Insmed Inc (INSM) 2013 Q3 法說會逐字稿

Welcome to the Insmed 3Q 2013 financial results conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded November 5, 2013. I would now like to turn the conference over to Ann Marie Fields. Please go ahead, ma'am.

Ann Marie Fields This is Ann Marie Fields with LHA. Thank you all for participating in today's call. Joining me from Insmed are Will Lewis, President and Chief Executive Officer; Andy Drechsler, Chief Financial Officer; and Dr. Renu Gupta, Executive Vice President Development and Chief Medical Officer. Earlier this morning Insmed announced financial results for the third quarter of 2013. If you have not received this news release or if you would like to be added to the Company's distribution list, please call LHA in New York at 212-838-3777 and speak with Carolyn Curran.

This morning, Insmed also filed its quarterly report on Form 10-Q for the period ended September 30, 2013, with the Securities and Exchange Commission.

Before we begin, I would like to caution that comments made during this conference call by management will contain forward-looking statements, involve risks and uncertainties regarding the operations and future results of Insmed. Please review the Company's SEC filings, including without limitation the Company's Forms 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements and which contain other important information about the Company.

Furthermore, the content of this conference call contain time-sensitive information that is accurate only as of the date of the live broadcast, November 5, 2013. Insmed undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

With that said, I would now like to turn the call over to Will Lewis. Well?

Thanks, Ann Marie. Good morning, everyone, and thank you for joining us. This quarter, we continue to make great progress toward our corporate objectives, achieving a number of important milestones that position us for continued success into 2014 and beyond. We executed a successful $67 million equity offering that attracted top-quality investors which will support the continued development of ARIKACE through important data readouts and regulatory submissions. We continue to build our infrastructure and human resource talent in anticipation of expected commercial launches in the US and EU.

To start things off, let's turn to our clinical program for ARIKACE to treat non-tuberculous mycobacteria lung disease. During the quarter and in recent weeks we had a number of important pieces come together to advance our NTM strategy, which allow us to stay on track to report top-line data and to initiate related dialogue with the FDA by the end of the first quarter of 2014, starting with the recent announcement that we completed enrollment in our Phase II clinical study of once-daily ARIKACE to treat recalcitrant NTM lung disease in the US and Canada. This is a major accomplishment, particularly given the challenge of enrolling patients who have actually completed at least six months on ATS IDSA guideline therapy, which was a strict entry criterion for this study. The current tolerability challenges of the guideline therapies limit the practical utility of these recommended treatment regimens and are a main reason why approximately half diagnosed NTM patients do not receive or continue to take these recommended off-label therapies.

Another important step along this journey was receipt of orphan drug-qualified infectious disease product and fast-track designations from the FDA for ARIKACE to treat NTM lung disease. We believe these designations are evidence of the regulatory awareness of the large unmet need for a therapy to be approved to treat NTM. We are hopeful they will continue to pave the way for continued productive discussions with the agency so we can move forward with increasing certainty toward registration and approval.

Finally, we initiated the scientific advice working party process with the European Medicines Agency for clarity on the regulatory path forward for ARIKACE to treat NTM lung disease in Europe. We expect to engage in communications with the EMA on this by the end of this year, which will help shape our filing strategy for NTM in Europe. We believe we will have clarity on their feedback in the first quarter of 2014.

We have conducted chart audits of NTM incidents in Europe and Japan. These are very compelling markets for ARIKACE with approximately 32,000 patients in Japan and approximately 30,000 NTM patients in Europe. As in the US, NTM remains a very underserved market worldwide. We are excited to be bringing what we hope will be the first approved drug to this globally uncontested orphan market.

Turning now to our clinical development of ARIKACE to treat Pseudomonas lung infections in patients with cystic fibrosis, in early July, we reported that we successfully achieved the primary endpoint in our Phase III study in Europe and Canada, which compared once-daily ARIKACE to the standard of care twice-daily TOBI on the primary endpoint of mean relative change in FEB-1 at the end of three treatment cycles for CF patients with Pseudomonas lung infections. These data, along with safety and patient reported quality of life data were presented in a poster at the recent North American Cystic Fibrosis conference. We expect to have the complete data set published in a peer-reviewed journal, hopefully by mid-2014.

We continue to prepare the modules for our regulatory submissions in Europe and Canada and remain on schedule to file these submissions in the first half of 2014. We feel very good about the data we have in CF and about the pathway toward registration and approval.

We continue to evolve our commercial strategy as we deepen our global knowledge of both NTM and NCF. Under the direction of Matt Pauls, our Chief Commercial Officer, we have undertaken considerable work sizing markets and have advanced our examination of pricing and launch strategy in the US, Canada and across Europe. We believe ARIKACE will require a limited commercial infrastructure because of the small, focused nature of the potential physician prescribing population for NTM patients. We believe there will be substantial overlap among the lung specialist physicians who treat CF patients with Pseudomonas lung infections and those who treat NTM lung disease, which will allow us to leverage our commercial infrastructure across both indications. In certain countries such as Japan, we are likely to seek to out-license ARIKACE.

I will now turn the call over to Andy for a review of our third-quarter financial results as well as to add some detail on how we are deploying our capital. Andy?

Thanks, Will. Good morning, everyone. Thank you for joining us.

Before reviewing the financials, let me point out that we filed our Form 10-Q with the SEC this morning. You can find all of our SEC filings on EDGAR or on our website. I refer you to the detailed discussion of our business, risk factors and financial disclosures contained in our SEC filings as well as to other important information.

Now, to summarize our third-quarter financial results, for the third quarter of 2013 we posted a net loss of $17.3 million or $0.46 per share. This compares with a net loss of $9.4 million or $0.38 per share for the third quarter of 2012. Research and development expenses in this year's third quarter increased to $12.1 million from $5.7 million a year ago. The increase is due to higher costs for clinical trial activities associated with the Phase III CF clinical trial and two-year open label extension study in Europe and Canada and our US Phase II NTM clinical trial as well as the cost related to the process improvements and related validation work made to manufacturing processes. Also contributing to the increase were higher internal expenses, including compensation and related expenses.

General and administrative expenses increased during the third quarter to $4.7 million from $3.6 million a year ago. The increase was primarily due to higher compensation expense and $1.1 million of expense in market research and related costs associated with preparations for product commercialization.

Turning now to our balance sheet and cash guidance, as of September 30, 2013 we had cash and cash equivalents totaling $128 million and debt of $20 million. During the first nine months of 2013, we utilized $32.6 million of cash to fund operations. This included a one-time cash revenue item of $11.5 million received in the second quarter. We estimate that our cash requirement to fund operations in the fourth quarter of 2013 will be in the range of $15 million to $17 million.

As we have reported, we plan to use the proceeds from our recent public offering to fund further clinical development of ARIKACE, invest in third-party manufacturing capacity, fund the efforts to obtain regulatory approvals and support preparations for commercialization. In addition to the investment in clinical development, regulatory and commercial preparations, which Will already highlighted, we are also making investments in our global supply chain as we've discussed with you on several occasions.

We continue to work closely with our manufacturing partner at [Jenimoso Althea] to expand and improve production capabilities. We are also qualifying second-source suppliers across our global supply chain, including our raw material suppliers as well as contract manufacturers at larger production scales for potential commercial supply.

With that financial overview, I will turn the call back to Will.

Thanks, Andy. Now we would like to depart from our usual approach to these calls to explore some of the key questions that we have heard from investors. Since these questions come up fairly regularly and are related to recent or pending clinical data, I thought it would be worthwhile to explore some of them in greater detail. As these involve more specific clinical details I thought it would be useful to pose these questions to our Chief Medical Officer, Dr. Renu Gupta, and have her respond. At the conclusion of our Q&A session, we will then open the call up for traditional Q&A to all of you.

So Renu, let's start with our clinical development program in NTM. One question we are often asked is how we chose the reduction in mycobacterial density as the primary endpoint for our NTM study. Is this a clinically relevant measurement for NTM patients? Can you walk us through the answer to these questions?

Thank you, Will, and good morning, everyone. Well, when people ask questions about the primary endpoint of our NTM study, their question usually has its origin in the observation that this is a measurement that is not used in other bacterial infections. Therefore, it may seem quite novel. However, there are several reasons why it is the right measure for those patient populations.

Here, it's important for me to go back in history to explain how we came to choose such a measure and its significance. In 1994, Wallace [Hettal] published in the [Blue] Journal the results of the clarithromycin monotherapy trial four patients who have [MAB], a complex lung disease. And the major outcome variable was sputum AFB quarter results, so acid class bacilli, or mycobacteria. And a definitive microbiological response was either conversion of sputum to culture-negative or reduction in colony count on three successive sputum cultures from 3-plus to 4-plus to 1-plus or accountable colonies, which is the semiquantitative scale that we've used. So essentially, in layman's terms, they were looking to measure response of patients to therapy based on the reduction in the semiquantitative colony count.

Two years later, in 1996, Griffith had published in CID the results of a study using azithromycin monotherapy rather than clarithromycin for mac lung disease. The study design was essentially similar and the same semiquantitative culture method and response criteria were utilized in this study as well.

In clinical practice, as centers specializing in the care of this patient population, semiquantitative mycobacteriology is routine practice. So here now in the last decade or so, not much development work has been conducted in NTM. And our study has been a significant undertaking for this severely neglected disease. As no controlled clinical trials were conducted in patients with NTM lung disease, the development of the primary endpoint for this study was a collaborative effort between the agency, FDA; the clinical experts, including those who had published previously and Insmed.

So you might recall that the study population in the 112 study are NTM patients who have failed prior therapy and not responding to therapy even after having been exposed to guideline-based regimens for a period of at least six months. Therefore, as we entered into our initial dialogue with the agency about study design, we shared the perspective that I've just outlined, and it was subsequently agreed that the reduction in mycobacterial density would be the most suitable endpoint to examine in order to better understand and evaluate the potential benefits of liposomal and (inaudible) for the treatment of recalcitrant NTM patients.

It's important to note that evaluation of clinical signs and symptoms, patient reported outcome measures and sputum culture conversions are also being assessed as important secondary endpoints. It is equally important to understand that it will be an examination of the totality of all these data that will inform us of the assessment of the impact we're having on these patients with our treatment with liposomal amikacin for (inaudible).

Renu, the measurement itself is a 7-point scale, and we refer to it as semiquantitative. Is this the measure clinicians use in their practices? And why not just measure reduction in CFUs as we did in the CF study? And practically, how does this 7-point scale work?

So, the standardized laboratory methodology used as a semiquantitative assessment primarily to assure consistency and reproducibility, and that the quantitation can consistently be done up to 49 colonies. Thereafter, (inaudible) of colonies are used. And this is accordance with a CDC recommendation published by (inaudible) [Kubikca] back in 1985, and the Clinical and Laboratory Standards Institute CLSI, as many of you might know, is that eminent body that standardizes laboratory methodology, and these are the tests and the methodology used in the published papers that I just referred to. So we have recommended the use of this semiquantitative methodology for our study as well.

And just briefly, sputum specimens that are obtained from patients in accordance with these published recommendations are cultured in what we call liquid media or broth as well as solid media agar. The liquid media is held up to six weeks and the results are examined before being recorded as culture negative.

And the semiquantitative assessment of the NTM culture for sputum comprises of seven steps, one being culture negative. And culture negativity is only documented when the liquid medium is negative. And 7 is the worst outcome, or 4-plus. So essentially, the report would be as follows, Will. Culture-negative is confirmed with no growth in liquid medium; growth in liquid medium only as liquid-positive; 1 to 49 colonies are manually counted on agar as individual colonies. And thereafter, there is a range of colonies that corresponds to 1-plus, which is 50 to 100 colonies; 2-plus, which is greater than 100 to 200 colonies; 3-plus, which is greater than 200 to 500 colonies; and 4-plus, which is greater than 500 colonies.

These counts, as I mentioned, are actually performed on visual inspection of the other plates utilizing the standardized methodology recommendations I just mentioned from CDC and CLSI and, as mentioned previously, quite commonly used in the assessment of the patients in clinical medicine today.

Many of you may not be very familiar with the change in CFU reduction on a semiquantitative scale for mycobacteriology and more familiar with the change of CFU reduction in routine bacteriology, as was the case in our CF study for Pseudomonas aeruginosa, the 108 trial conducted earlier this year. That methodology is not appropriate in the FCM study because the routine microbiology methodology is quite distinct from the mycobacterial cultures. This is not easily and reliably and reproducibly identified after a count of 50.

Additionally, the sputum samples are prepared differently than routine mycobiology. And I guess it gets a little bit too technical right now here to summarize that we are utilizing the best practice and, more importantly, the CDC and the CLSI recommendations for implementing the semiquantitative methodology for non-tuberculous mycobacterial, which, incidentally, is similar for Terabyte as well. This measure reveals a meaningful snapshot of whether the treatment is having a beneficial effect as I alluded to earlier with the two publications of the trial in Texas as well.

In summary, the awareness of this semiquantitative measure appears to be limited despite utilization by clinical centers. And I believe it's largely because research efforts targeting the NTM lung disease population have been far -- few data published, not really a whole lot since 1996 on this methodology. And all I can say at this point is that we are pleased to be leading this charge for evaluating a new antibiotic in the treatment of NTM lung disease, which might be an important addition to future treatment paradigms. And we are definitely aligning ourselves with some of the world's leading clinicians and laboratories to accomplish this.

Thanks, Renu. I think that was extremely helpful.

If I can turn now to our Phase III study results in CF patients, why did we report the per-protocol data for change in FEB-1 and not the MITT? Was there a difference in these results? Why use per-protocol for the primary endpoint but MITT for the other charts we put on our poster recently highlighted at NACF?

Well, this is definitely far simpler than the semiquantitative mycobacteriology.

So there are guidances; there's an ICHE 9 guidance on statistical methodology as well. And very simply put, the European regulators are required to use a per-protocol combination with a noninferiority design for the primary endpoint analysis, and this is very standardized. All secondary endpoints were presented as MITT in our poster. This is, as we have stated in the analysis plan, we have indeed planned to conduct per-protocol analyses for all our endpoints. And these are being included in our study, of course.

Importantly, data are internally consistent across all endpoints confirming comparability to TOBI. And beyond this regulatory requirement for the noninferiority design, it is important and, I believe, quite useful to remind everyone that the comments we made at the initial release of the 108 trial data results and the data presented in the poster are consistent in indicating that liposomal amikacin per inhalation is comparable to TOBI.

So, to summarize, the MITT was intensified in our analysis plan as the basis for our secondary endpoint analyses, but we are also doing the analyses for the per-protocol population. And importantly, all endpoints are trending in the same direction and internally consistent.

So these will form the basis for our reporting and submission to regulators. So the bottom line, Will, is we believe liposomal amikacin for inhalation is comparable to TOBI and the data provides evidence to support that.

Renu, thank you for taking the time to shed light on some of these questions, which can be confusing. I'm glad we had the chance to clarify these point for those listening today. As always, your input and insight is extremely valuable and appreciated.

Before we open the call to questions from those on the phone line, I would like to leave you with a couple of thoughts. At Insmed, we believe in being as transparent as we possibly can, and today's exploration of some of these critical details is an example of that. Whenever possible, we will empower the clinical experts we are fortunate enough to have involved in these trials to express the results in their own words so you can hear their views firsthand. This is what we did for the Phase III CF study results earlier this year and it is why we shared our latest incremental clinical data in the context of the NACF meeting so there was an opportunity to explore their meaning with key opinion leaders present at this important scientific form.

We also believe it is important for the professional scientists and clinicians involved in our clinical trial to have the opportunity to have their hard work shared in a peer-reviewed journal. To that end, we are preparing a manuscript of the CF trial data that we believe will be published in a peer-reviewed journal sometime around the middle of the year.

We are constructing a Company that is focused at the intersection of orphan, pulmonary and infectious disease. The first two indications we are pursuing are increasingly close at hand. We have what we believe is an approvable indication for ARIKACE with our Phase III study in CF in Europe and Canada. We are now fully enrolled and very soon will have data that we hope will be adequate for registration and approval of ARIKACE to treat recalcitrant NTM lung disease in the US.

In addition, we will also shortly have feedback from the SAWP process that will provide us with a roadmap for regulatory approval for NTM in Europe. Beyond that, we will continue to explore the path forward in other countries where NTM is already a sizable and growing market, such as Japan. We look forward to advancing ARIKACE to treat NTM, a globally uncontested orphan market.

These near-term commercial opportunities are backed by a very strong intellectual property portfolio and a significant amount of capital from some of the smartest investors in biotechnology. Our Board continues to support our vision and we are pleased to welcome David McGirr as the latest addition to our board. David has more than 30 years of experience as a senior financial executive, including the past 11 years at Cubist, where he was chief financial officer. We are very pleased with the progress we have made. We have got a lot of work to do and a ways to go, but we believe we are well on our way to building Insmed into a world-class biopharmaceutical company.

And now, operator, we are ready for questions.

(Operator Instructions) Ritu Baral, Canaccord.

Thanks for taking the questions, guys, and thanks for addressing some of those issues upfront. My question will now only have 4 parts versus 18. The safety portion of the data that you presented at ACFC -- Renu, I was hoping you could talk to us about the treatment-emergent adverse events, especially the moderate to severe, which numerically occurred more in the ARIKACE arm, but then the serious adverse events went in the other direction, towards TOBI. How should we think about those numbers and reconcile the trends?

I think the observation is that they are really not different between the two arms. And, more importantly, this is a population of very ill patients that we brought into the study. We have required these patients to have chronic Pseudomonas infection and we have permitted patients with an SCB-1 of 25% and above to enter into this study. And the study is evaluating two drugs over the period of six months across different seasons. And of note is that there are no unusual side effects that are observed in this study and nothing that has not been seen either in previous studies of ARIKACE or previous studies of TOBI.

So I think the way to think about it, Ritu, is that more importantly, one, that there are no unusual side effects; two, there are no statistical differences in the frequency of AE's between arms. One kind of an adverse event which is serious is slightly numerically higher but no different from the ARIKACE arm. So I think that's the way the clinicians with the SMB evaluate these data. If there was a concern, I think we would have highlighted that.

There's one other observation that I wanted to make, and that is this (inaudible) and other open-label studies. There is a comfort level with the standard of care. And as you know, that these are self-reported by physicians, the adverse events, and in good clinical trials you don't ask the physicians to change their minds, you actually require that they report adverse events. For example, a little bit of cough, a little bit of hoarseness is more expected and accepted by patients and clinicians with TOBI because it has been there.

For the new drug, they may have different expectations, but if there is any little change or shift in cough, which is an underlying symptom as well, they may tend to over-report. Today I am not prepared to talk about any over-reporting, but this is a phenomenon seen in open-label studies that sometimes adverse events of a mild to moderate nature are less reported in the standard of care arm.

So will we see additional granularity on side effects, such as severe cough or hemoptysis in the upcoming publication?

Absolutely. The details of the adverse events, as we have shown in our Phase II study with the 5% or more reported, it is indeed our intent to have those data disseminated to a peer-reviewed publication and, at an appropriate time, put that on clinicaltrials.gov as well.

And what is the distribution of some of the more serious detailed side effects?

Nothing unusual at all. The serious adverse event numerically is slightly higher in the TOBI group, but no unusual or unexpected adverse events at all.

A quick question on NTM and then I will hop back in the queue. How has the patient retention in the trial gone so far? And is there going to be any overlap with NTM discussions and CF discussions as you move forward talking to the EU?

With respect to the NDM trial, we are obviously blinded to that data. So we are not talking about any aspect of that study until the data are available. I have always said that with respect to the NTM population, just as Renu mentioned in regards to the CF population, you are talking about a very sick group of people. So we fully expect that this will be, as I have termed it, a noisy trial. But we are not saying anything more beyond that at this point until we get the data and can really interpret it and have something informed to say.

With respect to our dialogue with both Europe and FDA, I think, as we have always said, the dialogue with the US will be one that is in the near term focused on the NTM data but will include an examination in the dialogue around CF data because it's, frankly, supportive and on point. And the same will be true for our dialogue in Europe.

Great, thanks for taking the questions.

Paul Matteis, Leerink.

Congrats on the progress with target. So my first question was for Renu. So it was nice to learn about your powering assumptions for target ahead of time, 80% to demonstrate a one-step change. But I'm just wondering if you could take that one-step change and put it in like a clinical perspective. While that might be statistically significant if you do manifest that, what type of change on the seven-step scale do you think is actually clinically significant and meaningful to patients and physicians?

This is a very important question you have asked and a question that we spent a considerable amount of time years ago asking the expert clinicians, two of whom have published and Dr. [Olivier]. What is important? And even in their study, any reduction on the semiquantitative scale showed that it correlated with future sputum conversion. And they were looking at non-HIV mac patient populations. And those were important data for us to build upon. Now we are looking in our study target -- good to hear you say that name -- in a population that has been persistently positive despite six months of guideline-based regimen.

So here, Drs. Griffith and Olivier felt very strongly, even more strongly, that any reduction -- so when you look at reduction, it could be either a one-step reduction or a fraction of a step reduction as compared to standard of care, clinical trials with placebo added, and requiring patients to take their medication in a clinical trial setting would be considered important.

The second thing to note is that the randomized portion is for three months only. The other studies were looking at a longer period of time. And we are hoping that at the end of six months, although those analyses are exploratory, they will further inform us of the correlation between reduction and the first three months of randomized phase and any further changes in the open label.

Great, thanks a lot, that's really helpful. And so I was also wondering, it sounds like you have been doing some more research on the rest-of-world market. How does the standard of care for NTM and the diagnosis rate differ in the US, Europe and Japan? There are still obviously pretty sizable market opportunities at 30,000 patients in each of Europe and Japan. But it was interesting to learn that there are only 30,000 patients in Europe versus about 50,000 in the US, whereas the EU population is bigger. So are you wondering if it's underdiagnosed in these other markets too? What are your takeaways from your preliminary market research there?

Let me ask Renu to answer that question.

Thanks, Will. So I will just give you the following bullet point answer. So number one, overall, the ATSI DSA guidelines are being followed in Europe and Japan. We are very closely knit with those communities.

Number two, very recently a collaborative group working party was formed to look at -- across the two sides of the pond, look guidelines for CF patients. And they really looked at the ATSI DSA guidelines for NTM and adapted from that for CF as well. And there is a paper in preparation, and you will all be seeing it in a few months.

And number three, during our survey, we actually learned the components that may further strengthen the notion that more work needs to be done to bring awareness of the disease and to further diagnose. So the underreporting in Europe is probably of a similar magnitude as in Europe, if not worse.

Okay, great, thanks a lot, looking forward to the data in first quarter.

Greg Wade, Wedbush.

Renu, with respect to the baseline sputum density scores in the NTM study, I understand there was a review of baseline data that was conducted and the company commented that the study remained 80% power to see a one-step change. Perhaps you might share with us what the baseline density score expectations were and then perhaps describe where the data fell out so that we have some understanding of how much of a change is really going to occur in these patients.

Greg, let me just jump in. I think it's really important to clarify. I don't know what you are referring to specifically, but there was no examination of baseline data or review that gave us any insight of the nature you are describing. We are completely blinded to this study. And so I just want to clarify that for everybody on the phone so there's no misunderstanding. I will ask Renu to respond specifically to the inquiry, though.

I wanted to add to what Will said, that we did not require a certain level of quantification at baseline for screening purposes. All we required at screening was culture to be positive. We obviously have collected the data, and starting with day one we will be obviously looking at the data on the semiquantitative scale.

Okay, so we don't really know, then, if any of the cultures were sufficiently positive to develop the power that was expected in the study? I would have thought that you would have looked at these baseline characteristics so that you knew baseline data was of such a quality that you could see a change.

Let me just shed a little bit of our insight into that. So just to remind us all that the available data are on mac and very little is available on MF [stasis]. And so we have stratified patients at baseline by CF and non-CF, as you know, and by mac and MF stasis. The only available data that we had to develop assumptions, and we strengthened those assumptions by making sure that in the powering we had a wide enough standard deviation so that we wouldn't trip or under-power the study. So in our assumptions, we were conservative. So I think that's the message that I can comfortably give right now, that we were conservative in our assumptions based on the available information.

So it is our hope and our expectation, based on what has been published, although limited, previously at least for mac that requiring all patients to have been on guideline-based regimen and be positive at the end of six months allowed us to construct the design and allowed us with a conservative assumption for the standard deviation of the change to power, we hope adequately, to look at any change from baseline or the semiquantitative scale.

I think I understand that. In terms of your thinking around the changes, obviously patients can go from 7 on a scale downwards -- 6 to 5.5, etc., more than a 1-point change. Do you believe, in this study, that all changes are created equal and that movement from very high speed of density scores down is -- or it could be more meaningful to patients? And thanks for taking my questions this morning.

So very important question. I don't think we have data that can provide an informed answer to your question. But we do know one thing, that the higher the bacterial burden, the worse it is for patients. We do know that. However, we also know that intervention in mac does -- and as long as patients are on a regimen that they are taking and not having macrolide-resistant organisms, that intervention in Mac and particularly addition of an aminoglycoside should lead to a better outcome.

For an (inaudible), we do know that an [abscesses] is more susceptible to aminoglycoside. So we do not know whether a reduction from 4-plus to 3-plus is on the same scale as a reduction from 3-plus to a 2-plus. And so I think we will learn. Secondly is that different by species, so we don't know the answer. And if you talk to the experts I am sure the ones that we work with will inform us that any change on the scale is important and appears, at least in the published MacWorld, appears to correlate with subsequent sputum conversion as long as the patients are on effective antibiotics.

There are no further questions at this time. I would now like to turn the conference back over to Mr. Will Lewis for any closing remarks.

Thank you again, everyone, for your participation. We appreciate your continued interest and support and we look forward to addressing you again when we report our fourth quarter and year-end financial results. Have a great day.

Ladies and gentlemen, that concludes your conference call for today. We thank you for your participation and ask that you please disconnect your lines.