Ionis Pharmaceuticals Inc (IONS) 2009 Q3 法說會逐字稿

Good day, ladies and gentlemen.

Welcome to the Isis Pharmaceuticals 2009 third quarter financial results conference call.

Leading this call today from Isis is Doctor Stan Crooke, Isis Chairman and CEO.

Doctor Crooke, please begin.

Good morning and thanks everyone joining us on today's conference call to discuss our third quarter financial results.

Joining me on the call today are Lynne Parshall, our COO and CFO, and Beth Hougen, Vice President of Finance.

Also Kristina Lemondtis, Director of Corporate Communications.

The purposes of the call today are to report our financial performance for the third quarter of 2009 and to give you just a very very brief update on what is going on in the business.

As usual, Lynne will go over the financial results and then I will give you an update of the successes we've had this quarter in our business.

I will end the call with a brief recap of our recently announced phase 2 data from our novel insulin sensitizer and a very brief preview of what to look forward to for the rest of the year and into early next year.

But first, Kristina, will you read the forward-looking statements?

Sure, thank you.

Good morning, everyone.

A reminder to everyone this Webcast includes forward-looking statements regarding Isis's business, the financial outlook for Isis as well as Regulus, a majority-owned subsidiary and the therapeutic and commercial potential of Isis technology and products in development.

Any statements describing Isis's goals, expectations, financials or other projections, intentions or beliefs is a forward-looking statement and should be considered an at-risk statement.

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

Isis's forward-looking statements also involve assumptions that if never materialized or prove correct could cause results to differ materially from those expressed or implied by such forward-looking statements.

Although Isis's forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently 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's annual report on Form 10K for the year ended December 31, 2008 and its quarterly report on Form 10-Q for the most recent quarter, which are on file with the SEC.

Copies of these and other documents are available from the Company.

And now I'd like to turn the call over to Lynne.

Good morning, everyone, and thank you for joining us today.

I would like to briefly review the financial highlights of the quarter.

I am assuming you have all read our release, so I will not go through all the details but I would be happy to take questions at the end of today's call.

As we approach the end of the year, we are in excellent financial position -- the strongest in our history.

We have a very healthy balance sheet as demonstrated by our third quarter cash balance of more than $600 million and we are on track to meet our year-end cash guidance of more than $550 million.

2009 will be our fourth year in a row in which we have increased our cash balance.

And as we have said before, we have enough cash to fund our activities for the foreseeable future.

This is quite an accomplishment particularly with today's economy.

In addition, this will be our second year in a row of profitability with pro forma net income of more than $140 million.

Also consistent with our guidance, we are on track to report a 2009 pro forma net operating loss in the low to mid $20 million range.

Our financial success is predicated on both our unique business model and our productive and efficient direct discovery technology.

Since our inception, we have created and validated antisense technology and used it to generate an ever-expanding pipeline of new drugs.

The value of our technology is best exemplified by mipomersen, our most advanced drug in development.

Earlier this year we reported positive phase 3 data on Mipomersen in patients with homozygous FH.

Mipomersen, however, is only one of the 19 drugs in our pipeline.

And we have seen positive data on many of these drugs this year, including encouraging phase 2 data from treatment with our novel PTP-1B insulin sensitizer in patients with type 2 diabetes.

We look forward to reporting the full study at a medical meeting next year.

In addition, we have advanced a number of new and exciting antisense drugs into clinical trials including our SGLT2 and CRP inhibitors, two new drugs that we will report data on next year.

It has always been our business strategy to encourage innovation and support the advancement of the drugs in our pipeline.

We especially value the dedication, therapeutic expertise and the innovative spirit of our satellite company partners that are developing several of the drugs in our pipeline; and now we are in the financial position to make strategic investments in some of our satellite companies which ensures that our partners have the resources to advance existing antisense drugs and add new antisense drugs into development.

Already this year we have invested in Regulus Therapeutics, the company that we own jointly with Alnylam, to ensure that it has the capital to continue to advance the therapeutic opportunities targeting micro-RNAs.

Additionally we invested in iCo Therapeutics to support the clinical development of iCo-007, an antisense drug currently in phase 1 studies for the treatment of ocular disease.

In fact, iCo reported the treatments with iCo-007 appear to be well-tolerated and demonstrates the potential signs of activity in patients with diffuse diabetic macular edema.

Most recently we participated in Altair Therapeutics financing.

This second round financing led by high-quality venture capital investors will fund Altair's phase 2 development of AIR645, an antisense drug we discovered and licensed to Altair.

As well as move additional antisense asthma drugs towards development.

Like iCo, Altair recently reported encouraging phase 1 data in patients with asthma who were administered AIR645, an antisense drug that inhibits the inflammatory processes of both interleukin 4 and 13.

AIR645 is our first inhaled antisense drug to enter development.

And it is our first antisense drug in development to treat asthma.

We will continue to support the progress of our satellite companies are making as each company advances antisense drugs for a variety of diseases.

With that, I will now turn the call over to Stan who will discuss recent events and upcoming activities in greater detail.

Thanks, Lynne.

As you can see, 2009 is turning out to be another stellar year for Isis.

We are financially strong with the capital to fund all of the development activities we foresee in the future and as Lynne mentioned, we recently reported positive data on two of our most advanced drugs in development -- phase 2 data for ISIS 113715 and phase 3 data for Mipomersen.

Mipomersen remains the key driver for Isis in the near future.

With our first and riskiest phase 3 trial finished we look forward to sharing the data from the rest of the phase 3 trials in the coming months.

We have two podium presentations on November 17 at the American Heart Association.

One meeting will report the full data set for the homozygous FH trial with Mipomersen.

The second presentation will focus on the effect of Mipomersen observed in this trial on LPa -- another independent cardiovascular risk factor.

As you know, we are looking forward to this and we are very pleased with the performance of this drug in this very sick, hard-to-treat patient population.

Of course, the story doesn't end there.

Mipomersen will remain in the spotlight for the foreseeable future as we complete and report the initial clinical studies on Mipomersen to prepare the NDA filing.

The next study that we expect to report will be the phase 3 trial evaluating Mipomersen in the heterozygous FH population.

We are also excited about our novel insulin sensitizer, ISIS 113715.

It is an antisense drug that inhibits PTP-1b.

715 just completed a 13-week phase 2 study in combination with sulfonylureas in patients with type 2 diabetes who could not be controlled with maximum doses of sulfonylureas.

We only reported the topline data as we think the study will warrant a presentation at a scientific meeting and we certainly want to preserve the full data for that forum.

What we can say is that the profile of the drug is very promising.

We saw efficacy in both the 100 and 200 mg groups.

We reported positive [effects] of ISIS 113715 on multiple measures of glucose control on lipids, on adiponectin and encouraging observations with regard to weight.

We observed a significant reduction in glucose and improved glucose control.

We monitored several independent measurements of glucose control.

These included fasting, blood sugar, self-monitored blood glucose, fructosamine, and glycated [albumin].

The first is testing blood sugar, a spot check of glucose in blood.

Self-monitored blood glucose is a series of daily measurements, averaged to give glucose measure over a week.

Fructosamine measures average glucose over two to four weeks.

And glycated albumin measures average glucose over four weeks or so.

Despite being only a 13-week study, we think we have clear evidence that 715 significantly reduced short and intermediate measures of glucose control and these correlated with each other extremely well.

We saw a significant reduction in self-monitored blood glucose of about 25 mg per deciliter.

Fructosamine was also statistically significantly reduced by about 25 micromoles per liter.

Glycated albumin was also statistically significantly reduced and similar results were observed for testing blood glucose.

We also saw a statistically significant reduction in LDL cholesterol.

A large portion of patients with type 2 diabetes also have high cholesterol even on lipid-lowering therapies.

Furthermore, other insulin sensitizers such as some ppar gamma agonists actually increase LDL-C.

So an insulin sensitizer that lowers LDL would be very welcome and should contribute to cardiovascular health in this patient population.

Finally, we observed substantial and statistically significant increase in adiponectin which proceeded a trend toward weight loss.

This is another exciting component of a profile of the drug.

Many therapies of type 2I diabetes including sulfonylureas in insulin caused weight gain.

So a drug that is weight neutral or promotes weight loss could add substantial therapeutic benefits beyond glucose control.

We couple these reductions in cardiovascular risk factors with the glucose control and you can see that we have a very exciting and promising program.

Remember that in animals we've demonstrated that this drug is additive to all of the other drugs used to treat diabetes and, of course, being an antisense drug it has no drug/drug interactions to be concerned about.

We think that it is a very promising program and it is a real set of accomplishments to have been able to observe this in just a 13-week trial.

So lots of progress this year at Isis, but the year is not over yet.

Our mission is to create an ever-expanding pipeline of new drugs to treat disease.

So by the end of the year we will add at least two new drugs into development, enabling us to end the year with 21 drugs in our pipeline.

The power of the technology is that we will maintain and increase this rate of productivity with the size group that we have today.

Our business model enables us to focus on efforts on discovering new drugs, developing them through the phase 2 proof of concepts, and continuing to advance the antisense platform so that we may constantly better drugs.

In short, we have had another great year.

We expect to continue our success into 2010.

And with that I would like to open up the call for questions.

Eric, if you could set us up for questions I would appreciate it.

(Operator Instructions).

Salveen Kochnover with Collins Stewart.

Thanks for taking my questions.

Stan, apart from Mipomersen and homozygous FH, could you just give us some color on how the rest of the phase 3 trials are progressing in terms of enrollment, safety and dropout rates?

I can give you some information.

We expect all of the trials that are necessary -- the key trials for the NDA -- to complete enrollment in November.

And so that is great news.

There was a bit of a delay in recruitment in the [severe] trial, but that is now nearly finished enrolling.

So we are on track with all of the clinical trials.

The next trial to unblind is homozygous FH and the -- I mean sorry heterozygous FH.

And that trial, almost all of the patients are nearly finished dosing.

And there we have really a very attractive performance of the drug with the dropout rate being low and the performance in the trial looks very, very good.

I haven't looked in the last few weeks at the dropout rates and the other trials, so I will leave my comments at the heterozygous trial.

I will leave it where it is.

So overall, we feel very good about the program.

We, as you know, plan an investor meeting on November 17 at the AHA after the two podium presentations and, there, the investigators -- as well as John Butler from Genzyme -- will give you a much more fulsome picture of where Mipomersen stands and what the near future looks like for Mipomersen.

But we continue to be very, very excited about the productivity of the collaboration.

Just a follow-up on 715.

When will you determine in your go-forward strategy with that product?

We're working on it now.

I think we have a reasonably clear sense of what we want to do although it will take shape in a little more detail in the coming months.

I think what we want to do is move to 26-week studies and add it to quite a number of agents including insulin and metformin and perhaps byetta and other things.

So what we like is 26-week studies with several additional agents for type 2 diabetes and the rate limiting step there is just a complete longer-term toxicology.

All right.

Thank you.

Ted Tenthoff with Piper Jaffray.

Sir, your line is open.

You may be on mute.

The question was withdrawn.

Eric Schmidt with Cowen and Company.

Good morning.

Stan, do you have any better sense of timing for the next Mipomersen pivotal study, the HCFH?

Would that be late this year or early next?

It won't be this year.

And we will give you, but you can do the math if we finish dosing shortly.

You can see that it would be the next study that we will unblind.

And my guess is that we would follow the same process that we followed with homozygous, that is topline data when we have the data and then submit for a medical meeting.

And I was also intrigued by your comments that you made regarding homozygous FH being the riskiest of the pivotal trials.

Is there a reason behind that?

I'm just trying to understand your rationale.

Oh, absolutely.

First in the homozygous FH patient population, we had very little experience with 200 mg dose.

It's just because we had such few -- there are so few homozygous FH patients.

If you go back and look at our phase 2 experience, I think we only had one or two evaluable patients at 200 mg in the homozygous FH trial.

But all of our experiences were in patients who are either heterozygous or routine high cholesterol.

One of the debates that we had was whether we would use 200 mg in the homozygous FH patients, since it is obvious that over time they would probably get doses tailored to each patient rather than just 200 mg.

We decided to use 200 mg in the homozygous so that the NDA would be very simple.

All patients treated in the phase 3 program would be treated with the same dose, the same regiment, for the same length of time.

200 mg a week for 26 weeks was an evaluation, a primary evaluation at week 28.

So as we looked at it, we thought the risk of the 200 mg in the homozygous FH was meaningful.

The second factor of course is homozygous FH patients are by far the sickest group and they are the most drug-resistant and they are on the most other medications.

Most of the people who were in this trial, many of the people who were in this trial had had previous cardiovascular events.

They were also of course younger.

So you have a very drug-resistant patient population.

You have a very sick patient population.

You have a patient population that's clustered in a few areas around the world, which meant that many of them have to travel long distances to get to the trial center.

All of that meant that we could have significantly worse event, adverse events and it meant that we might expect more dropouts just because of the intrusive protocol.

All of those things from my perspective made this -- that particular trial a riskier trial than, say, the heterozygous trial where we had lots of experience.

We had 200 mg where we know that the patients are accessible and we know that they are not quite as sick as the homozygous FH patients and more drug responsive.

And then lastly, is there an update on the rat toxicology study?

Continues to look great.

As I mentioned the mouse is done and clean, and the rat continues to look the same.

It's nearly -- I can't remember exactly when it will finish precisely.

But as you know in these trials, we have to first have a valid trial.

That is you have to have enough survival and yet you have to have enough toxicities to satisfy everybody.

And that's in.

And as you know as animals die they typically will die in the high-dose group first, although that's not always the case.

So you get a chance to see what the high dose does as you move along.

So we are feeling extremely optimistic about that trial.

Great.

Thanks a lot.

Mark Monane with Needham.

Good morning and thank you for that comprehensive review.

A couple of concrete questions on [Mipo] -- and then the big picture question.

Previously, Stan, we had heard that all of the trials will have data in time for filing our submission for an NDA in the second half of '10 for Mipomersen for its first indication.

Is that timeline still intact?

Can you say that today?

All the trials will be done in time for getting our in -- our registration for both the US and Europe ready in 2010.

And we will provide -- as right now, we are in the process with Genzyme of planning the precise timing of the NDA and we will be giving you more clarity about that over the coming months.

That's okay, we'll look forward to that.

And then in regard to --.

I think the important thing part is that all of the trials will finish enrollment here this month.

And you know that the trials that are finished enrollment they are 26 weeks in dosing.

You can do the math for when the last trial will be available to be incorporated into registrational filing.

And similar to Eric's question, will the toxicology studies also be available in time?

Oh sure.

Mouses -- the mouse [cart] study is done and being written and the rat cart study is finishing and looks fabulous.

Now we saw some news from another company, at the Zetia Pfizer and Schering or Merck tried to put together a combination drug Zetia Lipitor -- a refusal to file based on manufacturing stability.

Can you update us on any manufacturing or stability challenges that you had or do you feel that the CMC portion is progressing as well as the clinical portion?

We think it is in great shape.

Isis will manufacture, the facility's been remodeled and is making antisense drugs now, including Mipomersen.

We have basically taught the world how to manufacture and analyze these drugs including the FDA.

So we don't foresee any difficulties.

We expect -- we certainly hope for three-year dating on the (inaudible) powder and 18 month on the solution.

So we are very confident that it is in great shape.

That's helpful.

And then the last question is, we've seen some nice progress in the pipeline in terms of metabolic diseases, in particular cardiovascular diseases.

What do you think the utility of antisense is in cancer and what are the ideas for Isis Pharmaceuticals moving forward and thinking about this as a therapeutic area?

I think the utility of antisense in cancer should be very high.

Most of the targets in cancer are classically undruggable.

We know that both in animals and now in multiple studies in man that antisense drugs get to cancerous tissues because the blood vessels are leaky.

And you get a lot of drug in cancer.

I think we've seen very encouraging data with the clustering drug of our partner, OncoGenex.

We have also seen quite encouraging data with survivin at Lilly.

And we are encouraged by what Lilly is seeing with the IF-4.

So we have three examples in the clinic of excellent tolerability, target engagement and therapeutic benefit that is encouraging.

I think that is great news.

So last year, we reinvigorated our own internal anticancer program.

We expect to be adding one or two new drugs to our cancer pipeline of our own.

And we are certainly looking at opportunities to move some of our partnered anticancer drugs along more rapidly than they are.

And I'll leave it at that.

And then -- I'm sorry, I thought of an additional question for Lynne.

How many people at the Isis Pharmaceuticals now and as you are developing these programs and companies that are joint ventures, any plans for incorporating them in the future or spinning them off later?

And how would that might affect headcount?

So Mark in the core of Isis you know R&D, G&A, we have about 250 people and you know our goal is to keep that number down significantly and we are able to do that because of the efficiency of the technology.

So our goal is not to be more than ever 325, 350.

We don't include in that, for example, Regulus which is set up as a separate company with a separate management team.

They benefit significantly by really being able to focus their resources on building a scientific core.

So right now, as you know, they are living in our building.

They are using our G&A infrastructure so they don't need a lot of finance and human resources and IT and all of those sorts of things.

They can stay very, very focused on moving science forward; and as a result they can be very efficient scientifically as well as financially.

So it's a structure that works really well for us.

Obviously over time, as Regulus grows up and continues to make scientific successes, you know, continues to add new partners and grows, the idea would be that they would become more and more independent and they would fill in with some of those things.

But again we wouldn't consider the Regulus headcount to be part of Isis although we do consider obviously the functions that we are lending them to be part of us.

And this is a strategy that works well for us.

So we don't think it's only going to be Regulus.

Our satellite company's strategy is very important to us and I would expect we'd do more similar things if they make sense as we go forward.

Thanks for the added information.

See you in Orlando.

Just a little addition, Mark.

We do constantly look at whether we want to create a new satellite company or, also, whether we want to reacquire a satellite company.

By and large, we are very comfortable right now with where we are on satellite companies.

We don't see us reacquiring any of the satellite companies in the very near future.

And I would not be surprised if we formed one or probably one or two new satellite companies next year, but those will be driven by opportunity and need.

Thank you.

If there are no more questions -- is there another question?

Yes.

Aaron Reames with Wells Fargo Securities.

I just wanted to follow up on the timing of some of the pipeline programs and particularly in the cardiovascular and metabolic arena.

So I didn't know if you could provide us an update on when we might expect data from the CRP compound as well as the SGLT-2 compound?

With CRP, the important data are phase 2 and we are just finishing the phase 1 program now.

So I had rather wait until we have had an opportunity to get the phase 2 effort underway before I give you specific data on that.

SGLT2 is finishing phase 1, and with other SGLT2 inhibitors it has been possible to see glucose reduction -- reductions in phase 1 and glucose in urine in phase 1.

So we are hopeful we will see glucose affects in phase 1.

So I would expect SGLT2 data a bit sooner, probably some time in the first half of 2010, but again that's a guess.

And it's just going to depend on how fast that phase 1 effort enrolls.

So basically you're not see -- what you're seeing now isn't unexpected for either program so both will be moving into phase 2?

Yes.

To clarify CRP.

At one point we had hoped in the phase 1 study to be able to recruit folks, normal people, who had elevated CRP levels.

Say 3 or 4.

That turned out to be much more difficult than we had expected.

We did not find a lot of folks, despite what the literature, says who were available for clinical trials with elevated CRPs.

And so we are just finishing the phase 1 effort the standard way and moving toward a phase 2 to evaluate CRP levels.

SGLT2, we still believe that we ought to be able to show in phase 1 work that we can cause glucose to be spilled in urine.

And then just kind of a general question.

In your last two years you have been cash flow positive.

You know, a lot of the Isis-owned compounds are fully owned compounds or maturing, but they are in more of a nascent stage.

And so I was wondering when we think about 2010 in our models, I'm not looking for guidance, but in general, what should we be mindful of in terms of thinking about cash flow generation?

Are there desires or activities underway that may lead to additional deals?

Or is that something that is going to be (technical difficulties) for a while?

No, we are constantly in conversation about deals.

There is a lot of interest.

We are just a lot more fastidious about the transactions that we're willing to do.

We are much less interested in early-stage research deals than we were in the past.

By and large, we want to adhere to the strategy of developing our own drugs through phase 2 and licensing them.

It's like anything else when you -- it's like when you need money nobody wants to loan it to you.

We don't need any deals and so we've got lots of deal opportunities.

So I continue to think that there will be proposals made to us that we find strategically and tactically attractive.

And I would expect additional deals.

Great.

Thanks for taking my questions.

The deals won't look like they have in the past because we simply are not interested in encumbering our research and early development activities with a large pharmaceutical company partner.

And we are not interested in putting our drugs in the hands of large companies that could delay their early development.

We had rather do that ourselves.

Okay.

Thank you.

I mean we had rather developed them rapidly ourselves rather I didn't mean to delay them ourselves.

Shiv Kapoor.

Morgan Joseph.

Stan, did you mention that there was a slight delay in enrolling patients for the heterozygous trial?

Could you explain the reason --

No, no, no, no.

The heterozygous trial is enrolled phenomenally well.

It is almost finished dosing.

No, the heterozygous trial enrolled probably -- it was probably the most rapidly enrolled trial we had.

Okay so I misheard.

Yes.

Sorry.

There was a slight delay in the severe trial, but that now has caught up and we will finish this month.

What was the reason for that delay?

It was mostly just getting the right centers opened and this is a trial in in-patients, what we used to call (inaudible) patients.

And it was a patient population that was a little more specific and we were looking for specific kinds of patients.

And so it took us a little while to get the exactly right centers opened and once the centers, the right centers were opened we got enrollment moving along nicely.

Fair enough.

Thanks.

Jim Birchenough with Barclays Capital.

A few follow-up questions.

Just wondered if there is any update on discussions with the FDA in terms of what defines a high risk group where you can use LDL as a surrogate?

Does the severe group qualify?

Does the heterozygous FH qualify for that definition for purposes of using LDL reduction as a surrogate?

We continue to believe that in the US severe qualifies and LDL will be an appropriate surrogate endpoint.

And in Europe, we believe that both -- that LDL will be an acceptable endpoint for homozygous, for severe, for heterozygous, and in fact, we think it is going to be a satisfactory endpoint when we have sufficient safety database even for routine high cholesterol at very high risk.

And then, Stan, you said you would be in a position -- you would be prepared to file with FDA for Mipomersen in the second half of 2010.

Is there any reason that you would be prepared, but not file in the second half of 2010?

I don't mean to parse your words, but I want to make sure that there will be a filing in the second half of 2010.

Yes.

When we are ready we will certainly file.

Remember that Genzyme is responsible for the filing.

And so I don't want to get out in front of Genzyme and we are in the midst right now of the precise planning for registration of filing.

And you know that when you lay out your plans to begin with, you put a time on your NDA and then as you get your phase 3 trials done and you get everything ready, you can do the detailed [gant] charts and that is going on right this second.

So I don't want to get ahead of that process and give you a precise date for the NDA filing, but certainly we are on track with the NDA filing that we projected.

And then just a final question for Lynne.

When -- the revenues that you will generate this year what percent would you say are recurring that we should consider coming back in, in 2010?

About 70% of the revenues that will generate this year are revenues from the same sources as we will expect revenue from next year.

(multiple speakers).

We did have the real bonus of selling --

Yes but that wasn't upselling our Ibis division which we will not have again next year.

But that is not an operating revenue line item.

And you know what is recurring is [great] deals and milestones and so on for us.

We in 2010 we won't have commercial revenues, so all of our recurring revenues are sort of a lumpy, sort of hard to predict exactly where those revenues will come from.

But it is pretty easy to predict that in aggregate, we will have plenty of revenue.

Great.

Thanks for taking the questions.

Carol Werther with Summer Street Research.

I was wondering if you could give us an update on the open label extension rollover in the pivotal trials on how many patients you might have on drug and out for how long?

The open label extension trials continue to progress nicely.

Our rollover rate into those trials continues to be very good.

I don't want to give you an exact number because that number changes every day, but if you were to think well over 60% you would probably be in the range.

Our longest treated patient is longer than two years.

And we are accumulating quite a number of folks who were treated up to a year and longer.

Then I just wondered you are still expecting to put three new drugs in development in the next two months.

Can you tell us what therapeutic areas they might be?

You know, what I had rather do is tell you what they are.

We are about to approve them.

We will be telling you all about these compounds in just a little bit.

Rather than give you a general answer, I am going to give you very specific information on them and I think lots of exciting data.

Okay.

Thank you.

I mean, these are not abstract predictions at this stage.

We know what these compounds are going to be.

Okay.

Great.

We're just waiting for the final tox and so on, so that we can -- for the final pre-tox and all the information necessary to be sure that we picked the right molecule.

We know the targets.

We know the diseases and we have multiple antisense drugs from which we are selecting the compounds that we are going to put into the clinic.

Just give us a few weeks.

You'll get to see it all.

Thanks.

Joseph Schwartz with Leerink Swann.

Thanks for taking my question.

I was wondering if you could give us a sense of what things you have been able to do to mitigate the dropout rate and the other studies beyond HOFH from [epulmirson]?

We haven't engaged in any specific efforts to mitigate dropout rate.

I think the dropout rates -- the dropout rate in the heterozygous FH will turn out to be lower, principally because of social reasons.

Difficulty in getting to the trial center and stuff like that.

Longer term, we are working to improve long-term use of the drug principally for commercial purposes and a lot of that is just educating physicians and patients who have never taken, never used a subcu drug and never taken a subcu drug, as to what to expect.

What to worry about, what not to worry about and stuff like that.

And there, I don't think we did a particularly good job in the early going in the phase 3 work.

And we're doing a better job of providing good information to physicians, to nurses, to study coordinators.

And over time we are going to hone that activity and do a better job of that and probably look at other dose schedules and other things so that we can provide as much flexibility to patients as possible.

But those are activities looking toward the commercial use of the drug, not so much in the registration.

And how much did the 18% dropouts contribute to the 22% difference in the two treatment arms that we saw in the HOFH trial earlier?

How much higher would be --?

We're not going to answer that question.

We are going to show the data at the AHA.

But it was an intent to treat analysis.

And it was 100 -- better than 100 mg per deciliter reduction in LDL and that is a great result.

All right.

Thank you very much.

Ladies and gentlemen, this concludes our Q&A session.

Now I'd like to turn the call over to Doctor Crooke for closing remarks.

Thanks, everyone, for the questions.

In summary, we are in excellent financial shape.

We will meet our financial guidance for the year and end the year with more than $550 million in cash.

I think the other key message that we hope we made is that drugs in our pipeline are performing well, both in early and late stage clinical trials.

I think this is great news for continued development of the drugs and the technology.

And as I said, we do expect to add new drugs to the pipeline to the next month or so and next year we certainly expect (technical difficulty) pipeline.

And finally in the coming year, we expect to continue to advance technology and to use the efficiency of the technology to advance the pipeline and yet stay small and maintain our strong financial growth.

Eric, thank you.

Thank you for your participation in today's conference, everyone.

This concludes our presentation.

You may now disconnect.

Have a good day.