Nektar Therapeutics (NKTR) 2011 Q3 法說會逐字稿

Good day, ladies and gentlemen and welcome to be Q3 2011 Nektar Therapeutics financial results call. My name is Laura and I will be your operator for today.

At this time all participants are in listen only mode. Later we will conduct a question and answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes.

I would now like to turn your conference over to your host, Jennifer Ruddock, Vice President of Investor Relations. Please proceed.

Good afternoon and thank you for joining us everyone. With us today are Howard Robin, our President and CEO; John Nicholson, our Chief Financial Officer; Dr. Rob Medve, our Chief Medical Officer; and Barry Flannelly, our VP of Global Product Strategy.

Before we get started please note that on the call we expect to make forward-looking statements that reflect our current views regarding our preclinical and clinical development plans, the medical and commercial potential for certain of Nektar's drug candidates, the value and potential of our technology, the projected Phase III trial start date for 102 in breast cancer and Amikacin Inhale which is partnered with Bayer, the future regulatory and development strategy for 102 in ovarian cancer, AstraZeneca's plans for regulatory filings for 118 and 2013, the timing and availability of future clinical results, the timing of future events related to the advancement of our drug candidate pipeline, including potential future regulatory filings with the health authorities, financial guidance for 2011 and certain other future events and opportunities relating to Nektar.

These forward-looking statements involve significant risks and uncertainties that are detailed in our reports and other filings with the SEC, including our quarterly report on Form 10-Q filed on August 5, 2011, and our report on Form 8-K filed today.

Actual events could differ materially from these statements. We assume no obligation to update any forward-looking statement as a result of new information, future events or developments.

A webcast of this call will be available for replay on the Investor Relations page of Nektar's website at Nektar.com. With that I would now like to hand the call over to Howard Robin. Howard.

Thank you, Jennifer, and thanks to everyone for joining us this afternoon. Today I would like to update you on both our proprietary pipeline and our partnered programs. Following that John will provide a review of financials.

In just a few years Nektar has generated a deep pipeline of programs ranging from late stage to early stage in high-value therapeutic areas such as pain and oncology. As a result, Nektar has one of the most promising and extensive pipelines for a company in our sector.

We have one program in Phase III and two programs being prepared for Phase III. NKTR-118 is in Phase III with AstraZeneca for opioid-induced constipation. NKTR-102 is scheduled to enter Phase III in metastatic breast cancer later this year. And NKTR-061 for pneumonia continues to advance towards Phase III in 2012.

NKTR-181, our new opioid analgesic for chronic pain, is moving rapidly through Phase I, and we expect it to enter Phase II in mid-2012. And our next IND candidate, NKTR-192, a new opioid analgesic for acute pain that I will talk more about today, is on track for an IND filing in the first quarter of 2012.

We are highly focused on executing on our plans and advancing Nektar's programs. We also strongly believe that we are making the right investments in our proprietary pipeline to build value over the long term by developing important new medicines.

In addition to these internal proprietary programs, Nektar's technology is driving multiple partnered programs in development, demonstrating not only the skill of our scientists and technology to enable new drug candidates, but also our track record of delivering for our partners.

Sales of UCB's Cimzia are doing well with additional indications being studied for this important biologic therapy. Roche's Mircera was recently approved in Japan, and sales in Europe are also continuing to grow.

We should start to realize the economic potential in 2012 of MAP and Allergan's Levadex, and Affymax indicated Peginesatide, with their potential approvals at the end of March.

As many of you know, Affymax and Takeda recently announced that ODAC will review their NDA on December 7. If approved, Peginesatide will be the first once-only ESA available for the treatment of anemia it in dialysis patients with chronic kidney disease.

Our partner Baxter plans to start Phase I for the BAX 855 this year. Baxter's Advate is the world's leading Factor VIII therapy for hemophilia patients, and had sales of over $2 billion. BAX 855 is a PEGylated Advate molecule, which uses Nektar's patented technology.

Analysts following the Factor VIII space estimating market potential of between $3 billion and $4 billion for long-acting Factor VIII products. The economic potential of BAX 855 could be very significant for Nektar.

Now let's talk about NKTR-118. Nektar's most advanced proprietary program, NKTR-118, in opioid-induced constipation is partnered with AstraZeneca and well underway in Phase III. If the Phase III program is successful, the economics on this program would be transformational for Nektar. Nektar is eligible for up to $235 million in development milestones, up to $375 million in sales milestones at certain commercial sales levels, and significant double-digit royalties on product sales.

NKTR-118 is designed to address a significant unmet medical need. Constipation becomes a critical issue in about 50% of patients taking opioids. With over 250 million prescriptions written annually in the US for opioids, OIC is an important medical problem and a potentially very large market.

Our enthusiasm for NKTR-118 stems not only from our knowledge of this novel molecule, but also from AstraZeneca's global and comprehensive Phase III program that builds on the excellent and robust Phase II data from our randomized study.

The KODIAC Phase III program currently has two 12-week 630-patient efficacy studies, a 52-week safety study in non-cancer pain patients, and a 340-patient four-week efficacy study in cancer pain patients. AstraZeneca is on track for a filing NKTR-118 in 2013. As a reminder, AstraZeneca is responsible for all costs of development and commercialization of NKTR-118.

We chose to partner with AstraZeneca because they have a global sales team that service primary care physicians and specialists in pain, cancer and GI disorders. They also have an outstanding track record of developing new products and a world-class marketing organization. We are highly confident in AstraZeneca's ability to become the market leader in the OIC market.

Now we would like to talk about NKTR-102, a next-generation topoisomerase I inhibitor being developed in multiple tumor settings. As you'll recall, the Phase II data for NKTR-102 in both ovarian and breast cancer demonstrated highly encouraging results in very poor prognosis populations, which included patients who were heavily pretreated, highly chemo resistant or who had particularly aggressive forms of cancer.

In breast cancer NKTR-102 performed very well across all subsets in our Phase II study in patients with very advanced disease, with a 30% response rate, including six patients with complete resolution of target lesions. This high response rate was consistent in all subsets -- patients with prior AT treatment, prior ATC treatment, HER2-positive, HER2-negative disease, as well as triple negative disease, demonstrating that NKTR-102 is highly active in metastatic breast cancer.

As the first and only topoisomerase I inhibitor being developed in breast cancer, NKTR-102 offers a different mechanism of action than commonly used agents such as Eribulin and taxanes, which are microtubular inhibitors and exhibit cross-resistance with each other.

We plan to initiate the Phase III BEACON study in metastatic breast cancer before year-end. The BEACON study will enroll approximately 840 patients, comparing single agent NKTR-102 to an agent of physician's choice with a primary endpoint of overall survival.

The FDA has agreed with our proposed study design, our primary endpoint of overall survival, and our comparator arm. We just recently received agreement on the BEACON study design from the EMA as well.

We are excited about initiating the BEACON study. There is no clear standard of care for patients with metastatic breast cancer who have progressed after ATC treatment. In addition there are no late-stage studies ongoing in this patient population. If we are successful, NKTR-102 has the opportunity to become a worldwide standard of care in advanced breast cancer.

Dr. Edith Perez, our principal US investigator for the BEACON study, a leading breast cancer specialist, and Deputy Director of the Mayo Clinic Cancer Center, will present the data and trial design for NKTR-102 at the 2011 Chemotherapy Foundation Symposium in New York on November 10.

Moving onto NKTR-102 in platinum-resistant ovarian cancer. As a reminder, NKTR-102 has orphan drug status in the US and in the EU in platinum-resistant ovarian cancer. Our expanded Phase II single arm study of NKTR-102 in women who have progressed while on Doxil is continuing. As many of you are aware, in recent weeks it has become apparent that the Doxil shortage will not be resolved anytime soon.

Our ongoing studies require women to have progressed while on Doxil before enrolling in our study. Although the Doxil shortage has only very recently begun to impact enrollment, based on communication with our study sites, we believe future enrollment in our study will be limited until the Doxil shortage is resolved. Further, there is no clear guidance as to when the Doxil supply shortage is expected to end.

To date we have enrolled 82 of the 110 platinum-resistant refractory ovarian cancer patients with prior Doxil treatment that were planned for the Phase II expansion study. We have decided that the best course of action is to proceed to compile, analyze and assess the data in the patients that are enrolled through the end of this year.

We have not yet accessed or reviewed the efficacy data from the expansion study and will be doing so in the coming months. Following our review and analysis of these data we plan to meet with the FDA to discuss NKTR-102, the Doxil shortage, and explore our regulatory options and development strategy in ovarian cancer. We expect to have topline response rate data to share with you in the first quarter of next year.

Now I would like to talk about two novel molecules Nektar is developing for pain, NKTR-181 and NKTR-192. Both drug candidates leverage our expertise in modulating drug entry into the brain. These new pain programs also represent sizable market opportunities for Nektar.

NKTR-181 is our new mu-opioid analgesic molecule to treat chronic pain. NKTR-181 is fundamentally different from other approaches used in the opioid space because we have created a brand-new opioid molecular structure using polymer drug conjugate technology.

The properties we observe are built into the molecule and are not a result of a formulation. As a result, NKTR-181's properties are inherent to its molecular structure, and crushing, melting or manipulating it won't change its attributes.

NKTR-181 has been engineered to have both an enhanced PK profile to allow it to be dosed once or twice daily in chronic pain patients, and a controlled rate of entry into the CNS to reduce its CNS side effects compared to standard opioid therapies.

The results from our single ascending dose study of NKTR-181 were very compelling and support NKTR-181's profile. We observed a clear analgesic response, slow entry into the brain. And NKTR-181 was very well-tolerated across a 50-fold range of doses.

Our second Phase I study of NKTR-181, a multiple ascending dose study is currently ahead of schedule. We now plan to report topline data from this study before the end of this year, which will include pharmacokinetics, safety and pharmacodynamic data.

The trial evaluates four dose cohorts of NKTR-181 over an eight-day treatment period. The data from this study will allow us to choose the dosing schedule for our Phase II program, which we plan to start in the first half of next year.

If NKTR-181 is successful, we believe it could dramatically change the chronic pain market. There are over $5 billion of annual sales of long-acting opioids to treat chronic pain conditions, including osteoarthritis, chronic back pain, cancer pain and fibromyalgia.

Now I would like to talk about how we are expanding our pain program and pain platform. NKTR-192 is our next important program in pain. It is also a new mu-opioid analgesic molecule designed to have a reduced entry rate into the CNS, but with a short-acting profile and relatively fast onset of action.

With NKTR-192 we have observed reduced sedation, reduced abuse liability, and less respiratory depression as compared to standard opioids in our preclinical model. The findings from these preclinical studies will be presented at the 2011 Society for Neuroscience meeting, which begins on November 13 in Washington DC. NKTR-192 will also be highlighted in the society's news conference.

If successful, NKTR-192 could be a highly differentiated drug to treat acute pain. This is an exceptionally large potential market with over $3 billion in opioid sales annually. As an acute pain drug NKTR-192 could be used in postoperative pain, muscle and bone injuries, pain arising from kidney stones, or any other painful condition that does not require continuous chronic treatment for long periods.

With both NKTR-181 and NKTR-192 in our portfolio we are uniquely positioned to target both the chronic and acute pain markets. These new drug candidates could be game changing in the area of pain relief, and we are tremendously excited about their advancement and development.

Next I would like to talk about NKTR-061, or Amikacin Inhale, partnered with Bayer. Amikacin Inhale could potentially be the first product to treat serious ICU lung infections by delivering antibiotic directly into the lungs. We continue to conduct our final test on the commercial drug device combination to prepare for Phase III studies.

Bayer starts the plan -- plans to start Phase III next year, and they have received an SPA from the FDA. The studies will enroll approximately 1,200 patients, with a primary endpoint of clinical test of cure. NKTR-061 has significant potential for Nektar with a flat 30% royalty in the US and an average ex-US royalty of approximately 20%. Both Bayer and Nektar continue to be very committed to moving Amikacin Inhale as quickly as possible into Phase III.

Before I hand the call to John, with regard to our convertible debt due next September, I want to let you know that we are actively pursuing a number of alternatives, and we believe that they are in the best interest of Nektar and our shareholders.

With that I will turn the call over to John.

Thank you, Howard, and good afternoon everyone. I will start by reviewing our financial guidance for 2011. We now expect to end the year with $410 million to $415 million in cash. Revenue for 2011 is expected to be between $64 million and $66 million, slightly higher than our prior guidance. The increase in revenue quarter-over-quarter is primarily a result of the recognition of $9.5 million in milestones and IP licensing revenue in the third quarter.

Our R&D expense guidance is between $142 million and $148 million. Approximately $20 million of this are non-cash expenses, such as stock-based compensation and depreciation. R&D expense guidance decreased due to lower startup costs for the start of BEACON Phase III study.

G&A is still anticipated to be between $44 million and $46 million. Included in our 2011 G&A expense are $13 million of non-cash items such as amortized free rent on a San Francisco facility, stock-based compensation expense and depreciation.

Capital expenditure for ongoing operations are expected to be about $12 million for 2011.

Total revenue in Q3 2011 was $27.1 million, a $9.8 million increase over Q2 2011 revenue of $17.3 million. The increase in revenue quarter-over-quarter is primarily a result of recognition of $9.5 million in milestones and IP licensing revenue in the third quarter, as I said earlier.

Year-over-year revenue in Q3 decreased from $37.9 million due to the completion in 2010 of the amortization of approximately $25.3 million of the $125 million payment from AstraZeneca for NKTR-118, which was included in the third quarter of 2010. This payment was fully recognized as of December 31, 2010.

R&D expense in the third quarter of 2011 was $31 million compared to $32.3 million in the second quarter of 2011 and $27.7 million in the same quarter a year ago. The increase over 2010 was primarily related to the advancement of multiple programs in clinical development, including two Phase I studies of NKTR-181 and our continued 102 study, as well as preclinical work for our NKTR-192, our next IND candidate.

In the third quarter of 2011 $5 million of our expenses were non-cash expenses of stock-based compensation and depreciation. G&A expense at Q3 2011 was $12.4 million, including $3.3 million in non-cash expenses related to amortization of free rent, stock-based compensation and depreciation.

Cash, cash equivalents and investments at the end of Q3 were $458 million as compared to $481.8 million at the end of Q2. As I stated, we now expect to end the year with approximately $410 million to $415 million.

With that I will now open the call to questions. Operator.

(Operator Instructions). Cory Kasimov, JPMorgan.

This is actually Karen Jay for Corey. Thanks for taking my questions. I have a couple. My first is on 118. I know you gave a filing timeline, but any updates on enrollment that you might have gotten from AstraZeneca that you could share with us or timing for data?

Yes, I wish I could, but that type of information is not something AstraZeneca makes public. And what we know is that the study is on track and that, as they have said, they plan to file in 2013.

Okay, okay. Then on 181, I know you mentioned you're going to start the Phase II soon and you're waiting for dose. But outside of dose, can you share any details on that, what the Phase II is going to look like, how big it is, and what -- are we going to get interim data from the Phase II at all?

Well, we haven't shared that yet. And what we have said was that the first Phase I study looked very good, and we have showed some data on that already. We said we have the second Phase I study ahead of schedule, and we will have data on that at the end of this year. But we haven't discussed anything yet in terms of Phase II design, but clearly we will be sharing that with everyone in the not-too-distant future.

Okay. My last question is on the randomized data versus irinotecan in colorectal, it has been pushed out a little bit. Any update on the timing of when you might see date of there?

Well, I will say that, of course, we all know that is a difficult study to enroll. Irinotecan is a single agent and NKTR-102 is a single agent in metastatic colorectal cancer. I will let Rob Medve, our CMO, comment further.

We have been following this trial and assessing enrollment. And as Howard correctly states, it is a difficult trial to enroll as irinotecan is not commonly used as a single agent. We are looking at ways to increase enrollment on that trial and we will inform you when we do make some decisions.

I think the most important thing to note though is that, look, we have a good, comfortable relationship with the FDA regarding the trial design of NKTR-102 in metastatic breast cancer. And we plan to start that study before the end of this year, and that is where the significant questions will be answered as to how good NKTR-102 is.

We are very hopeful that we can demonstrate a clear advantage in survival over physician's choice. And as I said, that is the study to watch and we will be starting that this year.

Great, thank you.

John Sonnier, William Blair.

The first is on 102. Howard, can you talk a little bit about, I guess, from a strategic, regulatory and clinical standpoint 82 patients versus 110, how relevant is that? What does that mean against the regulations where you might consider if it is profound data for an accelerated filing?

Well, look, good question. And because -- you know, there aren't a lot of statistics involved in this simply because it is a single arm study. And I have always said, look, this was a great opportunity for us to pursue, but of course I have always said that this has a very low likelihood of success associated with it, because the FDA generally -- generally doesn't accept single arm studies for accelerated approval.

That said, a lot of this will depend on what the data look like and what kind of response rate we have in that study. So 82 patients -- there may be 85 patients by the end of the year, versus 110, I'm not so sure that is overly critical. Let's see what the data looks like. And it is hard to predict what the FDA will save there.

We had started the study with 110 because we believe that with the number, but I think it will be very important to see what we have at the end of this year. And we said we will make the data available to everybody on those first 82 or 85 patients during the first quarter, and we will, depending on the robustness of the data take it to the FDA and have a discussion with them on it.

I think we learned a lot on the Seattle Genetics panel, the Adcetris panel about the accelerated pathway. Clearly it is alive and kicking. I think there was some skepticism over the last year, maybe based on some of the inconsistency with the FDA communication. But is there a threshold, I guess, from a response rate standpoint that you would look at and say, yes, that is good enough to file on?

Well, I think it is -- look, it is always a question of what the FDA believes is important for that patient population. In a patient population of 500 patients they're going to have a much lower threshold than in a larger patient population. It is very difficult to say. I wish I had that answer, and I wish I had an absolute number that we had to achieve.

If you remember in the Phase II study -- the original Phase II study, we had a response rate approximating 20%. And we felt that was a meaningful response rate in patients who had very limited treatment options.

But, again, we have to see what the response rate looks like in these 80 plus patients and we have to see if that is going to be compelling for the FDA. But it is very difficult -- we haven't looked yet, so it is very difficult to make that judgment.

At this point we just want to make sure that we have a position that is meaningful to go to them with. And of course the trial has greatly slowed down now because of the lack of ability to put patients on Doxil, or even continue patients on Doxil, which was required for enrollment in our study. So, fortunately, we have about 80 plus patients and let's see what the data looks like.

That is helpful. And then just a quick question on 118. There has been a lot of news, I guess, since your last call in the OIC space. Give us your perspective on how you see 118 positioned against some of the other competitive drugs that we see emerging in this landscape.

Well, look, I think if you look at the Salix drug, it is certainly somewhat ahead of us, but no one knows -- no one really knows what that molecule looks like. I haven't seen -- I don't think anyone has seen any data at the end of Phase II, so no one really can make a judgment.

The original molecule had all kinds of problems with oral availability. Supposedly they fixed it; supposedly they went into Phase III with the problem solved, but data was never presented. So I can't judge what Salix will do with that molecule.

The next molecule in line is NKTR-118, and quite frankly we know what NKTR-118 looks like in Phase II. That was a randomized trial and the data was spectacular. And everybody understands exactly how NKTR-118 works and what the data looks like that allowed us to move into Phase II. Quite frankly -- at Phase III, rather -- and quite frankly, putting that drug in the hands of AstraZeneca, who is a marketing power house, in my mind one of the best marketing companies and development companies in the business, I think says a lot about the potential for NKTR-118.

So whether you are first to market, second to market, I don't think that is a big issue here. I think the question is how well does your drug work, what does it look like, and who is the one -- who is the company that is going to be driving it forward into a very broad marketplace.

Remember, this isn't just a marketplace for pain. This is a marketplace for primary care; this is a marketplace for pain; this is a marketplace in oncology. And I think having AstraZeneca market this drug for us is going to cause them to dominate the space with NKTR-118. That is my personal opinion.

Now what if you look at the other programs that are coming, there are all perhaps two years behind us. So very difficult to comment at that point.

I appreciate it. Thank you.

(Operator Instructions). Steve Byrne, Bank of America.

On 181 do you consider it to be more unique in its challenge to be abused or its less addictive property? How would you rank those two characteristics?

Well, I think they are both very important. So you have to understand what we have done here. What we have done is taken a mu-opioid analgesic and given it product attributes that is beneficial product attributes as a molecule and not as a formulation.

So as I said earlier, it can't be crushed or chemically altered and still retain its effectiveness as an opioid. So consequently from a pure abuse potential and ability to manipulate it, it becomes very, very challenging. It is not simply a formulation that you can crush or alter or chemically alter in a way that frees up the opioid for abuse.

Now that is the physical component of it. Now if you go to the other dimension, it is structurally engineered to enter the CNS at a very controlled rate. And the general belief is that rapid entry into the CNS is what causes the euphoria, which can become addicting, which causes sedation, which causes respiratory distress, etc.

So by controlling the rate of entry into the CNS, not just by having a sustained release in plasma, but actually entering the CNS, crossing the blood-brain barrier in a controlled fashion, should give us the attributes of less euphoria, which means less likelihood of becoming addicted to it, as well as less sedation, less respiratory distress, etc.

So this is -- if NKTR-181 works according to plan, if we are successful with it according to our clinical profile, it becomes a major advance in opioid therapy. And we all know that opioid therapy is necessary because when you have severe pain there is no other place to go, you have to take opioids.

So the market for opioids is not going away anytime soon. Consequently, if you can make a better opioid molecule -- remember, it is not a formulation, it is a new opioid molecule, with these attributes, I think it is going to dramatically change the market.

Do you have any conceptual ideas on how you might be able to test this latter characteristic of being less addictive?

Well, I will let Rob Medve, our CMO, comment on that. There are very clear ways to test that. Go ahead, Rob.

Certainly, thank you, Howard. During the course of development we will later in development be looking at human abuse liability studies. That is a requirement for the development path for opioid analgesics.

Typically what one does in a human abuse liability study is compare to a relevant comparator drug and try to manipulate the dosage form to accelerate entry into the CNS. And as Howard pointed out, with 181 as far as we know that is not possible. This is built into the molecule. You can't accelerate delivery into the plasma, nor can once the drug is in the plasma can you accelerate delivery into the CNS.

Those are the things that typically drive the euphoric response and the liking response that we measure in human abuse liability trials. So that is how we would assess it in the course of the clinical development program.

Of course, there is many additional clinical development steps to be conducted before we are ready to do the human abuse liability trial, and Howard outlined the timeline for those in the body of the call.

Okay, and regarding your other pain drug in development, the rapid acting opioid, what would you consider to be unique about this one? And why is it not just as abuse likely as the others -- rapid acting opioids that are out there?

Well, a good question. It is essentially the same concept as NKTR-181. It is an opioid that, again, has a controlled rate of entry into the CNS, is a molecule and not a formulation that can't be altered. So the only thing we have altered is it has a somewhat more rapid uptake in its PK profile, as well as its entry across the blood-brain barrier. And consequently is more of a rapid acting short half-life opioid, which could be used for acute pain,, but with the same basic parameters, same basic attributes that we designed into NKTR-181.

So NKTR-192 is NKTR-181 -- a completely different molecule, of course, but basically a molecule, not a formulation, more shorter half-life, more rapidly acting, but still can't be easily diverted and still crosses the blood-brain barrier at a rate which would reduce euphoria, which would reduce sedation and reduce respiratory distress.

So you have basically taken the concept of controlling PK characteristics as well as CNS characteristics, made those -- taken two different molecules and addressing one towards the chronic pain market and one towards the acute pain market.

Okay, and can you provide an update on where your inhaler device is for the 061 drug with Bayer?

Well we said -- I said earlier we are in the process of testing and doing the validation runs for the final drug device combination -- the final market marketed device. Bayer is committed to putting this into Phase III next year. And we want to make -- we wanted to make sure that we had the final commercial device, and that is what we have designed. And that is what will be entering Phase III.

I think the most important point is that Bayer did an absolutely outstanding job in securing a SPA with the FDA, so that the endpoint of this trial is not mortality. The endpoint of this trial is clinical test of cure of the pneumonia.

And I think it is a very, very important attribute of this trial, which leads me to believe that we have a good shot at success there given that Amikacin is a very, very powerful antibiotic. And the problem with Amikacin, of course, is when you deliver it systemically you can't reach concentrations in the lungs without causing all kinds of -- necessary concentrations in the lungs without having all types of chronic systemic toxicity.

By delivering Amikacin directly into the lungs to cure the pneumonia, I think that is a very, very reasonable approach towards dealing with this very, very, very bad condition. And we are very excited about it. And I think the SPA that Bayer has with the FDA makes this trial very exciting to us.

Okay, but the device is still being evaluated as far as the meeting specs that Bayer has requested?

Well, look, I wouldn't say that. I would say the device is finished. It is going through final testing and validation, but at this point we have no further plans to change the device.

Okay. And then just one last one on Amikacin. There has been quite an evolution in recent years in the gram-negative space with various means of resistance development. Can you just comment on how Amikacin holds up on some of these more resistant isolates?

Well I think -- look, I think I can let Rob comment a bit on that. But overall the general belief is that Amikacin is a very, very potent antibiotic in these resistant strains. And to put it -- to be able to put it directly into the lungs in significant doses ought to deal with a number of the resistant strains of this bacteria.

Rob, do you want to comment further?

Sure. I think the key for this product is gaining high local concentrations of Amikacin in the area of infection as opposed to the particular resistant strains. So Amikacin is a very potent bactericidal drug, so just getting it into the lungs at high concentrations and avoiding systemic toxicity is a significant advance in this therapy.

Okay, thank you.

Sir, there are no further questions at this time. I would now like to turn the call over to Howard Robin for closing remarks.

Okay, well thank you for joining us on the call today. And as I said earlier, the team at Nektar is highly focused on building our Company, and I want to thank all of our employees for their hard work and their continuing accomplishments in putting together what I think is an incredibly promising pipeline.

And we look forward to seeing many of you at future medical meetings and other meetings in the coming months. So thank you for joining us today, I appreciate it.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. And have a great day.