Novavax Inc (NVAX) 2011 Q3 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Novavax third quarter 2011 financial results conference call. My name is Karen, and I will be your conference operator for today. (Operator Instructions.)Novavax, please proceed with your call.

Thank you. Good morning. This is John Herrmann, Executive Director of Legal affairs At Novavax. I thank you for joining us on today's third quarter 2011 financial results conference call.

Both the earnings release from this morning and an archive of this earnings call can be found on the Company's website at Novavax.com. On today's call are President and CEO, Stan Erck, and members of our executive team.

Before we begin our prepared remarks I want to remained you that we will be making forward-looking statements during this teleconference that could include financial, clinical or commercial projections. Statements relating to future financial or business performance, conditions or strategies and other financial and business matters including expectations regarding revenue, operating expense, cash usage, and clinical developments and anticipated milestones are all forward-looking statements within the meaning of the Private Securities Litigation Reform Act.

Novavax cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Further information on the factors and risks that could affect Novavax's business, financial conditions, and results of operations are contained in Novavax's filings with the SEC which are available at www.sec.gov. These forward-looking statements speak only as to the date of this call and Novavax assumes no duty to update any such statements. I will now turn the call over to Stan.

Okay. Thanks, John. And good morning, everyone. I am happy to report we've had a very productive quarter since our last conference call.

I would like to start the call with a broad message that I would like to deliver this morning, so in this third quarter we have started to see the impact of changes that we implemented earlier this year. We have moved the ball forward on all fronts, and I will take a few minutes to highlight our progress.

First, we have a management team on board that has shifted the Company into high gear. We have added seasoned managers in manufacturing, clinical development, and regulatory affairs, who have taken vaccines from early development through FDA approval to commercialization.

Second, as a result of those additions we are executing on all fronts with our BARDA contract. As promised and you will hear this from Fred Driscoll, the BARDA contract has dramatically cut our cash burn rate and we are poised to start as many as four clinical trials in influenza next year . And third we just presented data from a clinical trial in RSV that puts Novavax in the front of the line for important new vaccine in a market crying for a new product. Greg Glenn will take us through the RSV data in a few minutes.

Next I will cover our progress under our BARDA contract, a program that has been our primary focus and will be throughout the execution of this contract. As you know from previous calls, we are bound by strict confidentiality rules with BARDA, but I can generally report on progress and status. The overall relationship with BARDA continues to be very positive and our teams are working collaboratively with them to aggressively develop seasonal and pandemic influenza recombinant vaccines. As we have throughout the year, we're focusing efforts on refining our manufacturing processes for seasonal and pandemic flu and producing materials at large scale. I can report that we're meeting all of our goals in process development.

Our plan with respect to seasonal flu is demonstrate that our current manufacturing process results in a product that is well tolerated and highly immunogenic in a Phase II clinical trial. What is new is that our plans now call for a trial to evaluate a quadrivalent version side by side with our trivalent version.

Like many current flu vaccine manufacturers we believe that a quadrivalent formulation of the flu vaccine would offer better protection against the two B strain lineages of influenza. We also believe that quadrivalent vaccine will be the product of choice as we move towards commercialization.

This Phase II trial is scheduled to initiate in the first quarter of next year and our plans for conducting the Phase III trial remain on track for 2013.

Our pandemic Influenza program is on schedule and we plan to launch Phase I-II trials in Q1, 2012, to evaluate our H5N1 VLP based vaccine for safety and immunogenicity both with and without an adjuvant.

From a contract execution perspective we continued to generate significant revenue during the third quarter. We have been promptly sending monthly invoices and have been receiving monthly payments in full from the US Government. Fred will have more to say about this later in the call.

In addition to the BARDA contract in the third quarter we were awarded a $1.3 million contract from the department of Homeland Security to develop a vaccine to prevent foot and mouth disease. This is a highly contagious disease in livestock which poses a significant threat to US agriculture. The contract will support the development of a recombinant virus-like-particle based vaccine which, unlike current foot and mouth disease vaccines, would not require use of the highly infectious foot and mouth disease virus. Again, this is great opportunity for us to address a serious public health threat and demonstrate the value and the potential benefits of our VLP platform.

In early October we reported very positive results for the Phase I study of our vaccine candidate to prevent respiratory syncytial virus or RSV. From a corporate perspective it is important to note that these data represent a major milestone for our Company since it significantly broadens our clinical pipeline with our third clinical vaccine candidate.

Our portfolio of clinical stage products includes a seasonal flu vaccine, a pandemic flu vaccine and now an RSV vaccine. In addition, it is further validation of our proprietary, recombinant nanoparticle vaccine technology that can be utilized among a broad range of disease indications. We believe that strategically this is precisely how true value for a biotech company can be enhanced.

To remind everyone, RSV is the leading cause of lower respiratory tract infection in infants and young children as well as the elderly. On a global basis the disease burden is estimated at 64 million cases and 160,000 deaths every year. The need for a vaccine is greater than ever. There are no vaccines approved today to prevent RSV and current treatments are often inadequate or cumbersome and expensive. This is a very important program for Novavax and addresses a critical public health need for our nation. We are evaluating the market for this vaccine and it is clear that this product has the potential for over a billion dollars in sales in the US alone. Our hope is that we will be the first to market.

Now, let me turn the call over to our Chief Medical Officer, Greg Glenn, to describe the clinical results.

Thanks, Stan. The purpose of this Phase I trial was to assess the safety and tolerability of the adjuvanted and unadjuvanted formulations of the vaccine, and to evaluate the neutralizing RSV antibody responses and the impact of the alum adjuvant. As you know Phase I testing is an important hurdle in vaccine development because it provides not only human safety signals for a new vaccine candidate but also initial data on the potential dose administration schedule. This is essential information for advancing any clinical candidate.

We began this trial in late December of last year. We enrolled 150 healthy adults, 18 to 49 years old, who were allocated in a dose escalating fashion to six cohorts that included four dose levels of the vaccine. The two highest dose levels were formulated with and without the adjuvant alum. The study participants who were randomized received the VLP vaccine treatment or a saline placebo in a 4 to 1 ratio and given the vaccine at Day 0 and Day 30 and then blood samples were taken at Day 0, 30 and 60 to evaluate the immune response to the vaccine candidate.

The primary end point was to assess safety and tolerability of the alum adjuvanted and unadjuvanted formulations of our RSV vaccine candidate. A secondary objective was to evaluate the total neutralizing antibody responses and assess the impact of the adjuvant. Our vaccine was shown to be well tolerated and it induced a significant increase in antibodies against the RSV virus.

The primary safety findings were local pain and tenderness at the site of injection, the majority of which were mild in nature with no dose related increase. There were no observed vaccine related serious adverse events.

With respect to the immunogenicity analysis it is important to understand how the immune assessment was performed. We measured the immune response for the F protein using the RSV F nanoparticle, which presents the antigen in its native configuration. RSV F antibodies have been show to correlate with protection and the antibody response to the RSV F protein was significantly increased compared to placebo at a P value of less than .001 in all groups and increased by 19 fold in the highest dose group at Day 60.

A significant dose response pattern to the RSV F antibody was observed and high rates of serial conversion were seen in all doses with 100% at the highest dose adjuvanted group. Furthermore, in collaboration with the Baylor College of Medicine we also evaluated the viral neutralizing responses and found significant rises in neutralization of both the A and the B RSV strains when our [serial] was analyzed against these two viruses. Additional analysis using portions of the F protein recognized by Synagis, the monoclonal antibody shown to protect premature infants against RSV, indicate that a robust Synagis-like immune response was elicited by our vaccine. Together these data suggest the Novavax RSVF nanoparticle vaccine induced functional immunity that is known to be protective against RSV and suggests that the vaccine candidate should be advanced to the next stage of development.

Now let me turn the call back to Stan.

Thanks, Greg. So in summary, I am pleased with our progress this year and excited about the opportunities ahead of us. As we reported in the past, the management team is very experienced in bringing (inaudible - technical difficulties) into the market place, continue to make key additions. Once such addition that we've just announced is to bring on a new Vice President of Process Development. Dr. Erica Shane received degrees in chemical engineering from MIT and Carnegie Mellon University. For the past 17 years worked at MedImmune in increasing positions responsibility, eventually running the BioProcess Engineering Department. Developing a scalable, efficient manufacturing process for vaccines is a critical element of our value creation and we welcome Dr. Shane to the team.

Now I will turn the call over to our CFO, Fred Driscoll, to review our third quarter financial results.

Thanks, Stan. For the third quarter of 2011 we reported a net loss of $3.2 million or $0.03 per share compared to a net loss of $10.2 million or $0.10 per share for the third quarter of 2010. That represents a 69% improvement on the net loss on a year-over-year basis.

The primary reason for the decreased loss in the quarter was the recognition of revenue under the BARDA contract which we expect will generate significant revenue for us this year and lower R&D costs associated with our H5N1 and seasonal trials from 2010.

Revenue in the third quarter was $5 million as compared to $200,000 for the third quarter of 2010. On a year-to-date basis we have recognized revenue of $8.8 million as compared to $300,000 in 2010. The significant favorable year-over-year variances are due solely to the revenue associated with the BARDA contract.

Research and development expenses for the third quarter decreased to $6.2 million as compared to $7.9 million in the third quarter of 2010.

General and administrative expenses for the third quarter of 2011 were $2.7 million as compared to $2.8 million in the same period in 2010.

As of September 30, 2011, the Company had $19.6 million in cash, cash equivalents, and short-term investments compared to $31.7 million as of December 31, 2010.

Based on our cash balances as of September 30, anticipated revenue under the BARDA contract, possible proceeds from the sales of our common stock, under our at the market sales agreement, and our current business operations, we believe we will have adequate capital resources available to operate at plan levels for at least the next twelve months.

I would like to further amplify the point Stan raised earlier in this call regarding our success in providing timely invoices to the US Government and being fully paid, 100%, on a timely basis. This has significantly improved our cash flow position by dramatically reducing our cash usage situation.

To exemplify this point, in Q1 of this year, where we had not received any incoming cash flow from BARDA since the contract had just begun, we used over $9 million in cash to support our ongoing operating activities. In contrast, the Q3 cash used in operating activities was reduced by 63% to $3.3 million. So from a financial perspective this bodes well for the future and clearly demonstrates our ability to efficiently accumulate non-dilutive funding for the entirety of our influenza program .

That concludes our prepared remarks and, operator, we'll now open the call for questions.

Thank you sir. (Operator Instructions.) Our first question comes from the line of Greg Wade of Wedbush.

Good morning and congratulations on a good quarter. Stan, I wonder if you just might help us to understand this quadrivalent flu plan. Does the present BARDA contract contemplate supporting that? And then if you can just perhaps expand on what type of competitive position such a vaccine would find itself in the marketplace and then maybe Greg can talk a little bit about the antigens and how they would be chosen to go into that and then I have a follow-up question as well.

Yes, Greg, I will be happy to. Yes, so during the third quarter we delivered -- we discussed and delivered a five year clinical and regulatory development plan with BARDA, and we talked a lot about trivalent versus quadrivalent and BARDA is completely on board with respect to the quadrivalent, and the program is being paid for under the BARDA contract, so that's all covered. And everybody's on board with the need for it. I think the industry is -- all will head toward quadrivalent vaccines at some point. We've heard I think through announcements that some of the bigger companies have started clinical trials on quadrivalent. We want to be in the market with the best product in the marketplace and I think that requires a quadrivalent, and I I suspect that other companies will start introducing the quadrivalent products over the next five years. I think that's all you asked me. Greg?

Yes, a little more visibility into antigen choices if that's possible.

Yes, so, Greg, as you probably know, there is surveillance, global surveillance done by WHO sites throughout the world looking for strains that are out there, and in February the strains are announced. What has been found in the past several years is the B lineages have only been partially covered by the choices of the have vaccine, and so I think it is a general consensus and recommendation has been around for several years to add a second B strain so now we have an H1N1, an H3N2 and two different B lineages that will cover the B strains that come up globally.

Thanks. With respect to the RSV opportunity, two part question. First off, if maybe you can give us a little insight into how business development discussions are going and then secondly, is your preference to continue to do work on RSV and get to another inflection point or would you like to do a deal and if so, what type of transaction would be your preference? Thanks.

Greg, I will handle that, so we have held off discussions of RSV until we had clinical data. We have had those data for 30 days. Since Greg presented the data at a vaccine conference in Seattle at the beginning of October, we have had a number of inbound calls from all of the usual potential partners. I think as you can recognize that this is a very substantial market, that there are a lot of companies interested in having an RSV vaccine. There are no vaccines on the market.

In fact, I think we represent one of the latest stage products, at least that's been announced publicly, and so our plan is to partner. My guess is that would be likely within the next year or so. These things, these partnerships take time, and I think we'll be in a position to select the best partners on a regional and global basis. And it is far too premature to talk about the size of the deals or what will be covered yet, but I will keep you posted throughout the coming quarters whether we're making progress.

So just to be clear, this is a product that can be used in four different target markets. We have got the elderly which represents a very large opportunity with the potential to have an annual RSV vaccine taken alongside the flu vaccine. We have a -- we want to protect infants and young kids, and that includes infants from zero to two years old and toddlers from two to five years old, and one of the best ways we think to protect infants is to do maternal immunization, so build up the antibodies in the expectant mothers that then get transferred at birth to the infant, and so there are a lot of markets. There are a lot of clinical trials that we'll be doing over the coming years, and we want a strong partner to help finance those efforts.

Thanks, Stan, I hope the street starts to recognize this opportunity.

I do, too.

Thank you, sir. Our next question comes from the line of George Zavoico from MLV.

Hi, everyone. Good morning. And congratulations on quite a lot of progress in this quarter. Following up a little bit on your -- the answer to your last question about BARDA and the move from a trivalent to a quadrivalent vaccine, in my mind it speaks partly to the flexibility and the expertise at BARDA in recognizing the changing landscape. But at the same time with the changing landscape you could also have changes in what kind of trials and the cost of those trials. So if something like this happens and it increases perhaps the cost of the trial that was intended, is there flexibility in BARDA as well to increase the grant to cover that or how is something like that handled?

Yes. So good question. There is precedent, there is plenty of precedent for BARDA changing to meet the needs of product development. In other companies where they have expanded their trials or reacted to data in an unpredicted way, and BARDA has increased the contract, so that's possible to do. Right now our expectation is that we will complete the first three years within the $97 million budget that BARDA has allocated for this, so if that changes then we'll go back to BARDA and talk to them.

Okay. Great. That's good to know. With regard to the RSV, you talked a little bit about the discussions that are beginning now, and you also said that it was premature to discuss possible terms. I am wondering just broadly speaking two -- well, three questions. One, are you planning to retain any North American rights or regional rights in any potential deal? Are you delaying any further development of the RSV vaccine until you get a partner and can develop a plan for further progress with that partner? And the last question is given now that you've had a little bit of time to think about it, maybe just very broadly a ballpark of when an RSV vaccine might actually be launched. I know those are kind of broad questions.

Yes. Those are -- yes. Yes is the answer. I think in the answer to your first question about what rights would we retain for ourselves, I think that that we'll negotiate what we think are the best terms for the Company, and to retain as much value as we can, and it depends on which partner it is, what region they want to cover. Our expectations is that we will have long-term involvement with the product, and that's about as specific as I can get for you on that.

I think at least the last question was when do we expect to see it to market. We don't have a detailed clinical development plan. We're working on one now. My guess is that you would look in the five year time frame for getting a vaccine approved either for maternal or elderly which will be probably the first two indications that we choose, but that's a -- I can't give you too much specific guidance on that.

You also asked on -- will we delay the product. I don't think we are going to have to. We have Phase I data with a Phase I manufacturing process. We have turned aggressively to developing a manufacturing process that would support Phase II and Phase III production. That will take a bit of time. We expect to have clinical trials, Phase II clinical trials, start up in the middle of next year, and I don't anticipate that we'll have any delays as a result of partnering discussions.

That's great. So you're moving ahead with planning the Phase II trial regardless of what happens in the partnering --

Yes. I think we're in the front of the industry on this product, and we want to stay there.

Yes. Okay. Good. I wasn't expecting details. I think you provided in your answers and have been very helpful. All right, Stan. Thanks very much. Look forward to progress next year and I agree with Greg. I hope Wall Street recognizes the value proposition here.

Thanks.

Thank you, George.

Thank you. Our next question comes from the line of Kevin Degeeter of Ladenburg Thalmann.

Hi. Yes, I want to add my congratulations and a couple more questions, mostly on RSV. Can you talk a little bit more about the manufacturing process improvements in terms of maybe specific metrics to think about and just where you are in that process and kind of how that ties into perhaps the announcement earlier this week on sort of adding sort of a new hat or process development?

This is Greg Glenn here. I think as Stan mentioned the process was very suitable for a Phase I trial. We have taken advantage of a lot of work that has gone on in the last year with the influenza program, so they share the upstream, that is the back of our insect cell system. Productivity has been I think greatly increased in that setting so we can take advantage of the lessons learned there. And we have been working on the RSV process to some degree, and I think it will match with the development of the clinical development, so Erica Shane is very strong player in this arena, and I expect that she will help us move the product and process development along to a later stage. We fully expect to have an efficient commercializable process for our product.

Okay. And on maybe a slightly similar vein, do you anticipate the need, now that you've had a chance to look at the full Phase I data of development of additional assays, whether they be to characterize your RSV vaccine or to characterize the immunological response prior to kicking off Phase II?

That's a good question. That's a very active activity right now, and we have tremendous windows into the immune response here, so there are. Through serum epidemiology since there is natural protection conferred by RSV infections in both infants and adults, et cetera, we have a pretty good idea in those settings what to look for, and with respect to infants in particular, the Synagis, the monoclonal antibody to this part of the F protein, has also provided really good windows for us to have some idea of what to expect for efficacy. And this helps us de-risk the Phase III program, helps us determine what kind of end points we might look for and what kind of immune assessments for this. So it is good to be on well trod ground because there has been work going on in RSV for several decades now, and so we're able to take advantage of some of those immune assessments, and we're getting I think a very convincing type of immune response that suggests that the antigen is going to induce protection, and we will continue to work to qualify and validate some of these assays and maybe expand some of the windows that we have to look at the immune response.

Terrific. No, that's very helpful. Maybe just one more housekeeping item. You mentioned in the prepared remarks that the influenza program, the quadrivalent piece of the Phase II program will kick off in Q1 of next year. Can you give us kind of a status update on the trivalent portion of the Phase II program and when that may kick off?

Well, actually the Phase II trial that we're going to be kicking off will have both trivalent and quadrivalent arms in the same trial, and so we'll be able to compare both of those.

The trivalent program is going to be subsumed into the quadrivalent because that's going to be the final product, so that's merely a sort of development bridging step to use the trivalent, and we fully expect from there on out to be using quadrivalent vaccine.

Okay. Perfect. Thanks so much. I will jump back in the queue.

Thanks.

Thank you, sir. Our next question comes from the line of Ted Tenthoff of Piper Jaffray.

Great. Congratulations on all of the progress. A lot of questions have been asked on the flu and RSV programs. I am wondering, as those two programs are up and on pace, are there any things that you are thinking about in the earlier stage development or discovering?

Yes. We have taken the position over the last year that we generally don't talk about our earlier pre clinical programs until we have at least proof of principle data from animal trials, and with respect to that we do have one program that we talk about which is a rabies vaccine. We have transferred the vaccine over to our partner, Cadila, to develop into the clinic and it is because it is a very important product, perhaps one of the most important new products for India, and our joint venture in India will develop that into the clinic. We have proof of principle animal studies, and we're filing with the regulatory agencies to continue to do toxicology studies and ultimately get us into human trials, and we have I think a portfolio of other early stage programs that we'll talk to you about in coming years.

Excellent. Thanks for the update.

Thank you. Our next question comes from the line of Bill Tanner from Lazard Capital markets.

Thanks for taking the questions. A couple of them. Stan, just as you think about the seasonal flu opportunity, what -- how should we be thinking about how the Company might approach the commercialization of any of the vaccines that might come out?

We're taking the position right now that we have a program that is fully funded through to licensure, and I think that in the US we could -- we have the option of actually commercializing it. I think you can do that through a distributor network that allows a smaller company to be able to take a vaccine to market. We are -- we will talk with companies as appropriate to commercialize it internationally.

Okay. And then maybe just one for Greg on the RSV. I understand it is still kind of early days. Just -- and the data may have been presented, and I apologize if they have or they have been discussed. Just as it relates to the antibody titer, what have you seen there and what can be gleaned from what's been seen thus far that might help in predicting the efficacy of the vaccine?

Good question. So I presented this information in Seattle, so first of all, you know the subject population, 18 to 49, is a population that has recurrent annual exposure and so they develop a repertoire of antibodies to RSV and we know from various ways, for example, when babies are born, they're given the antibodies that the mother has developed over years, and they're fully protected for the first few weeks and up to a month of life, so we know those are antibodies that can be protective.

What's interesting in our case is we are taking the F protein, which we know provides protection and immunizing with that and that has actually, if you look at the naturally induced antibodies to F, they're relatively low. Their geometric mean is around 500, and after immunization with our F protein we have a geometric mean of around 9,000. We're producing very, very robust responses, and this protein is in its native configuration, so these are both functional and known to be protective antibodies. So that tells us that the vaccine is actually inducing quite a robust response.

And then I didn't really elaborate too much earlier, but the other window that we have to look at this F specific response is this is the -- this portion -- there is a portion of the F protein against which the Synagis monoclonal antibody binds to and we know that is quite efficacious in premature infants and we're able to demonstrate that the antibodies we induce from vaccination compete very, very nicely and have levels that are I think quite clinically significant. That tells us that we're making Synagis-like antibodies, so that's another window, and again I would say that what you see at the -- in the subjects who have had repeated exposure to the virus, they have almost no Synagis-like antibodies, so that's a very significant observation that we are creating Synagis-like antibodies and they're robust.

And then thirdly, a classic measure of the effectiveness of the immune response has been used -- is something called a viral neutralizing titer, and again we saw, as I mentioned, a significant boost in their virus neutralizing titers. And we have some idea based on seroepidemiology studies what the protective level looks like, and we are in excess, even the lowest subjects in some of the key groups have a titer that are two log excess of the neutralizing titer. So all of that put together, we have several windows to suggest that the immune response is both functional and at a level that would have clinical impact on the disease. And I think these are relevant to both the earliest stages of life and infancy as well as the elderly, and because this has been a very important research topic for a roughly 40 years, you can imagine there has been a ton of data, a lot of data collected on these assays, so I think it is unusual for a Phase I trial to have this type of strength of data suggesting that the vaccine could be efficacious.

And so just as it relates to the elderly getting RSV infection, that's just a function of the immune system really not being able to respond adequately to the recurrent seasonal exposure?

Yes. I think it is a combination of things. When you see -- if you look at the serological responses there is a bell curve and the people that have low end RSVF, and low end micro neutralization titers are more susceptible to infection than the people who have higher, and it is actually the gradation between those populations is relatively small, and so we think based on the magnitude we have seen in terms of improving the immune response to those two parameters that we could readily push that bell curve to the right and decrease susceptibility of that population to RSV. And I think the other confounding factor is that situation is true in healthy adults, but we're more robust, and so the people that are more prone to infection are the more frail or have underlying lung or cardiac conditions. So we would be optimistic that we could change that distribution of immune responses and we know that they're functional and protective.

Okay. Thanks very much.

Thank you, sir. And our next question is a follow-up from the line of Greg Wade.

Hi. This question is for Greg. So, Greg, in terms of our modeling exercises with this, why do you think it is going to be necessary to revaccinate the elderly on an annual basis? If you could maybe just provide us a little background on that? Thanks.

I think today the assumptions, if you look at papers by, say, the Rochester Group and [Valsey], they are sort of presuming that's going to be the case because you can watch the decay of the immune responses that are on the sort of protective end of the bell curve wane over one year, and one would expect that that would be true of vaccinations, so there is somewhat of an analogous situation with influenza where there is a pre-existing immunity, but it really doesn't persist at a level high enough to be fully protective. But that actually is an unknown today. We may have to -- it may end up being a more every five year, but right now I think if you read the literature, presumption in the experts in the field would be this would be an annual immunization would be required. We would plan to evaluate and follow the immune responses in that population over the appropriate time period, and then I think based on that we can make a judgment as to whether it's going to be an annual vaccination or what frequency it might be required.

Great. When you seek regulatory approval, can you give us an insight as to whether you'd have to have that data in hand in terms of repeat administration or do you think the agency would be accepting of one year as a protection with --

No, I think we would have to have data in that area, and this because this is an area where we have functional immune responses that we know have a relationship to protection and will have some idea of what those levels are, I think that data could be readily generated. My expectation is that you will see good immune responses, given, like flu because RSV is a predictable epidemic, given in the fall, and then when you reevaluate them a year later, you will see that they have decayed. That's just normal immune kinetics, so I would expect that we would have to do repeat immunization studies to show where the titers end up, and again my expectation would be that, like flu, you will see the decay of the immune responses and so would require periodic immunization, and we'll see based on the data what that frequency will be.

Thanks for taking my follow-up.

Thank you.

Thank you, sir. And this concludes our Question and Answer Session. I would like to turn the conference back to Stan for any final remarks.

Okay. We've covered a lot of ground. Thank you for your time and attention this morning, and appreciate your interest in our progress. Look forward to talking to you in another quarter.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a good day.