Infinity Pharmaceuticals Inc (INFI) 2012 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals conference call to discuss the Company's second quarter 2012 financial results. My name is JJ,and I will be your operator for today's call. At this time all participants are in a listen-only mode. There will be a question and answer session to follow. Please be advised that this call is being recorded at Infinity's request.

At this time, I would like to introduce your host for today's call, Ms. JarenMadden, Director of Investor Relations and Corporate Communications at Infinity. Please go ahead.

Thank you JJ. Good morning everyone. Welcome to today's call to discuss our recent progress and review our second quarter 2011 financial results. With me here today are Adelene Perkins, President and Chief Executive Officer, Larry Bloch, CFO and CBO, and Julian Adams, President, R&D. Following our remarks we will open up the call for Q&A. The press release issued earlier today details our results, and is available on our website at www.infi.com.

Please note that during this call we may make forward-looking statements about our future expectations and plans, including clinical development milestones and financial projections. It is possible that our actual results may differ materially from what we project today, due to the factors described in the Risk Factors section of the Form 10-Q for the second quarter of 2012 that we filed this morning. 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 are not taking on an obligation to do so. Now I would like to turn the call over to Adelene.

Thanks Jaren. Welcome everyone. Thank you for joining us on the call today. This year and particularly the past two months have been transformational for Infinity. The confluence events over the course of the last quarter has placed Infinity in an extraordinary position. While we had great hopes for the Hedgehog program, our strategy of developing a portfolio of drug candidates is paying dividends.

Today we are in the cusp of important near-term data readouts for both our PI3 kinase and Hsp90 program, with worldwide rights to both of these programs, as a result of restructuring our strategic agreements with Mundipharma and Purdue. This is significant given encouraging early data our Phase I trial of IPI-145, our potent oral inhibitor of PI3K delta and gamma, and continued progress with the clinical trials of retaspimycin hydrochloride. In addition, we have gained global rights to our entire discovery portfolio. Julian will provide additional details on our pipeline shortly.

As we move forward, we are focused on flawless execution to deliver on our pipeline promise. Our most important task is to advance these programs to key inflection points. Successful completion of our current trials is expected to drive the value of Infinity, and create additional opportunities as we evaluate paths forward through an optimal mix of financing and potential new strategic alliances. With $27.5 million from the expected equity investment by Purdue, in the absence of additional funding or business development activities and with savings from recent cost cutting initiatives, we have cash runway into the second half of 2013, based on our current success based plans for oncology and inflammation programs. Importantly this cash runway extends through the anticipated data readout from both our PI3K and Hsp90 programs.

To best capitalize on the opportunities before us, we have carefully reviewed our investment level to ensure that we are moving our programs forward, both aggressively and with fiscal discipline. We have implemented cost cutting measures that reflect the closure of our hedgehog program and restructured agreements with Mundipharma, but that we believe do not delay or negatively impact our key value driving programs. As part of this reduction we recently decreased our headcount by approximately 20% from our 2011 year end levels. The individuals impacted are extremely talented and played a tremendous role in advancing Infinity to where we are today, and we are grateful for the roles they served in building a strong foundation for the future.

While our science and pipeline are central to our vision of bringing breakthrough therapies to patients, our citizen owners are equally instrumental in driving the Company's success. As our development candidates advance, we remain focused on adding depth and experience to our organization. Last month we welcomed Larry Bloch to our Company, and to our Executive Leadership team. Larry joins as our first Chief Financial Officer and Chief Business Officer. He has a proven track record, and brings uniquely integrated scientific, medical and business perspective, which are already proving invaluable as we build the Company. We believe this is a fortuitous time for his arrival,given the potentially transformative clinical and business opportunities that we have in front of us.

And with that let me turn the call over to Larry, to review our second quarter results and provide updated financial guidance for 2012.

Thank you Adelene for your kind introduction. This an extremely exciting time to be joining Infinity, and I look forward to working with the leadership team and our citizen owners, as we build the Company and advance our goal of becoming a sustainable commercial biotech company.

Let me turn to our financial results for the second quarter of 2012 before providing an update on our financial outlook for the rest of the year. Total revenues for the quarter were $21.9 million compared to $20 million for the same period in 2011. In the second quarter of 2012 revenue was composed of $20.9 million for reimbursed R&D services, and $1 million for the amortization of deferred revenue associated with the grants of rights and licenses under our strategic alliances with about Purdue and Mundipharma. This compares to $19 million and $1 million respectively for the same period in 2011.

Our R&D expense for the quarter was $28.5 million compared to $25 million for the same period in 2011. The increase in R&D expense for the second quarter of 2012 compared to the same period in 2011 was related primarily to the continued clinical development of IPI-145, retaspimycin hydrochloride, in addition to restructuring charges. In terms of the restructuring charges that Adelene mentioned earlier, through the second quarter we recognized $1.4 million of restructuring charges related to severance, benefits and related costs for citizen owners, who were notified in June. We expect to recognize approximately $1.1 million of additional restructuring charges later this year, primarily in the third quarter. These charges are recorded within both R&D and G&A expenses.

With regard to G&A expense for the last quarter it was $7.7 million, compared to $6.3 million for the same period in 2011. The increase in G&A expense for the second quarter of 2012 compared to the same period in 2011 was related primarily to higher new product planning and consulting expenses, as well as increased business support for our R&D programs.

Net loss for the quarter was $14.7 million, or a basic and diluted loss per common share of $0.54, compared to $11.7 million, or abasic and diluted loss per common share of $0.44 for the same period in 2011. We ended the second quarter with total cash, cash equivalents, and available for sale securities of $104.6 million, compared to $104.9 million at the end of the first quarter of 2012.

I will now take a moment to update you on our financial outlook for 2012. At this time we are evaluating the accounting treatment for noncash items associated with restructuring of our strategic alliance agreements with Mundipharma and Purdue. One relates to deferred revenue primarily associated with the previous Alliance Agreements. The second relates to the payment of the $50 million loan we had from Purdue which we are planning to repay by issuing equity to Purdue. There are several reasonable accounting treatments for these noncash items, we together with our auditors have determined the best path forward is to seek guidance on the best accounting treatment from the staff at the SEC. As noncash items, the accounting treatment does not affect our financial position or business position. And since they are due to a third quarter event we have sufficient time to seek the staff's guidance on the appropriate accounting treatment, so that we can provide financial guidance for revenue and net loss later this year.

Today we are providing updated financial expectations for 2012 operating expenses and year end cash investments, which are the most relevant metrics for our business and financial strength. We expect operating expenses for 2012 to range from $135 million to $145 million. This is revised from the earlier estimate of $145 million to $155 million, and this decrease is predominantly due to cost savings associated with the termination of our Hedgehog program. We expect to end 2012 with year end cash and investment balance ranging from $65 million to $75 million. This is revised from an earlier estimate of $75 million to $85 million, and the decrease is due to a reduction of R&D funding following the restructuring of our strategic alliance with Mundipharma last month.

In the absence of additional funding or business development activities and based the on our current operating plans, we expect that our current cash and investments together with the proceeds in the planned equity investment of $27.5 million by Purdue, are sufficient to fund our planned operations into the second half of 2013. The $27.5 million equity investment remains subject to an Antitrust approval and other customary closing conditions.

As Adelene mentioned our cash runway extends through anticipated data readouts from the current trials of both IPI-145 in patients with advanced hematologic malignancies, and the retaspimycin hydrochloride in patients with non small cell lung cancer.

Now I will turn the call over to Julian for an update on our pipeline.

Thanks Larry, and let me personally welcome you to Infinity as well. We are encouraged by the progress we have made in our phosphoinositide-3-kinase PI3K, and our heat shock protein 90 programs in the past few months. We are looking forward to data from both of these programs in the near term.

This morning I will briefly review our pipeline, but with a particular focus on our PI3K program. IPI-145 is the first PI3K delta gamma inhibitor in clinical development. Last month we reported high level observations from our Phase I open labeled dose escalation trial of IPI-145 in patients with advanced hematologic malignancies. These top line data include reports of confirmed investigator assessments, of clinical response at the lowest dose levels, including 15 milligrams twice daily and less. Last month, we expanded the trial and are enrolling a cohort of approximately 30 patients with chronic lymphocytic leukemia, indolent non-Hodgkin's lymphoma, and mantle cell lymphoma. This cohort expansion allows us to further obtain further safety and pharmacokinetic data, as well as to access activity at 25 milligrams twice daily, while we continue to dose escalate to determine the maximum tolerated dose.

There are key features of IPI-145 that could lead to clinical benefits and opportunities for differentiation. First we believe that 145 is the most potent inhibitor of PI3K delta to be reported to date. Second, IPI-145 also inhibits PI3K gamma. It has been demonstrated in the literature that there is cross talk between these two isoforms of the enzyme system. We hope the cooperativity of inhibiting both delta and gamma, combined with the exquisite potency of IPI-145 on the delta isoform, will lead to profound durable responses, that will distinguish IPI-145 from the delta specific inhibitors.

In addition, we are seeking to differentiate IPI-145 from BTK inhibitors, which to date have not shown and would not be expected to show activity in patients with T-cell malignancies. This is not surprising, since BTK is not expressed in T-cells. We are planning to open cohort expansions at the maximum tolerated dose to evaluate 145 across a range of malignancies. These planned expansions include cohorts of patients with T-cell lymphomas, diffused large B-cell lymphoma, acute lymphocytic leukemia, and myeloproliferative neoplasms. These plans will allow us to investigate the bread and depth of activity of IPI-145 at doses where we believe we are inhibiting both PI3K delta and gamma optimally.

IPI-45 has generally been well tolerated to date and dose escalation is still ongoing to determine the maximum tolerated dose. While our sample size is small, we are encouraged by our early observations. By the end of the year we expect to report data from the dose escalation as well as from our first expansion cohort which will help refine our path to registration in oncology. We are planning to submit these Phase I data for presentation at a medical meeting at the end of the year, and look forward to sharing these results in a peer reviewed setting.

We are aggressively pursuing a dual path for IPI-145 in both hematologic malignancies and inflammation. Earlier this year, we completed a Phase I double blind randomized placebo controlled trial in healthy adult subjects. We have submitted abstracts to the American College of Rheumatology, detailing the Phase I data, and hope to present the pharmacokinetic, pharmacodynamic, and safety data at the Annual Meeting in Washington, DC in November.

We are now moving forward into Phase II development of IPI-145 in inflammation, and today we announced that we opened our first IIa trial in patients with mild allergic asthma. This randomized double blind placebo controlled study is designed to evaluate safety, pharmacokinetics, and activity of multiple doses of 145 in approximately 30 patients. This trial will be a crossover study in which each patient will serve as his own control. This trial is designed as a signal finding study using antigen provocation, with the primary activity endpoint is improvement in forced expiratory volume in 1 second, or FEV1, a standard measure of lung function.

In the fourth quarter we expect to initiate another Phase II trial of IPI-145 in patients with rheumatoid arthritis. This double blind randomized placebo controlled trial will be designed to evaluate safety and activity of multiple doses of IPI-145 in approximately 150 patients. We plan to provide further details once the trial is initiated. Since 145 is the first PI3K delta gamma inhibitor in the clinic, the asthma and RA trials are studies that should provide important initial clinical insights into the therapeutic potential of PI3K delta and gamma inhibition and inflammation. One of the advantages of 145 is that we have the ability to tune the relative inhibition of PI3K delta and gamma by selecting the optimal dose for each indication. We look forward to further elucidating the clinical profile of 145 through these trials.

To build our PI3K delta and gamma franchise beyond 145, we have a robust discovery effort underway with a goal of building a portfolio of isoform specific PI3K inhibitors. Given the broad potential of PI3K delta and gamma inhibitors in both oncology and inflammation, we believe it would be preferable to develop multiple new chemical entities with differentiated profiles. We have deep insights into the three-dimensional structure of PI3K delta and gamma, along with specific chemistries that allow us to tune in delta or gamma specificity. These efforts are progressing well, and we expect to name our next PI3K development candidate, and begin IND-enabling studies by the end of the year.

Turning now to retaspimycin hydrochloride, our potent and selective Hsp90 inhibitor,we have two trials underway in patients with non small cell lung cancer. Our Phase II double blind randomized placebo controlled trial of retaspimycin plus docetaxel in patients with non small cell lung cancer is enrolling ahead of schedule. We expect to complete enrollment this fall, and anticipate reporting data from this study in the first half of 2013. The trial is enrolling approximately 210 second or third line patients who are heavy smokers, and who are naive to docetaxel treatment, and is based on data from Phase Ib study.

In the Phase Ib trial, all partial responses were observed in heavy smokers and included patients with both Adenocarcinoma and squamous cell carcinoma histologies. Based on these findings we have two co-primary endpoints in our ongoing Phase II trial. Overall survival in the total population, as well as overall survival in patients with squamous cell histology. We will be testing the relationship between survival and a biomarker identified by our in-house molecular pathology group, using data from our Phase Ib study.

Our second trial of retaspimycin hydrochloride is an exploratory Phase Ib/II trial evaluating retaspimycin plus everolimus in non-small cell lung cell patients whose tumors have activating KRAS mutations. The Phase Ib dose finding portion of this trial is continuing, and we expect to report topline data from this ongoing dose finding study later this year.

In summary, we are making strong progress advancing our pipeline. We have worldwide rights to our entire portfolio, and are on the cusp of key data from trials of IPI-145 and retaspimycin hydrochloride. In addition, we have just opened our Phase IIa trial of IPI-145 in patients with asthma, and are planning to begin our trial in patients with rheumatoid arthritis by the end of the year. Behind our clinical candidates, we are building a pipeline based on our structural, chemical, biological and clinical insights.

I am excited about the position we are in today. We have never been more committed to discovering, developing, and delivering drugs that can make a meaningful difference for patients. We look forward to updating you on our progress in the coming months. Now let me turn the call over to the operator for questions.

Thank you. (Operator Instructions). Our first question comes from Ted Tenthoff. You may proceed.

Great. Thank you very much, and appreciate all of the detail on the update. Julian, if you could, going back to 145 with this expanded cohort. You mentioned three different indications. Can you tell me a little bit more about those, and what the rationale is for expanding into those specific lymphomas?

Yes, it is well appreciated that delta inhibitors have shown activity in these three indications. Specifically CLL, indolent non-Hodgkin's lymphoma, and mantle cell lymphoma, but we have an added advantage we believe in also being able to inhibit the gamma isoform. We are very interested in testing at this dose, where we believe we are hitting delta and gamma in this patient population.

Got you. So it is an exercise to show the increased potency in delta, and also the additive gamma activity?

Precisely.

Similar question for the asthma study, what led you to move there first in the inflam side?

We have strong preclinical data, a number of different asthma models were run by the preclinical group, both internally and with external collaborators, and we saw exquisite potency in the rodent models, so this is a fairly simple early study, to be able to investigate the safety and dose range for patients with mild allergic asthma.

Good, and get a proof of concept. Awesome. Thank you very much.

Thank you. Our next question comes from Eun Yang. You may proceed.

Thank you. Julian, I just want to make sure the data presentation in the second half of this year. Looks like Phase I, 145 data and volunteers coming out at ACR, correct?

That is correct.

How about also you guys did a dose escalation in patients with hematology malignancies, and I understand that you expanded the cohort to include CLL and indolent NHL patients. Are we expecting that expanded cohort at 25 milligram BID data maybe at ASH?

You could infer that is a reasonable medical meeting, of course. We have just opened that cohort, and are enrolling as quickly as we can. We have multiple sites around the country. So the question is what will be the maturity of the data, and we hope to present as mature data as possible should our abstract be accepted.

Okay. And then I remember on the last conference call, you mentioned that in inflammation doses have not reached NTD, but you moved into only efficacy study, although you are dose escalating. Is there a reason, I mean do you need to find NTD in inflammation, is that as important as the findings on the NTD in cancer studies?

No, no. Typically in cancer you do want to establish the NTD in Phase I. In inflammation what we are looking for is the optimal biological dose based on PK and pharmacodynamic readouts. We are not looking to push for the NTD in inflammation necessarily.

Okay. The last question on royalties, so on 145 you are paying 1% to 4% royalty to Mundipharma, but also are only obligated to pay until [decline], so combined is it fair to assume it is up to about 15% on sales?

So Eun you are right that the royalties to Purdue and Mundipharma are from 1% to 4%, and the royalties to now Millennium have inquired Intellikine, are from high single digits to low double digits. Your estimate on where that could come out is a very reasonable one.

Okay. And then do you owe milestones on clinical progress to Mundipharma as well as Intellikine?

No. There are no milestone payments to Mundipharma or Purdue.

Okay. Thank you.

Thank you. Our next question comes from Mani Mohindru. You may proceed.

Hi. Thanks for taking my questions. I actually had a couple of, first on the IPI-145 Phase I healthy volunteer study. I just wanted to get a little bit deeper sense, was there any kind of studies to pick up signals of safety, but was there any kind of safety signal that you picked up that we should be looking at going forward, infections or any such thing?

So we will be reporting on that we sub submitted an abstract and we will be reporting on that at the American College of Rheumatology. I would say that it was a well-conducted Phase I study, both single ascending dose and multiple ascending dose. We will provide the pharmacodynamic, pharmacokinetic, and safety data at that meeting.

How long as the drug candidate given in that Phase I study to patients, like what was the maximum exposure time in terms of days or weeks?

14 days.

14 days, okay.

Given BID.

Okay. And moving onto your mild asthmatic patient studies with IPI, the Phase II study that you just announced today. I just wanted to get a better sense of the design, help me understand. You said it is a crossover study, but are you going to have just purely a placebo arm in that, or it is just going to be every patient its own control and no parallel--?

Yes, the randomized study is a two-by-two design. Patients will get either drug or placebo, then be washed out for a period of 7 to 12 days, and then be given either placebo or drug, depending on what they got the first time.

And what should we look for in terms of changes in FEV1 to sort of get a sense of efficacy, and also help me understand what is the current standard of care for these kind of patients?

So these kinds of patients typically are maintained on either beta agonist, sometimes inhaled steroids. And they are typically handled through the allergy season. So the improvements in FEV1 we hope will be dose responsive. That would be a good signal to us that we are in the right dose range, and we will report on these data once we conducted the study. Of course, I can't review preview the results right now.

Right. But I just wanted to get a sense of the ranges, but that is understood. Any particular reason you didn't want to go after an active control, considering there are so many options for these patients out there, and you wanted to just do a placebo study?

Yes, so I mean because it is a placebo crossover study, this is the simplest design and it gives unequivocal results, and we think this is the most efficient way to run the trial.

Okay and if I may engage in one last, maybe a couple of questions. What were the best responses seen, some of the best responses seen with the IPI-145 study in Hemo malignancies so far? Whatever is ongoing, have you disclosed that, or would you mind sharing that?

The only thing we disclosed and let me reiterate it. We have seen confirmed clinical responses and by that I mean either partial responses or complete responses, not stable disease, established by international working group criteria, and these were both established by the investigators and my clinical teams has reviewed all of the cases. So there is no question that we have unequivocal responses. What remains to be seen now, and what we continue to follow on ispatients who stay on drug, what is the ultimate durability of these responses, and that is very important, and those data are maturing.

Okay. One last question, if I heard Dr. Blochcorrectly and correct me if I am wrong, is that by the time like the cash runs out in the second half of 2013, and he mentioned a bunch of data readouts by then, but what I didn't hear is any specifics around IPI-145 Phase II data?Would you have some of those before you run out of your current cash balance?

Thank you for the question. I am happy to clarify that. We have cash runways set into the second half of 2013, and that would provide us with the time to provide readout, both on the current IPI-145 trials that you are reviewing with Julian, as well as the two ongoing trials with retaspimycin hydrochloride, and they will both be read out sometime in the first half of 2013 or earlier.

Okay. Thank you. That is very helpful. That is all the questions I have, thanks.

Thank you. Our next question comes from Robin Davison. You may proceed.

Okay. Thank you. Just a few small points. First of all, for the studies for retaspimycin in non small cell lung cancer, can you confirm that the studies all recruit squamous as well as non squamous histologies?

That is correct. That is a stratification factor built into the trial.

Right. I was wondering whether you had any observation on the competing Hsp90 inhibitor efficacy in squamous, whether that is something you consider excluding those patients in the future?

We based our trial on our Phase Ib data in which we saw activity in both squamous and adenocarcinoma. In fact we saw three of seven responses in the squamous cell histology. Therefore that guided us into the Phase II trial that we are conducting in the current trial to look for a signal in squamous cell carcinoma. I cannot comment on other people's designs, and we look forward to our data and hopefully we have designed the trial robust enough to actually make the overall assessment about the total population, as well as the squamous cell patients.

Okay. I wonder if you could give me an update on the Phase II study in the KRAS mutant group in combination with Afinitor? There hasn't been an update on that, and I am quite interested in that group now?

Right. We have been enrolling those patients in an open label trial, and we are exploring everolimus and Hsp90 inhibition based on preclinical work we conducted with Karen Cichowski, a researcher at Harvard Medical School, and in her studies published in cancer cell in 2011 demonstrate profound autophagic cell death in this combination but not observed with either drug alone. So neither drug alone is expected to have this response or activity in this disease. So the question before us right now is can we translate this to the clinic, and what is the dosing schedule that we can study going forward?We are still in the Phase Ib portion of the trial looking at dosing schedule.

Okay. Finally on 145, I wonder if you could give some idea where your preclinical models predicted the dosing in inflammatory disease?Obviously I think we know the dose for the hem indications, 25 mgs twice daily. I was wondering could it be considerably lower in asthma and rheumatoid arthritis?

Yes. The dose ranges are certainly very different in oncology and inflammation. And that is because the FDA has different guidances for starting doses in oncology, as well as starting dose in inflammatory disease. So let me clarify the starting dose in hem was based on our most sensitive species in the preclinical tox, and we started at a very low dose based on one-tenth of the highest amounts of really toxic dose, or HMSTD in rodents, or one-sixth of the dose of the non human primate species, which was our non rodent species. That dose was substantially lower than 25 milligrams BID.

For inflammation we haven't yet revealed the doses that we began, but you can safely assume that they are lower doses still. And that is guided by the no observable adverse effect level of the no AL dose seen in our same preclinical IND-enabling safety studies. So we will reveal all of that at ACR when we describe our Phase I cohort in the normal healthy volunteers that establishes the dose range for inflammation. And I hope I am answering your question. There are two different dose paradigms. The additional features as we dose escalate, we know we hit a delta first, and then key can we can tune in gamma as we dose escalate.

Alright. Excellent. Thank you very much.

Thank you. Our next question comes from Chad Messer. You may proceed.

Hi, yes. Thanks for taking my question. This one is for Julian, and it is on your PI3K discovery program. So with 145 you are kind of differentiated because you have got a very powerful delta, and then going after gamma for cross talk, and you seem to indicate that what you are doing what the discovery programs is using your knowledge of PI3K to kind of dial in specifically on the Isoforms. I was just wondering what the rationale for dialing in on each one of those specifically is, and where you think they might be useful in terms of disease area?

Great question. Number one we are first guided by the clinical data we see with 145, as we dose escalate we can model out the level of inhibition of delta, and the level of inhibition of gamma, and then sort of prophetically we are making inhibitors that can tune in either delta specificity or gamma specificity, and the mix of the delta gamma-ratios. So upon revelation of our Phase I and Phase II data with 145, we will be able to select from a suite of molecules that we have made, that are tuned if you will, based on preclinical models and based on our intuition and our learnings from the clinic, so that we will have really a portfolio of molecules that can cover the broadest range of diseases. In a perfect world you could ask 145 to do the heavy lifting for every disease. Of course, there is no such world, so we believe we will need second and third generation, or follow-on molecules that are more finely tuned for the specific disease indications.

Okay. Are there diseases that you have reason to believe are better served by gamma and/or delta?

There are some theoreticalconsiderations in the literature. For example, in inflammation there are TH1 mediated diseases, like rheumatoid arthritis, there are TH2 mediated diseases, for example, like asthma, and then there is a sort of a mix of much more complicated autoimmune diseases, so we actually are trying to model this out, study it in the lab. But at the end of the day the human clinical disease is always more complicated and more variable, so we also have a robust biomarker effort in human patients to look at cytokine profiles and signatures of the molecular profiles of patients in different diseases, and we will apply the delta and gamma dual inhibition as prescribed by our preclinical work.

Great. Thanks for that added information.

Thank you. We have a follow-up question from Mani Mohindru. You may proceed.

Hi. One quick follow-up on your 145 asthma trial. As I see on clinical trials.gov you just have ex-US centers opened right now. Are you going to be enrolling US patients as well for the particular trial?

This particular trial is an androgen provocation trial, and we found sites that we really like in Europe. There are sites that are very experienced at running these sorts of signal finding studies, and so we just made the decision to find the INPD, and go there.

Okay. Thank you. That is all.

Thank you. (Operator Instructions). We have a follow-up from Eun Yang. You may proceed.

Thanks. With the 20% headcount reduction this year, what would be the level of savings in the OpEx for next year from the current run rate?

The predominant savings as you can tell from our press release and 10-Q will occur in 2013 because of the cost of restructuring and severance that we have disclosed. But we have not provided 2013 guidance, and will not be able to provide that until early next year.

Alright. Thank you.

Thank you. I am showing no further questions at this time.

Thank you everyone for joining us today. We look forward to providing you with further updates over the next few months.

Ladies and gentlemen, we thank you for participating in today's conference. This concludes the call. You may now disconnect. Have a good day.