IVERIC bio Inc (ISEE) 2016 Q1 法說會逐字稿

Good day and welcome to the Ophthotech Corporation first quarter 2016 earnings results conference call. Today's conference is being recorded. At this time, it is my pleasure to turn the conference over to Kathy Galante. Please go ahead.

Good morning and welcome to our first quarter 2016 earnings call. Joining me today I have Dr. David Guyer, Chief Executive Officer and Chairman of Ophthotech; Dr. Samir Patel, President and Vice Chairman; and Mr. Glenn Sblendorio, Executive Vice President, Chief Operating Officer, and Chief Financial Officer.

Before we begin, I would like to remind you that today we will be making forward-looking statements relating to Ophthotech's future expectations regarding its financial results, potential receipt of milestone payments, clinical and regulatory developments, and commercialization plans. These statements constitute forward-looking statements for purpose of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

These statements cover many events and matters that are subject to various risks that could cause actual results to differ materially from those expressed in any forward-looking statements. I refer you to our SEC filings, and in particular to the risk factors section in our annual report on Form 10-K filed on February 26, 2016, for a detailed description of the risk factors affecting our business.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we disclaim any obligation to do so, even if our views do change.

I would now like to turn the call over to David.

Thanks, Kathy and thank you to everyone for joining us on the call this morning. The first quarter was a productive quarter for Ophthotech. We advanced our Zimura program and dosed the first patient in a Phase II-III clinical trial in Zimura in patients with geographic atrophy, an advanced form of dry AMD. Our Phase II trial to evaluate the potential role of Zimura when administered in combination with anti-VEGF drugs for the treatment of wet AMD is ongoing.

We look forward to reporting initial top line data from both of the pivotal Phase III trials of Fovista in combination with Lucentis in wet age related macular degeneration in the fourth quarter of this year. Our key objective and plan is to make Fovista commercially available to physicians for their patients with wet AMD as quickly as possible, assuming a positive data outcome from the Phase III program and regulatory approval.

As you will recall, the FDA granted fast track status for Fovista for the treatment of wet AMD in September 2013. We believe Fovista is the most advanced anti-VEGF agent in development for the treatment of wet AMD, and if approved is expected to be first to market in this class of novel therapies for wet AMD. If granted priority review by the FDA, Fovista could be launched in the US as early as fourth quarter 2017.

As we remain anti-VEGF agnostic, let us turn to our third Phase III trial, which is investigating Fovista in combination with either Eylea or Avastin. This trial continues to enroll patients and remains on track to complete recruitment this year. As you may recall, a final payment of $30 million of the $130 million enrollment based milestone payments under the ex-US licensing and commercialization agreement with Novartis will be earned when the final Fovista Phase III study complete enrollment. Our collaboration with Novartis, our ex-US partner for Fovista, continues to go well.

Last week, we had the privilege of announcing that Dr. Carmen Puliafito, Former Dean of the Keck School of Medicine of the University of Southern California joined Ophthotech as Chief of Strategic Developments. As a globally recognized innovator and distinguished scholar in the diagnosis and treatment of retinal disorders, we are delighted to have Carmen join our Company during this exciting period for Ophthotech.

Samir and I have had a close professional relationship with Carmen that began at our days at Harvard Medical School over 25 years ago. We're extremely pleased to work with Carmen again. I will now turn the call over to Samir.

Thank you, David and thank you everyone for joining us this morning. The 2016 Association for Research in Vision and Ophthalmology Annual Meeting is still in progress and the Company has had one oral and two poster presentations. The presentations were part of our retrospective analysis of our large sample size Phase II-B studies investigating Fovista 1.5 milligram in combination with anti-VEGF versus anti-VEGF monotherapy.

As you may recall, there have been multiple reports based on mass retrospective studies suggesting that monotherapy anti-VEGF use may result in retinal atrophy over the longer term. Our presentation showed no evidence of increased RPE atrophy associated with the addition of Fovista to the anti-VEG regimen at the 24-week time point in the completed Phase II-B study.

Another retrospective analysis of our Phase II-B data was based on the suggestion that in the CAP trial, early visual loss in patients receiving monotherapy anti-VEGF on average results in lack of long-term visual improvement or benefit when evaluated as mean changing overall visual acuity.

Conversely, in light monotherapy anti-VEGF treated patients, the Fovista 1.5 milligram combination therapy treated patients in our Phase II-B study exhibited the potential for visual improvement despite the early visual loss in the Phase II study. We look forward to the confirmatory Phase III trials to further confirm and characterize the potential of Fovista in addressing the significant unmet need in wet AMD. Complete abstracts are available on our website. Please reference our press release that we shared this morning for details for locating the abstracts.

As David had mentioned, we are excited about the appointment of Dr. Carmen Puliafito. Many of you already know Carmen and his multiple accomplishments and contributions to the diagnosis and treatment of retinal diseases. Dr. Puliafito's highly distinguished career includes his remarkable accomplishments as the Dean of the Keck School of Medicine. Under his leadership, the School of Medicine became one of the nation's preeminent research intensive medical schools. Prior to that, Dr. Puliafito served as the Chair and Professor of the Department of Ophthalmology at the Bascom Palmer Eye Institute at the University of Miami Miller School of Medicine, a leading eye center in the world.

Prior to his leadership at Bascom Palmer, he served as founding director of the New England Eye Center, and Chair and Professor of the Department of Ophthalmology at Tufts University. Dr. Puliafito is recognized worldwide for his innovative advances such as the co-invention of optical coherence tomography, or OCT, a revolutionary technology for the management of macular diseases. He also pioneered basic science research in excimer laser ablation and optical breakdown in photo-disruption. Dr. Puliafito has been at the forefront of clinical innovation, including being part of the introduction of Avastin for the treatment of retinal disorders. Dr. Puliafito is on leave from his position as Professor of Ophthalmology and Health Management at the USC Roski Eye Institute. We are delighted to have his leadership, clinical and business acumen during this most exciting time for Ophthotech.

With the addition of Carmen, we continue to bolster our leadership team, which now includes five board certified retina specialists with synergistic skills and domain expertise. Turning to our Fovista expansion studies, these studies are designed to further evaluate the potential of Fovista in addressing a variety of unmet needs in wet AMD, including investigating the potential of Fovista in combination with multiple anti-VEGF agents to reduce sub-retinal fibrosis and investigating the potential role of Fovista combination therapy to reduce the treatment burden for wet AMD patients. Recruitment has been completed in these studies. Further, two additional Fovista expansion studies, which initiated at the end of 2015, one, a pilot study to investigate the role of multi-modal imaging and the other to study and investigate the potential role of Fovista in combination with Avastin with a discontinuous regimen during the maintenance phase continues to recruit patients.

I will now turn the call over to Glenn.

Thank you, Samir and good morning everyone. This morning, I'd like to present (technical difficulty) collaboration revenue for the quarter ended March 31, 2016, which we recognized under the Novartis agreement was $15.7 million, a decrease of $26 million versus the same period in 2015. The decrease in the quarter related to a decrease of $38.1 million license fee revenue, which related to the enrollment phase milestones we earned in the first quarter of 2015. The decrease was offset by an increase of $14.4 million in revenue we recognized from shipments of Fovista API to Novartis.

As we look forward into 2016, we expect to earn our final clinical milestone of $30 million under the Novartis agreement related to the enrollment of the Fovista Phase III Eylea Avastin trial and recognize revenue from additional shipments of Fovista API to Novartis.

Research and development expenses were $37.8 million for the quarter ended March 31. This was compared to $24.6 million for the same period in 2015. The increase in research and development expenses in the quarter ended March 31, 2016 relates primarily to the advancement of the Fovista Phase III clinical program and the Fovista expansion studies, including higher clinical trial expense due to a larger number of patients enrolled in the studies as well as the initiation of new clinical trials and associated costs related to the manufacturing of Fovista.

Also, compensation expense associated with additional research and development staffing increased. Going forward, we anticipate R&D expenses to increase as we reach full enrollment in our Fovista Phase III trials, continued enrollment in the Fovista expansion studies, ongoing enrollment in the two Zimura studies, and ongoing manufacturing spend including validation. As we mentioned in previous calls, our R&D expense may fluctuate from quarter-to-quarter based on the above activities.

Turning to general and administrative expenses, they were $14.7 million for the quarter ended March 31, 2016 compared to $9.6 million for the same period in 2015. The increase in G&A expense in the current year relates primarily to increases in cost to support the expansion of the Company's operations, including the Company's public company infrastructure and the hiring of additional management and corporate staffing, professional services, consulting fees, and increased share based compensation.

We expect to see additional increases in G&A costs in 2016 due to the expansion of our commercial organization in operations. The Company reported a net loss for the quarter of March 31, 2016 of $36.3 million or $1.03 per diluted share compared to net income of $6.6 million or $0.19 per diluted share for the same period 2015. Fully diluted weighted average common shares outstanding for the quarter March 31, 2016 were $35.3 million.

Turning to the balance sheet, cash, cash equivalents, and available for sale securities totaled $356.1 million at the end of the quarter. I'd now like to turn the call back over to David.

Thank you, Glenn and thank you everyone for your time this morning and for your continued support. I will now turn the call back over to the operator so we can open up the lines for any questions.

(Operator Instructions) And our first question comes from Carter Gould of Barclays.

Good morning, guys. Thanks for taking our questions. First, wanted to get your take on the five-year CAT data that was published earlier this week. I know in the past you've spoken at length about the Rosen and visual acuity gains after sort of the first one to two years with anti-VEGF monotherapy. And I guess beyond sort of the headline changes that were reported, were there any other data that were particularly illuminating or changed your view on how the unmet need is setting up in the marketplace? And I have a follow-up.

Hi, Carter. It's Samir. Thank you for your question. I literally have spent very little time there so I haven't really digested all their data so I can't really comment on it. But I think I'll just state that the real world data we have (inaudible) ourselves at [ARVO] and it embraces the real world data not only in ex-US, which has been published, but I believe it's the first time that we have shown the real world data in the United States and the outcome is significantly lower in terms of the visual benefit to patients than what you'd see in randomized trials.

Now, this could be any combination of under-treatment or characteristics of patients present at baseline. So remember the CAT initially had patients that were not -- though they were broader in terms of entry criteria compared to other studies, but nowhere near the real world criteria, which is where our focus is.

Great, and then just second question is, against that backdrop and the impotence of longer term data, in your conversations with the other stakeholders beyond sort of regulators, how critical will the two year data sets be relative to sort of the initial 12 month data?

Well, the two year data, Carter, if you're referring to our pivotal studies --

Correct, yes.

-- won't be as important as the primary data analysis. And the reason for that is simply that the power and the valuation of statistical significance is based on the regimen and time point at 12 months. The second year's main role is to look at further exposure and safety associated with it, not really as much emphasis on efficacy. And also, the regimen is markedly different so it would be fairly inappropriate to make a true comparison.

Great. Thank you.

Next, we have Joseph Schwartz with Leerink Partners.

Great, thanks very much. I was wondering if you've been talking to payers yet about what they view as the right level of reimbursement for a second injection in wet AMD patients and what are they most focused on, and how are you setting up to provide them with what they need to give you the price that you hope for?

So we have not yet publicly talked about reimbursement. We have put together a very strong commercial team led by a chief commercial officer who worked at Alexion and actually launched the first anti-VEGF as well as the first blockbuster drug in our ophthalmology (inaudible). We've had an ophthalmic reimbursement expert on -- working for the Company for the last several years. So we're doing a lot of work but we haven't yet discussed publicly our strategy on reimbursement.

Yes, and I would just -- this is Samir -- I would just also add it's going to be also very data dependent to be able to talk in a more educated fashion (inaudible) to state if you have a specific question about the injection, there is a residual amount of effort and resources that are required by the physicians so I'm sure that will be taken into account, but certainly not in terms of the detail. We haven't had any discussions.

Okay. And then I heard you say your collaboration with Novartis continues to go well. So I was wondering when do you think we might get a more detailed update so that we can appreciate what's being accomplished there?

Our collaboration with Novartis is going extremely well. As you all know, our ex-US partner for Fovista. In fact, on the Novartis first quarter 2016 earnings call, Joe Jimenez, the Novartis CEO, was talking about the broad and deep pipeline of Novartis. And in that public discussion, included Fovista as one of their potential blockbusters and growing areas of healthcare. So we're very excited that throughout the Novartis organization, there's great excitement about Fovista and we're seeing that in our day-to-day interactions.

So they've been a great partner and again, the strategy for ex-US, we have not, nor Novartis publicly announced, but the teams are working well together and they were a terrific partner with great capabilities in addition to the obviously great financial deal we were able to get with mid-30% royalties and significant milestone payments and up fronts as well. So it's been a really great partnership.

Thanks for the update.

Your next question comes from Yigal Nochomovitz of Citi.

Hi, guys. Good morning. Thanks for taking the questions. Just first of all, one sort of procedural one regarding the way you're going to analyze the Phase III data. We're one week away from the primary and the last patient's primary endpoint for the first Phase III trial, which I believe is on May 11, 2016. Does that in any way impact the plan for analysis or do you just wait until the last patient in for the second Phase III trial on October 26, 2016 to begin the analysis process? Thanks.

First, we're on track for data from both trials, Fovista with Lucentis fourth quarter. As we've said previously, we will present the primary endpoint separately for each trial but some of the supportive and secondary endpoints will use pooled data. So for that reason, they will be analyzed and we'll see them at the same time then in the fourth quarter. Of course, as one goes on, one always cleans data and is constantly doing that in both trials throughout. So we'll do that but we will actually be analyzing and seeing for the first time the trials together at the same time.

Okay, thanks David. And then I'm wondering if you could just offer some broad comments related to the hire of Dr. Carmen Puliafito. Maybe you could just talk a little bit more about how you see his mandate at Ophthotech and what specifically he will be tasked with to advance the value proposition for Fovista?

Yes, thanks for the question, Yigal. Yes, so as you know, Carmen is a remarkable individual with a very broad skillset. His ability to forecast the impact of technology and also execution of new programs with unmet need are really unmatched. In addition, his ability to identify and implement effective new technologies and most important, really I watched him over the years. He has the unique ability to collectively really bring all stakeholders of the industry, the academia industry, and providers at all different levels, to embrace new technologies and implement them in a very effective manner.

So as you can imagine, he'd be involved in all of these above and beyond what's natural, which is identify key technologies that will be very synergistic to create additional value for Ophthotech. So I think it would be improper not to use him to -- across the entire chain of development and commercialization.

Great, and then just one last thought or question. What's the latest plan as far as how you're going to approach the FDA with respect to a potential label for Fovista in combination with Lucentis? Is the plan to focus on the Lucentis trial designs or would you be able to claim a broader label with anti-VEGF based on some of the other work you've done in the refractory patient setting? Thanks.

Ultimately, there's no question we put a lot of effort and done a very large study because we have a great confidence that Fovista regimen, if confirmed and efficacious, and the safety margin is adequate, should be used with all anti-VEGF agents. I think it's been shown with a great deal of certainty that all the anti-VEGF agents are roughly equal with the respect to their safety and efficacy. So there's no reason to believe that Fovista wouldn't be an unattractive (inaudible) regardless of the anti-VEGF agent. So as far as the timing and sequencing of how we would go about that, that really is dependent upon the data and when they're available. But we are confident that if this concept works as we think it should that Fovista will be an addendum for the regimen regardless of the anti-VEGF agent.

All right. Thanks so much.

Next, we'll hear from Tyler Van Buren of Cowen and Company.

Good morning. Thanks for taking the questions. I wanted to get your thoughts on the recent CMS Medicare Part B proposed rule changes, specifically what percentage of eventual Fovista patients do you think this might effect? Potential timing of the rule changes as well as just your overall viewpoint on the impact of the potential Fovista commercialization and reimbursement. Thanks so much.

So overall, we think we're in fine shape. We think that much of this is really more towards oncology and does not affect Fovista since it's a novel and first in class agent. So if you kind of look at it, it's really -- in the sense of clinical trial of reimbursement -- in two parts. And the first question, the first part that they're trying to understand is are physicians' prescribing habits linked to a financial situation where they make money from selling the drug. And I think we already know that answer because we know that interest the United States there's over 60% off label Avastin use. And so if there was some type of motivation for physicians to use more expensive drugs, I think we would not see such a high penetrance.

So in a sense, I think we probably have the answer to that first part of the experiment that they said they were going to do, and also want to mention there have been over 100 groups that have questioned even doing this and the design. So we're far from even having any clue of knowing what will eventually come and that the result of this will probably be -- take up to five years to even see.

Despite that, we think we have a good sense of what -- if it does stay in this present form of what the first part of the program -- of the answer would be. The second part really relates more towards relative value, efficacy, and cost. And again, here in at least the initial description, it said that it was going to compare same mechanism of action, the same mechanism of action. Meaning if you're an anti-VEGF that could be an issue. But as a different class and different mechanism of action, an anti-VEGF agent, since there is no Avastin or other less expensive option there, we don't believe that this is going to be an issue for Fovista again, although it could be for some of the anti-VEGFs.

And then finally, the last part of it linking efficacy to pricing, well in a sense we have that today. If any drug doesn't show the appropriate efficacy, it's not going to be able to support its pricing and commercialization. So while they may do some more work on that, certainly we think Fovista is positioned in a very good place and that these really will not have much of an effect on a reimbursement.

I also want to mention one other thing. When you talked earlier, there was a question, when you look at some of the recent pharmaco-economic data that support premium pricing, one recent study showed that if you asked patients how long they would wait monthly in a doctor's office for having stable vision, the answer was a remarkable eight hours waiting in the physician's office on monthly. And more importantly, they said that they'd be willing to give up about a third of their life for maintaining their vision.

So you see that to patients this is very important and we think that will support premium-pricing reimbursement and has strong pharmaco-economic value.

That's great. Do you think that there's potential for Avastin use to increase with these rule changes?

This is Samir. I don't think we can really project there. I guess one could make the academic or theoretical case that when you have all anti-VEGF agents being roughly similar, the safety efficacy profile, does that justify two branded agents with significant cost from that perspective. But again, I think without having the full picture that determines pricing, the functional benefit to the patient, the economic benefit, and without having the data in hand, it would be premature to comment on that.

Great. Thanks again.

And next we have Yatin Suneja with SunTrust. Please go ahead.

Hi, guys. Thank you for taking my question. First one, could you just comment on the pre-launch work that you might be doing right now, if at all, or when you might start that? And then maybe if you could give us an update on the formulation work that you are working on for Tivozanib. I think you were working on a sustained formulation. So update us on the development plan there. Thanks.

So we're doing a lot of work on prelaunch, both ourselves and of course in global branding with our partner, Novartis, that has great expertise in this area as well. And as I mentioned earlier, we have put in place a very strong commercialization team, including our chief commercial officer, Henric Bjarke, who comes to us from Alexion, who also launched the first anti-VEGF and also was involved with the first blockbuster in ophthalmology with Pharmacia, Xalatan. And we've put together very strong team again, consistent with ophthalmic reimbursement experts, analysts, et cetera.

So we are doing a lot of work, as is our partner. As far as the formulation, I'll let Samir answer that.

Yes, and I would also say I think it's really important to understand that various physicians have come up to me and said that they're -- that most are not aware at the depth and breadth of the unmet need that's out there. And now that we have access to some of these real world databases in the US, the story is remarkably different in terms of the unmet need, and of course will impact utilization of new molecular entities that come out.

So I think the ability to truly understand that so that we can tailor our launch, assuming the data are positive, accordingly and make it optimal is going to be critical for the proper adoption. As far as the co-formulation, I think we mentioned this before. It's part of the equation here. You have to look at the totality of the unmet need, the service component of it, the allocation of the medica -- of the drugs. I think we've had multiple (inaudible) where the physicians have given their position on this. But I think it's important to realize if we're going to be ready for whatever the market dictates for the most optical distribution of the drug in the channel.

Okay. My question on the formulation was on Tivozanib. So if you could give us an update there. If I recall, there was a sustain release formulation that you said you guys are working on.

Samir Patel^ I apologize, sorry. On the Tivozanib side, we continue to develop it. We think that we may be in a position to give you a little more guidance towards the end of the year, but we're encouraged by its potential and certainly (inaudible) a significant amount of resources and focus towards that.

Great. Thank you very much.

Your next question comes from Gbola Amusa of Chardan Capital.

Hi, thanks for taking my call. Sorry to rehash an old topic, but our conversations with investors seems to touch on investor questions about the composition of your trials, but with regards to occult versus classic patients. As you're getting close to completing enrollment, could you tell us what percentage of your patients have occult wet AMD and if you wouldn't mind just frame the issue just so we can understand what we're -- where you are in Phase III versus Phase II.

Yes, Gbola thanks for your question and you are correct. It's been addressed multiple times and nothing has changed. It's a very simple answer. There is no occult in our pivotal study like Phase II-B study as well. So I think it's sufficed to state the definition of occult requires (inaudible) angiogram, and by definition that would make sure that somebody saying occult included is when you don't use fluorescein how can that statement be made. So it doesn't -- we don't understand it. It doesn't make any sense.

Secondly, the (inaudible) retinal hyper respective material, which we've covered, which is the entry point is -- requires patients that have neo-vascular complex according to its definition above the RPE. That would itself, by analogy, preclude occult. So I can't really give any further guidance where the perception that there is occult comes from. And I hope I've clarified and given you the answer you're seeking, but I'm happy to go into a little more granularity if you wish.

No, that's fine. Thank you.

And moving on, from Morgan Stanley we'll hear from Matthew Harrison.

Hi, this is Vikram on for Matthew. Just a quick one from us. Could you give some guidance around when you might expect the Zimura data? And sorry if you've mentioned this before, but we haven't heard any timelines prescribed to that candidate. So if you could give some guidance that would be helpful.

Yes, so we just recently started recruiting, Vikram. So it would be premature to give any guidance that has any validity with respect to timing.

Okay, thanks.

And next we have Stephen Willey of Stifel.

Yes, thanks for taking the questions. Can you just remind us how you're actually measuring and quantifying sub-retinal fibrosis in the Phase III and also within the expansion studies?

Hi, Stephen. It's Samir. Can you repeat the question? It was a little bit unclear because of the audio. I believe what you asked was how are we assessing sub-retinal fibrosis in the trial; is that correct?

Yes, correct, correct. Which imaging tool are you using to quantify sub-retinal fibrosis within the expansion studies and within the Phase III?

Sure, so we're using the fundus photography. I think it's important to realize that fibrosis has -- it's typically seen in the grade three or four that has been presented before by (inaudible) is fairly easy and specific by the use of fundus photography but equally important is to understand that it's a continuum and there isn't an accepted methodology for the presence or absence of fibrosis when it's in the category of subclinical, if you will. One could argue that fibrosis could be evaluated by OCT but it looks that reflectivity and various of the components in the sub-retinal neo-vascular complex and/or the associated (inaudible), which may give you reflectivity that could be indicative of either fibrosis or subclinical fibrosis. And that has yet to be sorted out.

So since the specificity of OCT is in question, so we continue to by fundus photography, which other studies have used prior to our Phase II study.

Okay, and then presuming you show a benefit on the fibrosis side, just wondering if you think from a practice perspective there will be a greater effort to try to distinguish between C&V and fibrosis and whether or not that will be used to determine whether or not a patient continues on VEGF therapy? Thanks.

Again, very good question. It's hard to project, but scientifically I can tell you my own personal opinion that I think most physicians would agree and that the goal of therapy is to improve visual outcomes. Regardless of what the biomarker state to date, there has never been a biomarker, whether it's anything on OCT that physicians (inaudible) patients with, that after the initial induction phase that one can state if you retreat based on X, Y, and Z biomarker parameter your visual outcome is going to be in a specific direction.

So in spite of the fact that therapy is administered by some form of flexible regiment utilizing the OCT, none of them have shown any correlation. I think we believe based on some of the data in our Phase II, that for example complete resolution of sub-retinal hyper-reflective material correlates quite well with the benefit that we see with Fovista administration.

You can add to that fibrosis as well based on some retrospective analysis with that qualification and a few others that we hope to unearth with detailed analysis in our Phase III data, but collectively this will give some feel how some of these biomarkers are evaluated.

At the end though, it is all about inhibiting and/or regressing the devastating (inaudible) of (inaudible) neo-vascularization. And its effect will be seen on visual acuity, and over time as our technology gets better, we may be able to sort out some of these issues.

All right, thanks for taking my questions.

And next we have Terence Flynn of Goldman Sachs.

Hi, thanks for taking the questions. Maybe just one follow-up on Zimura. Was wondering if you can tell us if there's interim analysis built into the Phase II-III trial and will this single trial be sufficient for approval in US and Europe? And then I had one Fovista question after that. Thanks.

Hi, Terence. Thanks for the question. Yes, we will look at it in an interim fashion and I think the end points from our interaction one cannot say for sure that expansion of geographic atrophy, in itself, which is acceptable in the US, has the same level of binary acceptance ex-US. On the other hand, the functional endpoint of improvement in visual function or reduction of visual loss by using visual function is acceptable on both sides of the Atlantic. So I think that if we're able to do an interim look and be able to tell what the potential impact is on both of those, there may be a way forward by enriching the trial and also determination of the ideal endpoint.

I hope that answers your question in connection to that before moving onto Fovista question.

Yes, and so I guess that's the reason for the interim is really to gather some of that data and then make an assessment about maybe modifications to the trial in terms of addressing both US and European regulatory questions, right?

That's one (inaudible), Terence. Also, the other is if you look at the body of evidence, whether it's from us or everybody, others out there -- we really believe that the strength of data in terms of natural history, what the impact is on the intervention, the statistical strength of evidence with sample size is simply not there, in our opinion.

So you'd like to understand that as well before committing significant capital to a very large study.

Okay, makes sense. And then on the Fovista Phase III trials, I know it he past you guys haven't provided powering assumptions for the primary endpoint. Given we're getting closer to the data and trials are nearly done, are you willing to share any insights there? Thanks.

I'm not sure, Terence, that we haven't provided. I think we've given adequate granularity and to be transparent, I just don't know the exact number to the last digit. But happy to share with you the relevant power assumptions that you -- that most would require to make the assessment. As you know, in our Phase II-B study, there were 150 patients per Arm. In this particular study, I believe there are about 311 an Arm. And so I can confidently tell you that it's over 80%.

As you know, the subsequent powering that occurs by addition of patients it not linear but I think it's reasonable to state it is at least in the low 80s if not higher. I just don't have any idea of the exact number. And at this level, if the truth indeed is four letters, for example, at Phase II, to have any power that's significantly higher than that, you certainly start getting into a narrowed difference in visual acuity, which maybe may not be clinically significant.

So trying to go much higher than where we have it, which is quite high to begin with, wouldn't be any (inaudible). So certainly, we can look it up and try to give you a number but I -- for practical purposes, I think you would have all the information that's necessary to make a determination on an adequate powering of the trial. If anything, it is higher than vast majority of trials that have been done to date in registration where the MD files.

Okay, thanks a lot.

And for our final question for today, we have a follow-up from Gbola Amusa with Chardan Capital.

Hi, it's just a follow on, on Glenn's comments about Novartis mentioning focused as a potential blockbuster. This is just a couple quarters ahead of the actual results, and I was just curious if you can say whether -- what the data is that Novartis may have seen in the last six to eight months. Is there anything new that they have seen or that you've seen and obviously would have shared with them in the last six to eight months? Is it what we saw at the December (inaudible) or is there anything else that you can mention?

And if you can't say anything, completely understand.

No, we can't comment on that area.

Great, thank you.

And that does conclude our question and answer session for today. I'd like to turn the conference back over to Dr. Guyer for any additional or closing remarks.

Just again like to thank everybody for their interest and support and thanks again for attending the call.

And that does conclude today's conference call. We appreciate your patience and thank you for your participation today.