Ionis Pharmaceuticals Inc (IONS) 2012 Q1 法說會逐字稿

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

Leading the call today from Isis is Stanley Crooke, Isis' Chairman and CEO.

Dr. Crooke, please proceed.

Thank you.

Good afternoon and thanks to everyone for joining us on today's call to discuss our first-quarter financial results.

Lynne will walk you through our financials goals for the first quarter of this year and then spend time highlighting the KYNAMRO growth opportunities and the potential value drivers for Isis beyond what KYNAMRO.

After that I'll give you a brief update on what we have already accomplished this year.

Joining me on today's call are Lynne Parshall, COO and CFO; Beth Halprin, Vice President of finance Richard Geary, Senior Vice President of Development, and Kristina Lemonidis, director of corporation communications.

Kris, will you read our forward-looking language statement, please?

I sure will.

Thanks, Stan.

Good afternoon, everyone.

A reminder to everyone, that this webcast includes forward-looking statements regarding Isis' business, the financial outlook for Isis and the therapeutic and commercial potential of Isis's technology and product and development.

Any statements describing Isis goals, expectations, financial or other projections, intentions or belief, including the planned commercialization of KYNAMRO in the forward-looking statements should be considered an at risk statement.

The 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 use of human therapies and in the endeavor of building a business around such drugs.

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

Although Isis forward-looking statements reflect a good base judgment of its management, these statements are based only on facts and factors currently known by Isis, and as a result you are cautioned not to rely on these forward-statements.

These and other risks concerning Isis programs are described in addition detail in Isis' annual report of Form 10-K for the year ending December 31, 2011, which is on file at the SEC.

A copy of these and other documents are available from the Company.

And with that I'll turn the call over to Lynne.

Thanks, Kris.

Good afternoon, everyone, and thank you for joining us.

As usual I'm assuming you've read the details of our quarterly financial results in our press release, so I plan to just cover the highlights.

We ended the first quarter with nearly $334 million in cash, and a per forma NOL of $16.2 million, which reflects an expected increase in revenues and expenses.

As you've heard me mention before, our revenue consists of several different components, including amortization of up-front fees we receive from our partners; R&D revenue we earn from our collaborations; milestone payments; and the sale of drugs to our partners.

As such, the timing of these payments can vary from quarter to quarter.

For example, our revenue in the first quarter of 2012 was higher than the first quarter of 2011, due primarily to the amortization of the $29 million up-front fee from our new relationship with Biogen IDEC, which began in January this year.

We have numerous opportunities to earn milestone payments for many of the drugs in our pipeline this year.

The most significant milestone payment we expect to earn is the $25 million milestone payment upon FDA acceptance of the KYNAMRO NDA.

Genzyme submitted the NDA in March and we expect to earn this payment this quarter.

We had hoped to earn the second $25 million milestone payment associated with FDA approval of KYNAMRO this year, and included this milestone payment in our 2012 guidance; however, with the January 2013 PDUFA date we now expect to earn this milestone payment next year.

As you recall, our guidance is based on a conservative projection of our financial results, which does not include any significant new transactions.

As such, it's still early the year to predict how this shift of this approval milestone will affect our guidance.

As expected, our expenses for the first quarter of 2012 were higher than our expenses in the first quarter of 2011.

In our year-end call in February, we projected that we would have a nominal increase of about 10% in our operating expenses this year.

This increase is due to the maturation of the drugs in our pipeline, as we begin later-stage clinical studies designed to support either rapid roots to the market or robust Phase II data packages.

Our increase in development spending is offset, in part, by a decrease in KYNAMRO-related expenses.

In 2011 we met our $125 million funding obligation, which means we now share KYNAMRO development expenses 50/50 with Genzyme until KYNAMRO is profitable.

These development expenses are related to the FOCUS HF study, which is well under way.

Genzyme is paying all of the marketing and selling expenses until KYNAMRO is profitable.

We have made potential value drivers for Isis and I'd like to review only of these that we believe will come on line within the next five years.

With the broad pipeline of drugs in development we have many opportunities for both short and long-term revenue growth.

Of course, our first commercial opportunity is KYNAMRO, which we expect Genzyme to launch this year.

We believe that the first syndication for KYNAMRO represents a significant commercial opportunity.

Our initial, and initially largest syndication in Europe should include both homozygous FH and severe heterozygous FH patients, and in the United States our initial indication will be in homozygous FH.

Genocide has a global marketing and selling plan intended to ensure that they fully penetrate these markets.

In addition, we and Genzyme are investing to expand beyond these initial patient populations.

The ongoing FOCUS FH study is designed to support the addition of severe heterozygous FH to the label for KYNAMRO and to provide an alternative doze regimen for those patients who prefer to take KYNAMRO three time as week.

A successful FOCUS FH study should allow us to expand the US market and offer patients an alternative dozing regimen both in the 2015, 2016 timeframe.

Following the US and European approval Genzyme plans to launch KYNAMRO in other markets across the world for patients with severe heterozygous FH.

So while we're looking forward to launching this drug in our initial markets, we believe our strategy to insure long-term growth opportunities for KYNAMRO is attainable and progressing well.

KYNAMRO, however, is just the start of what we believe could be a steady stream of revenue growth for Isis.

First, there are a number of products in our pipeline that we believe represent potential product launches over the next five years.

These drugs have the potential to be commercialized as early as 2016, so these drugs could enter the market and generate revenue.

At the same time, the KYNAMRO patient population should also be expanding and generating revenue growth.

We consider our APOCIII, TTR and SMN drugs as our next significant near-term commercial opportunities that we are developing.

For these drugs that initially target patient with rare and severe diseases, we've designed development paths intended to rapidly reach the market.

I hope that you were able to join us last week on the call in which we outlined the development path and potential value inflection points for our APOCIII drug.

We plan to bring this important drug quickly into registration studies next year to support a regulatory filing for a small, very sick patient population.

These are patients with severely-elevated triglycerides greater than a 1,000-milligrams per deciliter who are at significant risk to develop pancreatitis, a serious medical emergency that can result in prolonged hospital stays and even death.

We estimate that there are more than 200,000 patients in the United States and Europe with triglycerides over 1,000-milligrams per decileter despite currently available therapies.

As we did, with KYNAMRO, we plan to pursue a staged developments path for APOCIIIRx in which we focus first on the highest unmet medical need.

We initiated the Phase II development program for this drug in patients with triglycerides with greater than 500-milligrams per decileter.

We expect to complete this study and rapidly move to a Phase III study that will evaluate the effects of APOCIIIRx in patients with triglycerides greater that 1,000-milligrams per decileter.

We plan to start this study in 2013 and will provide more information on our Phase III program as we discuss the details with regulatory authorities later this year.

We believe that the desperate need for these patients to reduce their triglycerides because of their extremely high risk of pancratitis and the relatively small size of the population provide us with a rapid development path to reach these patients.

Our drug to treat TTR amyloidosis is another drug that we believe represents a near-term product opportunity.

Isis TTRRx will be the first drug in our GSK line to move into a Phase III clinical study.

This drug is designed to treat a fatal and rare genetic disease, TTR amyloidosis, which affects about 50,000 patients worldwide.

TTR amyloidosis is characterized by the slow degeneration of peripheral nerves in patients with FAP, or cardiac tissue with patients with FAC.

Both of these forms of TTR amyloidosis are progressive, fatal diseases.

Currently liver transplant, which would cost more than $500,000 and will only slow progression of FAP, is the most common approach to treat patient with TTR amyloidosis.

Our Phase I data bolstered our confidence in our TTR drug.

In this study, after just four weeks of dosing, we saw reductions of TTR levels greater than 80%, with three subjects reaching undetectable levels.

We plan to initiate a Phase III clinical study this year in patients with FAP.

The study is designed to achieve an efficient route to registration of patients with FAP and if successful, we believe that this important new drug could be available in 2016.

We believe that our drug to treat SMA also represents a significant near-term commercial opportunity for us.

SMA is a severe and fatal disease that is the leading genetic cause of infant mortality.

Infants with the most severe form of SMA will begin displaying muscle atrophy and lack of motor function in the first six months of life.

There are about 30,000 to 35,000 patients with SMA in the United States, Europe and Japan.

The only treatments available for these SMA patients are techniques in exercise that support the respiratory system.

While these measures can prolong life in some cases, disease progression continues.

We've received orphan drug designation in both the United States and Europe for this drug and have fast track status in the United States.

Currently we're conducting a Phase I study in children with SMA that we expect to finish this year.

Once that study is complete, we plan to begin a Phase II multi-dose study next year and to begin phase -- two Phase III studies late next year, or early 2014, that will evaluate the effects of Isis SMNRx in infants with -- and children with SMA.

We believe that these study could support an accelerated path to the market in the 2015, 2016 timeframe.

Our partners are also making significant progress in making drug to the market.

Recently Pfizer acquired Excaliard Pharmaceuticals and obtained the rights to EXC001, a drug for the local treatment of scarring associated with surgery.

The EXC001 is a drug we discovered and licensed to Excaliard.

We believe that Pfizer's development and commercialization muscle will provide additional support to quickly move this drug to the market.

Our partners at OncoGenex and Teva are continuing to enroll patients on a Phase III study for OGX-011 in prostate cancer and plan to report data from this study next year.

So we believe that both of these partner drugs could reach the market in the 2015-to-2017 timeframe.

Our economic interest in both drugs insures that we'll benefit financially from milestone payments and royalties of sale on these drugs.

In addition to the multiple near-term commercial opportunities the number of drugs in our pipeline could represent very valuable licensing opportunities.

We plan on having robust Phase II data packages to support licensing opportunities for at least five of our programs in the next two years.

These are drugs that could represent blockbuster commercial opportunities.

Among these near-term licensing opportunities is our Factor XI anticoagulant drug.

The anticoagulation market is estimated to be over $10 billion for a Warfarin replacement.

Blood clot formations are a leading cause of morbidity and mortality associated with a number of diseases, including an acute coronary artery disease and atrial fibrillation.

Current anticoagulants, including the widely over-used Warfarin and Heparin, pose significant bleeding risk.

Because of this risk, patients on Heparin or Warfarin require close monitoring while on these medications.

New entrants to the market, the Factor 10A inhibitors, also pose significant bleeding risks.

As such, there's a significant demand for an effective and safer anticoagulant.

We believe that the unique mechanism of action for our Factor XI drug could offer an effective anticoagulant with a superior safety profile compared to existing anticoagulation therapies.

In our Phase I study we observed robust dose-dependent reduction of Factor XI activity without causing bleeding.

This year we expect to initiate a Phase II study to evaluate the effect of our drug in patients who are undergoing total knee replacement.

We expect this to be a short study enrolling 400 patients designed to evaluate the efficacy and safety of Isis Factor XIRx against Onoxaparin, a commonly prescribed anticoagulant.

Our clinical and preclinical experience with the drug gives us confidence that our drug has the potential to be effective in reducing the incidents of clotting with a superior safety profile.

We expect to complete this study next year and assuming the study is successful, we will have a robust demonstration of efficacy with reduced potential for bleeding.

We believe these data could support very attractive licensing terms.

Our CRP drug is another drug that could provide us with a significant licensing opportunity.

Although CRP is elevated in many inflammatory diseases and elevated levels of CRP are associated with worse outcomes in many diseases, there are no selected CRP-lowering drugs.

We believe that a selective, effective and safe CRP lowering drug could be used on a host of different diseases.

We've already demonstrated in Phase I studies that we can collectively lower CRP in healthy volunteers and are currently evaluating Isis CRPRx in a Phase II study in patients with rheumatoid arthritis.

We're also evaluating Isis CRPRx in a clinical study that mimics severe inflammation, comparable to what patient's have when they undergo endotoxic shock.

This study is under way and should finish this year.

We plan to expand our Phase III -- sorry.

We plan to expand our Phase II program this year and evaluate the effects of reducing CRP in patients with atrial fibrillation.

We hope that by lowering CRP in these patients we will reduce the frequency and duration of the occurrence of atrial fibrillation.

As with our Factor XI drug, we expect to complete the Phase II studies next year, and if successful we'll have a robust data package that we believe could command significant licensing terms.

So while KYNAMRO will be our foundation, our broadened, deep pipeline should provide us with many opportunities to continue revenue growth in the future.

And with that I'd like to turn the call back over to Stan to wrap up with the accomplishments we've already achieved this year.

Thanks, Lynne.

2012 has been already a productive year.

We've had quite a number of important accomplishments that are -- we can take some pleasure at.

Of course, the most significant accomplishments was the NDA submission for KYNAMRO.

The European review is progressing as scheduled and we look forward to KYNAMRO being approved for its first indication in Europe this year.

Remember, because our initial indications in Europe will likely be broader than the United States, Europe should be our largest initial market.

In that context, I'm very, very pleased to tell you that we recently hosted inspectors who performed a preapproval inspection for Europe of our KYNAMRO drug manufacturing facility and the expension -- and the inspection went very, very well.

We believe that KYNAMRO is a great drug that has been comprehensively studied and bring real benefit to desperately needy patient, so we're confident that the initial indications will make KYNAMRO a commercial success and we think there's a great opportunity for significant long-term commercial growth, as well.

Our FOCUS FH study, which is designed to support this long-term growth, is enrolling on schedule, and is also designed to support an alternative dosing regimen.

We believe that providing patients an alternative dosing option could further enhance the long-term success of KYNAMRO.

We now have data on patients who have been treated with KYNAMRO for more than three years.

In these patients KYNAMRO continue to demonstrate consistent reductions at all [efrogenic] levels.

These data were presented in March by Dr. Will Santos at the International Symposium on Atherosclerosis.

A consistent safety profile with continued dosing and the unique lipid-lowering profile of KYNAMRO make this drug a potential game changer for patients with FH.

Stay tuned, as we have many KYNAMRO events to look forward to this year.

Moving beyond KYNAMRO, as Lynne said, we have many key events to look forward to over the next five years/ With significant commercial opportunities and Phase II proof-of-value studies that should support substantial licensing opportunities, we certainly are looking forward to a successful future.

With a large and maturing pipeline, of course we expect to have exciting news to report pretty much every quarter.

On the business front this quarter, we established a new strategic alliance with Biogen IDEC to develop and commercial our SMA drug.

This alliance is structured similarly to our DSK alliance.

Remember that in this alliance structure we give our partner an option to license the drug when we have proof of value and then they license that on late-stage licensing terms.

We receive an option fee and we control development through Phase III while receiving the milestone payments from our partner.

We initiated a Phase II study in our APOCIII in patients with very high triglycerides.

I hope you were able to join us on our May 4th call to discuss this program.

If not, there is a replay on our website.

We initiated a Phase I study on our STAT3 drug.

This is our first-generation [confi] drug and this drug could be applicable to many different types of tumors.

We reported positive Phase 1 data on our TTR drug and we plan to move this drug, as Lynne said, into a Phase III study this year.

At the recent annual meeting of the American Academy of Neurology, we reported that our SOD-1 drug was well tolerated in a Phase I study in patients with no safety issues.

These results blazed the trail for all the drugs that we plan to administer (inaudible) to treat neurodegenerative diseases.

The SOD-1 drug that we studied was designed to treat a very small fraction of ALS patients with a particular genetic mutation.

With the positive safety data, we now plan to develop a similar drug that has activity for a broader population of ALS patients.

Our partner, OncoGenex, reported positive Phase I and Phase II data on OGX-427 in patients with prostate and bladder cancers.

Finally, our partner, Eli Lilly, has decided not to continue the development of [Serivan], the anti-cancer drug that we licensed to them a number of years ago.

Given the exciting opportunities in which we can invest, we've also decided not to invest further in this regard.

So we think we're off to a fine start in 2012.

We're building upon a successful 2011 in which a number of drugs in our pipeline completed critically-important clinical studies and demonstrated promising activity with safety profiles that support continuing development.

Finally, I'm excited to share news with you about the newest addition to our pipeline, Xenon701, which is designed to treat anemia of inflammation.

Anemia is a condition in which the body has a lower-than-normal number of red blood cells.

Anemia of inflammation is type of inflammation that commonly occurs with chronic or long-term illnesses, including cancer and inflammatory disorders.

Patients with anemia of inflammation typically have normal stores of iron, but can't use the iron that they have properly.

This then results in reduction of red blood cell production.

Xenon701 targets a hormone that inhibits intestinal iron uptake and it also inhibits release of iron from storage sites.

The hormone is made in and secreted by the liver in response to inflammatory mediators, and since inhibition of this target should increase the availability of iron for use in red blood cell production, thereby decreasing the anemia in these very sick patients.

We also think this drug could be useful in cancer patients who are taking -- are weak.

Xenon701 was selected as a development candidate by our newest satellite company partner, Xenon.

Xenon has invested heavily in validating promising targets to treat anemia of inflammation and in 2010 approaches to explore [anasis] technology as means to inhibit the production of a number of these targets that might bring benefit to anemia patients.

This collaboration is a great example of our satellite company strategy.

Xenon approached us with a solid patent position and significant expertise in the area of anemia of inflammation, which is clearly outside our area or focus.

The collaboration allows us to expand the applicability of our anasis technology.

While we discover drugs and provide technological expertise to Xenon they do all the heavy lifting in the programs.

We benefit financially from an up-front payment, milestone payments and licensing fees from Xenon as we advance these drugs in development.

All of these are upsides for us, as this is a drug we would not have had either the expertise or intellectual property to pursue on our own.

We expect to receive $2 million from this collaboration this year as the drug enters preclinical studies.

We're also making progress in the program to identify a development candidate for a second partner under the collaboration with Xenon.

So as you can see, we've had a busy first quarter.

We have quite a number of accomplishments in many different areas of our pipeline and we look forward to the continue maturation of these drugs.

While KYNAMRO continues to dominate our communications, we have a number of pipeline advances to look forward to this year.

And with that I want to thank all of you for joining us today and we'll open the quest -- the call for questions.

Deanna, can you set us up for questions, please.

(Operator Instructions) The first question comes from the line of Ed Tenthoff, Piper Jaffray.

Thank you for the update and all recent communications recently around the pipeline.

One quick question around the KYNAMRO filings in Europe and US.

I appreciate your update on the manufacturing site.

What else has to be done in Europe and where are we in that European May review process?

Ted, the European process is proceeding a pace.

There are a variety of questions, answers, more questions, more answers that you go through in Europe and that process is going just the way you would expect just in the timeframe that you would expect.

Okay.

So should we be expecting approval in the back half of this year?

Genzyme has not given an approval date, but what they have said is that they're planning on launching in Europe this year.

Okay, perfect.

Excellent, that's very helpful.

Your next question comes from the line of Salveen Richter, Canaccord.

Thank you for taking my questions.

Just in terms of KYNAMRO, I know your CHMP recommendation could come shortly.

Is there any way to get a sense as you go through your discussions with this regulatory division in the EU whether they're looking at homozygous FH differently from how they're looking at severe heterozygous FH?

Salveen, all we can do is just reiterate what we've been saying for some time.

The guidance that we received indicated that they would consider KYNAMRO in this filing for homozygous FH and severe and nothing has happened that would cause us to question what they told us in those guidance meetings.

Great.

And then just given that you guys got standard review, did you get any clarification from the FDA as to why it's a standard review and not priority review?

We -- the FDA didn't tell us, we didn't ask, but we're actually really looking forward at this point to approval and launch and we're really thrilled with all of the activities going on at Genzyme and Sanofi to put this drug on the market promptly following approval.

Great, and then just one last question, Lynne, if I can.

I think in the beginning of the year you'd guided to pro forma net loss in the low $40 million range, is that still on track given the delay in US revenue?

So, given that delay, Salveen, what, I said a little earlier is that it's a little too early in the year to say.

We based our guidance -- we did include both milestones in this year's guidance, but we also give very conservative guidance and we also don't put any new transactions into our guidance calculations.

So I think it's a little too early in the year for us to comment on that.

Okay, thank you.

The next question comes from the line of Chad Messer, Needham & Co.

Yes, thanks for taking my question.

Mine's actual on the spinal muscular atrophy program.

I know you said you've got an ongoing Phase I trial, It's like a dose escalation trial, I believe, in children and that data would be coming next year, but I was wondering if you can give us a little bit more information on what that dose escalation trial looks like and whether or not there'd be any chance to get, given it is a Phase 1 update, particularly on safety ahead of when final data is, just because I do believe you're using a direct injection into the cerebral spinal fluid for that one?

Yes, that's right.

And just to give you a little more color, this is almost identical to the interest -- the intracerebral -- sorry, the intracecal injections that were given for SOD1, which we just reported out our dose escalation study there.

The study itself is a single-dose administration in children between the ages of two and 14, and these are children who have SMA, and it is a type 2 disease, so they have lack of function due to their SMA.

They receive one dose, they're then followed for a period of time.

A dose escalation then occurs on schedule with the oversight of a data safety management board.

That dose escalation has gone just as we had scheduled it and we're well into that study.

There have been no safety issues to date.

And, in fact, as the study progresses patients will be allowed to redose and the lower dose will be allowed to enroll into our Phase II program.

That is our plan, because these are very sick children.

And remember that the clearance of the drug from the central nervous system is very slow, so we don't yet know how frequently one would have to dose with these things.

One of the things that we'll be trying to learn over the next couple of years is, are we going to dose every six months, or three months, or nine months, or one year.

We just don't know yet, but so far things are going really, really well.

Okay, great.

Thanks for that update.

(Operator Instructions) The next question comes from the line of with Nicholas Bishop, Cowen and Company.

Hi, good evening.

I have a question on -- a couple of questions on a few different things.

The first's just on the current filing status of KYNAMRO with the FDA.

So, clearly if you're not getting a priority review, but it wasn't clear to me yet if the FDA has officially accepted the application yet?

Just wanted to clear that up.

We haven't gotten the 60-day point yet, Nick, so we haven't gotten that letter yet.

Okay.

Then I wondered about the SOD1 program in ALS.

Actually I haven't seen the data from ANN, but were there any efficacy measure that you were attempting to gather in that Phase 1 trial, and is there a plan to continue developing this particular candidate for that small fraction of the ALS market?

And I wonder if you can at all on your strategy for addressing the broader ALS market?

The short answer to the first question is, there were no efficacy measures in that trial.

We did try to measure SOD1 levels and CSF but they're very low.

The strategy -- to just put a little more flesh to it -- was that for our first drug that we took intracecally we wanted to be sure that we had a drug that was focused on patients who had a really severe illness, because we wanted to be sure that we build a strong relationship with the neuro division of the FDA and also the similar people in Europe.

So we deliberately selected, as you know, an anasis drug targeted to a very rate mutation that's associated with very severe -- even more severe than normal -- ALS in a very few patients.

And the main purpose for that was to build our relationships with the regulatory agencies and develop a safety experience with intracecal administration, so that worked wonderfully.

And I think the evidence that it worked well is the response that we're getting from regulatory agency in the US and Europe with regard to our SMA drug.

Having shown that we can do this safely now we are now working -- we will now develop a different SOD drug, one that targets normal, as well as mutant SOD1, and that, of course, gives us a much larger patient population to work with and that's been our strategy and I think that's -- and I think it's worked really well.

Okay, that's great, and then just one last one, if I could, on the CRP program.

I remember you were previously talking about addressing multiple myeloma, I'm wondering if you could elaborate on what happened to that plan?

And just more generally, what kind of profile would you like to be able to present to potential licensers next year for CRP?

Yes.

Multiple myeloma we still plan to look at it, but what has happened is that we've been able to get the atrial fibrillation study moved forward.

In our original planning we weren't confident that we could get an atrial fibrillation study done, and as we got more experience and talked to more investigators we realized that we could get an atrial fibrillation study under way now.

And so we pushed that forward because that's a much more important opportunity and a much more logical opportunity than was multiple myeloma and much easier for us to evaluate.

And so we've been balancing which opportunities to push and which opportunities to wait until we had additional data.

We did begin looking at multiple myeloma and we will probably go back and look at multiple myeloma but when we have more data and when we can look at it in multi sites rather than a single site.

What's exciting to us about CRP right now is that the rheumatoid arthritis study is going well, we're enrolling patients with very high CRP levels and so we will have data from that.

The endotoxin study is under way and we will have data from that.

And the atrial fibrillation study is about to get under way, and so we will have data from all those studies.

What we believe -- what we're very confident we'll show is that we can reduce high levels of CRP effectively.

This drug has already demonstrated that and we expect to reproduce that.

The profile that we think will get people excited is, if we show a reduction in signs and symptoms of rheumatoid arthritis and/or we show a reduction in the incidents and severity of atrial fibrillation, and we think we have a very solid opportunity in both those trials to do exactly that.

I don't think anyone doubts that CRP has the potential to be an enormous product opportunity.

The question is, are you going be able to provide encouraging data that suggests that lowering CRP can improve disease behavior and do you have a development path that could get the drug to the market in a reasonable timeframe.

With both rheumatoid arthritis and atrial fibrillation we'll have both those things, we hope.

Certainly the development path for both is relatively straightforward and not nearly as challenging as something like acute coronary syndrome or post myocardial infarction or those sorts of things.

Okay, great.

Thanks very much.

The next question comes from the line of Stephen Willey, Stifel Nicolaus.

Yes, thanks for taking my question.

Just a quick question on the TTR program with GSK.

With respect to maybe some of the secondary efficacy endpoints you may or may not be looking at with respect to trying to see if there's any kind of disease-modifying effect?

And I guess kind of secondarily to that, if you believe a knock down of a TTR expression will indeed have some kind of disease-modifying effect at the plaque level?

We hope so.

We think there's good reason to believe that it should because of we'll reduce both normal and mutant TTR and we've shown already that we can reduce TTR to undetectable levels.

So our hope and the data that we have to support this is, that by reducing both mutant and normal we will reduce the potential for additional plaque formation and maybe we'll cause some plaque dissolution, and so we'll certainly be looking for that.

I don't think we have to see that to get the drug approved, but we're hopeful.

Richard, do you want to add or subtract anything to that?

No.

Just to say that a lot of the secondary measures are under discussion and we're in development of that protocol, so I think it would be premature to be very specific on that, but certainly looking at measures that are consistent with the progression of this disease, this peripheral neuropathy that is developed by this disease.

And then can you just remind us what the schedule dosing duration or treatment period is going to be for the Phase II?

So it's a once a week dosing, similar to KYNAMRO, and the duration of dosing is up to 18 months, but one year -- with a one year.

But I should hedge all that in that what we will do once we have finalized the protocol, because we're talking about a Phase II, III program, is that we'll give you more detail about the protocol once it's finalized.

I just -- we're in the midst of all of that now.

We've had very positive interactions with regulators, we've gotten strong support for the drug.

Just give out little more time and we'll be able to share all that with you.

Understood.

Thanks for the color.

You bet.

If there are no more questions then -- were there more questions, Deanna?

There are no with more questions.

I'd like to turn the call back to Dr. Stanley Crooke, Chairman and CEO, for closing remarks.

Well, again, thank you very much.

I think in summery KYNAMRO continues to progress.

We're looking forward to approval of KYNAMRO this year in Europe and we have a pipeline that we think is very exciting, with five drugs that could reach the market while KYNAMRO's still growing and lots of opportunities in our cardiovascular, metabolic, cancer and other pipelines for very significant licensing transactions over the timeframe, as well.

Thank you very much.

Ladies and gentlemen, this concludes today's conference.

Thank you for your participation.

You may now disconnect and have a great day.