Ionis Pharmaceuticals Inc (IONS) 2008 Q1 法說會逐字稿

Good day, everyone.

Welcome to the Isis Pharmaceuticals first quarter financial results conference call.

Today's call is being recorded.

Leading the call today from Isis is Dr.

Stan Crooke, Isis Chairman and CEO.

Please begin.

Thanks, Melissa.

Good morning and thanks everyone for joining us on today's conference call to discuss the financials for our first quarter 2008.

Joining us on today's call are Lynn Parshall, COO and CFO, Jeff Jonas, Executive Vice President, Beth Hougen, Vice President of Finance and Christina Lemonitas, Associate Director of Investor Relations.

Financially and in all other respects, 2007 was a transformational year for Isis, and the momentum that we created in 2007 is continuing as we progress into 2008.

On today's call, Lynn will review for you the financial results and the business strategy that we expect will continue to build our financial strength.

I'll then spend a minute speaking briefly about the progress that we're making with the (inaudible) development plan, progress in the rest of our pipeline, and progress in our Ibis and regular subsidiaries as well as other satellite companies.

Chris, will you now present the forward-looking statement?

Sure.

Thanks, Stan.

Good morning, everybody.

A reminder to everyone that this Webcast includes forward-looking statements regarding Isis pharmaceutical's business, financial position and outlook for Isis as well as its Ibis science subsidiary and its regular joint venture and the therapeutic and commercial potential of the company's technologies and products and development.

Any statement describing Isis's goals, expectations, financial or other projections, intentions or beliefs is a forward-looking statement and should be considered an at risk statement including the statements that are described in Isis's goals or projections.

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

Isis' forward looking statement also involves assumptions that if they never materialize or prove correct could cause results to differ materially from those expressed or implied by such forward-looking statements.

Although Isis' forward-looking statements reflect good-faith judgment of its management, these statements are based only on fact and factors known by Isis.

As a result, you are cautioned not to rely on these forward-looking statements.

These and other risks concerning Isis' programs are described in additional detail in Isis' annual report on form 10-K for the year ending December 31st, 2007, which is on file with the SEC.

Copies of this and other documents are now available from the company.

I'd like to turn the call over to Lynn.

Thanks, Christina.

As usual I'm assuming you've all had an opportunity to read the press release we issued this morning.

So, I will not reiterate what's detailed in there.

However, I do want to spend a little time to highlight what we believe is a quarter of excellent financial performance.

We have a nearly nine-fold increase in revenue from $2.5 million to $21.4 million, with only a $5.4 million increase in expenses when comparing the first quarter of 2008 to the same quarter in 2007.

We have an increase in cash of $146 million all since the end of the year, as we ended the first quarter with nearly $340 million.

And we're on track to meet our guidance for 2008 for proforma NOL of less than $15 million and cash of at least $450 million, which does not include any additional cash from Abbott should it acquire Ibis.

This financial performance is a direct result of Isis's unique business strategy successfully implemented; and of course, underpinning that strategy is Isis technology dominance in RNA Therapeutics and the scientific investments we've made that are now resulting in very attractive drugs.

In 2007, both BMS and J and J's Ortho-McNeil Division completed significant corporate partnerships with us, which set the stage for 2008.

We and BMS just recently announced a development candidate less than a year into the collaboration and excited to add this novel lipid-lowering drug into our pipeline and move it forward toward the clinic with our partner.

Our Ortho-McNeil collaboration is also going extremely well with Phase I clinical trials on the glucagon receptor antagonist drug progressing nicely.

Of course, the key event of this quarter was the completion of our [Mipomerson] auction with a selection of Genzyme as our partner six months earlier than planned.

Stan will discuss Genzyme and Mipomerson in some detail later in the call.

I'll just focus here on the financial contributions of all three of these transactions.

The positive effects of these transactions are readily apparent in this quarter in both our cash and our revenue, as they will be for the rest of the year in going forward.

Of course, we received only the first $150 million from Genzyme and expect to complete that transaction shortly, which should add another $175 million.

Our satellite company strategy is a key aspect of our business strategy.

Two very important transactions have already occurred in 2008.

These are evidence that the value of our strategy that allows us to move novel technologies arising out of Isis innovation forward to create even more value for our shareholders.

In January, we announced a strategic relationship between Abbott and Ibis.

The financial benefits of this are obvious in both the short term as it provides funding for Ibis to move aggressively toward its largest market, Invitro diagnostics, and in the longer term as Isis shareholders will receive a total of 215 to $230 million should Abbott purchase Ibis.

We will continue to participate in Ibis' commercial success even after an Abbott purchase through an earn-out of up to 5% of sales.

Very importantly, our Ibis team is fully engaged with a very experienced Abbott team in mapping out the milestones to be achieved to reach medium and long-term commercial success in diagnostics.

Almost as soon as we could get it up and running, Regulus our microRNA joint venture (inaudible) corporate partnership with GSK..

Regulus, which we formed with our partners at Alnylam, was initially funded with $10 million from Alnylam and incorporates the strong intellectual property position of both companies, a world-class scientific advisory board, and a very strong and growing management team.

It's no surprise that Regulus quickly established itself as a leader in the new and very exciting area of drug discovery.

We now ensure that both Ibis and Regulus are fully funded adding $40 million of cash so far this year, enabling Isis to participate in two very exciting technology areas and benefiting Isis shareholders in a financially attractive way.

Plus each of these joint ventures has obtained a partner that will accrete value to the programs.

In other words, our strategy is successfully at work.

As our satellite companies mature, we continue to see value both in drugs moving forward in the pipeline and of payments associated with this progress.

In addition to Regulus and Ibis, we've seen great progress from our satellite companies, including OncoGenex who recently announced more positive clinical news on OGX011 a drug that we own 30% of.

As a result of ATL's license of our VLA-4 antagonist for multiple sclerosis, to Teva Pharmaceuticals, we will receive one-third of all sub-license fees and milestone payments as Teva moves the drug through development as well as a share of royalties.

We're pleased to have this drug in the hands of a strong multinational company as it enters the next stage of development.

Finally, Altair Therapeutics just recently began dosing patients with our inhaled anti (inaudible) drug to treat asthma.

We not only have an equity stake in Altair, as with the rest of our satellite companies, but will also receive a portion of sub-license revenues and royalties as the drug moves forward.

So in the first few months of the year, we've made significant progress in meeting our 2008 goals.

We're looking forward to more exciting news to come.

We have a large pipeline of drugs in clinical development.

Several of these are in critical clinical trials for which we will report data later this year.

We will also be initiating clinical trials on additional drugs such as our CRP inhibitor.

Our pipeline will continue to grow fueled by our efficient and robust drug discovery platform.

This year we plan to add two to four new drugs to our pipeline and are well along in meeting this goal having added one already.

Our strategy enables us to remain small, with an efficient research organization focused on what we do best: discovering and developing drugs.

Now with our recent partnering successes we have the financial strength to fully implement the strategy.

Indeed, for us, this is only the beginning.

Now I'll turn the call back over to Stan.

Thanks, Lynne I certainly do agree we've completed a series of transactions that truly have transformed our financial outlook.

Of course, Mipomerson remains our most important asset.

We have completed a Phase II program that demonstrates Mipomerson it is a very attractive drug candidate.

Mipomerson is a unique first in class agent that lowers all atherogenic lipids, works in all patient populations studied, works equally well in the presence or absence of other lipid lowering therapies and is unlikely to have drug interactions, muscle, heart or central nervous system side effects.

There is essentially no near-term competition from Mipomerson and our development is focused on bringing Mipomerson to patients with clear unmet medical needs.

I'm pleased to tell you that our Homozygous FH Phase III study is going well, Enrollment is right on track.

Since the FDA provided guidance, we and our friends at Genzyme have made progress in revising the development plan in accordance with that guidance.

We hope to provide more definitive information about our plans after we meet with the FDA.

As you probably know, Genzyme highlighted Mipomerson at their Analyst meeting last week, which is available on the Genzyme Web site, and I commend it to you.

From our perspective, the key take-home messages from the Genzyme presentation are, first, Genzyme, like Isis, is intensely committed to and excited about Mipomerson.

.

Some question whether Genzyme was the best partner for Mipomerson.

I think the progress the two companies have made in the past two weeks, the commitment of Genzyme, and the fact that MIpomerson is clearly in Genzyme's sweet spot attests to the wisdom of our decision.

Second, you are beginning to see progress in our thinking post-the FDA call.

On our call two weeks ago, we presented, of course, the worst-case scenario.

We had just gotten the call from the FDA.

But we told you then that the FDA had asked us to submit a plan, and that we expected to develop a better solution.

We now believe that we can potentially expand the initial indications for Mipomerson to include a range of very high risk patients, including apheresis eligible patients.

Of course, the drug will be priced appropriately for these needy patients.

We believe that a broader registration may be possible much earlier in Europe than in the U.S., and we are actively working toward this.

We're also confident that the out come study that we plan will be of modest size and duration, because we'll be treating patients at very high cardiovascular risk, and therefore, these patients have higher event rates.

Third, Genzyme remains very enthusiastic about the safety profile as well as the efficacy of Mipomerson.

We now know, based on other actions that the FDA has taken, that we are in a new and very conservative regulatory environment.

It is, considering that, remarkable that in this very conservative regulatory environment, that the FDA has given us the option with this totally new class of agents to pursue an early indication without an out come study.

Fourth, we're just beginning to discuss all of the issues with the FDA.

We continue to believe that we can get to a better place than where we are today.

For example, we had asked to be allowed to submit our first MDA for Homozygous FH, a severe ultra orphan indication, with one completed carcinogen study and one in process.

These are routine studies, and our request is absolutely reasonable.

We plan to continue to discuss this with the FDA as we generate more data, because any shift in this position adopted by the FDA could allow us to bring Mipomerson to these patients with this desperate need earlier.

Fifth, Genzyme believes that the overall value of Mipomerson is as great or greater than ever, just as we do.

Finally, we at Genzyme are revising our agreement in line with the changes in the development plan.

The license we have is one of the richest licenses ever for a Phase II product.

The basis for the deal is a 50/50 split of the current and future value of Mipomerson, split between Isis and Genzyme, and the changes in terms will be modest and will reflect the changes in the development plan.

The deal will be fair and attractive to both partners.

You should remember that we have many companies that are intensely interested and remain intensely interested in Mipomerson and Genzyme has already put $150 million into Isis as a first step in our relationship.

We do think we are making excellent progress with Genzyme, and are on schedule, even with the disruption that with the FDA response created, to meet the second quarter timing for completion of the deal.

So we do plan to complete the license of MIpomerson to Genzyme this quarter.

This year, we'll complete a number of analyses and clinical data on Mipomerson that will continue to provide more information on the safety profile of the drug.

Later in the year, we'll present initial data from the imaging study designed to measure the effects of Mipomerson on fat levels in liver.

We also will update our open label extension study results.

The update we just provided continues to support the fact that the longer you dose, the better Mipomerson looks.

That is, with longer-term chronic dosing, Mipomerson continues to be very well tolerated.

Further, we'll be starting numerous other key studies this year, and we'll continue to aggressively move Mipomerson toward the market.

With regard to the rest of our cardiovascular metabolic pipe lines, we expect to have an important year.

We expect our CRP antisense drug to enter clinical trials later in the year.

In the initial trial on normal volunteers we'll evaluate the effects of that drug on CRP levels.

So we'll have an early opportunity to see its pharmacological effects.

We just announced that BMS and we selected a development candidate for PCS 9 another novel lipid lowering target and we're getting IND enabling studies underway now.

In the metabolic pipeline, we're very encouraged by the progress in the key trial with Isis 113715 our PDP 1-B inhibitor in combination with sulfonylurea.

We believe this trial is likely to demonstrate that when added to sulfonylurea in stable diabetics, that Isis 113715 safely reduces glucose, safely reduces hemoglobin A1C and remarkably it also reduces LDL cholesterol.

Thus it would have the exciting profile of being a novel insulin sensitizer that is additive to all type II diabetes drugs, has no drug interactions, does not result in weight gain, metabolic acidosis or nausea and can be administered on a convenient weekly schedule, at the same time as lowering glucose and hemoglobin A1C, it lowers cholesterol for you as well.

We're also pleased with the progress on a glucagon receptor drug licensed (inaudible).

Remember in this Phase I study, we're evaluating the effects of our drug in a glucagon challenge test.

Our hope is that Ortho-McNeil will initiate Phase II trials this year.

Our glucocorticoid program continues to make progress as well, and we're looking forward to beginning clinical trials with our SGLT 2 inhibitor which we identified to develop a candidate late last year.

I know of no company, large or small with as exciting and novel a cardiovascular and metabolic pipeline as we enjoy.

At the ADA in a few weeks, we'll add to the excitement by sharing the progress we're making in obesity and related areas.

In fact, I believe we have nine posters and presentations at the ADA this coming June.

Our cancer and anti-inflammatory pipelines are progressing well also.

OnoGenex continue to report excellent progress with OGXO 11 and OGXO 427.

At ASCO OnoGenex is presenting additional Phase II data on OGXO 11, a clustering drug in patients with prostate cancer, and we believe those data will continue to be very encouraging.

Lily is initiating Phase II trials with our survivin inhibitor.

At ASCO Lily will be reporting data from its extensive Phase I experience in which it evaluated doses as high as a thousand milligrams per week and assessed drug concentrations of the effect of the drug on survivor levels in human tumors.

These results set the stage for Lily to initiate its Phase II trials.

In the anti-inflammatory pipeline, ATL 11 -- ATL will shortly report Phase II data on our BLA 4 drug in patients with MS.

As mentioned, ATL was recently licensed this drug to Teva.

Altair has initiated Phase I studies with our first aerosol drug to treat asthma.

As our first aerosol drug it is, of course, exciting.

But more importantly, we are now expanding opportunities for the technology with another new route of administration.

The rest of the pipeline continues to make great progress, too.

Finally Ibis and Regulus continue to make excellent progress.

Ibis has just completed a nonexclusive distributorship relationship with Abbott, which means that Abbott is now selling the Ibis product line.

This is the next step in our Abbott relationship, and it's an important step that has been accomplished in this quarter.

Ibis and Abbott are making excellent progress on validation and new kits, regulatory plans and improved instrumentation.

We're looking forward to a very productive year out of both Ibis and its collaboration with Abbott.

Like Ibis, Regulus is cooking on all burners, too.

In addition to the important collaboration recently announced with GSK, we're seeing excellent progress in basic reasonable in micronic therapeutics, and advances in the lead programs.

We are very pleased with the quality of the team we put together; and again, I think you'll be hearing lots of news about Ibis, lots of news about Regulus and lots of news from the rest of the pipeline as the rest of the year progresses.

In summary, we are financially strong.

Mipomerson is poised to make excellent progress.

Our pipeline is robust and progressing, our satellite companies are creating value, and we're making all this progress with all these drugs, all these technologies, all these relationships with a projected NOL of less than $15 million this year.

Now with, that now, I'll open it up for questions.

Melissa, if you can set us up for questions

Thank you.

(OPERATOR INSTRUCTIONS) We'll go first to Salveen Kochnover with Jefferies & Company.

Hi.

This is Brent for Salveen I have a couple of questions for you.

First can you talk about your discussions with the FDA, whether you guys have a scheduled meeting around the apheresis eligible indication and the broader high risk population.

What gives you confidence that you guys will have the information needed to close the deal with Genzyme by the second quarter?

And second, when we look at pricing would it be fair to say that the cost of apheresis is an accurate benchmark?

It was a little hard to hear you.

I think I heard all of the questions.

First, with regard to Genzyme, as Genzyme made it clear in their meeting, we're -- we're moving along toward completing the relationship on schedule and in this quarter, and that relationship will be based on the premise of the agreement -- the original premise of the agreement, a 50/50 split, and there will be minor adjustments that will be required as we have changed the development plan and moved the out come study forward.

We think that there -- the guidance that the FDA has given us is really focused on bringing the drug first to patients with very high risk.

Homozygous FH, as we've used that term, has always been a clinical diagnosis, and we've made it clear, I think, for more than two years that Homozygous FH patient population that we were planning to study would be a clinically diagnosed group of patients.

Those are patients at very high risk, patients who are on apheresis or are apheresis eligible, are similarly very high risk.

And so we believe there's a sound basis for moving forward in patients who have an equivalent very high risk for cardiovascular events to that of homozygous FH patients.

And I'm not sure I understand the question about apheresis costs other than to say that patients at very high cardiovascular risk, whether they're homozygous FH, clinically diagnosed or whether they're apheresis-eligible or others, all have very high LDL levels, and all have significant cardiovascular risk, and, therefore, all will be subject to many medical costs that certainly justify a new intervention that can reduce LDL and reduce a number of the clinical events that are both life-threatening and costly.

Do you have a scheduled meeting with the FDA in terms of talking around the apheresis eligible indication or the broader high-risk population?

We're putting our plans together, and we're moving forward with the FDA, and I would prefer to leave it at that level of detail.

Thanks.

We'll go next to Mark Monane with Needham & Company.

Good morning, everybody.

I'm here with my colleague Alan Carr.

We have a few questions for you.

Stan, can you clarify where things stand with the payments from Genzyme?

I understand that there's the $150 million stock purchase that's already happened, but is the up-front fee -- is that a certainty, or is that something that's going to be discussed with Genzyme in formalizing the deal later this quarter?

Yes.

Of course, we have the $150 million; and as I said, the transaction will be fair and attractive, and we believe that the $175 million will be forthcoming.

And I put -- can you say that -- are you saying that that one is likely, or a certainty?

I guess I'm just trying to get some clarification on that.

Lynn, do you want to respond?

We're in the process of, finalizing the details of the development plan and the details of the agreement with Genzyme.

Any dial could be turned, but I agree with Stan.

I think it's unlikely the $175 million will be a dial that will be turned.

Okay.

Okay.

A quick question on Ibis and Abbott You had quite a bit of growth in 2007 in terms of contracts for Ibis.

Do we expect to see more of that this year, or will it be more focused on meeting milestones in your deal with Abbott.

Both.

We are expecting meaningful growth in contract revenue, and we are expecting some of those contracts to move from research contracts to fee for service relationships.

We obviously are heavily focused with Abbott on sales-- commercial sales, and we see good progress there.

And we're also focused on bringing a large number of new kits for the infectious -- in vitro diagnostics business forward.

We're focused on improving the instrumentation as well.

So you should expect progress on all fronts.

Obviously, the next financial event for Ibis is the $20 million additional investment from Abbott which happens in July, if I remember correctly.

Okay.

Thank you.

Stan, may I make one clarification to what you just said?

Sure.

You know, in general, people will remember that our Ibis government contract revenue has been in the sort of 9 to $11 million range, and those government contracts in general, now that they're very application focused are between 18 -- in general, 18 to 24 months, and so Ibis has already made significant progress this year that we've announced, in getting new government contracts; but in general, those are replacing contracts as they end?

So our goal is to continue a steady stream of government contract revenue for Ibis, in the same kinds of levels that we've had going through this year and going from this year to next, and we're right on track to do that.

That's helpful.

On the 715 program, can you comment what kind of drop of hemoglobin A1C might be clinically relevant?

In the first presentation (inaudible) that we saw, it was a relatively well population.

So there's only so much you can go down in terms of hemoglobin A1C.

Can you comment, before we see the data, what would be relevant before bringing it forward to further studies?

Well, I think a relevant additional drop in hemoglobin A1C after 13 weeks in a patient population on sulfonylurea would be a half a percent.

We are certainly hoping for more.

And these patients, in contrast to the initial study, are all well established diabetics and who have been treated with stable sulfonylurea for some time.

So the hemoglobin A1Cs are higher than in the earlier trial, but the most important point is that the placebo effect that you see in diabetic -- in newly diagnosed diabetics, which is really not a placebo affect, but a response to diet and exercise and all of the things that medical care can bring to somebody who typically is overweight and diabetic, in a more stable diabetic population, you expect to see less of a placebo response, and therefore, you're able to discriminate a drug effect with fewer patients.

That was helpful.

And then last question on PCSK9.

As you talk with the FDA on Mipomerson, does it help with framing the development plan for this novel cholesterol agent as well, or is that a separate discussion?

How do you -- do you and Bristol Myers Squibb, are you working on envisioning some new guidance in this new era?

I think the conversation about Mipomerson is certainly relevant, but probably more relevant is all of the actions that the FDA has taken with our drug, other cardiovascular and other metabolic drugs.

I think the lessons being taught are very clear, that new agents are going to require more than surrogate outcomes, and any company that failed to respond to those trends would be making a mistake.

Thanks for the added information, and congratulations on the progress for the team for this quarter.

Thanks, guys.

We'll take our next question from Eric Schmidt with Cowen and Company.

Good morning.

Stan, on this Genzyme collaboration, why would Genzyme be entitled to better terms?

Sounds like you and they both always expected to run this out come study, so I'm trying to figure out kind of what their leverage point is with you, if any.

Well, the most important change is that we're moving the out come study up earlier.

That increases development expenses.

And secondly, there is a delay in the commercialization for polygenics because we had to finish the out come study before we can-- we can seek approval.

So that does change both the cost structure, and the timing of sales and profits, at least for that indication.

The other thing that is changing, obviously, is we had planned for a heterozygous FH filing in the United States.

It seems as though the heterozygous FH filing will certainly be rolled into a sort of general filing rather than polygenics.

And so those are the things we're grappling with as we look at the plan and we look at the cost, and we look at how to apportion the 50/50 split and currently and future value.

Lynne, do you want to add or subtract anything from that?

No.

Okay.

I guess, if I'm reading your comments right, it sounds like you're optimistic, the $175 million up-front payment remains, you're opted mystic the 50/50 structure remains, so --

Yes, I am.

And I am certain that the 50/50 structure will remain.

So can I assume that maybe what might change is your cost -- I guess you capped it at a certain dollar value, the cost was a little less than $100 million dollars?

Is that maybe what potentially might be renegotiated?

I think the thing to focus on is we have one of the richest licenses in the history of the industry for a Phase II drug.

That will continue.

And the basis of the deal will be a 50/50 transaction, and we will not do the deal unless it's fair and attractive to both partners.

Okay.

On 715, I may have missed this, but are the data definitely going to be presented at ADA?

No.

No.

We've always said that the data would be later this year, so the ADA is in June.

So they will not be at ADA?

715 will not be at ADA.

Okay.

Two bookkeeping questions for Lynne.

On Ibis are you going to continue to consolidate the officials there as you have in the past up until, I guess, the Abbott acquisition?

Yeah.

Okay.

Secondly, can you tell us what the final shares outstanding were for the quarter?

Don't know exactly when Genzyme made that purchase?

They made it this quarter.

And I apologize.

I am not at the office with everybody else.

I don't have that number in front of me, but we can have somebody call you back and give it to you.

Thanks so much.

Did it happen in the first quarter or second quarter?

Genzyme equity?

In the first quarter.

Yeah, yeah.

I don't know.

$95 million that says is the outstanding share count.

Does that answer your question?

Next question, please.

We'll go next to Carol Werther with Summer Street Research.

Hi.

Thanks for taking my question.

Stan, can you give us any kind of idea of how large the out come study might have to be?

And if you have to include both -- does it have to be a mortality end point?

Well, obviously, we're in the midst of planning this and negotiating with the FDA, and I think the thing that we and Genzyme would feel comfortable saying is that the mortality study we envision will be a few thousand patients in a few years, not the very large out come studies that have been performed, because we're looking at very high risk patients or at high risk patients.

And we will certainly look at morbidity and mortality, and we will have other -- and we will have multiple opportunities to evaluate the data throughout the trial, and we'll probably in, separate places, be looking at other surrogate or other measures of out come as well.

And I think that's as much detail as we dare go into until we get the actual study negotiated with the FDA.

Jeff, is that fairly on point?

I think that's right.

Almost certainly we'll use other events besides mortality just for that, number one.

And the other point just to make, is that the earlier studies were seeking to validate LDL lowering as an end point, which we don't need to do any longer.

So we don't have the power studies as the other earlier studies were.

So we're confident we can find a high risk population that will allow this to proceed with a modest number of patients over a shorter period of time.

But again, echoing Stan, I think, until the details are finalized and accepted, I think we're probably not going to say more about it.

That's good.

No.

I understand.

The other question I have, the cash guidance that you've given for this year, does that include signing additional partnerships?

No, it does not.

And any clue as to how many you might find this year?

Should we expect the run rate you have been doing in the last 12 months?

Well, we signed Genzyme, Abbott and GSK in the first quarter.

That's a fairly good start, and we have a lot of interest.

So it would not surprise us if we have more partnering news for you as the year progresses.

Okay.

Great.

Thank you.

Uh-huh.

(OPERATOR INSTRUCTIONS) We'll go next to Debjit Chattopadhyay with Boenning & Scattergood.

Good morning.

Thank you for taking my question.

Stan, you guys already have the 100 milligram dose (inaudible) for the 715 if I'm not mistaken.

Yes.

And in the call, you mentioned that, you feel confident that you would see reductions in the A1C levels and glucose levels as well, but do you think the optimism is based on the 100-milligram core data, which the optimal doses --

The optimism is based on everything we know about the drug.

The optimism is based on the other Phase II work that we did, the mechanism and the profile of the drug in animals and everything else that we know in regard to the drug, including its safety.

And the multiple sclerosis drug, which is now with (inaudible) is that a Phase II development we can expect, and is that a second or third quarter event?

Yes.

It's a Phase II program.

It's a program in which patients who had remitting relapsing multiple sclerosis were treated with the VLA 4 drug for, I think, three months, and then evaluated post that treatment.

So it's a Phase II program, and it's due in the second quarter.

Obviously, we're not in control of that.

ATL and Teva are in control of that.

But the study is being completed, being analyzed now.

And the 715 data that's most likely a third quarter event?

It's later this year.

I think thats the -- we've said later this year, and I think that's about as precise as we want to be.

It's a lift difficult to know when the data will be analyzed and more difficult to know whether -- how we'll manage it with regard to trying to present it at a scientific meeting.

I think you just have to hang on, and we'll give you more guidance as the year progresses.

And as far as the registration for Mipomerson in Europe, I mean, there seems to be an optimism that you can get away with a (inaudible) lowering end point.

Both you and Genzyme have basically mentioned the same thing.

Is there a basis for that?

Why would European regulators in a (inaudible) lower the (inaudible) end point as opposed to a hard end point?

There is a basis for the optimism.

It is based on interaction with regulatory agencies in Europe on an ongoing basis, and I think I'd leave it there.

Thank you very much, and good luck with your interactions with the FDA.

Thank you.

One other point that I wanted to make with regard to Carol's question.

Of course, our cash position in BERN do not include additional investments from Abbott for Ibis, and we're very optimistic that transaction will complete, and that's another $200 million plus.

We're certainly optimistic will take place.

And it appears we have no further questions at this time.

I'd like to turn the call back to our speakers for any addition that will or closing remarks.

If there are no other questions, Lynne, anything that you want to add?

No.

Thanks, Stan.

Jeff?

If not, then thank you very much for your attention.

We'll look forward to another exciting quarter coming up.

Thanks.

.

And once again, that does conclude today's call.

We appreciate your participation.

You may disconnect at this time.