Lexicon Pharmaceuticals Inc (LXRX) 2008 Q3 法說會逐字稿

Thank you for holding. Welcome to Lexicon Pharmaceuticals 3rd Quarter 2008 conference call. (Operator Instructions).

At this time I would like to introduce your host for today's call, Bobbie Faulkner, Manager of Investor and Public Relations. Please go ahead, Ms. Faulkner.

Good morning and welcome to the Lexicon Pharmaceuticals 3rd Quarter 2008 Conference Call. I am Bobbie Faulkner, and with me today are Dr. Arthur Sands, Lexicon's President and Chief Executive Officer, Dr. Philip Brown, Lexicon's Senior Vice President of Clinical Development, and Jim Tessmer, Lexicon's Vice President of Finance and Accounting.

We expect you have seen a copy of our earnings press release that was distributed this morning. During this call we will review the information provided in the release, then use the remainder of our time to answer your questions.

The call will begin with Dr. Sands, who will discuss our key accomplishments for the 3rd Quarter. Dr. Brown will then discuss the status of our drug development program, and Mr. Tessmer will review our financial results for the 3rd Quarter, and discuss our financial guidance for the rest of 2008. We will then open the call to your questions.

For those who wish to view the slides to which we will refer, please access the Lexicon website at www.lexpharma.com. You will see a link on the home page after today's webcast.

Before we begin, I would like to state that we will making forward-looking statements, including statements relating to, without limitation Lexicon's research and development of LX6171, LX1031, LX1032, LX2931, LX4211, and LX7101.

This call will also contain forward-looking statements relating to Lexicon's growth and future operating results, financing arrangements, cash and investments, discovery and development of products, strategic alliances and intellectual property.

Various risks may cause Lexicon's actual results to differ materially from those expressed or implied in such forward-looking statements including uncertainties related to our ability to enter into additional collaborations, alliances and license agreements, the success and productivity of our direct discovery efforts, the timing and results of preclinical studies and clinical trials of our drug candidates, our ability to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties, our dependence upon strategic alliances, and the requirements of substantial funding to conduct our research and development activities.

For a list and description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission. I will now turn the call over to Dr. Sands.

Thank you, Bobbie, and good morning everyone. We have certainly had a very busy quarter and made substantial progress this quarter moving our pipeline forward. I just have one overview slide to take a picture, a snapshot if you will, of our pipeline under clinical and preclinical development now.

So currently we have six programs now that are in formal development. We have four programs in the clinical phases of development and two programs in preclinical and, importantly, this quarter we have now advanced two of our programs, our leading programs, into Phase II proof of concept clinical trials, those being LX6171 for cognitive disorders. In this program, we have actually completed the dosing in the Phase 2a trial in age-associated memory improvement, and we are anticipating having a data package, top line data of the report on that trial by the end of this year.

And our next program, our newest program to move forward to begin Phase 2 is LX1031 for irritable bowel syndrome, and you will be hearing some detail on this. We have completed our Phase 1b multiple dose trial and, again, we are poised to commence the Phase 2 trial. So that is very important progress for Lexicon, to have two programs now advanced to the Phase 2 stages of clinical development.

We have two programs also that are in the second part of their trials in Phase 1, that is LX2931 for rheumatoid arthritis, having just completed a Phase 1b multi-dose trial and had a very excellent meeting just this past weekend and early part of this week at the American College of Rheumatology conference, annual conference in San Francisco, and Phil Brown will be spending more time on this program to discuss our results there and some of our anticipated next steps.

And then LX1032 for carcinoid syndrome. That has also now completed dosing for the Phase 1b multi-dose trial and we are anticipating disclosing top line data on that in the 4th quarter.

So you can see, again, that we have been very buy progressing our pipeline. At the preclinical stages as well, LX4211 on track for our anticipated IND filing for that compound for diabetes, type 2 diabetes, in the 4th Quarter, and then LX7101, our newest program, a very interesting program in the area of glaucoma and that has also now been selected as a clinical candidate.

So, with that broad overview I will turn the call over to Phil Brown to go into some greater detail on the clinical updates.

Right, thanks very much, Arthur. It has been a good quarter for us and our programs continue to progress through these early stages of development. Importantly, the programs are on track for where we expect them to be at this stage.

With that, let me start with an update on the LX1031 program. LX1031 is our compound that we are directing towards irritable bowel syndrome. As you recall, this is a locally-acting small molecule that targets and inhibits the enzyme tryptophan hydroxylase, and through inhibition of this enzyme we are able to decrease local production of serotonin, which we believe is an important mediator of gastric motility and function, and believe has potential utility in the setting of irritable bowel syndrome.

We have confirmed the pharmacologic activity of LX1031 in man through its reproducible effects on urinary 5-HIAA, which is the metabolite of serotonin that we are able to track as the biomarker.

The compound has been extremely well tolerated at all doses that have been evaluated in normal, healthy volunteers to date, and this is a very important consideration for any compound that is ultimately going to have utility in the setting of irritable bowel syndrome and other functional GI disorders.

As Arthur mentioned, we are currently in the process of initiating our Phase 2a proof on concept study in patients with irritable bowel syndrome.

This next slide sort of summarizes the study design that we are anticipating for this proof of concept study. It is 150 patients with either diarrhea-predominant IBS or a mixed form of IBS. It will explore two dose levels in a randomized fashion with a placebo control, either 250 mg four times daily or 1,000 mg given four times daily. Now, this is not the final formulation that we anticipate being utilized in the clinic, but is an appropriate formulation and dose levels to be explored at this early stage, this proof of concept stage in development, based on the very robust and reproducible effects on the biomarker that we have observed.

As Arthur mentioned, we are poised to initiate this study. We recently had our investigator meeting that was well attended. We are anticipating up to 40 sites will ultimately participate in this study. It is nice to see that at the investigator meeting we had very good interest expressed by the investigative community for this program and for the study design.

The study itself will be a two-week run-in period, followed by a four-week, double-blind randomized treatment period, followed by a two-week washout, or follow-up. And, we will track a number of symptoms that have been evaluated through other IBS studies and that we know were important to the condition.

Now, switching gears to the LX1032. This is another compound in this series which targets tryptophan hydroxylase but it was specifically designed by our chemists to gain increased systemic exposure and as the result of achieving increased systemic exposure, we have targeted indications such as carcinoid syndrome, where we know systemic serotonin production and hyperserotonemia is an important aspect of the disease process.

We have completed our initial Phase 1 studies with this compound and have just recently completed dosing in our Phase 1b in normal volunteers, and we are anticipating being able to discuss data from that study later this quarter.

LX2931 is an inhibitor of S1P lyase, which we have targeted towards rheumatoid arthritis but we believe has potential utility in the setting of a variety of autoimmune and other inflammatory conditions.

Earlier this week, as Arthur mentioned, we were present at the American college of Rheumatology in San Francisco, where we had two posters, one directed toward the clinical results, and another which described in more detail the preclinical activities and the basic science underlying this interesting mechanism. These posters were both extremely well received. We had good interest and good traffic around the posters, and I think this interest is representative of a novel target that is emerging in the setting of rheumatoid arthritis and we are very keen to continue progressing the program in this direction.

This next slide shows the Phase 1b data which again was conducted in normal, healthy volunteers. We dosed over a seven-day period of time and if you will bear with me, I will try to orient you to this slide. It is a little bit busy with the graphical representations.

You will notice that each color represents individual cohorts of subjects. The black line is the pooled placebo data, and then the dark blue line is 25 mg, the pink line is the 50 mg cohort. We did two cohorts at 100 mg, represented here both in yellow and a turquoise color. This was based on initial results of some variability in the PK data that we were trying to confirm and so we elected to purse another cohort at that dose level.

And then the purple and brown bars are the 125 mg and 150 mg dose levels, respectively. Importantly, what you see here is a reproducible effect and dose-dependent effect on lymphocyte count, where we see a fairly robust reduction in circulating lymphocyte levels following a single dose, [word] achieved by about 24 hours post dose, and at the higher dose levels you see a durability of that effect over the seven-day exposure period.

Equally important, when we withdraw, or discontinue dosing, you see a return to baseline levels within about 48 hours following discontinuation of dosing.

We continue to be very encouraged by these data because we are not causing the severe leukopenia that has been observed with other agents that I believe could problematic in the setting of various autoimmune conditions.

We also are encouraged because the leukopenia we are producing is consistent with those levels that we have shown reproducible pharmacology in our animals models in the setting of arthritis and in other areas of autoimmune conditions.

We also believe we are beginning to see a saturation of exposure pharmacokinetically occurring at the 125 mg dose level. If you recall the lymphocyte counts, this correlation between the degree of leukopenia achieved suggests that we are consistent with what we are seeing pharmacokinetically with the saturation of exposure.

We have also explored single-dose levels now, up to 250 mg, and we have observed isolated incidences of acute abdominal pain. This was observe in 2 of 24 subjects that were dose above the 175 mg dose level, which we believe represents a maximum tolerated dose above the 175 mg dose level with this compound. Again, we have seen very reproducible and robust pharmacology emerging at dose levels at the 125 mg dose, suggesting that we have a nice pharmacologic window in which to work, and at present we are moving to initiate our drug-drug interaction study in methotrexate with the compound in anticipation of moving the compound into rheumatoid arthritis.

For LX6171, we reported our initial clinical results and disclosed the target of the compound at the American Academy of Neurology meeting last spring. As Arthur mentioned, we have completed our dosing in our Phase 2a clinical trial in subjects with age-associated memory impairment. This was an important milestone for us in that we were very happy how well the trial had progressed. It remained on track and on time as we anticipated, and had planned for, and we have successfully enrolled all the subjects that we envisioned when the protocol was initially drafted and started. We are looking forward to updating you as those results become available, which we anticipate by the end of this year.

LX4211 is our next regulatory filing that we are anticipating occurring by the end of this year. This is a small molecule drug candidate that targets SGLT2, which regulates glucose excretion in the kidney. We believe it represents an interesting target for type 2 diabetes and we are excited to get the regulatory filing conducted so that we can initiate our first-in-man clinical studies in the very near future.

I will now turn the call over to Jim Tessmer to discuss our financial results.

Thank you, Phil. We issued a press release this morning detailing our 3rd Quarter financial results, which you may find on our website if you have not already reviewed it.

Lexicon's revenues for the three months ended September 30, 2008 were $7.5 million, a decrease of 26% from $10.2 million for the corresponding period in 2007. The decreased results are primarily from the completion in 2007 of the project funded by our awards in the Texas Enterprise Fund, and our progress towards completing the target discovery portion of the N. V. Organon alliance.

Our 3rd Quarter revenues are primarily attributable to work on our collaborations with Bristol Myers Squibb, Organon, and Genentech.

For the nine months ended September 30, 2008, revenues decreased 28% to $26 million, from $36.3 million for the corresponding period in 2007.

Research and development expenses for the 2008 3rd Quarter were $27.6 million, an increase of 13% from $24.5 million for the corresponding period in 2007. This increase was due primarily to higher preclinical and clinical costs related to the advancement of Lexicon's drug development programs, partially offset by decreased research expenses as a result of the Company's previously stated plan to reallocate resources from genetics research efforts to drug development.

For the nine months ended September 30, 2008, research and development expenses increased 11% to $85.8 million, from $77.4 million for the corresponding period in 2007.

General administrative expenses for the 2008 3rd Quarter were $4.7 million, a decrease of 8% from $5.1 million for the corresponding period in 2007. This decrease was due primarily to lower salary and benefit costs, as well as lower legal fees.

For the nine months ended September 30, 2008, general and administrative expenses increased 3%, to $15.8 million, from $15.4 million for the corresponding period in 2007.

Lexicon's net loss for the three months ended September 30, 2008 was $23.5 million, or 17 cents per share, compared to a net loss of $14.1 million, or 14 cents per share, in the corresponding period in 2007.

Net loss for the nine months ended September 30, 2008 was $61.4 million, or 45 cents per share, compared to a net loss of $46.6 million, or 53 cents per share, for the corresponding period in 2007.

For the three months ended September 30, 2008, net loss included non-cash, stock-based compensation expense of $1.4 million, compared to $1.6 million in the corresponding period in 2007.

For the nine months ended September 30, 2008, net loss included non-cash, stock-based compensation expense of $4.8 million, consistent with the corresponding period in 2007.

For the three and nine months ended September 30, 2008, net loss included an impairment of long-term investments of $3.3 million, which represents the decline in fair value of student loan auction rate securities held by Lexicon.

Let me turn to our cash and investments. As of September 30, 2008, Lexicon had $177.3 million in cash and investments, including $21.1 million in cash and investments held by Symphony Icon, as compared to $200.5 million as of June 30, 2008, and $258.8 million as of December 31, 2007.

We continue to make progress with our investment position and auction rate securities. Since the auctions relating to our securities began to fail in mid-February, we have been able to sell $21.1 million at par in auction rate securities and ended the quarter with $57 million in par value of triple-A rated student loan auction rate securities.

Based on our assessment of fair value of these securities as of the end of the quarter, we recorded an impairment loss of $3.3 million, reducing the value of these securities to $53.7 million. Our holdings of auction rate securities are reflective of long term investments on our balance sheet.

Earlier this month, UBS, the investment bank that sold us the auction rate securities remaining in our portfolio, offered us rights to require them to purchase such auction rate securities at par value beginning in June 2010. Under the offer we will also be eligible for a no net-cost loan for up to 75% of the market value of the auction rate securities. We are currently evaluating our options with respect to this offer.

We believe that the working capital available to Lexicon, without taking into account funds held in auction rate securities, will be sufficient to meet our cash requirements for at least the next 12 months.

I would now like to turn to our forward-looking financial guidance for 2008. Revenues from existing contractual agreements for 2008, attributed primarily to our collaborations with Bristol Myers Squib, Organon, and Genentech, are projected to be in the range of $31 million to $33 million, which is consistent with our previous guidance.

Operating expenses for 2008 are now projected to be in the range of $132 million to $137, a decrease from our previous guidance of $140 million to $145 million, primarily as a result of continued efforts to reduce expenditures.

Non-cash expenses will be approximately $14 million of this total, including $6 million in stock-based compensation, and $8 million in depreciation amortization.

Taking into account cash received under existing contractual relationships only, we expect our 2008 net cash used in operations to be in the range of $100 million to $110 million, down from our previous guidance of $105 million to $115 million, and our 2008 capital expenditures to be approximately $2 million to $3 million.

Thank you, and I will now turn the call back to Arthur.

Thank you, Jim. And we can now open up the call to questions.

(Operator Instructions). Your first call comes from the line of Ed Tenthoff from Piper Jaffray.

Great, thank you very much. Questions regarding the data release this year. With the dosing completed on LX6171, what still needs to be done as you collect that data and put it in perspective for us. What should we be expecting to see from this trial. What would you view as a success in terms of looking for a path forward?

Thanks very much, Ed. So, at this point, obviously we conduct studies through CROs and the data -- dosing has been completed. We are in the process or collecting the case report forms and the CRO will then enter the data into a database and compile the data for us in the pre-specified manner.

So, that is where we are, is we are awaiting for those data to be compiled and released to us after they have entered it and analyzed it for us.

As you alluded to, we have surveyed a number of parameters, or end points in this particular study. So, we have utilized the CDR data set, which is a computerized data assessment or a computerized assessment that probes for a number of cognitive parameters, short term, long term memory, attention, speed of recall, these types of things.

This has been utilized, of course, in our Phase 1 studies as well so we are compiling a fairly large data set now around these parameters. In addition to that, we have integrated some more standardized metrics which include both short and longer term recall assessments. We have evaluated for effects on sleep and we are interested in obvious seeing all of these parameters -- the effects of each of these parameters as we obtain the data.

So the anticipation would be that once we get a fairly broad picture using these variety of instruments in this study that it will point us in the direction for which to pursue for a formal indication, which, what I am alluding to is it may be more of an attention driving signaling. it may more of a short term memory phenomenon, or pharmacology that emerges from this and we believe that that will help guide us in the appropriate indication for further development.

That is very helpful. Maybe taking a step back into a larger question, Arthur, as you have this earlier clinical pipeline here, obvious cash to advance to proof of concept data, what is the larger partnering strategy as you balance resources, the rights offering, these current markets? Give us kind of what your perspective is on all of that.

Sure, so I think we are in a very strong financial position to progress our programs according to our business plan to proof of concept, and of course that does mean that along the way we will be seeking partnerships, and are in discussions, active discussions with parties. And, the goal there is to find pharmaceutical partners that can help progress the programs, especially in areas that require large clinical trials, may require large primary care sales forces, et cetera, and so those are the programs that we are focused on for partnership.

Fortunately, because Lexicon has such a broad portfolio we also have programs that address smaller indications where we feel we can progress them ourselves, if necessary, all the way to commercialization. Now, I would anticipate some of those as well will be very attractive to partners so I would not rule that out, but this is our broad strategy, is the large indications, multi-billion dollar markets, seek the large pharmaceutical partners who can really put the sort of full faith and credit behind the clinical development program, and the ultimate launch and commercialization, and we have an number of programs in that category.

I would say, for example, cognition, LX6171, could address a very big indication and certainly would be in that category.

If you look at LX2931, with not only rheumatoid arthritis, which is a multi-billion dollar market but also autoimmune diseases in general, that I would also put into a category for potential partnerships.

If you look at LX1031, in IBS, historically again, not just the GI doctors but looking at primary care physicians there, versus LX1032, a carcinoid indication, a very attractive biotech indication if you will, focused cancer supportive care setting, a limited number of centers, a program that we can certainly progress and of course have Fast Track status already granted from the FDA.

And so, you can go through each program, Ed, and sort of analyze it for yourself, and therefore extrapolate based on what I have said about our overall strategy of how we would prioritize it for partnership, bringing them this additional cash to bear to progress the programs. So, that is the partnership sum.

The other part of your question was with respect to future financings and, of course, you alluded to the fact that we are in a strong position having a year and a half ago aligned with a very major private equity fund, the Invus Fund, and then also a focused fund specializing in clinical development, the Symphony Capital Fund, and that was just last August where we closed on that $265 million of funding brought into the company for the progression of our pipeline.

So, we continue obviously -- we are in the early stages, early phases of working with these major new investors. It has been a year now, gone extremely well with both parties. Of course, Invus is represented on our board of directors and has a very strong and very long term horizon, a very conservative group with respect to their own cash management, which I think has been particularly beneficial in this last quarter, and of course Symphony Capital, bringing a depth of expertise, and clinical development, and a successful track record of getting drugs approved.

So, with these two investor partners in place, we can anticipate, I think going forward in a very strong fashion. We do come up on an opportunity for a rights offering if triggered by Invus in the fall of 2009, and that is a process whereby if Invus does exercise that right they would effectively serve as a standby underwriter for the amount to be offered, which is to be determined by the Board and Invus, and in so doing they would of course automatically be able to commit, have to commit to their 40% pro-rata ownership in that offering, or future offerings of that nature.

And then we would have an organized ability to offer shares to existing shareholders under this rights offering structure. And then those existing shareholders that do participate would have, again, over subscription rights if there was stock that was not sold to all the existing shareholder base.

So, what we have at Lexicon is pretty unique. As I said, about a year and a half ago we aligned with these new parties. We did not like where the markets were going about a year ago. Obviously, I think that has certainly gotten worse over that past year, and especially in this past quarter so I am glad we took those steps then.

I think that companies of our nature and, as you say, somewhat early our pipeline -- our pipeline is still somewhat early by comparison so we need to have anchor investors involved, and we do.

And I would say, you have seen our pipeline evolve, what is an early pipeline now suddenly becomes a life pipeline because time goes by quickly, so we are looking forward to getting on through Phase 2.

So, kind of a long answer, but you had a long question.

Good. Very helpful.

Your next question comes from the line of Sapna Srivastava from Morgan Stanley.

I am calling in for Sapna, thanks. Just a question, regarding the Invus deal, it was my understanding that if you wanted to offer equity, say before they triggered, or if they decide not to trigger the rights offering, that you have to offer it at $4.50 or above? I was just wondering if you could confirm that, and think about how you are thinking about that in terms of your current stock price? And then the second question was with the sort of lead asset sitting inside of the Symphony icon structure, can those be partnered while they are in there, or do you have to buy them back in order to partner them and, if so, how are you thinking about the financing, and finding the money to buy back the sort of $70 million to $90 million group there?

Right. So I will start with the second part of your question. Yes. The programs within the Symphony collaboration can certainly be partnered at any time during the collaboration. In fact, this is one of Symphony's priorities. They favor partnership along the development timeline with them. And they have historically worked very closely with their portfolio companies to actually help them achieve that. I mean, they have a lot of good contacts in the industry.

So that structure is partnership friendly, designed again, in fact to encourage it and then depending on the type of partnership available, the parties can then decide on how to unwind that Symphony collaboration, or not, depending on the deal, and that can be done at different junctures. There are defined steps where it can make sense to do it because there is the obligation of their return on a yearly step basis, but there is no reason to do it at defined periods. It could be done at any time, again, the deal can be struck.

So, what it does for us is actually increase our flexibility to partner because we are in a very, again, strong financial position with dedicated funding for the programs and a very dedicated team to progress the programs and I think that shows very well for partners. Historically Symphony has been successful with their business model and we will be successful with ours.

So, that is on the Symphony front. On the Invus front, yes, you recall that there is a mechanism by which the rights offerings can be triggered and then priced. So, the way it is set up is that if our stock is trading at above $4.50 a share, which was the price at which Invus invested their last round of $150 million in Lexicon, so if we are trading above that then the company can launch an offering, a public offering at any time and Invus have the option to participate according to their pro-rata share of the 40% ownership.

Now, if we are trading below $4.50, which obviously we currently are, then Invus has the right to trigger and in that scenario they would set the price, and the price is pre-defined. Our boundary is pre-defined. That would be between $4.50 a share and the then current market price of Lexicon.

So effectively, if we are somewhere below $4.50, they would have to be above our trading price so there would have to be some premium built in to the offer, and that was a negotiated agreement that makes a lot of sense to both parties. Again, it puts us in a strong position to complete the offerings.

So, if they decide not to trigger an offering, and your stock price is still where it is, what are your options at that point?

So, then that is a board-level discussion to decide on if we wanted to go forward with an offering, Invus would have to agree to that and under what conditions. So that would be a negotiated sort of setting to move forward from there.

And just one more thing. If the Symphony, if something gets partnered while it is still within the Symphony structure, does that affect the purchase -- sort of your re-purchase price, or is that purely a time-based step mechanism?

No, their re-purchase price is purely time based, and has defined step points based on the calendar and I believe we are one year into that, and I think there is a total of a four year, is that right?

Right. That is right.

A four year program with them, so we are -- you know we are very early in that whole process. So, it is independent of any partnership opportunities and, of course, their returns are fixed, you know, so.

Okay. Thank you very much.

Sure.

(Operator Instructions). Your next question comes from the line of Jason Kantor from RBC Capital Markets.

Hi, this is actually [Jing San] for Jason, and I have three questions. The first one is about the LX2931 program. For the drug-drug interaction study you guys will start in Q1 2009, I am just wondering, have you guys decided the dose for this study, and also can you share more details on this study?

So, we are in active discussions and consideration around this protocol at present so I do not think we are in a position to discuss the dose we wish to explore and, again, we will look forward to updating you as we initiate that study, which is anticipated in the first part of next year as you mentioned.

Okay. Then I have two modeling questions. So the agreement with Genentech will come to an end in 2008. Did you receive all of the potential milestones for the program? Are there more to come in Q4? Is there an option for Genentech to expand the agreement and have a follow-up? Thanks.

Well, we have received all the milestones under this program. We have achieved all the milestones and received all the payments, so that is the first answer. As far as the ability for them to extend it.

Well, that agreement goes into a different phase at that point, which is the clinical development phase and under that format Lexicon takes control over certain programs that we have picked, or chose, you know, we have a certain set of defined picks and Genentech does.

And then, we progress those programs and Genentech has defined points of being able to opt in to the program if they want to move it into a cost-profit share arrangement. And those two points are one, at IND filings, if Lexicon files a 9(d), and then two, during Phase 2, or at the end of Phase 2, I believe. So those are the two points and there are defined ways that Genentech could opt into those programs and change it to a cost profit share, otherwise they are Lexicon programs. We execute the plan. We fund them, and if we keep them as our own we would owe Genentech a reciprocal type of royalty on those programs.

We also have other programs that they may develop where we would have some rights where we could earn milestones and royalties if they are taken into the clinic as well.

Okay, great. And then looking to 2009, where is the majority of the revenue coming with respect to the existing collaborations? Which programs where you received revenue in 2008 will end, and can you just comment on this? Thanks.

Yes, so of course we have not given any projections yet for 2009, but our existing programs, as far as the research programs for BMS and Genentech will end. We will still be generating some revenues, at least for the first half of the year under Organon alliance as it is set at this time, and beyond that, you know we really cannot comment at this time.

Great. Thanks a lot.

Thank you.

There are no further questions at this time. Are there any closing remarks.

Yes, well I would like to think everyone for participating. Again, we have had a very, I think, substantial quarter in terms of our clinical progress. Certainly by the end of the year we are going to have a lot more to report. I would like to re-emphasize to keep December 2nd open, if you can, on your calendars for our research day, which we will be holding in New York City as we usually do, and we plan to have a multi-hour session, going into quite some detail about our pipeline. Again, thank you for participating. Bye-bye.

This concludes today's teleconference. You may now disconnect.