Ionis Pharmaceuticals Inc (IONS) 2004 Q1 法說會逐字稿

Welcome to the ISIS Pharmaceuticals conference call.

Leading the call today from ISIS is Dr. Stanley Crooke, ISIS's Chairman and CEO.

Please go ahead, sir.

Thanks, everyone, for joining us on today's conference call to discuss the financial results for the first quarter of 2004.

Participating with me today are Lynne Parshall, Executive Vice President and CFO;

Brett Havrin (ph), Vice President of Finance; and Kristina Peterson, Executive Director of Corporate Communications.

We have had a strong start to the year as evidenced by our new strategic alliance with Alnylam Pharmaceuticals, the expansion of our cancer collaboration with Lilly that we announced this morning, and with the receipt of the new government contract for the continued development of TIGER, our biosensor program that accurately and rapidly identifies a broad range of infectious organisms.

We also started the year by announcing positive Phase II data with ISIS 1048383, our TNF alpha inhibitor in patients with rheumatoid arthritis in a randomized, double-blind, placebo-controlled Phase II trial.

On today's call, Lynne will review our financial results as described in the financial press release issued earlier today.

Then I'll discuss the quarter's highlights, with a particular focus on our pipeline, the activity on the patent licensing front, and of course, our progress with TIGER.

We will be happy to answer any questions you have at the conclusion of our prepared remarks.

Before we begin, Kristina, will you summarize our policy on forward-looking statements, please?

This conference call contains forward-looking statements regarding our business, the financial position of ISIS Pharmaceuticals, and the therapeutic and commercial potential of our technology and products in development.

Any statement describing our goals, expectations, intentions, or beliefs, is a forward-looking statement, and should be considered an at-risk statement, including those statements that are described as ISIS's clinical goals.

Such statements are subject to certain risks and uncertainties, particularly those inherent in the process of developing technology and systems used to identify infectious agents and discovering commercializing drugs that are safe and effective for use in human therapeutics and in the endeavor of building a business around such products and services.

Actual results could differ materially from those discussed in this call; as a result, you are cautioned not to rely on these forward-looking statements.

These and other risks concerning ISIS research and the development programs are described in additional detail on ISIS's annual report on Form 10-K for the year ended December 31, 2003, which is on file with the U.S.

Securities and Exchange Commission, copies of which are available from the Company.

Now here is Lynne.

Today, my comments will be based on the financial press release we put out this morning.

I will discuss the following financial aspects of the quarter -- our revenue, operating expenses, net operating loss, and our strong balance sheet.

Total revenue for the three months ended March 31, 2004 was $12.3 million compared to $14 million for the same period last year.

The decrease reflects the completion of our Affinitak Phase III clinical trials and an associated reduction in revenue offset by two key developments.

The first is an increase in revenue related to our strategic alliance with Alnylam Pharmaceuticals to develop and commercialize RNAi therapeutics.

And the second is an increase in revenue for our TIGER biosensor program, including new funding from the Defense Advanced Research Project Agency, or DARPA, under a subcontract with Science Applications International Corporation, SAIC, to automate the TIGER system.

Our operating expenses were $34.6 million for the first quarter of 2004 compared to 32.9 million for the same period in 2003 according to generally accepted accounting principles, or GAAP.

Included in our operating expenses was non-cash compensation expense related to stock options of $32 million for the first quarter of 2004 and $9 million for the same period in 2003.

Variable accounting for stock options can result in significant increases and decreases in non-cash compensation expense as a result of the variability in our stock price.

Our stock price increased 19.4 percent between December 31, 2003, and March 31, 2004.

Our operating expenses on a pro forma basis were $31.4 million for the first quarter of 2004 compared to $32.9 million for the same period in 2003.

Operating expenses on a pro forma basis were adjusted from GAAP to exclude non-cash compensation expense related to stock options.

The decrease in operating expenses on a pro forma basis was the result of planned expense reductions that began in the second quarter of 2003, offset in part by increased spending to support the development of other products in our pipeline and our TIGER biosensor program.

Please refer to the table in our financial press release for a detailed comparison of our operating expenses and loss from operations on the basis of both GAAP and our pro forma analysis.

These documents are also available on our website at www.ISISPharm.com.

Our loss from operations was $22.3 million for the first quarter of 2004 compared to $18.9 million in the first quarter of 2003 according to GAAP.

Our loss from operations for the first quarter of 2004 on a pro forma basis was $19.1 million compared to $18.9 million for the same period of 2003.

Our loss from operations on a pro forma basis remained relatively flat for the first quarter of 2004 compared to the same period in 2003.

Loss from operations according to GAAP increased, primarily due to the large non-cash compensation expense recorded in the first quarter of 2004.

The loss from operations for this quarter is in line with our NOL guidance for this year.

We stated our goals for net operating loss to be in the mid $80 million range, excluding non-cash compensation expense.

In terms of cash, we are well-positioned, as evidenced by the continued strength of our balance sheet.

We ended the first quarter with $180.9 million in cash and short-term investments and working capital of $169.2 million.

Cash and short-term investments and working capital decreased from the previous quarter as a result of cash used to fund our operations as well as cash we used to make an equity investment in Alnylam and to retire (ph) partner debt held by Boehringer Ingelheim.

In late 2003 and early this year, we refinanced this and other debt to take advantage of attractive interest rates.

Going forward, we will use our resources to efficiently and judiciously moved our antisense drugs towards key development milestones as well as to advance the technology.

At the same time, we intend to exploit our multiple-RNA based business initiative to generate revenue while managing our expenses appropriately.

Our business model of diversified revenue sources reduces risk and helps to offset our cash needs.

We continued to enter into partnerships that best utilize our expertise and capitalize on the strength of our leading patent estate (ph).

This quarter, we initiated two relationships that demonstrate our successful execution of this strategy.

We forged our alliance with Alnylam Pharmaceuticals, which includes our participation in the development and commercialization of RNAi therapeutics.

Additionally now, we are positioned to take advantage of Alnylam InterfeRx patent licensing program, which will offer Alnylam collaborators licenses to our patents.

This has the potential to generate additional transactions which translate into an important revenue opportunity.

Our relationship with the government serves as an important source of funding for technology development and as a revenue source.

This quarter, we received contract of up to $19.5 million from DARPA under a subcontract (ph) with our collaborator SAIC to automate our TIGER biosensor, and we are now planning for its initial commercialization.

Over the past several years, we have received more than $35 million in support from DARPA and other government agencies, and this new award brings the total potential funding to more than $55 million for our IBIS (ph) program to develop the technology that holds great commercial potential.

We are successfully exploiting our business strategy to engage in RNA-based drug discovery collaborations, which lets (ph) us increase the use of our technology and participate in commercial upside of our partners' successes.

Overall, we are very pleased with the financial strength of the Company.

With reasonable assumptions for new sources of revenue and cash, our resources are more than adequate to fund our activities at least through the end of 2006.

Stan, I will now turn it back to you.

We are pleased that we have the financial resources to move the product opportunities that we have today and potentially a number of new products toward commercialization over the next few years.

We also continue to invest in the core of the Company, the research programs, and are leading the way in the exploration of multiple antisense mechanisms, and continue to lead the way in understanding how drugs that interact with RNA work and how to make them work better.

As we have expanded our knowledge about the technology over the years, we want to continue to make this expertise available and accessible under appropriate terms to the industry.

We believe that there is much to be gained from our experience in discovering and developing antisense drugs, and our productive history in RNA-based drug discovery and development has yielded an exciting pipeline, which is, of course, our most valuable asset.

And in the process of creating the technology and building the pipeline, we have created two additional assets -- our patent stake of more than 1,300 issued patents, and our TIGER biosensor.

Both of these are primed to bring both near- and long-term value, and in fact, they are today bringing value.

Let me briefly discuss the intellectual property and TIGER.

Because of the depth of the work in RNA-based drug discovery and the breadth of the antisense technology that we have developed, we obviously can't invest in all of the drug discovery opportunities that we have in hand.

To take advantage of these opportunities, we create strategic partnerships that are mutually beneficial.

In these partnerships, we gain from our partners a focus on research efforts that are crucial to them, and our partners gain from our intellectual property and our expertise.

Our transaction with Alnylam, designed to accelerate the development and commercialization of an antisense mechanism RNAi that can lead to new therapeutics, showcases this strategy.

We have exclusively licensed to Alnylam a significant number of our patents that relate to mechanisms, oligonucleotide chemistries, and motifs (ph) that will support their discovery and development of double-stranded RNAi or siRNA drugs.

As a result, we expect to receive fees from Alnylam's drug discovery and development partnerships and its siRNA patent licensing program.

Further, as Alnylam and its partners develop and commercialize RNAi-based drugs based on both their technology and the technology that we have developed, we will receive milestone payments and royalties on those drugs.

Also, we will be able to develop a limited number of double-stranded RNA drugs ourselves.

But our primary focus is developing single-stranded antisense drugs that work through the RNAi mechanism, an area of research that we have been involved in for quite a number of years.

So the Alnylam transaction focuses Alnylam on the double-stranded oligonucleotide RNA drugs and allows us to continue to focus in the area that we want to.

We will pay Alnylam milestones and royalties upon the success of drugs that might use their technology.

And of course, with an equity purchase of Alnylam, we will share in the success of Alnylam as a Company.

The combined patent portfolios of the two companies we believe creates a dominant position in RNAi therapeutics.

Another example of how we're taking advantage of our patents is our transaction with Eyetech.

Eyetech licensed a specific chemistry patent from us to develop, manufacture, and commercialize Macugen for the treatment of ophthalmic disease.

You know that Macugen is an aptamer -- that is a modified oligonucleotide.

Through this license, we receive milestones and royalties on future sales.

Eyetech and Pfizer stated they expect to proceed with an NDA filing this year and anticipate commercialization in 2005.

And we are gratified that Eyetech just this week announced additional positive data from additional clinical trials that we believe will enhance the commercial potential of that drug.

To date, we have generated more than $40 million from licensing of various components of our intellectual property estate.

And we plan to continue to forge alliances and engage in transactions that allow us to reap the benefit of our intellectual property portfolio.

The short-term value, of course, is important.

But what is of greatest significance is that we believe that our intellectual property estate provides us an outstanding intellectual property position long-term with regard to any RNA-based drug discovery activity.

Our knowledge of RNA also laid the foundation for an entirely different novel invention, and that's a new biosensor system based on diagnostic technology called TIGER, which stands for Triangulation Identification Genetic Evaluation of Risk -- you can tell we've spent too much time with the government.

We continue to develop this technology, and recently have added funding from DARPA under a new subcontract from SAIC.

The development of TIGER has been supported significantly by the government.

The government is interested in the system for a range of applications, including biological warfare defense and infectious disease surveillance.

TIGER is fundamentally different from current infectious agent identification tools because it is capable of identifying essentially all infectious organisms, such as bacteria, virus, fungi, and protozoa, meaning that it can identify without knowing what you're looking for or having to culture any infectious disease threat, whether it be a natural evolution of infectious disease organisms or an engineered organism.

In terms of our commercialization strategy, first, we intend to focus our business development efforts on government agencies, particularly in the area of infectious disease surveillance, and than transition to non-government commercial markets.

We are excited about TIGER's potential, and TIGER should be -- could be essential against the threat of bioterrorism, as well as newly discovered viral threats such as SARS, and could fundamentally change the way infectious disease diagnosis is done in the clinic.

Now to our drug discovery partnerships and our pipeline.

We recently extended our cancer drug discovery collaboration with Eli Lilly & Company to characterize and develop RNase H, siRNA, siRNA, and splicing modulation inhibitors for the treatment of cancer using second- and third-generation antisense chemistry.

An important component of this extension will be the exploration of new anticancer drug target using RNA-directed technologies.

Our oncology relationship with Lilly initiated in 2002 builds on of course the broad strategic alliance that we have established and continue to work on with Lilly to discover antisense drugs in areas of inflammation and metabolic disease.

Our antisense drug discovery partnership with the Industrial Technology Research Institute or ITRI of Taiwan and the Economic Development Board of Singapore are clear examples of the versatility of antisense technology and how we are expanding our therapeutic scope.

As we announced in January, we've received two milestones in our ITRI partnership that was focused on the discovery of antisense drugs against the coronavirus associated with SARS.

These studies are important overall for antisense technology because they demonstrate that second-generation antisense drugs can be administered effectively by aerosol for lung disease.

Also on the research front, two leading researchers in the area of neurodegenerative disease -- Dr. Richard Smith of the Center for Neurological Study and Dr. Don Cleveland of the Ludwig Institute at UCSD collaborated with us in pre-clinical studies relating to a familial form of amyotrophic lateral sclerosis, known as Lou Gehrig's disease.

In these studies, and antisense drug that we invented with these collaborators suppressed the production of a mutant protein called copper/zinc superoxide dismutase one, a molecule that is known to be associated with the most aggressive form of ALS.

These researchers believe that decreasing the amount of mutant SOD1 in the brain of patients with ALS could potentially modify or halt progression of the disease.

The ISIS antisense inhibitor produced a 50 to 90 percent reduction in SOD1 messenger RNA in these target tissues, accompanied by a significant reduction in the protein.

This shows that the drug is working through an antisense mechanism.

And based on these findings, researchers concluded that antisense drug targeting SOD1 could potentially benefit patients with ALS.

Dr. Smith and Cleveland conducted the study with funding support from the ALS Association.

Obviously, our most valuable asset is our pipeline, which will reach a number of milestones in the second half of this year.

We have achieved one development goal already, as we made significant advancement and development of our second-generation antisense drugs.

In January, we announced promising data from a Phase II study of ISIS-104838, an inhibitor of TNF alpha in patients with rheumatoid arthritis.

This was our first second-generation antisense drug to go into man.

The trial demonstrated that the drug was active, and a earlier study demonstrated unequivocally that the drug was working by an antisense mechanism as expected.

Furthermore, in these trials we took a step toward identifying the dose at which second-generation antisense drugs will work, depending on the tissues in which the targets are expressed.

In this case, we showed that a 300 milligram a week dose could reduce a difficult to reach target in the synovium of patients with rheumatoid arthritis.

ISIS-104838 may offer patients with rheumatoid arthritis potentially oral (ph), less costly treatment options with fewer side effects than current protein-based therapeutics.

We plan to initiate Phase II studies this year to begin -- to continue the process of dose and schedule optimization.

Beyond 104838, we plan to report the following in the second half of the year.

First, we will report the results of two Phase III trials of Alocarforsen in Crohn's disease.

Second, we will quote the results of two Phase II trials of studies of Alocarforsen as an enema in ulcerative colitis -- that's four major trials of Alocarforsen.

We will report results of Phase II studies of ISIS-14803 in combination with the standard of care in Hepatitis C, which is pegylated interferon ribovirin.

We will report results of the trial of ISIS-301012, our ApoB-100 inhibitor, the first of our cardiovascular program.

And in those subjects, we will measure the ability of ApoB-100 to reduce lipid levels -- specifically LDL, as well ApoB-100 levels in total cholesterol, as well as safety.

We will initiate enrollment in our Phase II trials of ISIS-113715 in type 2 diabetes, and we expect to report results in early '05, or perhaps even as early as late this year -- but more likely in early '05.

We also expect to have information coming from trials that our partners are conducting.

Lilly plans to report results of Phase III studies of Affinitak in non small cell lung cancer later this year.

Lilly plans to initiate clinical trials on the first drug from our collaboration to enter the clinic, LY-2181308, which is an inhibitor of survivin and a very exciting drug in the treatment of cancer.

OncoGenex Technologies plans to report Phase I/II results of OncoGenex-011, an inhibitor of clusterin in prostate cancer at ASCO.

In this study, they are treating patients and then measuring the ability of the drug to reduce clusterin levels in prostate cancer that's removed surgically.

This again is a difficult tissue for antisense drugs to reach, and will provide the second wave on our dosing stool that will tell us what dose is required again to get activity in difficult-to-reach tissues.

Antisense Therapeutics limited plans to report Phase I results of ATL-1102, an inhibitor of VLA-4, that will be used in multiple sclerosis.

In fact, they will initiate Phase II studies of this drug in patients with multiple sclerosis this year.

So we are optimistic about the all the clinical data we intend to have by the year, but we have a large roster of opportunities for exciting information.

So let me summarize the information that we just presented.

First, ISIS is rich in assets.

Our pipeline is the largest antisense pipeline in the industry.

And we will encounter key milestones with regard to nearly every drug in the pipeline this year.

This is a pipeline that we believe has the potential to bring near- and long-term value to our shareholders, address major markets, and continue the evolution of the technology as a platform that could create a sector of the industry that's very significant.

Our intellectual property position continues to generate revenues, and as we make it available, it increases the use of RNA-based drug discovery technology across the industry and with an eye toward benefiting patients.

And intellectual property utilization is of extraordinary long-term value.

Thirdly, TIGER is a great asset.

And we are making significant progress toward commercial exploitation of this diagnostic opportunity.

So we continue to be very encouraged by all the progress that we are making.

We are optimistic that as we continue our investments that our assets will continue to advance and our shareholders will be rewarded as the programs mature.

We very much appreciate your support.

Of course, we will continue to update you regularly on our progress.

And we would be delighted to answer any questions that you have now.

Tara, if you can set us up for question-and-answer, I would appreciate it.

(OPERATOR INSTRUCTIONS).

Mark Monane, Needham & Company.

A couple questions.

Could you please comment on the progress for enrollment for Alocarforsen in the Crohn's disease product?

I think a lot of people are asking about that Phase III trial.

Mark, we don't comment specifically on enrollment, but I can guarantee you that we will achieve our goal of completing all of the four large trials in time to announce the data in the second half of this year.

That's good enough for me.

That is a good answer.

A question then on -- there are a number of programs going on at ISIS.

If one looks at the pipeline, there is a lot going on for a relatively small company.

How should we think about the company's prioritization of these products and the potential going toward in terms of value for the shareholders?

I am going to answer that question perhaps in too complicated a way, and if I do, Mark, just force me to give you a simpler answer.

We are a complicated company.

We are advancing a broad technology and a broad pipeline.

And this year, we have (multiple speakers) the following major goals.

We want to move Alocarforsen toward commercialization.

We want to complete our major investment in first-generation antisense drugs, and convert the pipeline to second-generation drugs.

We want to with the better performance of the second-generation drugs expand the pipeline into diseases other than cancer and inflammation, specifically metabolic disease and cardiovascular disease.

We want to work with our second-generation drugs in diseases where we can very quickly and very early have definitive information about their potential value.

And again, with diabetes, we will be able to measure glucose, and with our ApoB-100 inhibitor, we will be able to measure cholesterol -- LDLT (ph) and ApoB in blood.

Third, or fourth or fifth or whatever it is, we want to by the end of the year have a clear set of understandings about the doses necessary for second-generation antisense drugs in various tissues -- some hard for these drugs to get to, like sonomium (ph) in prostate, and some easy, like the liver.

That will then inform all of our programs with antisense drugs about what dose we need to use.

And I think that will reduce our Phase IIb and Phase III risk.

Those are the things we want to accomplish with the pipeline.

So Alocarforsen is a significant asset that is close to the market, and investors should I think carefully watch what we are doing there.

We are optimistic that, given the activity that we have seen in Crohn's and the activity we have seen in ulcerative colitis and pouchitis, that there is a real opportunity for positive data and near-term commercial success.

That was very helpful.

Thanks for going over that.

The last question and then I will leave you alone -- could you please -- there have been a lot of advances in antisense technology and in RNA interference by ISIS, as well as other companies.

Can you comment on the landscape right now, and tell us what you think -- highlight some opportunities for ISIS going forward?

I think the progress across the board in antisense is gratifying.

Drugs are working in man and in animals.

They are demonstrating antisense mechanism and adequate performance against the diseases that we're looking at.

And we're making great advances in understanding various mechanisms.

And one of the most important areas of interest is siRNA.

But I would not want to forget the great progress that we are making along with our partner Ercole in learning how to use antisense agents to alter spicing.

Splicing accounts for probably 80 percent of your protein diversity.

And so it will be a tremendously important topic in the coming years.

Now with siRNA -- it is an exciting mechanism that can be exploited using modified single-strand antisense drugs or duplexes that are the traditional siRNA molecules.

The Alnylam relationship provides first, a combination of the two intellectual property estates -- our chemistries, our patents in the mechanism, and the outstanding patent estate that Alnylam has.

And second, it provides what we believe to be the best basic research in the area of siRNA to focus on the double-strand oligos while we can focus on primarily single-strand siRNA molecules.

I think that the mechanism offers great promise.

It expands the opportunities for RNA-based therapeutics, and we are very confident that we picked the outstanding performer in the siRNA space when we picked Alnylam.

Thanks very much for the added information.

Russell Gilbertson, Roth Capital Partners.

A couple of questions -- first question is in regard to your antisense compound that you are in preclinical development for the SOD1 gene in ALS.

I am just curious about the nature of that compound -- if you could give us a little more detail other than just being an antisense compound.

And could you give us a little more detail on your developmental plans, and if you would form a collaboration for this compound?

Yes, it is a second-generation antisense inhibitor that works through RNase H. So in that sense, it's very much like our ApoB-100 inhibitor, or our PDB1V (ph) inhibitor, or our TNF alpha inhibitor.

It binds to a specific site in the target RNA, and causes the target RNA to be destroyed.

It is injected directly through a pump into the central nervous system in these animals.

And it is being developed jointly with the support of the ALS foundation and our collaborators.

And we are just in the process of deciding what the development path will be.

And that will be something that we will describe a little later in the year.

Do anticipate that you would form some collaboration -- possibly extend your agreement with Alnylam on this compound?

I think it's a little early to talk about all that.

But as you know, we typically engage in a wide range of partnerships.

And so this is a disease that is in desperate need of new therapy.

SOD1 is a very exciting target -- not so much because of the mechanism of the enzyme, but for other factors.

And so we are looking for ways to bring benefit to these patients.

And so we will seek all the opportunities that are available.

My second question is in regard to the TIGER biosensor.

How close are you to deployment of the first unit?

And are any of the revenues tied to that deployment, or are they just reimbursed on the basis of the expenses that you incur?

The revenues that we reported -- that is the contracts, are strictly tied to the development -- that is, those revenues related to the deployment are tied to development of the instruments that would be deployed.

They are not related to sales post-deployment.

And we are progressing very nicely right on schedule with deployment.

And that's about as much as I am able to say about that, given the sensitivity of the topic.

Elemer Piros, Rodman & Renshaw.

Can you please hear me?

I can hear you, and so can Lynne and Kristina and Brett (ph).

Thank you.

I'm glad to see that the Eli Lilly relationship has been expanded.

With regard to that, you mentioned third-generation chemistries.

This is new to me.

Could you please elaborate?

Our strategy from inception has been to continue to invest in the technology.

And that includes some additional chemistry and basic mechanisms of action.

And we plan to move from first- to second-generation chemistry when we felt we had a second-generation chemistry that would be sufficient to generate drugs for many years.

But that never changed our commitment to continuing to evolve the chemistry.

We do have -- we have insights that we believe are going to create sort of Generation 2.5, which are better designed second-generation drugs that we think can be significantly more potent and we're making great progress there.

And then long-term -- and this is long-term, multiple years, because we think second-generation drug will be sufficient to generate many, many drugs for many years -- we are working on chemistries that are simpler, that have different entirely different characteristics from traditional oligonucleotides, that may be less costly to manufacture, significantly more potent, and take advantage of chemistries that are radically different from anything that is in the clinic right now.

The expansion the agreement -- does it mean that financial terms that you previously communicated have also expanded?

We are not at liberty to discuss the financial terms.

I'm sorry.

Amgen -- do you expect to share anything from Amgen this year in terms of reaching traditional milestones?

The program is progressing.

We are pleased with the progress.

I think Amgen is.

And so we're on target, Elemer.

That's as much as I can say.

Lynne, if you could please -- the licensing and royalty component of your revenues were $5.3 million for this quarter.

It's a sharp increase.

Could you please highlight what was engaging (ph)?

The primary component of the increase, Elemer, was the $5 million (technical difficulty) upfront licensing fee that we received in the context of our strategic relationship with Alnylam.

Now, Alocarforsen (technical difficulty) appeared to be very comfortable with that.

You could report '04 target (ph) results in the second half of '04.

Would you be able to exclude reporting results in the third quarter of '04 -- i.e., that it's more likely than for the end of the year?

Elemer, our guidance has been second half of the year.

We have a lot of news coming.

One of the most interesting things for me this year is that the drugs that are earlier in the pipeline are of such tremendous importance because of the breadth of diseases -- the importance of the diseases that they are addressing and the clarity of the endpoints.

So we're looking very much forward to being able to talk about results that we hope to have from our ApoB-100 inhibitor, even though these are early results, because they'll be looking at cholesterol and LDL and ApoB-100 -- and also 715, our diabetes drug.

So in addition to Alocarforsen, we just have such an extensive amount of clinical data coming from so many different kinds of trials that managing our way through all that information and managing those trials to completion is challenging, and therefore providing guidance with regard to specific months or quarters is just something we're not going to do.

This is the last question.

What partially caused the death or potential death of Genasense was increased toxicity.

Could you please compare your experience with Alocarforsen and compare it to the toxicity profile that you have seen this last Monday with the doses used in Genasense, and particularly in light of the fact that in the new Phase III Crohn's disease trial, you have to increased dose?

Yes, well, first let's remember that Genasense was a first-generation antisense drug.

By design, they dosed the patients with malignant melanoma at a near-maximal tolerated dose in combination with a highly cytotoxic regimen.

In my view, the committee agreed that Genta had demonstrated that Genasense was active, that it worked as an antisense mechanism, and that in the context of cancer, in a highly monotoxic (ph) regimen, that the safety was adequate.

I don't think -- I certainly don't think that the toxicities were nearly as significant as one would expect from adding a traditional cytotoxic drug.

The side effects that were observed are consistent with first-generation behaviors at higher doses -- that is, reducing in the midst of the cytotoxic regimen increased levels of low platelet count and white (ph) count.

And they were also consistent in that the mechanisms that underlie those are not bone marrow toxicity, but rather local effects, and the quality (ph) are not very significant -- that is, there is not an increase in bleeding, or wasn't an increase in dropout rate because of side effects with some of them.

So I think their experience at that dose in a cancer patient with a very toxic regimen is consistent and adequate for what you would expect in that patient group.

And I think the committee actually felt that as well.

With regard to Alocarforsen, our dose is by design about double what we dosed in the earlier trial.

And of course, significantly lower than a maximal tolerated dose or near-maximal tolerated dose that you would use in a cancer trial.

So we are very confident that both for Crohn's, where the drug is given systemically, and ulcerative colitis, where the drug is given by enema, that we're not experiencing safety issues.

The studies are still blinded, but our drug safety monitoring board assures us that the drug is performing well.

This is the last question, really.

Are you engaged in partnership talks for Alocarforsen at this stage?

Our general plan that we've annunciated is that we would wait to engage in definitive partner discussions until we have the data.

After all, we've paid for the trials, and the value of the drug will inflect when the results of the trial are in.

Dr. Crooke, there are no further questions at this time.

I will now turn the call back to you.

Please continue with your presentation or closing remarks.

If there are no other questions, I want to thank everyone for your interest and continued commitment to what we are trying to accomplish at ISIS.

We look forward to a really important year with regard to the pipeline, the technology, our intellectual property, TIGER -- and obviously, we will be in touch as we achieve each of these key milestones.

Thanks so much.

Ladies and gentlemen, that concludes the conference call for today.

We thank you for your participation, and ask that you please disconnect your line.