Infinity Pharmaceuticals Inc (INFI) 2007 Q4 法說會逐字稿

Good day and welcome, everyone, to the Infinity Pharmaceuticals Fourth Quarter 2007 Financial Results Conference Call. This call is being recorded. At this time I would like to turn the call over to Vice President of Finance, Mr. Steve Kafka. Please go ahead, Sir.

Thank you very much and good morning. My name is Steve Kafka, Vice President of Finance for Infinity Pharmaceuticals and here with me this morning are CEO Steven Holtzman, Chief Scientific Officer Julian Adams; and Chief Business Officer Adelene Perkins.

Today we will be discussing our recent R&D and business progress and review our financial results for the fourth quarter of 2007. The press release detailing our results was issued last evening and is also available on our website at INFI.com.

This conference call will be archived on our website for 30 days.

On the call today, we will be discussing our future discovery and development efforts, our collaboration, our financial position, and other future expectations. These remarks constitute forward-looking statements for purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act.

It is possible that our actual results may differ from what we project today, due to the factors which are described in the risk factors section of our most recent 10-Q, filed with the SEC in November. While these forward-looking statements represent our views as of today, they should not be relied upon in the future as representing our then-current views. We may update these statements in the future, but we are not taking on an obligation to do so.

So with that I will now turn the call over to our CEO, Steven Holtzman.

Thanks, Steve.

So as you know Infinity is a cancer drug discovery and development company dedicated to discovering, developing, and delivery to patients important new medicines. We have a pipeline of novel, exciting, anticancer agents. We have great R&D and business teams led respectively by Julian and Adelene and we are in a strong financial position.

Fourth quarter of 2007 and, indeed, the whole of 2007 was a remarkable period for Infinity. We made significant progress on the lead indication in our Hsp90 program, positioning ourselves for a potential registration trial. We initiated three new clinical studies with our lead molecule. We advanced our oral Hsp90 inhibitor and our Hedgehog inhibitor toward the clinic and we ended the year in a strong financial position.

Now as this is our year end call, before Julian and Adelene dig into the specifics of our progress, I want to take a moment to reflect on where we were 12 months ago, where we've come since, and the accelerating momentum with which we are moving forward into 2008.

12 months ago Infinity was a new [lean] public company having become public through a reverse merger. We sit here one year later with seven covering sellside analysts and major shareholders drawn from among the who's who of the biotechnology financial community, a lot of you who are sitting on this call listening. And we really thank you for your support and belief in what we're trying to accomplish.

At the beginning of 2007, we had an accomplished discovery team but really all only nascent capabilities in clinical and pharmaceutical development. In contrast today we have a team that are fully able to executable clinical development and manage the commercial manufacture of our drug candidates.

12 months ago, our Hedgehog program was still only in lead optimization. It was also in a 50-50 worldwide partnership. Today, we are on the cusp of filing an IND and initiating Phase I studies of IPI-926, our highly potent and selective oral products. And today, we own 100% of worldwide rights on a royalty fee basis for this program. And, finally, today, we have option rights all the way up to the beginning of the initiation of registration trials to AstraZeneca's Hedgehog programs, effectively constituting backups to our own wholly-owned program.

Last January, in our Hsp90 program, we were still all only dose-escalating and experimenting with multiple schedules of administration of IPI [and] 504. Today, we published data showing evidence of biological activity in not one but two indications GIS T in non-small cell lung cancer and we have ongoing four separate clinical trials addressing some of the larger solid tumor indications.

So in sum, quite a year.

But I would be remiss not to end this part of the discussion without acknowledging a tough reality about the past year and in particular, the last three months of the year and even the last month, the first month of this year. If like me you owned Infinity stock a year ago on January 1, 2007, that stock is worth less today than it was then. And if like me when our stock first fell below $10 a share, middle of this last fall, and you look at it and you just couldn't resist the extraordinary buying opportunity, well, like me the stock you bought then is also underwater today.

Now this is [hooked] on all of us who are Infinity investors. It's hard on the citizen owners of Infinity who are busting their you know whats to deliver the enormous progress that I just reviewed for you. And, lastly, quite frankly this is a hard issue for a CEO to sit here on a conference call to address with the investment community without sounding either defensive or sounding naive by claiming well, my Company is undervalued as if there is some measure out there other than the market for what is properly valued.

So I hope to come across as neither defensive nor naive in acknowledging these realities. And what I can do and all I can do is simply offer to you the basis of my personal beliefs in an excitement about Infinity's prospects for near-term value creation.

First we have a drug that we see and believe to be working. IPI-504 has shown biological activity in more than one indication and it is becoming clearer and clearer everyday that Hsp90 inhibition is emerging as a major new target applicable across a broad array of cancers. In 2008, we expect to move forward in at least a half a dozen trial of these major indications. We believe that we are positioned to have potentially both the first-in-class and the best-in-class Hsp90 inhibitors.

Second, Infinity is not a one trick pony. We are not a one product company. We have and will continue to build a sustainable pipeline of novel small molecules including our oral Hsp90 inhibitor and our exciting Hedgehog inhibitor, both of which will enter the clinic this year.

Third, we have proven business and R&D management teams. While past performance does not guarantee future success, it is arguably the best predictor of future execution and success.

And, finally, we are making steady progress with accelerating momentum. We set aggressive goals, we hope you find that we communicate them to you clearly, and that we then honestly report to you on our progress and also our failures.

As Adelene will review in detail, we delivered on essentially all of our major goals in 2007 and as we'll lay out for you today has set an ambitious agenda for 2008.

So with that make your telephone call to 1 800 FLOWERS if you need to and I will turn the proceedings over to Julian and Adelene to review for you the progress of the last quarter and of 2007. Dr. J.?

Thanks Steve. And Happy Valentine's Day, Patty, I will be home on time today. And good morning, everyone else.

We've made terrific progress in the past few months with our pipeline. But before I get into that, I would like to share with you the news that our nomenclature for IPI-504 has evolved. IPI-504 was recently granted the nonproprietary or generic name retaspimycin. It is a mouthful I know but we will all get used to this name as we review the progress we've made on our Hsp90 program.

Let me remind you that retaspimycin has shown evidence for biological activity in two separate settings -- gastrointestinal stromal tumors or GIST and non-small cell lung cancer. In the second half of 2007, we established the recommended Phase II dose and schedule, enabling us now to move into a broad expansion of retaspimycin development.

We believe that there is a broad potential for Hsp90 inhibition. This morning I would like to review with you the developments of our Hsp90 program including the completion of enrollment in the expansion portion of our Phase I trial in GIST, initiation of three additional clinical studies with retaspimycin and, importantly, advancement of our next generation oral Hsp90 inhibitor, IPI-493.

I will also briefly touch on our Hedgehog program.

So as excitement about Hsp90 continues to build, it is important to remember the two key aspects of differentiation for retaspimycin. First, our molecule is based on the geldanamycin natural product -- nature's gift, whose pharmaceutical properties we have improved. It is highly selective. It has an excellent safety profile and it is in a patient-friendly aqueous formulation.

Second, we also have a very well-defined clinical development strategy which is grounded in scientific rationale and guided by data; a fast path to registration; and a breadth of applications already in clinical studies that implicate some of the most common solid tumors.

Now I will provide you an update on our progress in GIST, our lead indication. We have been conducting a Phase I dose-escalation trial in a refractory population -- that is, refractory to Gleevek and Sutent, and even other experimental agents. We reported preliminary data at ASCO 2007 that 76% of our patients experience stable disease as measured by RECIST criteria. Recall that stable disease is meaningful in this setting and this is referenced from the Gleevek and Sutent trials and careful understanding of those data.

Further analysis of the data demonstrate a median progression-free survival of 12 weeks which we believe is clinically significant in this heavily pretreated population. We have completed enrollment in the expansion portion and expect to share the data with you in ASCO 2008.

We are in active consultation with investigators on our worldwide basis and the regulatory authorities both in the U.S. and in Europe; and pending those discussions we expect to enter a Phase III registration study in the third quarter of this year.

Our second indication, non-small cell lung cancer, is also progressing rapidly. At the [EURTC] meeting last October we reported evidence of activity in a Phase I-II trial of retaspimycin in non-small cell lung cancer.

Seven of nine evaluable patients achieved stable disease by RECIST over at least one cycle of administration. One patient with a mutation in EGFR and refractory to kinase inhibitors satisfied one of the defined endpoints for expansion into the Phase II portion of the trial. That is stable disease for greater than 12 weeks. In fact, this patient had stable disease for greater than six months.

We are now in the Phase II portion of this study actively enrolling and we anticipate reporting more mature data at an appropriate meeting in the second half of this year. Our clinical development strategy in this disease is motivated by the fact that mutated EGFR is a highly sensitive client protein of Hsp90.

As we move forward with single agent trial, we also think about our path forward to explore mechanistic combination therapies, and for the important potential to evaluate lung cancer treatment with our oral Hsp90 inhibitor.

Last November, we launched a Phase II trial in our third solid tumor indication, hormone-resistant prostate cancer. Preclinical data indicate a role for Hsp90 inhibition of several client proteins implicated in prostate cancer, including the androgen receptor and AKT, a kinase that drives growth in survival of this tumor. Based on these data, we indicated a single agent open level study of retaspimycin in patients with advanced hormone-resistant prostate cancer.

We are valuating two groups of patients. One that is Taxotere-naive and one group that is Taxotere-experienced with a potential expansion to additional patients if activity is observed in either arm of this trial. Pending results of this trial, we have a number of potential paths forward likely in combination with chemotherapy or with our oral therapy.

A few weeks ago we launched our fourth ongoing clinical trials for retaspimycin in combination with Taxotere. Clinical and preclinical evidence to date suggest that Hsp90 inhibition has a therapeutic potential in many indications where Taxotere is effective. For example, in preclinical models prostate cancer, Taxotere demonstrates increased anti tumor activity when administered in combination with retaspimycin.

The goal of this open label dose-escalation study is to establish the safety, the maximum tolerated dose and the optimal schedule for administration of retaspimycin in combination with Taxotere. Our approach should support potential development in a number of disease settings, including lung, prostate and breast cancers.

So now let's talk about our oral Hsp90 program. It provides an even greater opportunity to impact the lives of patients with cancer. It offers more flexibility in dose administration and the potential for greater exposure of a drug which is critical with this mechanism.

Also this will enable us to move into early lines of therapy and be given in combination with a variety of agents. We have demonstrated potent and selective Hsp90 inhibition preclinically with IPI-493. We have achieved excellent oral exposure both in terms of bioavailability and half-life. And this will enable us to move forward with the strongest product -- possible product profile and differentiate ourselves from the wholly synthetic competitors.

We are on track to enter the clinic in 2008, so we can rapidly explore dose, schedule and combinations.

Finally, let me provide a brief update on our lead Hedgehog candidate IPI-926. 926 has demonstrated highly potent and selective inhibition of the pathway and anti-tumor activity in several preclinical models. We are on track to file an IND and enter the clinic later this year. And we will be discussing our progress and strategy more extensively in conjunction with the AACR meeting in April.

In fact, we have four abstracts accepted for AACR for Infinity from Infinity, including two oral presentations. So stay tuned.

In summary, we're really excited about the progress we have made in both our Hsp90 and Hedgehog programs. We have four trials underway including having completed enrollment of our Phase I GIST trial, our oral Hsp90 and Hedgehog programs are making steady progress towards the clinic, and we intend to initiate these trials with our lead candidates later this year.

Our programs are scientifically driven, have clear regulatory paths and have the potential to address areas of high unmet need. We are charging full steam ahead and look forward to updating you throughout the year.

With that I'll turn the call over to Adelene for the business (technical difficulties).

Thanks, Julian, and good morning, everyone.

I'm truly enamored -- an adjective I would only use on Valentine's Day -- by the developments Julian just shared with you on both the breadth of our Hsp90 program and the substantial progress we have made in our Hedgehog program. As we've said all along, delivering data is the key value driver for our business and we are doing that with an increasing volume of news to come in 2008.

With respect to our financial performance, the critical point for you to take away is that we continue to enjoy a very strong financial position enabling us to fund our R&D efforts to meaningful value creation milestones.

As of December 31st, we had over $114 million in cash in short-term investments. Based on our 2008 operating plan, we expect our 2008 net cash burn will be between $35 and $45 million. These plans allow us to reiterate our guidance that we expect to have cash to support our current operating plant through at least the end of 2009. For additional details on our financial performance please see the press release that we issued last night.

Underlying our strong financial position is the fact that we accomplished our major scientific and business objective. In the spirit of reinforcing our commitment to you, to articulate our goal, execute against them and then report our progress, I will briefly review our 2007 report card.

For 2007, we said we would initiate a Phase I-II trial on retaspimycin in non-small cell lung cancer which we did last February. We set out to complete our Phase I trial in GIST and as you have heard we have completed enrollment in the expansion phase of that trial. We planned to advance retaspimycin to at least one Phase II trial and did. We established our recommended Phase II dose in the late summer and started our Phase II prostate and lung cancer trials last quarter.

We said we would initiate a combination study with retaspimycin which we did with Taxotere in December. We said we would enter the clinic with an oral formulation of retaspimycin. And this is the one thing we didn't do because Infinity scientists discovered -- [ICI] 493 which we believe to be a superior molecule and which will be clinic-ready later in 2008.

We said that we would select a Hedgehog candidate and ICI 926 is now moving towards an IND. We said we would file a financial plan to end the year with more than $100 million in cash and in fact we started 2008 with $114 million. We also said we would sustain our strategic alliances and we worked hard and to good results to develop and sustain an excellent dialogue with our partners which has been particularly important in the transition of some of our collaborative efforts from (inaudible) to AZ.

Finally we said we would utilize our position of strength to increase shareholder value and we recaptured all rights to our Hedgehog program. Because we completed our negotiations with AstraZeneca on the Hedgehog program since our last call with you, I would like to spend just a moment to remind you about this came about and why we believe this is incredibly good news for Infinity and for our shareholders.

Our relationship with [MedImmune] was structured such that any and all effort of either party directed towards both Hsp90 and Hedgehog would be done within the collaboration. Neither party was free to pursue these targets or pathways independent of the collaboration, a provision which survived any change in control.

As a result, once AZ acquired Medi, AZ was no longer able to independently pursue either Hsp90 or the Hedgehog pathway. AZ did have a Hedgehog program it wished to continue so we renegotiated our agreement, allowing AZ to continue with our Hedgehog program in exchange for the full, worldwide, royalty-free return of our Hedgehog program and the right to opt into AZ's Hedgehog programs at various points in the future.

As you've heard Infinity is now readying an IND filing for our lead Hedgehog inhibitor ICI-926.

Turning to 2008, we will be generating important critical data on all of our most advanced programs. We understand the market's demand for data and we share a sense of urgency for its generation. As a data-driven company, these results will continue to drive our clinical development strategies and plans. Our goals for this year focus heavily on execution to ensure we generate these data.

Our five key goals for 2008 are, one, we expect to report data on our retaspimycin GIST trial at ASCO and we are in discussions with regulators and investigators about the potential for registration trial in GIST; two, to initiate and progress our multiple Phase II trial for retaspimycin, in additional indications, including reporting preliminary data in the second half of this year; three, to initiate a Phase I clinical study with our oral agent [C-90] inhibitor IPI-493; four, to initiate a Phase I clinical study with our Hedgehog molecule, IPI-926; and, five, as always we will seek strategic opportunities to create additional value for patients and shareholders.

In closing I'm really energized and inspired by the progress we've made in our pipeline, and of the important milestones we are on track to achieve over the coming months. We see a phenomenal future and we look forward to continuing to discuss our progress with you on future calls.

Finally thanks for your continued support. We really appreciate it.

Thanks Adelene. For those of you who follow up in vegetation and to Infinity and particularly those of you who have actually physically visited us, you know that hanging in our Jazz Cafe are a series of frame T-shirts, one from each year, for each year of our full operations from 2002 each year bearing on it the year's theme.

We adopt a theme every year and it is kind of interesting to look at the evolution of those themes as we've evolved. These year's theme at Infinity is Passion and Promise For Patients. I think you've heard about the promise of our programs for patients today.

I want to talk about the passion. Because you don't make drugs that are important without a passion for making a difference in patients' lives.

I've had the incredible good fortune to be surrounded by over 100 citizen owners who come to work everyday with that passion. If you haven't looked at our website which we relaunched at the beginning of this year and you want to know about the soul of Infinity which is the real reason why I am more excited than at any other time in my career in biotech about what I am a part of, I encourage you to go look at it. Because you'll see and feel what is going to make the difference.

Remember, tough times are when the differences between the best and the rest become most evidenced. Keep your eye on this team.

And with that we will be delighted to take your questions.

(OPERATOR INSTRUCTIONS) Eun Yang from Jefferies.

This is [Lu Ahn]. And my first question is about [Senta] and I believe they have Hsp90 inhibitor as well in Phase I and I think they are going forward with a once a week dosing and I know you guys are going ahead with twice a week dosing. And I was wondering if you could comment on how that might affect (inaudible) as both compounds move forward in the development process?

We are aware that there are several competitors including Senta that are progressing their compounds on various doses, schedules, etc. We have -- and it is very difficult for us to comment on competitors' compounds because we are not intimately familiar with their -- the actual structure of their molecules and data.

But what I can say about our approach is that we rely heavily on the preclinical data to guide us. Importantly we have emerging data in terms of occupancy of Hsp90 that suggests that a more frequent dose administration is optimal. And so what we are trying to do particularly with our oral program is to determine more precisely the interval of dose administration at both frequency and absolute dose. And we are working very hard to optimize that.

The IV program we are indeed treating patients twice weekly. This has been a very well-qualified and well-tolerated dose schedule and we feel that we have achieved optimal coverage with our IV product. So I can only speak that we think that we are guided by biomarkers, occupancy and client protein degradation in preclinical models, to be able to translate safely that activity into human clinical studies.

And just another quick question on modeling. On the G&A line, there's a significant jump in terms of spend. I was just wondering if that would continue going forward?

The primary increase in our G&A expense this year were for increase in patent-related costs. We've been filing very aggressively on our entire program, our 493 oral inhibitor as well as 926 and Hedgehog as well as we've grown the organization to increase in compensation expense. And some of that is non-cash compensation stock-related expense.

Do you expect that to continue going forward with the higher expenses in 2008?

There will be some modest level of increase, but I think from a modeling perspective, you -- it won't be as significant an increase because of the bolus of IP filing that we have done this year.

You know it's probably worth commenting that we are very sensitive to the ratio of G&A to R&D expense. Apart from patent expenses I affectionately refer to G&A as "useful and useless overhead" with putting myself into the second.

It is an oddity of the world of accounting that our R&D expense -- correct me if I am wrong, Adelene -- is recorded as a net expense. Net of [50]% reimbursement of what we actually spent that we get back from, so to speak, AZ and furthermore doesn't really account for what AZ's is spending.

So consequently there's a double whammy if you will on the apparent ratio of R&D to G&A where as, in fact, from looking at other companies religiously, we have one of the best R&D to G&A ratios in the industry. But in the accounting world, it won't be evident.

That's right and some of that is detailed in the financials we released where we are recording an R&D expense of $10 million and that's net of $3.6 million of reimbursement from MedImmune. So the total R&D spend on our side was closer to $13.6 million in the quarter.

Mike King. Rodman & Renshaw.

A couple of questions. I was wanting if you could discuss the (inaudible) association of [KIT] mutations in GIST and just, I guess there's anywhere from 5 to 15% of GIST tumors that are KIT negative and what that might mean for response to retaspimycin?

So that is correct, Mike, you are all over the GIST literature apparently. The C-KIT mutations occur primarily in [X-ON] 9 and 11. There are other mutations outside the kinase binding domain as well. Importantly, there's a gatekeeper mutation, [T-670-I] akin to the BCR [able] mutation, P315-I. We are agnostic to all mutations on KIT because every cell line and every KIT-dependent GIST tumor is susceptible susceptible to Hsp90 inhibition. And our beloved IPI-504 or I should say retaspimycin.

With regard to your second point, there are a few -- a small number of patients -- I think it's slightly less than 10% that are in fact KIT wild type. And in those patients it is broadly thought that PDGF is the driving oncogenic protein responsible in those cancers and PDGF is also a client protein.

So at least from a theoretical basis we haven't had a lot of those patients, still been small numbers in our trials, but we cannot -- at least from a theoretical basis -- rule out any GIST patient or susceptibility to IPI-504 retaspimycin.

And that is consistent with [which], I think, Julian, is an emerging theme you explained to me. So for example when you look at patients with non-small cell lung cancer who are responsive to TKIs and then become refractory, you focus initially on the mutant EGFR and then again as you said even all mutant forms of EGFR are responsive to Hsp90 inhibition. And 50% I think of those who after responding on TKI risk move forward and they get the (inaudible). That sort of gatekeeper mutation.

But there has been recent evidence that 20% progress because they get a correlative mutation in Met (multiple speakers) amplification. Right -- well, lo and behold Met is a wonderful clients of Hsp90 inhibitions so there we found that.

We have seen in preclinically the strength of combination with Taxotere. That could seem like that was just an empirical finding but there is an emerging story that Taxotere administration resistance arises as a result of either its overexpression as (inaudible) ?

Expression of [survivens] and other [BCL2] family member proteins and some of these are potent clients for Hsp90.

So the emerging story that's why Hsp90 is picking up momentum is finding those indications where you have a strong client protein. Because not all client proteins are created equal.

Let me back up. Two features to find the ideal indication. The presence of a strong client and the level of addiction of that tumor to that client. That's the underlying science that is going to drive this; and as Julian indicated, things like the discovery biology we put on to our development programs with things like in vivo occupancy assays. Looking at client program protein degradation. Looking at the kinetics of all of that.

This game is not going to be won by simply claims about potency, all right? And you are not going to understand that and it's one of the great strength of Infinity that we have great applied discovery and there has been no major successful pharmaceutical or biotech company that has not maintained that dedication to great research in support of drug hunting.

Great. Appreciate that. There's some other stuff we can talk offline about on GIST. Then I just wanted to ask a question about the solid tumor development programs in terms of your Taxotere combinations. You do (inaudible) therapy in the mutant lung cancer patients. You are doing signal seeking and Taxotere plus retaspimycin.

If you get a signal in the combination would you eventually merge those two trials in a Phase II setting or do you see yourselves taking parallel paths in lung cancer?

There may be well parallel paths and in fact triple parallel paths that the potential for retaspimycin alone in a refractory TKI population and that we are testing in a Phase II study. The combination with Taxotere is not simply restricted to lung, but it does certainly include lung. We are also trailing patients with prostate cancer as well as breast cancer because Taxotere's a very active agent in each of those diseases.

And, thirdly, the oral inhibitor, depending on the actual schedules of combinations, may play a unique role both in monotherapy and in combination therapy depending on the schedule for combination.

Right now we are testing the Taxotere combination in a Q3 weekly schedule. We'll be looking at more dose-intense schedules with the IV product as well, but it may be as Steve was alluding to, that if we can chemosensitize Taxotere for better response rates on a Q3 weekly schedule, that has its own independent course of development in either lung, breast or prostate.

And whereas when you look forward to the combinations with oral TKIs, you are more motivated for patient convenience to be really looking to that opportunity with 493 or (inaudible).

And, in earlier line of treatment, that's exactly right.

Then just a financial question. I know that your contract with Novartis runs out in this month. Is this the last we investors will hear about Novartis? Or can we get some kind of sense whether we think there might be a development candidate in '09, 2010? Is there any guidance that we can get or any color we can get on what goes -- what is going to happen going forward with Novartis?

Right. So you are obviously well read on our Novartis relationship as well. And when we put that in place, the structure was such that for the first two years of the relationship, which we are just coming upon the completion of, Infinity was carrying the heavy end of the laboring or on the discovery and lead optimization.

So we are now in the process of readying the molecules that we have to pass the baton for Novartis, because the structure of that deal was such that, as you know, Novartis would carry the molecules through development and commercialization. And Infinity will receive milestones and royalties.

So we are in discussions with Novartis on how to make sure that we pass that baton as smoothly as possible. And I wouldn't want to speak to when Novartis will move something into the clinics. That will ultimately be their decision.

But I would say that we have made great progress over the last couple of years in identifying highly potent and selective inhibitors.

And you know, it's a formal possibility and you've seen this before when something is passed off is, we will then be subject to the larger companies' views of disclosures of progress. So we can't sit here today and tell you that that will be something that they would be reporting on. So but what we will report certainly in the next quarter and conference calls what we understand and what we can disclose about Novartis's is plants for our (inaudible) inhibitors.

Phil Nadeau from Cowen and Company.

Congratulations on a productive quarter. Couple of questions. First on the Phase III. I realize you are still in discussions with the agencies, but do you have any updated thoughts on what the design of the Phase III trial might look like?

All I can tell you is it will be a randomized control trial. It is being powered for a trial that will have sufficient safety and size for registration; and we are still working through the details with investigators dependent on treatment practices in Europe and in the U.S.

And we have recently submitted a special protocol assessment to the FDA. We have not heard back from them and we have this statutory 45 day waiting period, but rest assured at the appropriate time that we will be -- we will announce exactly the trial design.

We're putting a lot of thought into this with respect to how disease progression should be monitored through Central Imaging, how safety will be recorded, how there'll be independent safety data monitoring board and independent response committee. All the kinds of things that look to a (inaudible) very pristine trial and will not raise the typical type of fiasco scenario one experiences ahead of (inaudible).

Along those lines we've seen several disappointing (inaudible) recently when progression free survival was used as a primary endpoint. You think that progression free survival is still a possible endpoint for the trial?

Indeed we do. Progression free survival is actually -- has been considered a -- next to overall survival, the next available surrogate particularly in the salvage setting. I think what you are referring to is, is progression free survival acceptable in front line treatment? And that has been the source of debate at recent (inaudible) and within the agency. But Richard [Pasda] has been very clear that progression free survival is an acceptable endpoint. And I will remind you that the Sutent's trial was essentially based on time-to-progression and progression free survival. And that approval occurred several years ago.

Let me add just a little color there because one could say that was then and this is now and they don't like TCP and they don't like (inaudible). And after what -- so there. So I will play devil's advocate. But certainly the day after the (inaudible) or that night I was on the phone with Julian and David (inaudible) head of medical and saying what is this made for us. We also had that whole team listening to the [ODAC] and then they tell me go listen to the ODAC and I suggest you all who have got this question go and listen. Because it is really striking in that very ODAC Pasda affirms the appropriateness and acceptability of PFS end the kinds of settings we are talking about and that one not -- ought not incur from questions in that particular case, front line questions about how PFS was measured and also associated toxicities that that should no way implicate that PFS is not still the right endpoint for refractory settings. I encourage you to go listen to it.

Great. One last question on the AZ Hedgehog program. You mentioned in your prepared remarks there are certain discrete times when you could opt into their development program. Could you give us some more information on when those times are? Is it late in the development program say after Phase II, Phase III or are they spread out throughout from IND stage through approval?

Yes they are spread out from the early development milestones up through [start up] pivotal trial. And if we exercise those which we haven't disclose the relatively modest upfront fees the structure of the partnership at that point would be a 50-50 global cost-saving profit share.

And on that point, Phil, so regardless of when we popped in it is 50-50 and you can infer that the only difference is the cost of the opt in itself. And that we therefore, we focus on the fact that the last opt in is when they have proof of concept in base to and present to us their package which they are presenting to the FDA for the Phase III registration trial. And just business being what it is, you are kind of saying in all likelihood you are going to wait for them before to make the decision unless the payments for making the decision so late was so onerous. And it is not.

Okay. So that's a (inaudible) so they actually have to ask for the proof of concept Phase II. They have to seek you out and bring to you --

That's the last chance.

Right and for them to (inaudible) package on which we would make the opt in decisions.

And that Adelene just that's on any Hedgehog candidate. So for example if they have two different candidates, a small molecule, say, and an antibody we could have a crack -- we have the same crack at both of them.

(inaudible) from Roth Capital.

I have a follow-up question on the registration trial. Where are the PET scan still use in assessment and also what is your conclusion from the Phase I trials on the correlation between PET scan results and the traditional risk reassessment results where you continue your PET scan in other trials?

We used PET in the Phase 1 to determine biological activity and PET scan typically correlates with the outcomes of RECIST but there are also discordant examples, as well.

In the Phase III trial, because this will be a blinded trial, we will not be using PET scanning because this is a way to unblind the trial if PET scans are taken in this trial. So we will rely exclusively on the standard approved RECIST criteria. As you also know PET scanning is not nearly as quantitative and is not an accepted endpoint yet by the agency. The agency is very interested in using PET scanning for early assessment of activity; and encourages companies to do so. It does not yet meet the standard for quantitative assessment of disease burden.

And perhaps we should accept some responsibility for maybe engendering some confusion in the financial community about this by presenting PET data when we did where people might have thought we were saying, we will use PET to get our drug approved -- which would be doubly challenging, given it is not an approved endpoint. It served a role, as Julian indicated, to give us an early indication of biological activity in a setting where it is a well-established biomarker.

It emboldened us. But going forward, the registration trial is using well-established approval criteria, not PET.

Derek Jellinek from Susquehanna.

Great. I'm pulling in the rear. Sorry if I'm going to ask a question that's already been answered, but I was actually on the line to 1-800 FLOWERS since you have been promoting it so heavily.

My question is, what are we going to see at ASCO? I know that we are going to see the data set from the Phase I, but is that going to be the complete data set? Meaning, the original patients that were originally dosed in that including the expansion phase patients?

Yes. It will be a comprehensive analysis of the entire GIST. We have completed enrollment and we still have patients ongoing -- knock wood. Those patients should continue through ASCO. But we will report all the data that will have been scrubbed and their clean database at ASCO.

Julian, on that then out of the 10 GIST and the expansion arm, when you combine that with the original phase -- I think there were 40 patients in the original Phase I -- how many patients as a total are actually current on the dosage schedule and going to be used in the pivotal study? I know the 10 and the extension, but how many in the current Phase dose escalation were used on that current schedule going forward?

I'm not sure I understand.

Julian -- .

We expanded it 400 mg per meter square on the twice weekly -- for a two-week schedule with one week off. And I can say that what we've seen in the dose escalation phase and what we're seeing in the dose expansion phase is holding up pretty well.

Before the dose escalation, how many patients got 400 mags per meter squared two times a week for two weeks with a week off.

That's right.

I'm sorry. So that would be six patients and, subsequently, we have another 10 -- 12 patients that had been enrolled in the expansion phase. We had intended to enroll 20. It looks like we are going to be at 23 or 24 patients just because of the multi-site nature of this and having patients waiting in the wings.

Okay. I'm just trying to elucidate, we are going to have 18 patients then that are currently dosed 400 mg for meter squared on the current (multiple speakers) moving into the Phase III.

Plus or minus one or two. Don't hold me to that number. Depending on when we actually formally shut down the trial.

And what we will also have in the database are people who are on the same schedule but at the lower doses as we are coming up through the dose escalation and if you look back at (inaudible) we presented previously there were people showing, getting multiple cycles and showing stable disease at the lower doses as well.

Right. Okay. And quickly on -- are you looking to initiate other Phase IIs this year? I guess it kind of goes with Mike's question about the Taxotere trials. Seems you'll be looking into a (inaudible) but would that be started or would we just allow the Taxotere data to speak for itself?

We are imminently together with our partners at MedImmune and AZ looking at a couple of indications and, again, we are not yet announcing those indications. But I think it will be obvious to you when we initiate and enroll a patient.

Our practice has been to announce a trial when the first patient is enrolled. (multiple speakers)

I think also this -- I was thinking about this whole thing as evolving as a function of the rapid progress of 493, our oral, and some of the preclinical data that we are seeing. The imperative to launch if you will indication-finding trials with the [IV] gets somewhat modulated if the oral really makes very, very rapid progress and is effectively catching up.

And as Julian indicated, as we understand the underlying science of Hsp90 inhibition and the importance of coverage of the target occupancy, the actions of a signal with the IV, the presence of the signal with the IV bodes well for the oral. But the absence of the signal given the different pharmacokinetics and coverage may not be and should not be taken as a negative.

And so we will have to be thinking strategically and tactically about the best use of our resources going forward; and we will make that clear as we go.

Right, great. One last question if I may. Julian, you commented on the four abstracts at [AACR] and two oral presentations. Were they specifically for the Hedgehog program or what were they?

That's correct. That's just referring to the Hedgehog program.

AACR is the coming out party for 926 exactly. You're invited.

We promise to have more Hsp90 data. It is likely to be, we have some biochemical and preclinical data suggesting PD markers and dose response relationships relating to occupancy of the target and client protein degradation. But the lab work is still underway to firm up those data and that, perhaps, you'll see in the second half of the year. It is going to be a very strong story, I can promise you that.

With no further questions in the queue I would like to call the back over to Mr. Steve Kafka for any additional or closing remarks.

Thanks, Operator. I'll just wrap up by saying thanks, everyone, for joining us today. As always, we are available to answer additional questions you may have and we certainly appreciate your continued interest in Infinity.

Thank you. This concludes today's conference. We thank you for your participation. You may now disconnect.