 31 was approximately $501 million, which reflects the net proceeds of approximately $242 million from our 3.5 percent subordinated convertible note offerings, and includes our net use of cash of approximately $35 billion in the quarter. Cash and its effective use is the key magic upon which we measure our financial performance.

Our cash used this year is still expected to be between 130 and $140 million, which is unchanged from our previous guidance. We still expect the use of cash to be as follows. Up to $80 million for Wilmington-based drug discovery and development and administrative activities. Up to $23 million for restructuring activities related to the closure of our Palo Alto facilities. Up to $15 million, primarily for the first quarter operations of our information productline and transitional expenses related to the closing of our California operations. And up to $60 million used for net interest expense, other items and working capital changes, primarily related to the information productline.

It is important to note that this guidance does not include any cash that may be used for possible repurchases of our 5.5 percent subordinated convertible notes or any possible in-license or purchase of products for clinical development.

Revenues for the first quarter of 2004 were $6.6 million. Due to the termination of development of our licensing productline, we are maintaining our revenue guidance for the year of $7 million to $9 million, although we now expect revenue to be at the higher end of that range.

The net loss for the first quarter was $37.7 million, or 52 cents per share. Included in net loss were restructuring and related charges of $7.6 million in connection with our previously announced closure of our facilities in Palo Alto. We expect to record up to an additional $40 million of restructuring and related charges, primarily in the second quarter of 2004. The total expected 2004 restructuring charge of up to $47 million is unchanged from our previous guidance.

Also included in our net loss for the first quarter of 2004 is a charge of $2.7 million as a result of write-downs related to reduced market valuations in strategic investments that we hold in other companies. This charge is included in interest income and other income expense net.

Our R&D expense in the first quarter was $26.2 million. The first quarter includes expenses for our Palo Alto operation, as the closure of those facilities was not affected until April 2nd. We still expect our overall R&D expense for the year to range from $91 million to $95 million. This amount is unchanged from previous guidance.

Our selling, general, and administrative expenses were $6.3 million for the quarter, and, as with R&D expense, includes costs related to the operations in our Palo Alto facility. We still expect selling, general and administrative expense to range between $21 million and $23 million for the year. Again, this is unchanged from previous guidance.

In terms of other income expense, our interest income in the first quarter was $1.7 million. Due to the higher average cash balances resulting from the recent convertible note offering, we are increasing our interest income guidance for the year to a range of $7 million to $8 million from a previous range of $3 million to $3.5 million. Our interest expense for the quarter amounted to $3.5 million, and again, due to the higher debt balances, we now expect interest expense to amount to approximately $18 million. This is an increase from our previous guidance of a range of $9 million to $9.5 million. Both interest income and expense could fluctuate depending on what actions we take in connection with the 5.5 percent subordinated convertible notes. In addition, our other income expense guidance does not include any potential adjustments related to our strategic investments in other companies which may occur throughout the year.

I would like to conclude my remarks by saying that I believe the first quarter marks a significant turning point for our Company. We have positioned our balance sheet for success by raising capital and rationalizing our infrastructure, and I look forward to our continued progress throughout the year. With that, I will turn the call back over to Paul.

Operator, we are now ready to open the call up for Q&A.

Thank you. (OPERATOR INSTRUCTIONS) David Witzke of SunTrust Robinson Humphrey.

Thank you and congrats on a very productive quarter on many fronts. I guess if we start on the new program, the sheddase inhibitor program. The term sheddase has been used pretty loosely in the literature, and wondering if we could get more specific what you're going after. I mean, for example, the tase or ADAM 17 membrane-bound metalloproteases, there's a lot of knockout studies showing that the phenid (ph) type closely resembles the EGFR knockout. Is this a related target that you're going after?

We have not specifically identified the proteolytic activity for competitive reasons. But I will tell you that sheddase is a proteolytic activity that resides in the ADAM metalloproteinase class, as does tase, or ADAM 17. And the activity -- I agree -- when the terminology sheddase is used in some of the early papers, it describes just proteolytic activity without a specific enzyme identified. We have identified the specific entity that leads to the proteolytic activity of interest. We have cloned, expressed and used that activity in our drug discovery efforts. But for competitive reasons at this point, we still do not want to specifically name the ADAM metalloproteinase.

But to be clear, Bristol and Exelixis are going after cell surface proteases, where they aim to spare certain inhibition of certain sheddases -- for example, hydroxamate MMP1, which is related to joint tox. Can you discuss joint tox, and is this any way related to your target?

That's a very important toxicologic issue, and we are very aware of that -- actually, not only at Incyte but in the previous life at other companies, looking at other targets. But classical MMPs in that instance. For example, Marimistat, which looked so promising in animal models, but at concentrations that were necessary to achieve antitumor activity, that rather nonspecific inhibitor crossed over and began to inhibit these critical ADAMs.

And also, to get at the ADAMs, you had to take out certain MMPs. I have this backwards, I'm sorry. And when you take out the MMPs, the matrix metalloproteases, this leads to a fibrosis in the joints. And that side effect can be reproduced very readily in rodents with Marimistat, and we had done experiments with Marimistat side-by-side with our compounds, using our compounds at very high doses for extended periods of times, and we have not seen that side effect. Because our compounds are significantly more specific vis-a-vis the proteases that they inhibit.

So you feel pretty good there. And as far as target markets, is this more the Herceptin-related breast cancer market and may be used in combination with the antibody, or do you see it more where the EGFR drugs -- Erbitux, Iressa, Tarceva -- are targeting in lung and colorectal.

I think that was the point I tried to make in my remarks, that all the current agents are restricted to either HER1 or HER2. And the inhibition of sheddase actually allows you to inhibit HER1 activity, HER2 activity and we believe 3 and 4 as well, which we think as more information appears in the literature will also be shown to be of significance in cell proliferation.

So the way this can be used is it can be used alone, based on the animal results that we have, but it can also be used in conjunction with either the tyrosine kinase inhibitors and/or the antibodies to more completely shut down these pathways. And we have some very compelling preclinical work, cell culture experiments and some early in vivo results, that demonstrate very nice synergy with these agents when you add on sheddase inhibition. So we think that this type of approach should have efficacy in tumors that have been responsive to HER1 blockers and HER2 blockers, but we think that the potential set of tumors that might respond is probably greater than that yet still.

And a question on Reverset, if I can. As far as entry criteria, what type of failing regimens would you look to put patients on the drug and could we see data on the Phase II at Retrovirus in February or is that too early?

Yes, so we have not restricted entry, because what we have done is we have restricted the percentage of any given mutation -- set of mutations that can be entered into the study so that we don't get too many of one type. Because what we're trying to learn in this study is not only safety, but whether certain subgroups, as you would expect, with a certain signature set of mutations will respond less well or better to the drug.

But for example, we would let people in with greater than three TAMs -- thymide analogue mutations. But we would not allow 85 percent of the recruited patients to have that particular signature. We might limit that -- without going into details because it's more just the point here -- I would say we would limit that to no more than 20 percent of the total patient population.

We also will allow patients in who have -- the way the study is designed is we do genotyping on the patient before they enter the study, and there is a 14-day period after they are randomized where they stay on their current regimen, which is failing. In other words they now have virus detected in the blood. They add on whatever they have been randomized to. And then after 14 days, based on the genotyping that was done before they were randomized, they are optimized to a regimen that they would have been optimized to regardless of whether we were doing the study or not. And on top of that, they continue to take whatever they were randomized to.

So there will be a percentage of patients who have nothing to be optimized to. And again, we will allow those patients into the study, but we will limit the percentage of the total patient population that will have that set of circumstances, so that we will get in the 180 patients a spectrum of patients, and it will give us a better idea as to how to design the Phase III trials.

With respect to Retrovirus, it's a stretch, but we could have a late breaker if we can get our interim analysis done by year-end. So we are shooting for that, but I can't guarantee that.

But you could be in Phase III before you actually present Phase II?

I think if Retrovirus is in February again next year, we would not be. It could be soon thereafter, but it couldn't be before.

One final question. Regarding CCR2, is the DTH response inhibition sufficient to get the economics you would wish to in a partnership or would you need to do a Phase IIA in a given indication before partnering?

Yes, that is an open question. We are currently talking to a significant number of companies that have expressed interest in the program, and they know what our clinical plans are and what we're likely to have at the end of Phase I. I think it would be very unlikely that we will not see a positive DTH response, based on the Millennium data and our own preclinical data, as long as we get blood levels that we expect to get. And again, I am pretty confident about that because we do a significant amount of preclinical PK work on our compounds in primates, and that has helped us in the past to almost always do well with regard to PK in Phase I. So if we get the levels that I fully expect we will get, we will get a positive DTH response.

So the issue is how convincing that surrogate will be to a potential partner, realizing that with a drug using this mechanism that there are a lot of shots on goal for therapeutic indications. And if you also then dial in the fact that many of the big pharma companies have pipelines that require a lot more than they currently have. We don't know what they are willing to put on the table, but we are in, I think, a very nice position, having $0.5 billion in the bank, being prepared to go ahead and do the studies if we have to, the Phase II studies. But if the right deal were to be put on the table, we would certainly be very receptive to partnering after the surrogate proof of principal studies are in the bank.

And finally, ideally would you look to partner certain indications? For example, it looks very promising in multiple sclerosis, but those are difficult trials. Or would you look to do a broad alliance across all indications?

I think we are open to either of those situations. And we have to have these discussions with the companies before coming down on one side or the other as to how we would do that. We thought about retaining a more restricted indication for ourselves and then partnering the remaining indications with the larger partner. But we really do have to have these ongoing discussions with multiple companies that we're talking to I think to crystallize what would make the most sense for us.

That is helpful. Thank you.

Alex Hittle of AG Edwards.

Good morning. I was wondering, could you review the situation with your ownership stake in diaDexus and whether or not you're going to see or are perhaps already seeing some portion of the revenues from the Lp-PLA2 test?

I think I'm going to let Dave answer our ownership question. I think we have not seen any revenues from that test yet. But Dave, do you want to comment on that?

Our ownership is under 20 percent, so we account for that on a cost basis. And therefore, we do not record their financial results.

Okay. And second question is could you review what you're doing with and what the state of IP estate is that is sort of part of what's being mothballed here in association with the shutdown of the Palo Alto facilities.

What we have pointed out in, I think, one previous presentation that I made are the following. We are retaining and continuing to prosecute the large intellectual property portfolio that we have. We are taking it out of Palo Alto and having its administered by an outside firm that we have a lot of confidence in.

What we have done in the interest of reducing expense is we have taken a very, very hard look at the overall patent estate and have culled out those patents that we feel confident have future value -- potential future value to us or obvious value now to us, and stopped prosecuting some obvious patents at this juncture that we were certain would not have value going forward. So we've taken a significant amount of expense out of maintaining the patent portfolio, but we are actively continuing to prosecute our intellectual property, and believe that it is and will be going forward a very valuable asset to us.

The other point that I think should be noted is that in no way are we not going to continue to -- I guess use the word police what should come to us in the future as milestones and low single digit royalties from subscriptions that were taken for the most part in the mid to late '90s by most of the big pharma companies and a significant number of the larger biotech companies for the genomic database, where programs that they initiated using information from the database before any of that information existed in the public sphere would obligate them, regardless of the patent position on a particular target to pay some milestones and low single digit royalties going forward.

And while we have not tried to guess when the first of these would appear in the clinic, it is inevitable, based on, I think, very conservative analyses that we have done, that a significant number of such potential products will appear in the clinic going forward. And in the out years, the revenues, which is basically an ongoing annuity that we would receive from the aggregate, is pretty substantial. So we have retained I think what we regard as the valuable assets of Palo Alto activities and we have just cut our losses on the rest.

Finally, if I may one more, on the cash burn going forward. You have given an $80 million figure here for the Delaware activities. Would that be a good number going forward? Is that a run rate?

I think it is, but clearly, as we go out in further years, the sensitivity to that run rate would be our drug development costs as Reverset goes further into Phase III and our other compounds progress into the clinic. The other sensitivity, of course, would be any collaborator payments we would receive, whether they are up front or reimbursements for R&D efforts.

Thank you.

(OPERATOR INSTRUCTIONS) Derik De Bruin of UBS.

I'm having a little bit of a garbled connection. Could you go over your CCR2 timeline again, please?

Okay, we are momentarily going to put our first dose into people. We have completed our cost studies -- one-month cost studies. We have had our meeting with the FDA. And in the next week or so, we will dose the first patient in what is a single- and multiple-dose combined Phase I study, with this DTH surrogate proof of principal. All of that we anticipate will be completed sometime in September, early October at the latest.

We will by that time be in a position to start Phase II proof of principal study in RA, rheumatoid arthritis, and possibly in one other clinical indication. And those studies could start in the fourth quarter.

We are not committing to having a partnership consummated by the end of this year, but we could. And the studies that I'm describing to you in RA and in other indication would run us into the first quarter -- end of the first quarter of 2005 before those studies would be done. And in the event that we decide we're going to wait to partner until after those studies, then the partnership that we're talking about would not occur until sometime in April, May, June, July timeframe of 2005.

Okay, great. And on dosing the Reverset in the Phase II that you would be doing -- could you give that?

Yes, we are going to look at the same three doses that we looked at in anti-retroviral naive patients in this larger study in treatment-experienced patients, where there are 180 patients that are going to be randomized equally to placebo, 50 milligrams, 100 milligrams, 200 milligrams once a day. The study is blinded for three months. We will do an interim analysis, once we have 80 patients or more who have completed one month of study. And we are hoping to have that completed as well as full enrollment before the end of the year.

Okay. And did I hear you correctly in saying that you were increasing your interest expense guidance to 18 million?

That's correct.

Do you have any plans to pay down that debt or do anything of that nature?

I think a couple things to reflect on. One, as Paul said, we're very confident in our discovery and development pipeline. Certainly, cash is critical to continue to progress that pipeline. Clearly, we're going to be very prudent and fiscally responsible in the way we manage that cash.

Secondly, I think by completing that financing, the $250 million, we really have created a lot of financial flexibility in our strategy, both to finance our discovery and development programs, as well as to manage and reduce our 5.5 percent subordinated convertible notes over the long-term. So I think with all that said, we will be very patient and optimistic with the way we reduce those notes in the future.

Okay. You certainly addressed the IP question that was one aspect I wanted to address. But is there anything else in terms of other assets in Palo Alto that you can monetize?

Well, I'll answer and Dave, you add if I haven't covered it completely. We did created a final release for LifeSeq Foundation, the genomics database -- I think it was Release 14. And that is still being sold as a frozen database. We're not going to update it going forward. So there are revenues which will diminish over time obviously for selling that, but there is some interest out in the scientific community for having that database.

They are not in the Palo Alto area, but in Beverly, Massachusetts we have the Bioknowledge Library, which is our other database. It is a proteomic database that we continue to produce and update and sell. And that remains a source of cash, but it is pretty much a breakeven operation for us. It has been slightly cash positive in the past. The amount of cash that it generates is uninteresting vis-a-vis our burn. And while it does not consume very much of management's time -- actually very little of our time to put the product out the door -- it long-term is not strategically central to where we want to go, and eventually we will have to figure out what we're going to do with that asset.

Just one final question. You talked briefly about the potential side effects of the sheddase inhibitors. I am just curious as -- it seems to me that if you knock out all four of the HERs and you're going after an entire pathway, that you could open up a whole can of worms in terms of potential side effects. Could you elaborate a little bit more on what the literature is out there and what your thoughts are on this?

I can tell you more specifically than that, because the literature is not terribly mature, especially on HER3 and HER4. Data is probably more important than my thoughts. We have taken these compounds and infused them around the clock at concentrations that take out 99 percent of sheddase activity, like for a month, and we don't see any toxicity. So I think with those results, we feel pretty good that we will have a significant therapeutic index to be able to administer sheddase inhibitors.

Whether we will see significant toxicity, I think you're just going to have to go to the clinic to find out. But if the animals are at all reflective of what we would expect to see in man, we have a very clean profile so far. And when I say we haven't seen anything, we haven't seen anything grossly, haven't seen anything blood hematology, we haven't seen anything blood chemically, and we haven't seen anything in histopath. But again, these are non-GLP studies, but I think it is pretty reassuring.

Okay. And so you would say that either more specific as opposed to one that was causing problem (indiscernible)?

It's definitely much more specific than Marimistat. Marimistat took out a whole slew of matrix metalloproteases. And although the original targets were the MMPs, the matrix metalloproteinases, the antitumor effects, we believe, that you saw with Marimistat were when several ADAM metalloproteinases were inhibited. And you had to go to higher concentrations for Marimistat to be able to inhibit the critical ADAM proteases, and in doing that, Marimistat was inhibiting a whole slew of matrix metalloproteinases, which is what led to the toxicities that were shown, and in particular, the joint fibroplasia that was seen.

Thank you very much.

Dave wants to comment on the last question.

Just on your California asset question. There is a strategic investment we hold that in the medium-term could have a liquidation event for the Company. What I would say, though, we would never put that in our guidance, given the fickle nature of the markets. But I think that is an important response to that question as well.

Great, thank you.

At this time, there appears to be no further questions and I would like to turn the floor back over to our presenters for any closing remarks.

Well, again, I think we are progressing ahead of schedule on our programs. I want to reiterate one thing that I said earlier, and that is in addition to the programs we talked about, we are looking forward to being able to bring you up-to-date on some of the earlier programs as the year progresses. And just thank you for your time this morning and we look forward to speaking with all of you again. Thank you very much.

Thank you and thank you, callers. This does conclude today's conference. You may disconnect your lines at this time and have a wonderful day.