IVERIC bio Inc (ISEE) 2016 Q2 法說會逐字稿

Good day, everyone, and welcome to the Ophthotech Corporation second quarter 2016 earnings results conference call. Today's conference is being recorded and at this time, I would like to turn the call over to Kathy Galante. Please go ahead.

Good morning and welcome to our second 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, Mr. Glenn Sblendorio, Executive Vice President, and Chief Operating and Financial Officer.

Before we begin, I would like to remind you that today we will be making 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 purposes of the Safe Harbor provision 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 statement. I refer you to our SEC filings and in particular to the Risk Factors section in our quarterly report on Form 10-Q filed on May 9, 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.

During the second quarter, we reached a significant milestone in our Fovista program. In June we completed patient recruitment in our Phase 3 trial of Fovista in combination with Eylea or Avastin, which triggered achievement of the final $30 million milestone of the $130 million aggregate enrollment-based milestone payments under the ex-US licensing and commercialization agreement with Novartis Pharma. Additionally, Ophthotech is eligible to receive up to an aggregate of $300 million upon achievement of specified regulatory milestones, including marketing approval and reimbursement approval in certain ex-US territories, and ex-US sales milestones up to $400 million. In addition, we will receive royalties at a mid-30s percentages of net sales of standalone Fovista products and a royalty of approximately equal value for sales of combination Fovista products.

I'm extremely pleased to announce that Ian Smith has joined our Board of Directors as of August 2. He will also serve as Chair of the Company's Audit Committee. Ian is Executive Vice President and Chief Financial Officer of Vertex Pharmaceuticals, a global biotechnology company that discovers, develops and commercializes innovative medicines for serious disease. Ian holds responsibility for core functions at Vertex, including Finance and Accounting, Investor Relations, Corporate and Business Development, Global Information Systems, and Worldwide Operations, and he is a member of Vertex's executive team. We are confident that Ian's outstanding and proven track record at Vertex and his financial operations and commercial expertise will be beneficial to Ophthotech's future growth.

We've also brought together a very seasoned management team, including most recently a distinguished leader in the development and commercialization of retinal products, Dr. Carmen Puliafito, former Dean of the Keck School of Medicine at the University of Southern California. Carmen has joined Ophthotech as Chief of Strategic Development. Dr. Puliafito is on leave from his position as Professor of Ophthalmology and Health Management at the USC Roski Eye Institute.

Earlier this year, Glenn Sblendorio, a leading industry veteran with more than 30 years of experience in the biotechnology and pharmaceutical sector, joined Ophthotech as Chief Operating Officer and Chief Financial Officer. Both Carmen and Glenn bring a tremendous wealth of knowledge and expertise to Ophthotech.

We look forward to reporting initial top line data from both of the pivotal Phase 3 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 with for their patients with wet AMD as quickly as possible, assuming a positive data outcome for the Phase 3 program with regulatory approval. Between now and data, we are focused on compiling a new drug application shell in an effort to ensure efficiency for an optimized NDA submission to the FDA, following the potential positive outcome of the Phase 3 trials.

As you will recall, the FDA granted fast track status for Fovista for the treatment of wet AMD in September of 2013. We believe Fovista is the most advanced anti-PDGF agent in development for the treatment of wet AMD and if approved, it's expected to be first to market in this class of novel therapies for wet AMD.

I will now turn the call over to Samir.

Thank you, David. Thank you, everyone, for joining us this morning. As David stated, we are actively engaged in working towards the generation of a new drug application shell, assuming positive outcome of the Phase 3 trials.

The Fovista expansion studies are designed to further evaluate the potential of Fovista in addressing a variety of unmet needs in wet AMD, including investigating the potential role 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 two of the studies.

Further, two additional Fovista expansion studies which initiated at the end of 2015, one a pilot study to investigate the role of multimodal imaging, and the other, a study to investigate the potential role of Fovista in combination with Avastin with a discontinuous regimen during the maintenance phase, continue to recruit patients.

We continue to enroll patients in the Phase 2/3 trial of Zimura in patients with geographic atrophy, an advanced form of dry AMD. In addition, the Phase 2 trial evaluating the potential role of Zimura when administered in combination with anti-VEGF drugs for the treatment of wet AMD has been activated.

I will now turn the call over to Glenn.

Thank you, Samir, and good morning, everyone. This morning, I'll present a brief update on our results of operations.

For the quarter ended June 30, 2016, we recognized $28.2 million of collaboration revenues, representing an increase of $26.6 million versus the same period in 2015. Collaboration revenue for the six months ended June 30, 2016 was $43.9 million, an increase of $0.6 million versus the same period in 2015. As we look further into 2016, we expect to recognize revenue from additional shipments of Fovista API to our partner Novartis.

Research and development expenses were $48.3 million for the quarter ended June 30, 2016 compared to $32.1 million for the same period in 2015. Research and development expenses were $86 million for the six months period ended June 30, 2016 compared to $56.6 million for the same period in 2015.

The increase in R&D expense in both the current quarter and the six-month period ended June 30, 2016 relates to increased costs associated with Fovista manufacturing activities, our Phase 3 clinical programs, the Fovista expansion studies Samir just discussed, as well as higher clinical trial cost due to a larger number of patients enrolled in these studies, as well as increased compensation expenses associated with additional research and development staffing.

As we look to the second half of 2016, we anticipate R&D expenses to increase as we continue our Fovista Phase 3 trials, also continue the enrollment in the Fovista expansion studies, continue enrollment in the two Zimura studies, and the ongoing manufacturing spend, which includes validation.

As we mentioned in previous calls, our R&D expense may fluctuate from quarter to quarter based on manufacturing schedules, as we validate our Fovista manufacturing process and begin to produce commercial grade Fovista API.

Moving on to general and administrative expenses, they were $10.5 million for the quarter ended June 30 compared to $12 million for the same period in 2015. This represented a decrease in the second quarter of this year. This decrease related primarily to costs associated with professional services and consulting fees during the period.

G&A expenses were $25.2 million for the six-month period ended June 30, 2016 compared to $21.5 million for the same period in 2015. This overall increase for the six months relates to expansion of the Company's operations, the hiring of additional management and corporate staffing, professional services and consulting fees, and increased share-based compensation.

The Company reported a net loss for the quarter ended June 30, 2016 of $29.9 million, or $0.85 per diluted share. This compares to a net loss of $37.1 million or a $1.08 loss per diluted share for the same period in 2015.

The Company reported a loss for the six-month period ended June 30, 2016 of $66.2 million or $1.88 per diluted share. This compared to a net loss of $30.5 million or 89%[sic] per diluted share for the same period in 2015. Our fully diluted average common shares outstanding for the quarter ended June 30, 2016 was $35.4 million.

Now turning to the balance sheet, our cash, cash equivalents and available for sale securities totaled $325.7 million at June 30. This does not include the $30 million milestone triggered in the second quarter. This payment has now been received in the third quarter.

And now I'll turn the call over to David.

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

Thank you, sir. (Operator Instructions). Our first question comes from Matthew Harrison with Morgan Stanley.

Hi, this is Vikram on for Matthew. Just two quick questions from our side. First, could you provide any updates on timing for when Phase 2 results might be published? And secondly, I mean you touched on this during the call but do you have any updated guidance on your filing strategy with regards to whether or not you'll wait for the Eylea/Avastin study to read out or do you plan on filing with just -- assuming it's positive -- the two Phase 2 data readouts for Q4 this year with Lucentis?

Hi, this is Samir. Thank you for your question. With respect to the publication on Phase 2, really it's not in our hands. It's with the reviewers, so we can't really comment on the timing or the outcome.

As far as the second question, I think you asked if we'll include any data, did I hear correctly? Yes, go ahead.

So yes. No, I think as we said before, we -- our goal is to get Fovista available to physicians and patients as soon as possible, which means we will use the two Fovista in combination with Lucentis trials for our NDA filing. And we'll either supplement or amend with the Avastin at a later data or as we feel is most appropriate as we're in a review period.

Okay, understood. Thank you.

Our next question comes from Tyler Van Buren with Cowen and Company.

Hi, good morning and thanks so much for taking my questions. My first question was with respect to potential granularity of timing within Q4. We obviously know what the treatment period will be but perhaps you could give us some input on some of the less obvious timelines with respect to reviewing the data once the last patient has had its last treatment? Thank you.

So as we've said, data is on track for the initial top line Phase 3 pivotal data in the fourth quarter. Now, we know from a press release last year, approximately November 1, that that was when the last patient was enrolled in the second Fovista in combination with Lucentis trials, and so with a one-year follow-up point, and then I think one can extrapolate in general that it usually takes somewhere four to six weeks, up to six weeks to have independent statisticians analyze the data, do quality control. This is all before we at the Company see any data. And then after that four- to six-week period, we see it for the first time and since it's a material event, we likely will disclose it within a few days of us first seeing that. And it most likely will include -- it will include the primary endpoint of each of the trials independently, with the independent P value. So hopefully that gives a little more granularity.

Yes, that's really helpful, thank you. And just the last question was with respect to the trial outcomes, obviously there are some very binary outcomes where both trials reach statistical significance with very clinically relevant outcomes or they either don't. But kind of in between with the mixed outcomes, if one trial is hugely successful, statistically significant results, very clinically meaningful benefit and the other perhaps has a less clinically meaningful benefit or for whatever reason doesn't reach statistics, how do you think about that situation? Is it possible that you would be able to pool the results or what would be a potential pathway for there in a worst case?

Yes, hi Tyler, it's Samir. Thanks for your question. So if I understood your question correctly it is you have a -- one of the trials being highly statistically significant and when you say that it is very clinically meaningful, and the other one perhaps not as clinically meaningful. But I didn't hear you whether you said if it was statistically significant. Are you -- is the presumption the other one is also statistically significant but perhaps not as clinically meaningful?

I guess it would be interesting to hear your response in a situation that it is statistically significant and then potentially not as well, so?

Okay. So typically if you have statistical significance, I think it's a bit -- it's a complex situation if one is so-called clinically meaningful. In itself, the determination of clinically meaningful is quite subjective in many respects. And just to give you some type of granularity, you could see a situation, for example, where you have -- you may not have proportion of patients gaining a lot of vision, for example, yet you can have a significant benefit on proportion of patients who are losing vision. The other setting, it could be the other way around. That obviously is two very different situations, but both are clinically meaningful, depending on, you know, where you started out. So there's a lot of complexity in making that determination. And so I think I can't really comment on how the FDA will look at it. They'll look at the totality of the data to reach that assessment.

The issue is a bit more complex when you have one trial that is statistically significant and the other isn't. In general, I think it's safe to say that that would mean one trial failed and the other didn't. But there are -- to the best of my knowledge, there are situations where you have one trial being extremely positive in terms of the P value, being let's say something in the range of 0.0001 and the other one barely missing it.

You know, I think there are some situations where if you can explain that there was a confounder that was present and that could explain why the trial is in that fashion, then, you know, I think a case can be made for an approval in that, and at least that's what I've been led to believe by statisticians just, you know, with informal conversations. I hope that answers your question.

Yes, that's super helpful. Thanks so much.

Our next question comes from Anupam Rama with JPMorgan.

Hey, guys. Thanks so much for taking the question. Maybe just a quick one from me on the statistical analysis plan on the pooled secondaries, just quickly, maybe you could remind us what those secondary you'll be looking at, and is there a hierarchy to those secondary endpoints. If there is a hierarchy, how have you ranked the endpoints, secondary endpoints in this statistical analysis plan? Thanks so much.

Sure. I don't think we've disclosed that level of granularity but I think in general, just looking through the Phase 2 that it's a reasonable way to think about it, which is we had the descriptive type of endpoints, secondary endpoints.

You know, our thinking on that is in general, I think the type of hierarchal treatment is often done for labeling purposes. But you know, we just feel in this type of situation, as I mentioned on the previous question, the determination of clinically meaningfulness really requires to look at some of the binary endpoints or discontinuous endpoints in its totality, whereas the primary endpoint is a continuous variable.

So we think the clinical meaningfulness in that situation requires to look at the broad range of secondary endpoints. And as far as additional color into what are the secondary endpoints, I think it's safe to say they are mostly functional endpoints, and that's how you determine the clinical meaningfulness, and, you know, are fairly similar to what one would expect in most trials of looking at proportion of patients gaining (inaudible) vision.

Thank you so much for taking our question.

Our next question comes from Joseph Schwartz with Leerink Partners.

Morning, everyone. this is Brett Larson dialing in for Joe. Quick question on both programs. First on Fovista, when considering the Phase 2b results, to assess what results do we expect from these upcoming Phase 3 studies, we've heard consistently from investors and clinicians that they recognize there are two key characteristics that -- one providing tailwind, one the other headwinds to achieving comparable efficacy, one being that patients showed lower visual acuity gains in the Lucentis arm of the Phase 2 study than one might have expected compared to other studies that have been conducted. But on the other hand, now you have a trial endpoint that is one year versus six months previously. So I'd love to hear your thoughts on how significant of a driver one of these factors is versus another, and if there are any other key characteristics that have changed leading to these Phase 3 results that you'd like to highlight, that increase or temper your confidence.

Yes, hi, it's Samir. I don't think I heard the full question, but I will take a stab what I think I heard, and feel -- please feel free to correct me. As far as the issue, I think the question is it's related to what inferences we may make from the Phase 2b to the 3 -- to the Phase 3 trial, and two issues are one is the duration is greater than the Phase 2 and you know, it -- I think that was your second question.

So in connection to that, I think that we just have to wait for the data. We don't have that much experience on what happens from 6 months to 12 months. But you know, we had 15 patients in our Fovista expansion studies during our Investor Day that we presented which went out to about a year, and there was continued benefit in those patients based on the treatment regimen, of course, which was quarterly, so that was very encouraging.

In general, if you were to look at anti-VEGF studies in general what you typically see at three to six months is what you really end up with at month 12 and that's been a consistent phenomenon with the anti-VEGF type, and since here you are talking about synergies in many respects, if it was to work, we would think it would continue.

But one encouraging data point that we had in the Phase 2 study was between three and six months, there was a relative expansion of the curve so the combination was doing -- performing better than monotherapy, and it's possible that that's going to continue. But even I think regardless of that, I think the robust efficacy in Phase 2b, if repeated or confirmed in this Phase 3, was, we believe, quite significant and clinically meaningful.

So the underperformance, which is what you are referring to, we think that's quite irrational. First, cross-trial comparisons are not scientifically valid so that in it itself is, you know, we think not really valid. Secondly, I think to say that one arm underperformed, but somehow magically the combination arm wouldn't in a very large trial where this randomization and baseline variables are similar, that would be quite irrational.

And then even if you were to knock both of those off, I don't see how Lucentis underperformed if you look at six months, I mean, that's where CATT and IVAN trials performed roughly at the same level. In the VIEW trials, I think it was, it's likely higher at six months' time point, but you know, these patients, whether you look at CATT and VIEW, the presence of classic lesions typically have worse outcome if you look at the CATT data and patients who lost vision I believe in VIEW trial showed the same thing. So you'd expect that if you're looking at ANCHOR, for example, which was a trial done over 9 or 10 years ago if not greater, it was a different time point, then I can tell you roughly 50% of the patients won't even qualify from that study in this study. So you know, to do any cross-trial comparisons is also irrational, but even having said that, we see no evidence that Lucentis underperformed.

Okay. Well, thank you for the color there. And then on Zimura, can you remind us what the duration of treatment is for the primary endpoint in the wet AMD anti-VEGF combo trial and any update on how far along enrollment is in the geographic atrophy study?

There are not that many updates to give on the enrollment but I believe in the Zimura wet AMD, I think it's -- I don't want to speculate, but I think it probably is a year.

Okay, great. Thank you very much.

Our next question comes from Yigal Nochomovitz with Citi.

Hi, guys. Thanks for taking the question. Just first of all, a quick on what the label might look like initially. Is the plan to construct the label with Lucentis plus Fovista with the first two, or will you argue for anti-VEGF plus Fovista?

Yes. You know, that's something that has to be obviously negotiated with the regulatory agencies. So obviously our goal is to eventually get the label with any anti-VEGF drug, or our mission is to be anti-VEGF agnostic. Whether that staged or whether that's all at once really depends upon negotiations with the regulatory authorities and how they look at it. So really can't comment until we have the data and have discussions with them.

All right, thanks, David. And then can you provide any more granularity on the timing of data for the Avastin/Eylea third Phase 3 please?

Yes, I can. You know, we haven't publicly said it but again, in general, if things went according to plan, which, you know, usually they do but one always never knows. We announced that recruitment was complete in June of this year. So very similar to before, take your one year for last patient visit. And remember, we have a very senior experienced team that is very comprehensive of making sure that that last few patients are in on time or even early, so that we hit that one-year deadline. I've had that question asked before, that we really do look at the last patients coming in and try to get them in on time or earlier so that that is a solid one year and doesn't go over.

So if you take and add a year to that and again as I said, traditionally companies, assuming everything goes smoothly with the independent statisticians, with quality control, etc., take somewhere from a four- to up to six-week period of which, again, the company does not have any knowledge of the data. At that conclusion of that period where the statisticians or quality control teams work, we see the data and again, because it's a material event, within a few days we would report it. So you can probably construct an approximate timeline that way, so it's similarly.

Okay, got you. And then David, you mentioned at the beginning you have a shell NDA under construction so to speak. Is there anything going on in that shell with respect to in that blinded analysis of the first Phase 3 trial that obviously is already finished, the first patients' primary endpoint ended back in May?

No, no, no. The -- again, the two Phase 3 trials of Fovista with Lucentis are being cleaned, masked and will be analyzed at the same time by the statisticians and will be given to us, again, at the same time period after the four- to six-week period of statistical analysis and quality control.

The shell refers to basically things such as preclinical, manufacturing, putting in clinical and medical information with blanks, where -- so that it's much easier later to just fill in the information once you have it later on. So that's really what we mean by constructing a shell. There are some components [obviously] that one can pretty much do almost to completion, again more in preclinical and manufacturing, but clearly the least developed will be clinical, although we believe we can put a shell together where a lot of it is fill in the blanks, but then of course some of it will depend on the actual data and will have to be edited after we get it.

Great, thanks very much.

We'll take our next question from Yatin Suneja with SunTrust.

Hi, guys. Congrats on the all the progress and thanks for taking my question. A couple of questions. Again on the data, I mean, we understand it's going to take four to six weeks, for statisticians to analyze the data. But on a blinded basis, have you able to see or have you able to look at the baseline characteristics and any differences from the Phase 2b that you saw, anything you could share there? And then I have a follow-up.

No, I want to strongly emphasize that the Phase 3, we have seen nothing, including any of -- anything at all, and that will all be seen at the end of that cleansing and quality control period. So we will be seeing everything at once and then you will be seeing that shortly a few days likely after.

Okay, that's helpful, and then, and a question on injection burden, we get this question a lot from investor. I mean, could you maybe talk about your comfort around two injections versus one, I mean, what sort of work you have done that gives you confidence that two injections would be -- would not be an issue, and I mean, have you done any patient survey, anything you could share with us?

Yes, and Yatin, so it's Samir. Do you mean from a scientific perspective or a commercial perspective?

More from commercial perspective.

Yes, I think in general, you are not increasing the treatment burden for the patients as far as the frequency of visit. When one talks about treatment burden, it's the number of visits patients have to make, and you're going to have same exact number of visits because they're coming for the anti-VEGF injection anyway.

As far as the prep time is concerned and things of that sort, I think we've had three [science days] and it's been represented by just vast amount of practice in the United States. We've already had a large practice in the United States and this has been (inaudible).

I think the answer has been consistent all along that the two injections is not really an issue for them, and I think we would agree with that, because a patient, obviously the way it's administered in this day and age, it's a very common procedure, there's really no pain involved and discomfort on patients given the type of anesthetic that's given. The morbidity isn't really there with these injections and they're very, very safe. And so I think even from a practice management standpoint, the adoption is not going to be an issue there, so no.

And on the scientific side, I mean, I think total volume that's being administered here, it's a large amount of database and roughly more amount of volume over 24 months' trial than previously with the [macu-gen] trial and there was no material issue there as well. So we're fairly confident that from a safety perspective and from a commercial adoption perspective it's not going to be any issues.

Okay, very helpful. Just a very quick question for Glenn on the P&L side. Glenn, could you help us model the SG&A for the remainder of this year? I mean, obviously this quarter was a bit lower than we anticipated, but just give us the direction how should we model it for the remainder? Thank you.

Yes, that's a good question and I know you're probably looking at the slight decrease from the first quarter. We will continue to build infrastructure across the board. So I think if you look at the first six months of the year, you should anticipate that that will increase, so don't focus just on the second quarter and try to project out. I think more importantly, I'd take the six months and put a slight increase on that for the latter part of the year. We haven't given specific guidance, I don't want to give specific numbers, but it will increase.

All right. Thank you, guys.

Our next question comes from Gbola Amusa with Chardan Capital.

Hi, it's Gbola Amusa at Chardan Capital. Thanks for taking my call. Just a have a couple of questions. First of all, are you able to comment roughly on what proportion of your $48 million of R&D expense comes from Fovista programs versus Zimura programs? And then secondly, by my count, your partners Novartis and Roche have at least a few potentially longer-acting anti-VEGFs in Phase 2 or 3 development. So I was wondering if it's part of your longer-term strategy to develop Fovista in combo with those products as soon as reasonably possible?

It's Glenn, I'll answer the first question on the $48 million and the percentage that's probably the Fovista. It's a significant majority of that because you have three components in that. One is the ongoing Phase 3 trials, the second are the Fovista expansion trials, and the third, which we referenced in the discussion, are manufacturing activities which are obviously at this point all expensed. So it's a large part of that number.

[Over 80%?]

I think that's fair.

Okay, thank you.

Sure, and on the second question and before I address that, I stand corrected on a previous question related to the duration of the Zimura combination study in wet AMD. It's not a year, it's a 18-month duration.

And related to your question about other anti-VEGF agents, will they come down in the future and development of those in combination with Fovista, well, first you know, we're hopeful that the data are going to be confirmatory in our Phase 3 trial and generalizable across all anti-VEGF agents and if that's the case, as we expect, we believe that the efficacy of Fovista when added to an anti regimen is agnostic to whichever anti-VEGF agent is utilized.

So in that setting, should the other anti-VEGF agents, regardless of who the sponsor is, that come forth in the future, they'll have to prove the non-inferiority to the other anti-VEGF agents first. And then we believe that the label hopefully - and again if the data are cooperative - would encompass all future anti-VEGF agents in that setting.

Sorry, just to be clear, Samir, are you saying that there's potential for a label to be encompassing for anti-VEGFs or do you believe that you have to test Fovista with each new agent after those agents are approved?

No, I think that there's precedence obviously in other settings as well like protease inhibitors where if you're able to show efficacy and a rough equivalent, which we are doing with three of them, that that would bode very strongly for a label that would state Fovista in combination with anti-VEGF. And that general label would encompass future anti-VEGF agents provided that they've shown efficacy for the same indication. And it would be more of a class like, that we wouldn't have to do another study in that setting with every new anti-VEGF that comes forth.

Great, thank you.

Our next question comes from Stephen Willey with Stifel.

Yes, thanks for taking the questions. I guess maybe a follow-up to the last question. I guess we're expecting to see pivotal data from Novartis's brolucizumab in the first half of next year, and obviously they have an option to develop a fixed combo with a VEGF agent of their choice. So just wondering how close you guys are to the decision-making process that's going on at Novartis and how open are the lines of communications just regarding strategic intent?

Okay, it's active discussion, active work, but not something that Novartis has made public, nor have we. But it's certainly, I think, a major initiative on their part and we are working very closely with their senior team on that.

And then maybe just to clarify, I guess, again part of the last question, there would be potentially the opportunity, I guess, based on the other Phase 3 that's looking at both Eylea and Avastin that you could perhaps generalize to all VEGFs and that Novartis could potentially pursue some come kind of fixed combination shortly thereafter?

Here again, we can't comment on the agents they're looking at or the work they're doing, as they have not made that public and that's being directed by them.

Okay, and then maybe just one housekeeping question on the P&L side, just the breakdown of the recognized milestone revenue versus some of the collaborative revenue for API shipments, I think historically there is been some amortization of received milestone payments. Just wondering if that's applicable here as well. Thanks.

So I'll focus on the current quarter and go deeper if you'd like. So it was $28.4 million in the current period and we did receive or earn the $30 million, so if I break down that $28 million, there's actually four components and a majority applies to the license and also the R&D effort.

So of the $28.4 million, $27 million was part of the $30 million, which means we deferred $3 million. So a very small portion is deferred, so you don't see a direct match-up of [$30 million and $30 million], on the revenue and the balance was deferral of previous deferred revenue that we had [hung up]. So our practice, our accounting has been to take a majority of the current milestones recognized in the deferred piece over the balance of the enrollment period. Did that get to (inaudible).

All right, thanks for the color. That's helpful. Thank you.

Our next question comes from Evan Seigerman with Barclays.

Hey, guys, thanks for the taking the questions. Can you just, stepping back to Zimura, kind of remind us of the rationale to use, to target C5a in wet AMD? And with this, are you -- just remind me - are you anti-VEGF agnostic or are you specifically looking at Lucentis in this Phase 2 trial?

This is Samir. So the rationale is that if you look at some of the immunologic studies around patients who have human -- in the human subjects that have neovascular AMD, you see a marked amount of immunohistochemical staining involving the complement activated fragments. So I think it's reasonable - that coupled with some of the genetic study, linkage studies, and also histopathology studies in animals, are all very consistent that there is a significant role for complement-mediated inflammation not only in dry AMD but also in wet AMD. So, and then in addition to that, I think it's been shown that complement activation leads to upregulation of some key mediators of pathologic neovascularization such as VEGF and PDGF as well. So one can -- one has a strong rationale that in patients who failed anti-VEGF, for example, that part of that resistance is from complement-mediated inflammation that's not addressed by anti-VEGF strategy.

Okay, great. And then just the other one about the Phase 2, is there a preferred - sorry if that's something I should know but is it Lucentis or are you agnostic?

What's the - can you repeat the question please, it's --

Sorry, with the Phase 2, you're looking at it in combination with an anti-VEGF.

Oh, right.

Is it specifically Lucentis or are you, do you, are you agnostic when it come to the other agent that's used?

No, we're agnostic and just a little bit of color on that. You know, in general, all anti-VEGF agents for the safety, efficacy, quality rations are really roughly equal, and that's been shown in some of the randomized control trials. So we wouldn't think any of the combination agents, if it's addressing an issue with the class, it shouldn't make a difference. They may have some durability differences, but I don't think in respect to safety, efficacy or the type of rationale we want to study would make a difference.

Okay, great, and then also what other milestones can we expect towards the end of the year, especially with the top line readouts towards fourth quarter? Have you given any guidance on that or how should we be thinking about that?

I think we should look at that as by far the biggest milestone --

Right.

There's really nothing else close to that so look for fourth quarter data.

Okay, thank you.

Our next question comes from Terence Flynn with Goldman Sachs.

Hi, this is Cameron Bradshaw filling in for Terence. Thank you for taking our question. Can you remind us of the potential size of your potential US commercial team for Fovista? And then also do you plan to make contingent offers to reps ahead of the Phase 3 data or wait until you have the Phase 3 data in hand? Thanks.

Yes, so the answer to the first question is we will commercialize the United States by ourselves and we've previously said that a sales and marketing team of a total of 100 people or less for the sales force can do that. We know because we've done that before at Eyetech launching the first anti-VEGF and we've seen the excellent job Regeneron has done ex-US. Obviously Novartis is our partner and will commercialize that outside the United States.

Thanks.

And that concludes today's conference. Thank you for your participation. I'll turn the call back over to Dr. Guyer.

Great. I just want to thank everyone again for their attention and interest. Thanks very much. Bye bye.

And that does conclude today's conference. Thank you for your participation and you may now disconnect.